UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-K



(Mark One)



| | ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ------------------------------------------------------------------------------------



For the fiscal year ended
April 30, 2015.



| | ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ----------------------------------------------------------------------------------------



For the transition period
from ________________ to _______________.



Commission file number: 1-8266



|DATARAM CORPORATION                                   
|------------------------------------------------------
|(Exact name of registrant as specified in its charter)



|New Jersey               |  | 22-183140                           
|------------------------ |  | ------------------------------------
|(State of Incorporation) |  | (I.R.S. Employer Identification No.)



|P.O. Box 7528, Princeton, New Jersey    |  | 08543-7528
|--------------------------------------- |  | ----------
|Address of principal executive offices) |  | (Zip Code)
|                                        |  |           



Registrant’s telephone number, including
area code:(609) 799-0071



Securities registered pursuant to section 12(b)
of the Act:



| | Title of each class           |  | Name of exchange on which registered
| | ----------------------------- |  | ------------------------------------
| | Common Stock, $1.00 Par Value |  | NASDAQ Stock Market                 



Securities registered pursuant to section 12(g)
of the Act: NONE



Indicate by check mark
if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ☐   No ☒



Indicate by check mark
if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes ☐   No ☒



Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.   Yes ☒   No ☐









Indicate by check mark
whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T 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
if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant’s knowledge, in the definitive proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   Yes ☐   No ☒



Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.



See definition of “accelerated
filer and large accelerated filer and smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer
☐ Accelerated filer ☐ Non-accelerated
filer ☐ Smaller reporting company ☒



Indicate by check mark
whether the registrant is a shell-company (as defined in Rule 12b-2 of the Act).   Yes ☐   No ☒



The aggregate market value
of the Common Stock held by non-affiliates of the registrant calculated on the basis of the closing price as of the last business
day of the registrant’s most recently completed second quarter, October 31, 2014, was $5,303,126.



The number of shares of
Common Stock outstanding on July 29, 2015 was 2,801,012 shares.



DOCUMENTS INCORPORATED BY REFERENCE:



(1)  Portions of the Definitive Proxy Statement for the Annual Meeting of Shareholders to be filed
within 120 days of the end of the fiscal year (Definitive Proxy Statement), are incorporated into Part III hereof.











DATARAM CORPORATION

INDEX

|           |          |                                                                                                              | Page
|---------- | -------- | ------------------------------------------------------------------------------------------------------------ | ----
|Part I     |          |                                                                                                              |     
|           |          |                                                                                                              |     
|           | Item 1.  | Business                                                                                                     | 4   
|           | Item 1A. | Risk Factors                                                                                                 | 15  
|           | Item 1B. | Unresolved Staff Comments                                                                                    | 24  
|           | Item 2.  | Properties                                                                                                   | 24  
|           | Item 3.  | Legal Proceedings                                                                                            | 24  
|           | Item 4.  | Mine Safety Disclosures                                                                                      | 25  
|           |          |                                                                                                              |     
|Part II    |          |                                                                                                              |     
|           |          |                                                                                                              |     
|           | Item 5.  | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 25  
|           | Item 6.  | Selected Financial Data                                                                                      | 26  
|           | Item 7.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations                        | 26  
|           | Item 7A. | Quantitative and Qualitative Disclosures About Market Risk                                                   | 35  
|           | Item 8.  | Financial Statements and Supplementary Data                                                                  | 36  
|           | Item 9.  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         | 63  
|           | Item 9A. | Controls and Procedures                                                                                      | 63  
|           | Item 9B. | Other Information                                                                                            | 63  
|           |          |                                                                                                              |     
|Part III   |          |                                                                                                              |     
|           |          |                                                                                                              |     
|           | Item 10. | Directors, Executive Officers, and Corporate Governance                                                      | 64  
|           | Item 11. | Executive Compensation                                                                                       | 64  
|           | Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               | 64  
|           | Item 13. | Certain Relationships and Related Transactions and Director Independence                                     | 64  
|           | Item 14. | Principal Accounting Fees and Services                                                                       | 64  
|           |          |                                                                                                              |     
|Part IV    |          |                                                                                                              |     
|           | Item 15. | Exhibits and Financial Statement Schedules                                                                   | 64  
|           |          |                                                                                                              |     
|Signatures |          | 65                                                                                                          



3









CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS



The Business section and
other parts of this Annual Report on Form 10-K (“Form 10-K”) contain forward-looking statements, within the meaning
of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Many of the forward-looking statements
are located in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking
statements provide current expectations of future events based on certain assumptions and include any statement that does not directly
relate to any historical or current fact. Forward-looking statements can also be identified by words such as “future,”
“anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,”
“predicts,” “will,” “would,” “could,” “can,” “may,” and
similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ
significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include,
but are not limited to, those discussed in Part I, Item 1A of this Form 10-K under the heading “Risk Factors,” which
are incorporated herein by reference. The Company assumes no obligation to revise or update any forward-looking statements for
any reason, except as required by law.



EXPLANATORY NOTE



The Company has
prepared and presented the accompanying financial statements for the two years in the period ended April 30, 2015 in
accordance with SEC Regulation S-X. The Financial statements for the year ended April 30, 2015 include the audit opinion of
our registered public accounting firm dated August 7, 2015. The Financial statements for the year ended April 30, 2014
were audited by our predecessor auditor whose audit opinion was dated July 29, 2014.The Company requested, but has not
received as of the date of this filing, the predecessor auditor’s approval to reissue its previously issued
Audit Report covering the financial statements for the year ended April 30, 2014. Upon receipt of the reissued Report
from the predecessor auditor, the Company will file an amendment to this Annual Report to include the Report.





PART I



Item 1.  BUSINESS



Since 1967, Dataram Corporation
(“Dataram” or the “Company”) has been a leading independent manufacturer of memory products and provider
of performance solutions. The Company provides customized memory solutions for original equipment manufacturers (OEMs) and compatible
memory for leading brands including Cisco, Dell, Fujitsu, HP, IBM, Lenovo and Oracle as well as a line of memory products for Intel
and AMD motherboard based servers.  Dataram manufactures its memory in-house to meet three key criteria - quality, compatibility,
and selection - and tests its memory for performance and original equipment manufacturer (OEM) compatibility as part of the production
process.  With memory designed for over 50,000 systems and with products that range from energy-efficient DDR4 modules to
legacy SDR offerings, Dataram offers one of the most complete portfolios in the industry.   Backed by in-depth quality
test programs, nearly fifty years of manufacturing expertise, and a limited lifetime warranty, Dataram memory products are built
to last.  The company is a CMTL Premier Participant and ISO 9001 (2008 Certified). Its products are fully compliant with JEDEC
Specifications.



Dataram’s customers
include an international network of distributors, resellers, retailers, OEM customers and end users.



4







Dataram competes with several
other large independent memory manufacturers and the OEMs noted above.  The primary raw material used in producing memory
boards is dynamic random access memory (DRAM) chips. The purchase cost of DRAMs is the largest single component of the total cost
of a finished memory board. Consequently, average selling prices for computer memory boards are significantly dependent on the
pricing and availability of DRAM chips.



In addition to memory products,
Dataram offers solutions that provide our customers significant and quantifiable cost savings (reduction in total cost of ownership)
while helping them manage end-of-life transitions. These include:



| | · | Design and engineering services
| | - | -------------------------------



| | · | Contract and flexible manufacturing to accommodate special customer needs
| | - | -------------------------------------------------------------------------



| | · | Simulation labs for testing and validation
| | - | ------------------------------------------



| | · | Financial programs and trade-in / trade-up programs to allow customers to optimize memory procurements
| | - | ------------------------------------------------------------------------------------------------------



| | · | Software tools to assess memory needs and optimize memory deployment and application performance
| | - | ------------------------------------------------------------------------------------------------



Dataram has four business
lines which provide complimentary solutions to the market.  Each has a different customer focus and “go to market”
approach. They are:



| | · | Dataram / Princeton Memory
| | - | --------------------------



| | · | Micro Memory Bank (MMB)
| | - | -----------------------



| | · | MemoryStore.com
| | - | ---------------



| | · | 18004Memory.com
| | - | ---------------



The Dataram / Princeton
Memory Business provides innovative new memory products that support enterprise / mission critical need; custom and high end memory
solutions for most demanding customers ranging from enterprise and data center segments to power users and gamers; provides solutions
to extend the density memory options available to customers.  The business also provides:



| | • | Memory Solutions Services:
| | - | --------------------------



| | – | Performance optimization, total cost of computing reduction consulting
| | - | ----------------------------------------------------------------------



| | – | Engineering and design services for embedded applications
| | - | ---------------------------------------------------------



| | – | Proof of concept engagements
| | - | ----------------------------



| | – | Customized consignment programs
| | - | -------------------------------



| | – | Product on-demand offerings
| | - | ---------------------------



| | – | Installation services
| | - | ---------------------



5







| | • | Software: products that improve application and computing performance
| | - | ---------------------------------------------------------------------



| | • | Buy-back program:  in conjunction with the MMB business, provides customers with opportunity to “trade-in”
existing memory as part of a sale with trade-in credited towards purchase of new memory
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Micro Memory Bank business
provides new and refurbished memory products which are not commonly available.  These solutions extend the life of the system
where memory is no longer available by the OEM, helping companies avoid the cost of additional hardware expenditures.  The
business also provides:



| | • | Brokerage services:  makes opportunistic purchases of excess surplus inventories for less than market price; also buys
unknown inventory which is then opened, cataloged, and sometimes refurbished.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Buy-back program: works with Princeton business to provide customers with opportunity to “trade-in” existing memory
as part of a sale with trade-in credited towards purchase of new memory.  Memory traded-in is refurbished and then sold.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Technology recycling program: provides end of life recycling services to customers across all IT hardware categories including
laptops, desktops, workstations, servers, main frames, hubs and switches.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Operating since 1994, 18004Memory.com
web property provides a one-stop source for new and refurbished memory products used in desktops, laptops, notebooks, servers,
MAC systems, printers, digital cameras, PDAs, MP3 players, and more.  They provide memory upgrades for all major brands including
Compaq, Dell, Apple, Hewlett-Packard, Toshiba, IBM, Gateway, Sony, Fujitsu, Acer.  Products are backed by a limited lifetime
warranty on all computer memory and 30-day money back guarantee.



The Memorystore.com web
property provides a one-stop web source for “Dataram Value Memory” products used in desktops, laptops, notebooks, servers,
workstations, and MAC systems.  Dataram Value Memory is memory specifically designed and tested to meet industry standards. 
It is purchased by customers who know the exact technical specifications of the memory they need. Dataram Value Memory is fully
compliant with JEDEC Specifications.  It is 100-percent tested and backed by a limited lifetime warranty.



The Company was incorporated
in New Jersey in 1967 and made its initial public offering in 1968.  Its common stock, $1 par value (the "Common Stock"),
was listed for trading on the American Stock Exchange in 1981. In 2000 the Company changed its listing to the NASDAQ National Market
(now the NASDAQ Stock Market) where its stock trades under the symbol "DRAM." The Company's principal executive office
is located at 777 Alexander Park, Princeton, New Jersey 08540, its telephone number is (609) 799-0071, its fax is (609) 799-6734
and its website is located at http://www.dataram.com. Proxy Statements, Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K, and all amendments thereto, are available on the Company’s website free of charge.



Available Information

Our Annual Report
on Form 10-K, Quarterly Reports on Form 10-Q along with our Code of Conduct and Ethics are available through our corporate
website at www.Dataram.com. A copy of this Annual Report on Form 10-K is located at the Securities and Exchange Commission’s
Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room can
be obtained by calling the SEC at 1-800-SEC-0330. The public may also download these materials from the Securities and Exchange
Commission’s website at http://www.sec.gov. Any amendments to, and waivers of, our Code of Conduct and Ethics will be posted
on our corporate website.

6







Industry Background



The market for the Company's
memory products is principally the buyers and owners of workstations, servers and the OEMs that manufacture workstations, servers
and other products that use embedded computers. These systems have been important to the growth of the Internet.



The OEM market is also
an important part of the Company's business. Management believes that increasingly cost conscious OEMs are looking to independent
memory suppliers such as the Company for the low-cost supply of memory modules.



A workstation, like a PC,
is designed to provide computer resources to individual users. A workstation differs from a PC by providing substantially greater
computational performance, input/output capability and graphic display. Workstations are nearly always networked. As a result of
this networking capability of both workstations and PCs, the network server has grown in importance.



Network servers are computer
systems on a network which provide dedicated functions accessible by all workstations and other systems on the same network. Examples
of different types of servers in use today are: file servers, communication servers, computation servers, database servers, print
servers and storage servers.



The Company designs, produces
and markets memory products for workstations and computer servers sold by Dell, HP, IBM, Sun Microsystems, Intel and AMD. Additionally,
the Company produces and markets memory for Intel and AMD processor based motherboards for use by OEMs and channel assemblers.



The "open system"
philosophy espoused by most of the general computer industry has played a part in enlarging the market for third party vendors.
Under the "open system" philosophy, manufacturers adhere to industry design standards, enabling users to "mix and
match" hardware and software products from a variety of vendors so that a system can be configured for the user's application
in the most economical manner with reduced concern for compatibility and support. Memory products for workstations and servers
have become commodities with substantial competition from OEMs and a number of independent memory manufacture suppliers.



Generally, growth in the
memory market closely follows both the growth in unit shipments of system vendors and the growth of memory requirements per system.
There has been a recent acceleration in the growth of memory requirements per system driven the deployment of virtualization solutions,
high performance computing, and big data.



Management also estimates
that in the compatibles market, sales by system vendors constitute 80% of the memory market. To successfully compete with system
vendors, the Company must continue to respond to customers' needs in a short time frame. To support customers' needs, the Company
has a dedicated and highly automated manufacturing facility that is designed to produce and ship customer orders within twenty-four
hours or less.



7







Products



The Company's principal
business is the development, manufacture and marketing of memory modules which can be installed initially or, added to various
enterprise servers and workstations to upgrade or expand the capabilities of such systems. When vendors produce computer systems
adhering to open system industry standards, the development effort for the Company and other independent memory manufacturers is
straightforward and allows for the use of many standard components.



Our
RAMDisk software product creates a virtual RAM drive, or block of memory, which a computer treats as if it were a disk drive. By
storing files and programs into memory, a user can speed up internet load times, disk-to-disk activities, accelerate databases
and reduce compile times. The product features a save and load option that allows RAMDisk to appear as persistent storage, even
through reboots. RAMDisk has developed a strong presence in both the consumer and commercial marketplace. RAMDisk software has
also been licensed and integrated into specialized commercial products. RAMDisk is also capable of extending the longevity of expensive
solid state storage devices by housing writes which tend to wear out these devices.



In the fourth quarter of
fiscal year ended April 30, 2015, with the recommendation of the board of directors, the Company chose to terminate its agreement
with AMD to manufacture and sell memory modules for the consumer market branded as AMD under the name Radeon to refocus on its
core strength of memory products for the business market.



Distribution



The Company sells its memory
products to OEMs, distributors, value-added resellers and larger end-users. The Company has sales and/or marketing support offices
in New Jersey, USA, France, and Denmark.



Product Warranty and Service



Management believes that
the Company's reputation for the reliability of its memory products and the confidence of prospective purchasers in the Company's
ability to provide service over the life of the product are important factors in making sales. As a consequence, the Company adopted
a Limited Lifetime Warranty program for its memory products. The economic useful life of the computer systems to which the Company's
memory modules are attached is almost always substantially less than the physical useful life of the Company's memory products.
Thus, our memory products are unlikely to "wear out." The Company's experience is that less than 1% of all the products
it sells are returned under the Lifetime Warranty.



Going Concern



The
Company's financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally
accepted in the United States of America and have been prepared on a going concern basis, which contemplates the realization of
assets and the settlement of liabilities in the normal course of business. For the previous fiscal years ended April 30, 2015 and
2014, the Company has incurred losses in the amounts of approximately $3,829,000 and $2,609,000, respectively.



8







Our
continuation as a going concern is dependent upon obtaining the additional working capital necessary to sustain our operations.
We may raise additional working capital by obtaining financing, raising capital through the sales of equity and or debt securities
and upon future profitable operations. We may also seek to reduce our expenses. For example, the Company began taking aggressive
measures in late November 2014 to increase the efficiency of its operations and improve the
affordability of its products and services. To date, the Company has implemented actions resulting in approximately$3.5
million in annual cash savings for Dataram Corporation. These cost reductions have been achieved
through organizational realignment, space reduction, network optimization, benefits improvements, contract renegotiations, and
improved purchasing and supply management. There is no assurance that our current operations will be profitable or that
we will raise sufficient funds to continue operating. The Company continues to seek out opportunities to reduce overhead expenses
to meet revenues. These factors raise doubt about the Company’s ability to continue as a going concern. The financial statements
do not include any adjustments relating to the recoverability and classification of recorded assets, or the classification of liabilities
that might be necessary in the event we cannot continue in operations.



On
November 12, 2014, the Company completed a private placement of 600,000 shares of its Series A Preferred Stock (“Series A
Stock”) together with Warrants to purchase shares of its common stock (“Preferred Warrant”) at a price of $5.00
per share, in accordance with the Series A Preferred Stock Purchase Agreement dated October 20, 2014 (the “Purchase Agreement”).
The net proceeds to the Company from the sale of the Series A Stock and Preferred Warrant, after deducting the estimated offering
expenses incurred by the Company were approximately $2,700,000. At any time from November 17, 2014, the date of Closing, and prior
to October 20, 2019 (the “Put/Call Exercise Period”), and the investors may exercise a right to purchase and require
the Company to sell up to an additional 700,000 shares of Series A Stock. If the investors have not exercised this right during
the Put/Call Exercise Period, the Company may exercise a right to cause and require the investors to purchase up to an additional
700,000 shares of Series A Stock, for an aggregate purchase price of $3,500,000.



On February 2, 2015, the
Company completed a private placement of 26,600 shares of its Series A Stock (“Series together with Preferred Warrants to
purchase and additional 66,500 shares at an exercise of its common stock at a price of $2.5 per share, in accordance with the Purchase
Agreement. The net proceeds to the Company from the sale of the Series A Stock and Preferred Warrant were approximately $133,000.
As of April 30, 2015 the Company has remaining 673,400 Series A shares available.



Working Capital Requirements



Credit Facility



On November 6, 2013, the
Company entered into a new financing agreement (the “Financing Agreement”) with Rosenthal & Rosenthal, Inc. to
replace the existing loan agreement. The Financing Agreement provides for a revolving loan with a maximum borrowing capacity of
$3,500,000. The loans under the Financing Agreement mature on November 30, 2016 unless such Financing Agreement is either earlier
terminated or renewed. Loans outstanding under the Financing Agreement bear interest at a rate of the Prime Rate (as defined in
the Financing Agreement) plus 3.25% (the “Effective Rate”) or on Over-advances (as defined in the Financing Agreement),
if any, at a rate of the Effective Rate plus 3%. The Financing Agreement contains other financial and restrictive covenants, including,
among others, covenants limiting our ability to incur indebtedness, guarantee obligations, sell assets, make loans, enter into
mergers and acquisition transactions and declare or make dividends. Borrowings under the Financing Agreement are collateralized
by substantially all the assets of the Company. On April 29, 2014, the Company entered into an amendment (the "Amendment")
to the Financing Agreement. The Amendment provides for advances against inventory balances based on prescribed formulas of raw
materials and finished goods. The maximum borrowing capacity remains at $3,500,000. Borrowings at April 30, 2015 totaled
approximately $2,109,000 and there was no additional availability on that date.



9







Plan of Operation



The Company has been experiencing
losses due to the decline and instability of DRAM prices, poor investment and capital allocation decisions. It is uncertain how
long the current level of DRAM pricing will continue, or whether or when prices will rise in the near future. Until such time that
the Company can raise prices, it will continue to seek alternative methods of generating profits and cash flow. For example, the
Company continues to pursue product diversification, either by development or as a contract manufacturer. Additionally, the Company
will continue to identify joint ventures, strategic partnerships and business combination opportunities. There can be no assurance
that any of these initiatives will mature to profitability and positive cash flow, or even occur.



Sales of Securities



On July 15, 2014,
the Company entered into the Purchase Agreement governing the issuance of $750,000 aggregate principal amount of Bridge Notes and
Bridge Warrants. The Bridge Notes and Bridge Warrants were issued on July 15, 2014.  The Company issued $600,000 aggregate
principal amount of the Bridge Notes to certain Institutional investors and $150,000 aggregate principal amount of the Bridge Notes
to certain members of Management. The Bridge Notes, the initial maturity date of which was October 15, 2014 (which was subject
to a three-month extension at the option of the holders that occurred; see below), are convertible into shares of the Company’s
common stock. The initial conversion price for Institutional Investors is $2.50 per share (which was subsequently reduced; see
below), and the initial conversion price for Management is equal to the closing price of the Company’s common stock on the
closing date of the Purchase Agreement, $2.94. The Bridge Notes are secured obligations of the Company and bear interest at a rate
of 8% per year. The Bridge Warrants are exercisable for five years after the closing date of the Purchase Agreement, or July 15,
2019. For each $1,000 of principal amount of Bridge Notes, the holder received 1,200 Bridge Warrants, each exercisable for the
purchase of one share of the Company’s common stock. Each holder is entitled to exercise one-third of all Bridge Warrants
received at an exercise price of $3.00, one-third of all Bridge Warrants received at an exercise price of $3.50, and one-third
of all Bridge Warrants received at an exercise price that is equal to the closing price on the closing date of the Purchase Agreement,
$2.94. Pursuant to the terms of the Purchase Agreement, the Company has agreed to register for re-sale the shares underlying the
Bridge Notes and the Bridge Warrants.

On October 15, 2014, the original maturity
date of the Bridge Notes, the maturity date of the Bridge Notes was extended to January 15, 2015 for all holders of the Bridge
Notes. On November 17, 2014 the Company closed the sale of 600,000 shares of its Series A Stock, which resulted in the reduction
of the conversion price of the Bridge Notes held by the institutional investors to $2.00 from $2.50 to equal the conversion price
of the Series A Preferred Stock (see below). In addition, two additional 90-day extensions were provided to the institutional investors,
which could extend the final maturity date to July 15, 2015. The extensions expired on January 15, 2015 and at the quarter ended
January 31, 2015 the Bridge Notes were in default. The Company paid off approximately $42,500 of the Notes and received extensions
from all Bridge Note holders except for one holder of an $80,000 Bridge Note, which extend the maturity date to January 15, 2016
from the Bridge Note holders. The Company continues to accrue interest on the Bridges Notes. In the event the Bridge Notes are
converted to equity, their incremental fair value will be recognized in the consolidated statement of operations. The Company has
also advised Rosenthal and Rosenthal, Inc. of the default on the Bridge Notes which is a default under our finance agreement.

10







On November 17, 2014, the
Company completed a private placement of 600,000 shares of its Series A Stock together with the Preferred Warrants to purchase
shares of its common stock at a price of $5.00 per share, in accordance with the Series A Preferred Stock Purchase Agreement dated
October 20, 2014 (the “Purchase Agreement”). The net proceeds to the Company from the sale of the Series A Stock and
Preferred Warrants, after deducting the estimated offering expenses incurred by the Company were approximately $2,697,000.



At any time from November
17, 2014, and prior to October 20, 2019 (the “Put/Call Exercise Period”), the investors may exercise a right to purchase
and require the Company to sell up to an additional 700,000 shares of Series A Stock. If the investors have not exercised this
right during the Put/Call Exercise Period, the Company may exercise a right to cause and require the investors to purchase up to
an additional 700,000 shares of Series A Stock, for an aggregate purchase price of $3,500,000. Neither party can refuse the put
or call. Holders of the Series A Stock shall initially have the right to convert such shares of Series A Stock into the number
of authorized but previously unissued shares of the Company’s common stock obtained by dividing the stated value of each
share of Series A ($5.00) by $2.00. For each share of Series A Stock, the investors received 2.5 Preferred Warrants to purchase
the Company’s common stock at an exercise price of $2.50 per share. The Preferred Warrants are exercisable immediately for
a period of five years from the date of closing. The exercise price of the Preferred Warrants is subject to adjustments in the
case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions. The exercisability of
the Preferred Warrants may be limited if upon exercise, the warrant holder or any of its affiliates would beneficially own more
than 4.99% of the Company’s Common Stock.



The Holders of the Series
A Stock will receive preferential cumulative dividends at the rate of 8% per annum (equivalent to a fixed annual payment of $0.40
per share). The dividends are payable in shares of common stock and shall be valued at the weighted average price of the Company’s
common stock over the ten (10) consecutive trading days ended on the second trading day immediately before the payment date.

On February 2, 2015, the
Company completed a private placement of 26,600 shares of its Series A Stock (“Series together with Preferred Warrants to
purchase and additional 66,500 shares at an exercise of its common stock at a price of $2.5 per share, in accordance with the Purchase
Agreement. The net proceeds to the Company from the sale of the Series A Stock and Preferred Warrant were approximately $133,000.



On February 2, 2015, the
Company issued and sold an aggregate of 183,000 restricted shares of its common stock at a price of $2.00 per share and five-year
warrants to purchase an additional 316,000 shares with an exercise price of $2.50 per share, of which 50,000 shares were purchased
by David A Moylan, the Company’s CEO. The net proceeds to the Company from the sale of the restricted common stock and warrants
(exclusive of any exercise thereof) were approximately $365,000.



DRAM Prices



The memory product business
is heavily dependent upon the price of DRAMs. Producers of DRAM are required to invest substantial capital resources to produce
their end product. Their marginal cost is low as a percentage of the total cost of the product. As a result, the world-wide market
for DRAMs has swung in the past from period to period from oversupply to shortage. During periods of substantial oversupply, the
Company has seen falling prices for DRAMs and wide availability of DRAMs allowing the Company to maintain minimum inventories to
meet the needs of customers. During periods of shortages, DRAMs are allocated to customers and the Company must invest heavily
in inventory in order to continue to be assured of the supply of DRAMs from vendors. At the present time, the market for DRAMs
is balanced, but with spot shortages of certain DRAM configurations.



11







Memory Product Complexity



DRAM memory products for
workstations and enterprise servers have, for many years, been undergoing a process of simplification with a corresponding decline
in profit margins for current generation memory products as competitors' entry into the market becomes easier. Memory products
for prior generations of workstations and servers are sold with higher margins as few competitors continue to supply memory for
those computers.



Engineering



The Company's ability to
compete successfully depends upon its ability to identify new memory needs of its customers. To achieve this goal, the Company's
engineering group continually monitors computer system vendors' new product developments, and the Company evaluates and tests major
components as they become available. The Company designs prototype memory modules and subjects them to reliability testing procedures.
The Company incurred engineering costs of $768,000 in the fiscal year ended April 30, 2015 and $1,186,000 in the fiscal year ended
April 30, 2014.



Raw Materials



The Company purchases industry
standard DRAMs. The Company also purchases finished modules from DRAM manufacturers. In either case, the cost of DRAM chips is
the largest single component of the total cost of our memory products. Fluctuations in the availability or prices of DRAMs can
have a significant impact on the Company's profit.



The Company has created
close relationships with a number of primary suppliers while qualifying and developing alternate sources as backups. The qualification
program consists of extensive evaluation of process capabilities, on-time delivery performance and the financial stability of each
supplier. Alternative sources are used to assure supply in the event of a problem with the primary source or to handle surges in
demand.



Manufacturing



The Company assembles its
memory boards at its manufacturing facility in Pennsylvania.



Backlog



The Company expects that
all of the backlog on hand will be filled during the current fiscal year and most in the first quarter of the fiscal year ending
April 30, 2016. The Company's backlog at April 30, 2015 was $98,000 at April 30, 2014 was $216,000. Product backlog at any point
in time may not translate into net revenue in any subsequent period, as unfilled orders can generally be canceled at any time by
the customer.



Competition



The intensely competitive
computer industry is characterized by rapid technological change and constant pricing pressures. These characteristics are equally
applicable to the third party memory market, where pricing is a major consideration in the buying decision. The Company competes
with HP, Sun Microsystems, IBM, and Dell, as well as with a number of third party memory suppliers, including Kingston Technology.



12







Although many of the Company's
competitors possess significantly greater financial, marketing and technological resources, the Company competes favorably based
on the buying criteria of price/performance, time-to-market, product quality, reliability, service/support, breadth of product
line and compatibility with computer system vendors' technology. The Company's objective is to continue to remain strong in all
of these areas with particular focus on price/performance and time-to-market, which management believes are two of the more important
criteria in the selection of third party memory product suppliers. Market research and analysis capability by the Company is necessary
to ensure timely information on new products and technologies coming from the computer system vendors and from the overall memory
market. The Company must continue low cost, high volume production while remaining flexible to satisfy the time-to-market requirement.



The Company believes that
its 48-year reputation for providing quality products is an important factor to its customers when making a purchase decision.
To strengthen this reputation, the Company has a comprehensive lifetime warranty program which provides customers with added confidence
in buying from the Company. See “Item 1 --Business-Product Warranty and Service.”



Patents, Trademarks and Licenses



The Company believes that
its success depends primarily upon the price and performance of its products rather than on ownership of copyrights or patents.



Sale of memory products
for systems that use proprietary memory design may from time to time give rise to claims of copyright or patent infringement. In
most such instances the Company has either obtained the opinion of patent counsel that its products do not violate such patents
or copyrights or obtained a license from the original equipment manufacturer.



To the best of the Company's
knowledge and belief, no Company product infringes any valid copyright or patent. However, because of rapid technological development
in the computer industry with concurrent extensive patent coverage and the rapid rate of issuance of new patents, questions of
infringement may continue to arise in the future. If such patents or copyrights are perfected in the future, the Company believes,
based upon industry practice, that any necessary licenses would be obtainable upon the payment of reasonable royalties.



Employees



As of April 30, 2015, the
Company had 27 full-time salaried employees and 15 hourly employees. The Company believes it has satisfactory relationships with
its employees. None of the Company's employees are covered by a collective bargaining agreement.



Environmental



Compliance with federal,
state and local provisions which have been enacted or adopted to regulate the protection of the environment does not have a material
effect upon the capital expenditures, earnings and competitive position of the Company. The Company did not make any material expenditure
for environmental control facilities in the current fiscal year, nor do we expect to make material expenditure in the fiscal year
ending April 30, 2016.



13







Financial information about geographic area
sales



For the last two fiscal
years the Company has had sales in the following geographic areas:



REVENUES (000's)
Export



|Fiscal |  | U.S. |        |  | Europe |   |       | Other* |  |   | Consolidated | 
|------ |  | ---- | ------ |  | ------ | - | ----- | ------ |  | - | ------------ | 
|2015   |  | $    | 23,285 |  |        | $ | 3,785 |        |  | $ | 1,188        | 
|2014   |  | $    | 24,917 |  |        | $ | 3,431 |        |  | $ | 2,051        | 





PERCENTAGES
Export



|Fiscal |  | U.S. |       |  | Europe |  |       | Other* |  |  | Consolidated | 
|------ |  | ---- | ----- |  | ------ |  | ----- | ------ |  |  | ------------ | 
|2015   |  |      | 82.4% |  |        |  | 13.4% |        |  |  | 4.2%         | 
|2014   |  |      | 82.0% |  |        |  | 11.3% |        |  |  | 6.7%         | 



*Principally Asia Pacific
Region





14







Item 1A.  RISK FACTORS



Our business, operating
results, financial condition, and prospects are subject to a variety of significant risks, many of which are beyond our control.
The following is a description of some of the important risk factors particular to our business and industry that may cause our
actual results in future periods to differ substantially from those we currently expect or seek. The risks described below are
not the only risks facing us. There are additional risks and uncertainties not currently known to us or that we currently deem
to be unlikely or immaterial that also may materially adversely affect our business, operating results, financial condition, or
prospects.



Our largest stockholder, Isaac Capital Group,
holds significant control over our common stock and Series A Preferred Stock and may be able to control our Company indefinitely.



The Isaac Capital Group
currently has beneficial ownership of approximately 23% of our outstanding common stock, including shares of Series A Preferred
Stock convertible into shares of common stock, and therefore has considerable influence over the outcome of all matters submitted
to our shareholders for approval, including the election of directors, and the approval of significant corporate

transactions.



Failure to satisfy NASDAQ continued listing
rule.



For the fiscal year ended
April 30, 2015 our shareholder’s equity was less the $2,500,000 and we are in non- compliance with the applicable shareholder’s
equity requirement for continued listing on The NASDAQ Capital Market. Our failure to comply with the shareholder’s equity
requirement may subject our securities to delisting from NASDAQ. The Company intends to present its plan to evidence and sustain
compliance with all applicable requirements for continue listing on NASDAQ.



Our independent auditors have issued a going
concern opinion and, if we are unable to obtain bank financing, raise capital or generate enough cash from operations to sustain
our business, then we may have to liquidate assets or curtail our operations.



In its audit report
dated August 7, 2015 for the fiscal years ended April 30, 2015, the opinion of our independent registered public accounting
firm, Anton & Chia LLP, included an emphasis paragraph as to the uncertainty of our ability to continue as a going
concern. Most notably, significant recurring net losses through April 30, 2015 raise substantial doubt about our ability to
continue as a going concern. During the fiscal year ended April 30, 2015, we incurred a net loss to common shareholders of
$3,829,000. We will need to generate significant revenues in order to achieve profitability.



We have incurred net losses in recent years
and our future profitability is not assured.



For the fiscal years ended
April 30, 2015 and 2014, we incurred net losses of approximately $3,829,000 and $2,609,000, respectively. Our operating results
for future periods are subject to numerous uncertainties and we cannot assure you that we will not continue to experience net losses
for the foreseeable future. If we are not able to increase revenue and reduce our costs, we may not be able to achieve profitability.



15







We are likely to need additional financing, but our access to
capital funding is uncertain.



As of April 30, 2015, we
had cash, cash equivalents and marketable securities totaling $327,000. During the year then ended, we had a net loss of $3,829,000
and used cash in operating activities of $2,581,000. We believe our existing capital resources should be sufficient to fund the
activities contemplated by our current operating plan into the third quarter of the fiscal year ending April 30, 2015. We intend
to seek external funding prior to that time, however, most likely through bank debt and the issuance and sale of securities. We
cannot predict with any certainty when we will need additional funds or how much we will need or if additional funds will be available
to us. Our need for future funding will depend on numerous factors, many of which are outside our control.



Our access to capital funding
is uncertain. We do not have committed external sources of funding, and we may not be able to obtain additional funds on acceptable
terms, or at all. During the fiscal year ended April, 30 2015, we implemented cost-containment initiatives through the restructuring
of our workforce and we could implement other cost-containment initiatives in the future. Such cost-containment initiatives could
result in a temporary lack of focus and reduced productivity amongst our work force which could adversely impact our prospects
for product sales and profitability. We might also need to sell or license our technologies on terms that are not favorable to
us, which could also adversely affect our prospects for profitability. Our inability to raise additional capital on terms reasonably
acceptable to us would seriously jeopardize the future success of our business.



If we raise funds by issuing
and selling securities, it may be on terms that are not favorable to our existing stockholders. If we raise additional funds by
selling equity securities, our current stockholders will be diluted, and new investors could have rights superior to our existing
stockholders. If we raise funds by selling debt securities, we could be subject to restrictive covenants and significant repayment
obligations.



On
November 12, 2014, the Company completed a private placement of 600,000 shares of its Series A Preferred Stock (“Series A
Stock”) together with Warrants to purchase shares of its common stock (“Preferred Warrant”) at a price of $5.00
per share, in accordance with the Series A Preferred Stock Purchase Agreement dated October 20, 2014 (the “Purchase Agreement”).
The net proceeds to the Company from the sale of the Series A Stock and Preferred Warrant, after deducting the estimated offering
expenses incurred by the Company were approximately $2,700,000. At any time from November 17, 2014, the date of Closing, and prior
to October 20, 2019 (the “Put/Call Exercise Period”), and the investors may exercise a right to purchase and require
the Company to sell up to an additional 700,000 shares of Series A Stock. If the investors have not exercised this right during
the Put/Call Exercise Period, the Company may exercise a right to cause and require the investors to purchase up to an additional
700,000 shares of Series A Stock, for an aggregate purchase price of $3,500,000.



We may have to substantially increase our
working capital requirements in the event of DRAM allocations.



Over the past 20 years,
availability of DRAMs has swung back and forth from oversupply to shortage. In times of shortage, we have been forced to invest
substantial working capital resources in building and maintaining inventory. At such times we have bought DRAMs in excess of our
customers' needs in order to ensure future allocations from DRAM manufacturers. In the event of a shortage, we may not be able
to obtain sufficient DRAMs to meet customers' needs in the short term, and we may have to invest substantial working capital resources
in order to meet long-term customer needs.



16







We could suffer additional losses if DRAM
prices continue to decline.



We are at times required
to maintain substantial inventories during periods of shortage and allocation. Thereafter, during periods of increasing availability
of DRAMs and rapidly declining prices, we have been forced to write down inventory. There can be no assurance that we will not
suffer losses in the future based upon high inventories and declining DRAM prices.



Our sales, revenues and results of operations
could fluctuate from quarter to quarter.



Our revenues and ultimate
results of operation may vary for a variety of reasons. Such reasons could include, for example, changes in general economic conditions
or consumer demand, the introduction of new products by us or by our competitors, a significant purchase or sale of assets or other
business combination or an unanticipated event affecting us or our industry, among other factors. Such variability in operating
results may affect credit terms offered to us, makes prediction of revenues for each financial period difficult and increases the
risk of unanticipated variations in quarterly results and financial condition.



In order to compete and succeed, we need
to introduce, and continue to provide, products that provide value for customers.



Our future success is dependent
on the development of new markets wherever possible, and new applications and new products which customers believe will add value,
as well as the continued demand for our products among our existing customers. Our ability to develop, qualify and distribute new
products and related technologies to meet evolving industry requirements, at prices acceptable to our customers and on a timely
basis are significant factors in determining our competitiveness in our target markets. There can be no assurance that the Company
will be able to exploit new markets or continue to develop products that achieve wide customer acceptance in the marketplace, or
that demand for existing products will continue.



The Company’s business is subject
to the risks of international procurement which could have an adverse effect on the Company’s financial results.



A significant portion of
the Company’s raw materials and finished goods are purchased from foreign manufacturers. As a result, the Company’s
international procurement operations are subject to the risks associated with such activities including, economic and labor conditions,
international trade regulations (including tariffs and anti-dumping penalties), war, international terrorism, civil disobedience,
natural disasters, political instability, governmental activities and deprivation of contract and property rights. In addition,
periods of international unrest may impede our ability to procure goods from other countries and could have a material adverse
effect on our business and results of operations. An interruption in supply and resulting higher costs, could have an adverse effect
on the Company’s financial results.



We may not successfully implement our strategic
plans.



The Company presently has
plans to expand its sales of memory products, to develop new business opportunities based on its existing expertise and software,
to continue to seek and evaluate possible strategic alliances to enhance its sales, and to develop and monetize additional intellectual
property. These plans, however, are subject to modification or replacement by management if it decides that economic, industry,
technological, regulatory or other factors warrant a change. In addition, there can be no assurance that the Company will successfully
implement all such plans or that circumstance in the marketplace and the economy will allow the implementation of such plans.



17







If we fail to achieve and maintain favorable
pricing and credit terms from our vendors, our business would be harmed and our operating results would be adversely affected.



Our costs are affected
by our ability to achieve favorable pricing and credit terms from our vendors and contract manufacturers, including through negotiations
for vendor rebates and other vendor funding received in the normal course of business. Because these supplier negotiations are
continuous and reflect the ongoing competitive environment, the variability in terms can negatively affect our costs and operating
results if we cannot sufficiently adjust pricing or cost variables.



In order to compete, we must attract, retain,
and motivate key employees, and our failure to do so could harm our results of operations.



In order to compete, we
must attract, retain, and motivate executives and other key employees. Hiring and retaining qualified executives, engineers, technical
staff, and sales representatives are critical to our business, and competition for experienced employees in our industry can be
intense. We also do not have an equity compensation plan applicable to executive officers. If we continue to suffer losses or do
not implement an equity compensation plan for executive officers, our ability to attract, retain, and motivate executives and employees
could be weakened, which could harm our results of operations.



We may not be able to adequately protect
our intellectual property rights.



We rely on copyright, trademark,
patent and trade secret laws, confidentiality procedures, controls and contractual commitments to protect our intellectual property
rights. Despite our efforts, these protections may be limited. Unauthorized third parties may try to copy or reverse engineer portions
of our products or otherwise obtain and use our intellectual property. Any patents owned by us may be invalidated, circumvented
or challenged. Any of our pending or future patent applications, whether or not being currently challenged, may not be issued with
the scope of the claims we seek, if at all. In addition, the laws of some countries do not provide the same level of protection
of our intellectual property rights as do the laws and courts of the United States. If we cannot protect our intellectual property
rights against unauthorized copying or use, or other misappropriation, we may not remain competitive.



Our products may violate third party intellectual
property rights.



Certain of our products
are designed to be used with proprietary computer systems built by various OEM manufacturers. We often have to comply with the
OEM's proprietary designs which may be patented, now or at some time in the future. OEMs have, at times, claimed that we have violated
their patent rights by adapting our products to meet the requirements of their systems. It is our policy to, in unclear cases,
either obtain an opinion of patent counsel prior to marketing, or obtain a license from the patent holder. We are presently licensed
by Sun Microsystems and Silicon Graphics to sell memory products for certain of their products. However, there can be no assurance
that product designs will not be created in the future which will, in fact, be patented and which patent holders will require the
payment of substantial royalties as a condition for our continued presence in the segment of the market covered by the patent or
they may not give us a license. Nor can there be any assurance that our existing products do not violate one or more existing patents.



18







We may lose an important customer.



During the fiscal year
ended April 30, 2015, the largest ten customers accounted for approximately 53% of the Company's revenues and one customer accounted
for approximately 20% of the Company's revenues. There can be no assurance that one or more of these customers will not cease or
materially decrease their business with the Company in the future and that our financial performance will not be adversely affected
thereby.



Sales directly to OEM's and contract manufacturers
can make our revenues, earnings, backlog and inventory levels uneven.



Revenue and earnings from
OEM sales may become uneven as order sizes are typically large and often a completed order cannot be shipped until released by
the OEM, e.g., to meet a "just in time" inventory requirement. This may occur at or near the end of an accounting period.
In such case, revenues and earnings could decline for the period and inventory and backlog could increase.



We face competition from OEM’s.



In the compatibles market
we sell our products at a lower price than OEMs. Customers will often pay some premium for the "name brand" product when
buying additional memory and OEMs seek to exploit this tendency by having a high profit margin on memory products. However, individual
OEMs can change their policy and price memory products competitively. While we believe that with our manufacturing efficiency and
low overhead we still would be able to compete favorably with OEMs, in such an event profit margins and earnings would be adversely
affected. Also, OEMs could choose to use "free memory" as a promotional device in which case our ability to compete would
be severely impaired.



We face competition from DRAM manufacturers.



DRAM manufacturers not
only sell their product as discrete devices, but also as finished memory modules. They primarily sell these modules directly to
OEMs and large distributors and as such compete with us. There can be no assurance that DRAM manufacturers will not expand their
market and customer base, and our profit margins and earnings could be adversely affected.



The market for our products may narrow over
time.



The principal market for
our memory products consists of the manufacturers, buyers and owners of workstations and enterprise servers, classes of machines
lying between large mainframe computers and personal computers. Personal computers and mobile devices are increasing in their power
and sophistication and, as a result, are now filling some of the computational needs traditionally filled by workstations. The
competition for the supply of after-market memory products in the PC industry is very competitive and to the extent we compete
in this market we can be expected to have lower profit margins. There can be no assurance that this trend will not continue in
the future, and that our financial performance will not be adversely affected.



A portion of our operations is designed
to meet the needs of the very competitive Intel and AMD processor-based motherboard market.



In addition to selling
server memory systems, we develop, manufacture and market a variety of memory products for motherboards that are Intel or AMD processor
based. Many of these products are sold to OEMs and incorporated into computers and other equipment. This is an intensely competitive
market with high volumes but lower margins.



19







Delays in product development schedules
may adversely affect our revenues.



The development of software
products is a complex and time-consuming process. New products and enhancements to existing products can require long development
and testing periods. Our increasing focus on software plus services also presents new and complex development issues. Significant
delays in new product or service releases or significant problems in creating new products or services could adversely affect our
revenue.



Any claim that our products are defective
could harm our business.



We undertake to produce
consistently high-quality products, free of defects and errors. Nevertheless, it is possible that our products may contain errors
or defects. Our products are complex and must meet stringent user requirements, and we have consistently provided a lifetime warranty
for our products. Any customer claims of errors or defects could result in increased expenditures for product testing, or increase
our service costs and potentially lead to increased warranty claims. Errors or defects in our products may be caused by, among
other things, errors or defects in the memory or controller components, including components we procure from third parties. These
factors could result in the rejection of our products, product recalls, and damage to our reputation, lost revenues, diverted development
resources, increased customer service and support costs, warranty claims and litigation. We record an allowance for warranty and
similar costs in connection with sales of our products, but actual warranty and similar costs may be significantly higher than
our recorded estimate and harm our operating results and financial condition.



Moreover, despite testing
prior to its release, our software products may contain errors, especially when first introduced or when new versions are released.
The detection and correction of any errors can be time consuming and costly. Errors in our software products could affect the ability
of our products to work with other software or hardware products, could delay the development or release of new products or new
versions of products and could adversely affect market acceptance of our products. If we experience errors or delays in releasing
our new software or new versions of our software products, we could lose revenues. End users, who rely on our software products
and services for applications that are critical to their businesses, may have a greater sensitivity to product errors than customers
for software products generally. Errors in our software products or services could expose us to product liability, performance
and/or warranty claims as well as harm our reputation, which could impact our future sales of products and services.



We may make unprofitable acquisitions.



The Company is actively
looking at acquiring complementary products and related intellectual property. The possibility exists that an acquisition will
be made at some time in the future. Uncertainty surrounds all acquisitions and it is possible that a particular acquisition may
not result in a benefit to shareholders, particularly in the short-term. In addition, there can be no assurance that the business
of MMB acquired by the Company will remain a profitable operating unit of the Company or that savings from having a larger consolidated
business operation will continue.



20







The investments we make in research and
development may not lead to profitable new products.



The Company has implemented
a strategy to introduce new and complementary products into its offerings portfolio, and expects to spend substantial sums of money
on research and development of such possible new products. Specifically, the Company has made considerable investments in research
and development of the RAMDisk product line. We will also continue to invest in new software and hardware products, services, and
technologies. Investments in new technology are speculative. Commercial success depends on many factors, including innovativeness,
developer support, and effective distribution and marketing. If customers do not perceive our latest offerings as providing significant
new functionality or other value, they may reduce their purchases of our products, unfavorably impacting revenue. There can be
no assurance that these research and development expenditures will result in the identification or exploitation of any products
that can be profitably sold by the Company.



We may be adversely affected by exchange
rate fluctuations.



A portion of our accounts
receivable and a portion of our expenses are denominated in foreign currencies. These proportions change over time. As a result,
the Company's revenues and expenses may be adversely affected, from time to time, by changes in the relationship of the dollar
to various foreign currencies on foreign exchange markets. Currently, the Company does not hedge its foreign currency risks, but
could do so in the future.



We may incur intangible asset and goodwill
impairment charges which could harm our profitability.



We periodically review
the carrying values of our intangible assets and goodwill to determine whether such carrying values exceed the fair market value.
Our goodwill is subject to an annual review for goodwill impairment. If impairment testing indicates that the carrying value exceeds
its fair value, the intangible assets or goodwill is deemed impaired.



The market price for our Common Stock has
experienced significant price and volume volatility and may continue to experience significant volatility in the future.



Our stock has experienced
significant price and volume volatility for the past several years, and is likely to experience significant volatility in the future,
which could result in investors losing all or part of their investments. We believe that such fluctuations will continue as a result
of many factors, including financing plans, future announcements concerning us, our competitors or our principal customers regarding
financial results or expectations, technological innovations, industry supply and demand dynamics, new product introductions, governmental
regulations, the commencement or results of litigation or changes in earnings estimates by analysts, as well as a result of numerous
factors outside our control. Significant declines in our stock price may interfere with our ability to raise additional funds through
equity financing or to finance strategic transactions with our stock. A significant adverse change in the market value of our Common
Stock could also trigger an interim goodwill impairment test that may result in a non-cash impairment charge. In addition, we have
historically used equity incentive compensation as part of our overall compensation arrangements. The effectiveness of equity incentive
compensation in retaining key employees may be adversely impacted by volatility in our stock price.



21







Our stock has limited liquidity.



Although our stock is publicly
traded, it has been observed that this market is “thin.” As a result, the common stock may trade at a discount to what
would be its value if the stock enjoyed greater liquidity.



We do not intend to pay dividends in the
foreseeable future.



We have rarely declared
or paid any dividends on our Common Stock. We anticipate that we will retain any future earnings to support operations and to finance
the development of our business and do not expect to pay cash dividends in the foreseeable future. As a result, the success of
an investment in our common stock will depend entirely upon any future appreciation in its value. There is no guarantee that our
Common Stock will appreciate in value or even maintain the price at which stockholders have purchased their shares.



We are subject to the New Jersey Shareholders
Protection Act.



This statute has the effect
of prohibiting any "business combination" - a very broadly defined term - with any "interested shareholder"
unless the transaction is approved by the Board of Directors at a time before the interested shareholder had acquired a 10% ownership
interest. This prohibition of "business combinations" is for five years after the shareholder became an "interested
shareholder" and continues after that time period subject to certain exceptions. A practical consequence of this statute is
that a hostile acquisition of our Company is unlikely to occur and hostile transactions which might be of benefit to our shareholders
are unlikely to occur.



We are a party to a number of litigations
that could cause us to incur substantial cost to pay substantial damages.



Effective as of the close
of business on December 17, 2014, we terminated our agreement with MPP Associates, Inc., pursuant to which Marc P. Palker had been
providing CFO services to us. On April 8, 2015, MPP Associates, Inc. and Mr. Palker filed a complaint, styled MPP Associates, Inc.
and Marc Palker v. Dataram Corporation, Jon Isaac, David Moylan, Michael Markulec and Richard Butler, in the Superior Court of
the State of New Jersey, Essex County, Docket No. ESX-L-002413-15. MPP Associates, Inc. asserts claims for breach of contract against
Dataram for breach of contract and breach of the covenant of good faith and fair dealing.  Mr. Palker asserts a claim against
Dataram for breach of contract, alleging that he is a third party beneficiary of the agreement between MPP Associates, Inc. and
Dataram.  Mr. Palker also asserts a claim against Dataram and Messrs. Isaac, Moylan, Markulec and Butler for violation of
the New Jersey Conscientious Employee Protection Act (“CEPA”), alleging that he was an “employee” of Dataram
under the law and that his employment was terminated in retaliation for making lawfully protected objections concerning certain
conduct.  Plaintiffs do not demand a specific amount of damages, but instead seek legal damages, compensatory damages, lost
earnings and benefits, punitive damages, attorney’s fees with enhancement, costs of suit, and pre-judgment and post-judgment
interest. We believe that the allegations are fully without merit and will defend ourselves vigorously in this action.



22







Effective as of the close
of business on January 22, 2015, the company terminated the employment agreement with John H. Freeman, our former Chief Executive
Officer. On April 9, 2015, styled John Freeman v. Dataram Corporation, David A. Moylan, Jon Isaac, and John Does 1-5, in the Superior
Court of the State of New Jersey, Essex County, Docket No. ESX-L-002471-15. Mr. Freeman asserts claims for breach of contract against
Dataram for breach of his employment agreement and breach of a promissory note. Mr. Freeman asserts claims against the company
and Messrs. Moylan and Isaac for defamation per se and defamation. Mr. Freeman similarly asserts a claim for defamation against
the John Doe defendants. Mr. Freeman does not demand a specific amount of damages, but instead seeks compensatory damages,
punitive damages, attorney’s fees, costs of suit, and pre-judgment interest. We believe that the allegations are fully without
merit and will defend ourselves vigorously in this action.



Similarly,
on April 10, 2015, the company filed an action against Mr. Freeman, Mr. Palker and MPP Associates, Inc., styled as Dataram Corporation
v. John Freeman, Marc Palker and MPP Associates, Inc., in the Superior Court of the State of New Jersey, Mercer County, Docket
No. ESX-L-000886-15. The company asserts claims against Mr. Freeman for breach of the duty of loyalty and misappropriation of corporate
property/conversion, claims against Messrs. Freeman and Palker for breach of fiduciary duty, and claims against Messrs. Freeman
and Palker and MPP Associates, Inc. for fraud.  The company seeks at least $110,640.52 against Mr. Freeman and legal damages,
compensatory, consequential, and punitive damages, attorney’s fees, costs of suit, and interest against all defendants. Mr.
Freeman filed a counterclaim in this action that mirrors his claim in the action described above.



On
June 26, 2015, Alethea Douglas, a former employee, filed a complaint against the Company with the U.S. Equal Employment Opportunity
Commission, alleging a claim for age discrimination in connection with the termination of her employment effective May 20, 2015.
We believe that the allegations are fully without merit and will defend ourselves vigorously in this action.



Government regulations may have a negative
effect on our business.



Government regulators,
or our customers, may in the future require us to comply with product or manufacturing standards that are more restrictive than
current laws and regulations related to environmental matters, conflict minerals or other social responsibility initiatives. The
implementation of these standards could affect the sourcing, cost and availability of materials used in the manufacture of our
products. For example, there may be only a limited number of suppliers offering “conflict free” metals used in our
products, and there can be no assurance that we will be able to obtain such metals in sufficient quantities or at competitive prices.
Also, we may face challenges with regulators and our customers and suppliers if we are unable to sufficiently verify that the metals
used in our products are conflict free. Non-compliance with these standards could cause us to lose sales to these customers and
compliance with these standards could increase our costs, which may harm our operating results.



We may suffer a breach of our computer security
measures, which could harm our business.



If our security measures
are breached and unauthorized access is obtained to our information technology systems, we may lose proprietary data or suffer
damage to our business. Our security measures may be breached as a result of third-party action, including computer hackers, employee
error, malfeasance or otherwise, and result in unauthorized access to our customers’ data or our data, including our intellectual
property and other confidential business information, or our information technology systems. Because the techniques used to obtain
unauthorized access, or to sabotage systems, change frequently, we may be unable to anticipate these techniques or to implement
adequate preventative measures. We believe we have obtained adequate available insurance to address the business which can be insured
against with respect to our business. However, any security breach could result in disclosure of our trade secrets or confidential
customer, supplier or employee data, or harm our ability to carry on our business, all of which could result in legal liability,
harm to our reputation and otherwise harm our business.



23







Item 1B. UNRESOLVED STAFF COMMENTS



Not applicable.



Item 2.  PROPERTIES



The Company occupies 2,865
square feet of space for administrative, sales, research and development and manufacturing support in Princeton, New Jersey under
a lease expiring on April 30, 2020.

The Company leases 17,500
square feet of assembly plant and office space in Montgomery County, Pennsylvania. The lease expires on March 31, 2016.



Rent expense amounted to
approximately $432,000 and $629,000 for the fiscal years ended April 30, 2015 and 2014, respectively. Fiscal year ended April 30,
2014 rent expense includes a $225,000 provision to settle a suit against the Company.



Item 3.  LEGAL PROCEEDINGS



Effective as of the close
of business on December 17, 2014, we terminated our agreement with MPP Associates, Inc., pursuant to which Marc P. Palker had been
providing CFO services to us. On April 8, 2015, MPP Associates, Inc. and Mr. Palker filed a complaint, styled MPP Associates, Inc.
and Marc Palker v. Dataram Corporation, Jon Isaac, David Moylan, Michael Markulec and Richard Butler, in the Superior Court of
the State of New Jersey, Essex County, Docket No. ESX-L-002413-15. MPP Associates, Inc. asserts claims for breach of contract against
Dataram for breach of contract and breach of the covenant of good faith and fair dealing.  Mr. Palker asserts a claim against
Dataram for breach of contract, alleging that he is a third party beneficiary of the agreement between MPP Associates, Inc. and
Dataram.  Mr. Palker also asserts a claim against Dataram and Messrs. Isaac, Moylan, Markulec and Butler for violation of
the New Jersey Conscientious Employee Protection Act (“CEPA”), alleging that he was an “employee” of Dataram
under the law and that his employment was terminated in retaliation for making lawfully protected objections concerning certain
conduct.  Plaintiffs do not demand a specific amount of damages, but instead seek legal damages, compensatory damages, lost
earnings and benefits, punitive damages, attorney’s fees with enhancement, costs of suit, and pre-judgment and post-judgment
interest. We believe that the allegations are fully without merit and will defend ourselves vigorously in this action.



Effective as of the close
of business on January 22, 2015, the company terminated the employment agreement with John H. Freeman, our former Chief Executive
Officer. On April 9, 2015, styled John Freeman v. Dataram Corporation, David A. Moylan, Jon Isaac, and John Does 1-5, in the Superior
Court of the State of New Jersey, Essex County, Docket No. ESX-L-002471-15. Mr. Freeman asserts claims for breach of contract against
Dataram for breach of his employment agreement and breach of a promissory note. Mr. Freeman asserts claims against the company
and Messrs. Moylan and Isaac for defamation per se and defamation. Mr. Freeman similarly asserts a claim for defamation against
the John Doe defendants. Mr. Freeman does not demand a specific amount of damages, but instead seeks compensatory damages,
punitive damages, attorney’s fees, costs of suit, and pre-judgment interest. We believe that the allegations are fully without
merit and will defend ourselves vigorously in this action.



24







Similarly,
on April 10, 2015, the company filed an action against Mr. Freeman, Mr. Palker and MPP Associates, Inc., styled as Dataram Corporation
v. John Freeman, Marc Palker and MPP Associates, Inc., in the Superior Court of the State of New Jersey, Mercer County, Docket
No. ESX-L-000886-15. The company asserts claims against Mr. Freeman for breach of the duty of loyalty and misappropriation of corporate
property/conversion, claims against Messrs. Freeman and Palker for breach of fiduciary duty, and claims against Messrs. Freeman
and Palker and MPP Associates, Inc. for fraud.  The company seeks at least $110,640.52 against Mr. Freeman and legal damages,
compensatory, consequential, and punitive damages, attorney’s fees, costs of suit, and interest against all defendants. Mr.
Freeman filed a counterclaim in this action that mirrors his claim in the action described above.



On
June 26, 2015, Alethea Douglas, a former employee, filed a complaint against the Company with the U.S. Equal Employment Opportunity
Commission, alleging a claim for age discrimination in connection with the termination of her employment effective May 20, 2015.
We believe that the allegations are fully without merit and will defend ourselves vigorously in this action.



Item 4.  MINE SAFETY DISCLOSURES



Not applicable.



PART II



Item 5.  MARKET FOR REGISTRANT'S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES



Common Stock Information



The Common Stock of the
Company is traded on the NASDAQ Stock Market under the symbol “DRAM”. As of July 15, 2015 there were approximately
2,000 shareholders of record, which does not include approximately 300 beneficial owners of shares held in the names of brokers
or other nominees. The following table sets forth, for the periods indicated, the high and low intraday prices per share of our
common stock as reported by the NASDAQ Stock Market.



|               |  | 2015 |      | 2014
|-------------- |  | ---- | ---- | ----
|               |  | High |      | Low 
|First Quarter  |  | $    | 3.05 |     
|Second Quarter |  |      | 3.56 |     
|Third Quarter  |  |      | 2.66 |     
|Fourth Quarter |  |      | 3.29 |     



All prices have been adjusted
to reflect the reverse 1-for-6 stock split which was effective March 15, 2013. The Company does not intend to pay dividends in
the near future.



Dividends



We do not anticipate paying
dividends in the foreseeable future as the board of directors intends to retain future earnings for use in our business. Any future
determination as of the payment of dividends will depend upon our financial conditions, results of operations and such other factors
as the Board of Directors seems relevant. In addition, our financing agreement contains covenants limiting the declaration and
distribution of a dividend.



Issuer Purchases of Equity Securities -
NONE



25







Item 6.  SELECTED FINANCIAL DATA



(Not covered by Independent Registered Public Accounting Firm’s
Reports)

(In thousands, except per share amounts)



The following selected
financial data should be read in conjunction with item 7, “MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS” and our financial statements and the related notes appearing in item 8,” FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA” of this form 10-K



|Years Ended April 30,      |  | 2015 |        |   | 2014 |  
|-------------------------- |  | ---- | ------ | - | ---- | -
|                           |  |      |        |   |      |  
|Revenues                   |  | $    | 28,258 |   |      | $
|Basic loss per share       |  |      | (2.20  | ) |      |  
|Diluted loss per share     |  |      | (2.20  | ) |      |  
|Current assets             |  |      | 4,656  |   |      |  
|Total assets               |  |      | 6,275  |   |      |  
|Current liabilities        |  |      | 3,979  |   |      |  
|Total stockholders’ equity |  |      | 2,117  |   |      |  
|Cash dividends paid        |  |      | —      |   |      |  



Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS



This Item 7, “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” and other parts of this Form 10-K contain forward-looking
statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking
statements provide current expectations of future events based on certain assumptions and include any statement that does not directly
relate to any historical or current fact. Forward-looking statements can also be identified by words such as “future,”
“anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,”
“predicts,” “will,” “would,” “could,” “can,” “may,” and
similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ
significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include,
but are not limited to, those discussed in Part I, Item 1A of this Form 10-K under the heading “Risk Factors,” which
are incorporated herein by reference. The following discussion should be read in conjunction with the consolidated financial statements
and notes thereto included in Part II, Item 8 of this Form 10-K. All information presented herein is based on the Company’s
fiscal calendar. Unless otherwise stated, references to particular years or quarters refer to the Company’s fiscal years
ended in April and the associated quarters of those fiscal years. The Company assumes no obligation to revise or update any forward-looking
statements for any reason, except as required by law.



26







Overview



Since 1967, Dataram Corporation
(“Dataram” or the “Company”) has been a leading independent manufacturer of memory products and provider
of performance solutions. The Company provides customized memory solutions for original equipment manufacturers (OEMs) and compatible
memory for leading brands including Cisco, Dell, Fujitsu, HP, IBM, Lenovo and Oracle as well as a line of memory products for Intel
and AMD motherboard based servers.  Dataram manufactures its memory in-house to meet three key criteria - quality, compatibility,
and selection - and tests its memory for performance and original equipment manufacturer (OEM) compatibility as part of the production
process.  With memory designed for over 50,000 systems and with products that range from energy-efficient DDR4 modules to
legacy SDR offerings, Dataram offers one of the most complete portfolios in the industry.   Backed by in-depth quality
test programs, nearly fifty years of manufacturing expertise, and a limited lifetime warranty, Dataram memory products are built
to last.  The company is a CMTL Premier Participant and ISO 9001 (2008 Certified). Its products are fully compliant with JEDEC
Specifications.



Dataram’s customers
include an international network of distributors, resellers, retailers, OEM customers and end users.



Dataram competes with several
other large independent memory manufacturers and the OEMs noted above.  The primary raw material used in producing memory
boards is dynamic random access memory (DRAM) chips. The purchase cost of DRAMs is the largest single component of the total cost
of a finished memory board. Consequently, average selling prices for computer memory boards are significantly dependent on the
pricing and availability of DRAM chips.



Results of Operations



The following table sets
forth consolidated operating data expressed as a percentage of revenues for the periods indicated.



|Years Ended April 30,               |  | 2015 |       |    | 2014 | 
|----------------------------------- |  | ---- | ----- | -- | ---- | 
|                                    |  |      |       |    |      | 
|Revenues                            |  |      | 100.0 | %  |      | 
|                                    |  |      |       |    |      | 
|Cost of sales                       |  |      | 85.2  |    |      | 
|                                    |  |      |       |    |      | 
|Gross profit                        |  |      | 14.8  |    |      | 
|                                    |  |      |       |    |      | 
|Engineering                         |  |      | 2.7   |    |      | 
|                                    |  |      |       |    |      | 
|Impairment of goodwill              |  |      | 0.0   |    |      | 
|                                    |  |      |       |    |      | 
|Selling, general and administrative |  |      | 21.8  |    |      | 
|                                    |  |      |       |    |      | 
|Loss from operations                |  |      | (9.7  | )  |      | 
|                                    |  |      |       |    |      | 
|Other income (expense), net         |  |      | (3.8  | )  |      | 
|                                    |  |      |       |    |      | 
|Loss before income tax expense      |  |      | (13.5 | )  |      | 
|                                    |  |      |       |    |      | 
|Income tax expense                  |  |      | 0.0   |    |      | 
|                                    |  |      |       |    |      | 
|Net loss                            |  |      | (13.5 | )% |      | 



27







Fiscal 2015 Compared With Fiscal 2014



Revenues for the fiscal
year ended April 30, 2015 were $28,258,000 compared to $30,399,000 in the fiscal year ended April 30, 2014, a 7% decrease. Average
selling prices decreased approximately 6% from the prior year periods, attributable to a decline in the price of DRAM chips, the
primary raw material used in the Company’s products.



Revenues for the fiscal
years ended April 30, 2015 and 2014 by geographic region were:



|                                        |  | Year ended April 30, 2015 |            |  | Year ended April 30, 2014 |  
|--------------------------------------- |  | ------------------------- | ---------- |  | ------------------------- | -
|United States                           |  | $                         | 23,285,000 |  |                           | $
|Europe                                  |  |                           | 3,785,000  |  |                           |  
|Other (principally Asia Pacific Region) |  |                           | 1,188,000  |  |                           |  
|Consolidated                            |  | $                         | 28,258,000 |  |                           | $



The Company expects that
the entire backlog on hand will be filled during the fiscal year ending April 30, 2016 and mostly in the first quarter. The Company's
backlog at April 30, 2015 was $98,000. At April 30, 2014, the Company’s backlog was $216,000.



Cost of sales was $24,068,000
in the fiscal year ended April 30, 2015 or 85.2% of revenues compared to $24,353,000 or 80.1% of revenues in the fiscal year ended
April 30, 2014. Fluctuations in cost of sales as a percentage of revenues are not unusual and can result from many factors, some
of which are a rapid change in the price of DRAMs, or a change in product mix possibly resulting from a large order or series of
orders for a particular product or a change in customer mix.



Engineering expense in
the fiscal year ended April 30, 2015 was approximately $768,000 versus approximately $1,186,000 in the fiscal year ended April
30, 2014. The Company has capitalized approximately $365,000 of cost related to the maintenance and development of our RAMDisk
product in the fiscal year ended April 30, 2015.



Selling, general and administrative
expenses were $6,171,000 in the fiscal year ended April 30, 2015 versus $7,181,000 in the fiscal year ended April 30, 2014. The
overall reduction in expense was primarily the result of a reduction of employees and related benefit expenses. Stock-based compensation
expense was recorded as a component of selling, general and administrative expense and totaled approximately $14,000 in the fiscal
year ended April 30, 2015, versus $43,000 in the fiscal year ended April 30, 2015. Intangible asset amortization is recorded as
a component of selling, general and administrative expense and totaled approximately $133,000 in the fiscal year ended April 30,
2014 and nil in the fiscal year ended April 30, 2015. The Company also recorded a provision for lease settlement of $225,000 in
the fiscal year ended April 30, 2014.



Other income (expense)
for the fiscal year ended April 30, 2015 totaled approximately $1,077,000 of expense versus $288,000 of expense in fiscal 2014.
Other income (expense) for the fiscal year ended April 30, 2015 includes $1,001,000 of interest expense and $76,000 of foreign
currency transaction losses, primarily as a result of the US dollar strengthening against the EURO. The interest expense recorded
in fiscal year ended April 30, 2015 includes a non cash interest charge of approximately $750,000 recorded for the amortization
of debt discount as a result of the issuance of the subordinated convertible notes and interest expense of approximately $251,000
on the Company’s revolving bank credit line. Other income (expense) for the fiscal year ended April 30, 2014 includes $306,000
of interest expense and $18,000 of foreign currency transaction gains, primarily as a result of the US dollar weakening against
the EURO.



28







The Company’s consolidated
statements of operations for the fiscal year ended April 30, 2015 included tax expense of approximately $3,000 that consists of
state minimum tax payments. For the fiscal year ended April 30, 2015, the Company had Federal and State net operating loss (“NOL”)
carry-forwards of approximately $29,900,000 and $29,400,000, respectively. These can be used to offset future taxable income and
expire between 2023 and 2035 for Federal tax purposes and 2016 and 2035 for state tax purposes. The Company’s NOL carry-forwards
are a component of its deferred income tax assets which are reported net of a full valuation allowance in the Company’s consolidated
financial statements for the fiscal years ended April 30, 2015 and 2014.



Liquidity and Capital Resources



The
Company's financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally
accepted in the United States of America and have been prepared on a going concern basis, which contemplates the realization of
assets and the settlement of liabilities in the normal course of business. For the fiscal years ended April 30, 2015 and 2014,
the Company incurred losses in the amounts of approximately $3,829,000 and $2,609,000, respectively.



Our
continuation as a going concern is dependent upon obtaining the additional working capital necessary to sustain our operations.
We may raise additional working capital by obtaining financing, raising capital through the sales of equity and or debt securities
and upon future profitable operations. We may also seek to reduce our expenses. There is no assurance that our current operations
will be profitable or that we will raise sufficient funds to continue operating. The Company continues to seek out opportunities
to reduce overhead expenses to meet revenues. These factors raise substantial doubt about the Company’s ability to continue
as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of
recorded assets, or the classification of liabilities that might be necessary in the event we cannot continue in operations.



As of April 30, 2015, we
had cash and cash equivalents totaling $327,000. During the year then ended, we had a net loss of $3,829,000 and used cash in operating
activities of $2,581,000. We believe our existing capital resources should be sufficient to fund the activities contemplated by
our current operating plan into the second quarter of fiscal 2016. We intend to seek external funding prior to that time, however,
most likely through bank debt and the issuance and sale of securities. We cannot predict with any certainty when we will need additional
funds or how much we will need or if additional funds will be available to us. Our need for future funding will depend on numerous
factors, many of which are outside our control.



On
November 12, 2014, the Company completed a private placement of 600,000 shares of its Series A Preferred Stock (“Series A
Stock”) together with Warrants to purchase shares of its common stock (“Preferred Warrant”) at a price of $5.00
per share, in accordance with the Series A Preferred Stock Purchase Agreement dated October 20, 2014 (the “Purchase Agreement”).
The net proceeds to the Company from the sale of the Series A Stock and Preferred Warrant, after deducting the estimated offering
expenses incurred by the Company were approximately $2,700,000. At any time from November 17, 2014, the date of Closing, and prior
to October 20, 2019 (the “Put/Call Exercise Period”), and the investors may exercise a right to purchase and require
the Company to sell up to an additional 700,000 shares of Series A Stock. If the investors have not exercised this right during
the Put/Call Exercise Period, the Company may exercise a right to cause and require the investors to purchase up to an additional
700,000 shares of Series A Stock, for an aggregate purchase price of $3,500,000.



On February 2, 2015, the
Company completed a private placement of 26,600 shares of its Series A Stock (“Series together with Preferred Warrants to
purchase an additional 66,500 shares at an exercise of its common stock at a price of $2.5 per share, in accordance with the Purchase
Agreement. The net proceeds to the Company from the sale of the Series A Stock and Preferred Warrant were approximately $133,000.
As of April 30, 2015 the Company has remaining 673,400 Series A shares available.



29







Net cash used in operating
activities totaled approximately $2,581,000 for the fiscal year ended April 30, 2015. Net loss totaled approximately $3,829,000
and included stock-based compensation expense of approximately $14,000, depreciation and amortization expense of approximately
$127,000 and bad debt expense of approximately $50,000. Amortization of debt discount of approximately $750,000 was recorded. Inventories
decreased by approximately $202,000. The decrease in inventories was a management decision to reduce inventory levels and conserve
working capital. Accounts payable increased by approximately $559,000. Accrued liabilities decreased by approximately $645,000.
Trade receivables decreased by approximately $1,442,000.



Net cash used in investing
activities totaled approximately $394,000, primarily the result of capitalizing software development costs. On May 1, 2014, the
Company determined that technological feasibility for Intelligent Caching Software product was established, and development costs
subsequent to that date totaling approximately $365,000 have been capitalized. In December 2014, the Company suspended development
of the software product. Prior to May 1, 2014, the Company expensed all development costs related to this product line. The Company
also purchased $29,000 of property and equipment.



Net cash provided by financing
activities totaled approximately $3,044,000 and consisted of proceeds of $750,000 from the Subordinated Secured Convertible Bridge
Note and Warrant Purchase Agreement. The Company also recorded net proceeds of approximately $2,832,000 from the private placement
of 626,600 shares of its Series A Stock together with Warrants to purchase shares of its Common Stock. Additionally, the Company
sold 183,000 shares of common stock and warrants to purchase shares of common stock for proceeds of approximately $365,000. The
Company also paid down approximately $861,000 of its bank revolving credit line.



The Company amended and
restated its Note and Security Agreement with David Sheerr a former executive officer of the Company, as of October 31, 2013; the
Company sold certain equipment and furniture for a purchase price of $500,000 under a sale leaseback transaction to Mr. Sheerr.
The Company used the proceeds of the purchase price received from Mr. Sheerr to reduce the remaining principal amount of the original
loan by an amount equal to $500,000. The principal amount was reduced to approximately $966,667 at October 31, 2013. was obligated
to pay monthly, interest equal to 10% per annum calculated on a 360 day year of the outstanding loan balance. Principal is payable
in 29 equal monthly installments of $33,333, beginning on November 15, 2013 and subsequently on the 15th day of each month thereafter,
until paid in full. On April 30, 2014 the note was paid in full. Interest expense recorded for the Note in the fiscal year ended
April 30, 2014 was approximately $122,000.



As of October 31, 2013,
the Company also entered into an agreement with Mr. Sheerr to leaseback the aforementioned equipment and furniture that was sold
to Mr. Sheerr on October 31, 2013. The lease is for a term of 60 months and the Company is obligated to pay approximately $7,500
per month for the term of the lease. The Company has an option to extend the lease for an additional two year period. The transactions
described have been accounted for as a sale-leaseback transaction. Accordingly, the Company recognized a gain on the sale of assets
of approximately $139,000, which is the amount of the gain on sale in excess of present value of the future lease payments and
will recognize the remaining approximately $322,000 in proportion to the related gross rental charged to expense over the term
of the lease, 60 months. The current portion of $72,000 deferred gain is reflected in accrued liabilities and the long term portion
of $250,000 is reflected in other liabilities long term in the consolidated balance sheet as of April 30, 2014. The current portion
of $72,000 deferred gain is reflected in accrued liabilities and the long term portion of $179,000 is reflected in other liabilities
long term in the consolidated balance sheet as of April 30, 2015.



30







On November 6, 2013, the
Company entered into a new financing agreement (the “Financing Agreement”) with Rosenthal & Rosenthal, Inc. to
replace the existing loan agreement. The Financing Agreement provides for a revolving loan with a maximum borrowing capacity of
$3,500,000. The loans under the Financing Agreement mature on November 30, 2016 unless such Financing Agreement is either earlier
terminated or renewed. Loans outstanding under the Financing Agreement will bear interest at a rate of the Prime Rate (as defined
in the Financing Agreement) plus 3.25% (the “Effective Rate”) or on Over-advances (as defined in the Financing Agreement),
if any, at a rate of the Effective Rate plus 3%. The Financing Agreement contains other financial and restrictive covenants, including,
among others, covenants limiting our ability to incur indebtedness, guarantee obligations, sell assets, make loans, enter into
mergers and acquisition transactions and declare or make dividends. Borrowings under the Financing Agreement are collateralized
by substantially all the assets of the Company. On April 29, 2014, the Company entered into an amendment (the "Amendment")
to the Financing Agreement. The Amendment provides for advances against inventory balances based on prescribed formulas of raw
materials and finished goods. The maximum borrowing capacity remains at $3,500,000. Borrowings at April 30, 2015 totaled approximately
$2,109,000 and there was no additional availability on that date.



On September 18, 2013,
the Company and certain investors entered into a securities purchase agreement (the “Purchase Agreement”) in connection
with the offering, pursuant to which the Company agreed to sell an aggregate of 350,931 shares of its common stock and warrants
to purchase a total of 350,931 shares of its common stock to such investors for aggregate net proceeds, after deducting fees to
the Placement Agent and other estimated offering expenses payable by the Company, of approximately $807,000. The common stock and
warrants were sold in fixed combinations, with each combination consisting of one share of common stock and one warrant, with each
warrant exercisable for one share of common stock. The purchase price was $2.30 per fixed combination. On September 23, 2013, the
offering of 350,000 shares and warrants was closed with net proceeds to the Company of approximately $695,491 after accounting
for all expenses of the offering. The exercisability of the warrants may be limited if, upon exercise, the holder or any of its
affiliates would beneficially own more than 4.99% of the Common Stock. After the one year anniversary of the initial exercise date
of the warrants, the Company had the right to call the warrants for cancellation for $.001 per share in the event that the volume
weighted average price of the Common Stock for 20 consecutive trading days exceeds $10.00.



On March 20, 2014, the
Company and certain investors entered into a common stock purchase agreement (the “Purchase Agreement”) in connection
with the offering, pursuant to which the Company agreed to sell an aggregate of 219,754 shares of its common stock to such investors
for aggregate proceeds, after deducting fees to the Placement Agent and other estimated offering expenses payable by the Company,
of approximately $559,000. The purchase price was $3.00 per share.



On March 20, 2014, holders
of warrants issued in connection with the sale of common stock on September 18, 2013, exercised 86,100 of those warrants at the
exercise price of $3.50 per share resulting in net proceeds of approximately $306,350. The exercise of these warrants resulted
in the issuance of 86,100 shares of the Company’s common stock.



The pricing model
the Company used for determining fair values of the warrants is the Black-Scholes Pricing Model. The model uses market-sourced
inputs such as interest rates, dividend yields, market prices and volatilities. The risk-free interest rate used of 1.26% is based
on the rate of U.S Treasury zero-coupon issues with a remaining term equal to the expected life of the Warrants. Expected dividend
yield assumes the current dividend rate of zero. Expected volatility of approximately 100% was calculated using the daily closing
price over a five year period of the Company’s Common Stock.

31







The value of the
warrants was derived and used as a basis to allocate the proceeds received between the warrants and bridge notes. The proportionate
value ascribed to the warrants amounted to approximately $562,000 and was reflected as a discount on notes payable. Further the
Company estimated a value of beneficial conversion feature of approximately $188,000 (limited to the amount of proceeds allocated
to the notes payable) and reflected such as an additional discount on the bridge notes. The discount on notes payable is being
amortized using the straight line amortization over ninety days. This resulted in a non-cash interest charge of approximately $617,000
in the quarter ended October 31, 2014 and approximately $133,000 in this year’s fiscal first quarter ended July 31, 2014.

On July 15, 2014,
the Company entered into the Purchase Agreement governing the issuance of $750,000 aggregate principal amount of Bridge Notes and
Bridge Warrants. The Bridge Notes and Bridge Warrants were issued on July 15, 2014.  The Company issued $600,000 aggregate
principal amount of the Bridge Notes to certain Institutional investors and $150,000 aggregate principal amount of the Bridge Notes
to certain members of Management. The Bridge Notes, the initial maturity date of which was October 15, 2014 (which was subject
to a three-month extension at the option of the holders that occurred; see below), are convertible into shares of the Company’s
common stock. The initial conversion price for Institutional Investors is $2.50 per share (which was subsequently reduced; see
below), and the initial conversion price for Management is equal to the closing price of the Company’s common stock on the
closing date of the Purchase Agreement, $2.94. The Bridge Notes are secured obligations of the Company and bear interest at a rate
of 8% per year. The Bridge Warrants are exercisable for five years after the closing date of the Purchase Agreement, or July 15,
2019. For each $1,000 of principal amount of Bridge Notes, the holder received 1,200 Bridge Warrants, each exercisable for the
purchase of one share of the Company’s common stock. Each holder is entitled to exercise one-third of all Bridge Warrants
received at an exercise price of $3.00, one-third of all Bridge Warrants received at an exercise price of $3.50, and one-third
of all Bridge Warrants received at an exercise price that is equal to the closing price on the closing date of the Purchase Agreement,
$2.94. Pursuant to the terms of the Purchase Agreement, the Company has agreed to register for re-sale the shares underlying the
Bridge Notes and the Bridge Warrants.

On October 15, 2014,
the original maturity date of the Bridge Notes, the maturity date of the Bridge Notes was extended to January 15, 2015 for all
holders of the Bridge Notes. On November 17, 2014 the Company closed the sale of 600,000 shares of its Series A Stock, which resulted
in the reduction of the conversion price of the Bridge Notes held by the institutional investors to $2.00 from $2.50 to equal the
conversion price of the Series A Preferred Stock (see below). In addition, two additional 90-day extensions were provided to the
institutional investors, which could extend the final maturity date to July 15, 2015. The extensions expired on January 15, 2015
and at the quarter ended January 31, 2015 the Bridge Notes were in default. The Company paid off approximately $42,500 of the notes
and received extensions from all Bridge note holders except for one holder of an $80,000 Bridge Note, which extend the maturity
date to January 15, 2016 from the Bridge Note holders prior to this filing. The Company continues to accrue interest on the Bridges
Notes. In the event the Bridge Notes are converted to equity, their incremental fair value will be recognized in the consolidated
statement of operations. The Company has also advised Rosenthal and Rosenthal, Inc. of the default on the Bridge Notes which is
a default under our finance agreement.

On February 2, 2015, the
Company completed a private placement of 26,600 shares of its Series A Stock (“Series together with Preferred Warrants to
purchase and additional 66,500 shares at an exercise of its common stock at a price of $2.5 per share, in accordance with the Purchase
Agreement. The net proceeds to the Company from the sale of the Series A Stock and Preferred Warrant were approximately $133,000.
As of April 30, 2015 the Company has remaining 673,400 Series A shares available.



32







On February 2, 2015, the
Company issued and sold an aggregate of 183,000 restricted shares of its common stock at a price of $2.00 per share and five-year
warrants to purchase an additional 316,000 shares with an exercise price of $2.50 per share, of which 50,000 shares were purchased
by David A Moylan, the Company’s CEO. The net proceeds to the Company from the sale of the restricted common stock and warrants
(exclusive of any exercise thereof) were approximately $365,000.



At April 30, 2015 the Company
had 3,358,275 warrants outstanding with exercise prices between $13.56 and $2.00.



Contractual Obligations



Future minimum lease payments
under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) as of April 30, 2015 are as
follows:



|                      |  | Non-Related |         |  | Related |   |         |       | 
|--------------------- |  | ----------- | ------- |  | ------- | - | ------- | ----- | 
|                      |  | Party       |         |  | Party   |   |         | Total | 
|Year ending April 30: |  |             |         |  |         |   |         |       | 
|2016                  |  |             | 169,000 |  |         |   | 90,000  |       | 
|2017                  |  |             | 82,000  |  |         |   | 90,000  |       | 
|2018                  |  |             | 84,000  |  |         |   | 90,000  |       | 
|2019                  |  |             | 85,000  |  |         |   | 45,000  |       | 
|2020                  |  |             | 86,000  |  |         |   | —       |       | 
|Thereafter            |  |             |         |  |         |   |         |       | 
|Total                 |  | $           | 506,000 |  |         | $ | 315,000 |       | 



Purchases



At April 30, 2015, the
Company had open purchase orders outstanding totaling $83,000, primarily for inventory items to be delivered in the first three
months of the fiscal year ending April 30, 2016. These purchase orders are cancelable.



Off-Balance Sheet Arrangements



We do not have, and do
not have any present plans to implement, any off-balance sheet arrangements.



Recent Accounting Guidance Not Yet Adopted



In May 2014, the Financial
Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers.  The
purpose of this new standard is to clarify the principles for recognizing revenue so that can be applied consistently across various
transactions, industries and capital markets.  We have not completed our assessment of ASU No. 2014-09.

33







Critical Accounting Policies



During December 2001, the
Securities and Exchange Commission (“SEC”) published a Commission Statement in the form of Financial Reporting Release
No. 60 which encouraged that all registrants discuss their most “critical accounting policies” in management’s
discussion and analysis of financial condition and results of operations. The SEC has defined critical accounting policies as those
that are both important to the portrayal of a company’s financial condition and results, and that require management’s
most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that
are inherently uncertain. While the Company’s significant accounting policies are summarized in Note 1 of notes to consolidated
financial statements included in this Annual Report, management believes the following accounting policies to be critical:



Revenue Recognition - Revenue
is recognized when title passes upon shipment of goods to customers. The Company’s revenue earning activities involve delivering
or producing goods. The following criteria are met before revenue is recognized: persuasive evidence of an arrangement exists,
shipment has occurred, selling price is fixed or determinable and collection is reasonably assured. The Company does experience
a minimal level of sales returns and allowances for which the Company accrues a reserve at the time of sale in accordance with
the Revenue Recognition – Right of Return Topic of the FASB ASC. Estimated warranty costs are accrued by management upon
product shipment based on an estimate of future warranty claims.



Research and Development
- Research and development costs are expensed as incurred, including Company-sponsored research and development and costs of patents
and other intellectual property that have no alternative future use when acquired and in which we had an uncertainty in receiving
future economic benefits. Development costs of a computer software product to be sold, leased, or otherwise marketed are subject
to capitalization beginning when a product’s technological feasibility has been established and ending when a product is
available for general release to customers. Technological feasibility of a computer software product is established when all planning,
designing, coding and testing activities that are necessary to establish that the product can be produced to meet its design specifications
(including functions, features and technical performance requirements) are completed.



Income Taxes - The Company
utilizes the asset and liability method of accounting for income taxes in accordance with the provisions of the Expenses –
Income Taxes Topic of the FASB ASC. Under the asset and liability method, deferred income tax assets and liabilities are recognized
for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. A valuation allowance is provided when it is more likely than not that some
portion or all of the deferred income tax assets will not be realized. The Company considers certain tax planning strategies in
its assessment as to the recoverability of its tax assets. Deferred income tax assets and liabilities are measured using enacted
tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred
income tax assets and liabilities of a change in tax rates is recognized in earnings in the period that the tax rate changes. The
Company recognizes, in its consolidated financial statements, the impact of a tax position, if that position is more likely than
not to be sustained on audit, based on technical merits of the position. There are no material unrecognized tax positions in the
financial statements.



Goodwill – The carrying
value of goodwill is not amortized, but is tested annually as of March 31 as well as whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable using a two-step process. As of April 30, 2015, management has concluded
that no impairment of goodwill is required.



34







Use of Estimates - The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including deferred
income tax asset valuation allowances and certain other reserves 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. Estimates and assumptions
are reviewed periodically and the effects of revisions are reflected in the consolidated financial statements in the period they
are determined to be necessary. Some of the more significant estimates made by management include the allowance for doubtful accounts
and sales returns, the deferred income tax asset valuation allowance and other operating allowances and accruals. Actual results
could differ from those estimates.



Item 7A.   QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



The Company does not invest
in market risk sensitive instruments. At times, the Company’s cash equivalents consist of overnight deposits with banks and
money market accounts.



The Company purchases and
sells primarily in U.S. dollars. The Company sells in foreign currency (primarily Euros) to a limited number of customers and as
such incurs some foreign currency risk. At any given time, approximately 5 to 25 percent of the Company’s accounts receivable
are denominated in currencies other than U.S. dollars. At present, the Company does not purchase forward contracts as hedging instruments,
but could do so as circumstances warrant.





35





Item 8.   FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA



|Index to Consolidated Financial Statements and Schedule | Page                                                                       
|------------------------------------------------------- | ---------------------------------------------------------------------------
|                                                        |                                                                            
|Consolidated Financial Statements:                      |                                                                            
|                                                        |                                                                            
|                                                        | Report of Independent Registered Public Accounting Firm – Anton & Chia, LLP
|                                                        |                                                                            
|                                                        | Consolidated Balance Sheets as of April 30, 2015 and 2014                  
|                                                        |                                                                            
|                                                        | Consolidated Statements of Operations –                                    
|                                                        | Years ended April 30, 2015 and 2014                                        
|                                                        |                                                                            
|                                                        | Consolidated Statements of Cash Flows -                                    
|                                                        | Years ended April 30, 2015 and 2014                                        
|                                                        |                                                                            
|                                                        | Consolidated Statements of Stockholders’ Equity -                          
|                                                        | Years ended April 30, 2015 and 2014                                        
|                                                        |                                                                            
|                                                        | Notes to Consolidated Financial Statements -                               
|                                                        | Years ended April 30, 2015 and 2014                                        



All schedules are omitted as the required information
is not applicable or because the required information is included in the consolidated financial statements or notes thereto.



36







REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM



The Board of Directors and Stockholders’
of
Dataram Corporation

We have audited the accompanying consolidated
balance sheet of Dataram Corporation and Subsidiaries (the “Company”) as of April 30, 2015, and the related consolidated
statement of operations, changes in stockholders’ equity, and cash flows for the year then ended. These consolidated financial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.

We conducted our audit in accordance with
the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that we
considered appropriate under the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audit provide a reasonable basis for our opinion.

In our opinion,
the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position
of Dataram Corporation and Subsidiaries as of April 30, 2015 and the results of their operations and their cash flows for the year
then ended, in conformity with accounting principles generally accepted in the United States of America.

The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As
discussed in Note 1 to the consolidated financial statements, these conditions raise substantial doubt about its ability to continue
as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements
do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification
of liabilities that might result should the Company be unable to continue as a going concern.

/s/ Anton & Chia, LLP

Newport Beach, California

August 7, 2015





37







DATARAM CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

April 30, 2015 and 2014

(In thousands, except share and per share
amounts)





|                                                                                                                                                                                    |  | 2015 |         |   | 2014 |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | -
|Assets                                                                                                                                                                              |  |      |         |   |      |  
|Current assets:                                                                                                                                                                     |  |      |         |   |      |  
|Cash and cash equivalents                                                                                                                                                           |  | $    | 327     |   |      | $
|Accounts receivable, less allowance for doubtful accounts and sales returns of $140 at April 30, 2015 and $220 at April 30, 2014                                                    |  |      | 2,171   |   |      |  
|Inventories:                                                                                                                                                                        |  |      |         |   |      |  
|Raw materials                                                                                                                                                                       |  |      | 911     |   |      |  
|Work in process                                                                                                                                                                     |  |      | 2       |   |      |  
|Finished goods                                                                                                                                                                      |  |      | 1,176   |   |      |  
|                                                                                                                                                                                    |  |      | 2,089   |   |      |  
|                                                                                                                                                                                    |  |      |         |   |      |  
|Other current assets                                                                                                                                                                |  |      | 69      |   |      |  
|Total current assets                                                                                                                                                                |  |      | 4,656   |   |      |  
|                                                                                                                                                                                    |  |      |         |   |      |  
|Property and equipment:                                                                                                                                                             |  |      |         |   |      |  
|Machinery and equipment                                                                                                                                                             |  |      | 479     |   |      |  
|Leasehold improvements                                                                                                                                                              |  |      | 609     |   |      |  
|                                                                                                                                                                                    |  |      | 1,088   |   |      |  
|Less accumulated depreciation and amortization                                                                                                                                      |  |      | 967     |   |      |  
|Net property and equipment                                                                                                                                                          |  |      | 121     |   |      |  
|                                                                                                                                                                                    |  |      |         |   |      |  
|Other assets                                                                                                                                                                        |  |      | 50      |   |      |  
|Capitalized software development cost                                                                                                                                               |  |      | 365     |   |      |  
|Goodwill                                                                                                                                                                            |  |      | 1,083   |   |      |  
|                                                                                                                                                                                    |  |      |         |   |      |  
|Total Assets                                                                                                                                                                        |  | $    | 6,275   |   |      | $
|                                                                                                                                                                                    |  |      |         |   |      |  
|Liabilities and Stockholders’ Equity                                                                                                                                                |  |      |         |   |      |  
|Current liabilities:                                                                                                                                                                |  |      |         |   |      |  
|Note payable-revolving credit line                                                                                                                                                  |  | $    | 2,109   |   |      | $
|Accounts payable                                                                                                                                                                    |  |      | 880     |   |      |  
|Accrued liabilities                                                                                                                                                                 |  |      | 282     |   |      |  
|Convertible notes payable, net of discount                                                                                                                                          |  |      | 600     |   |      |  
|Convertible notes payable related parties, net of discount                                                                                                                          |  |      | 108     |   |      |  
|Total current liabilities                                                                                                                                                           |  |      | 3,979   |   |      |  
|                                                                                                                                                                                    |  |      |         |   |      |  
|Other liabilities – related party                                                                                                                                                   |  |      | 179     |   |      |  
|Total liabilities                                                                                                                                                                   |  |      | 4,158   |   |      |  
|                                                                                                                                                                                    |  |      |         |   |      |  
|Commitments and contingencies                                                                                                                                                       |  |      |         |   |      |  
|Stockholder’s equity:                                                                                                                                                               |  |      |         |   |      |  
|Preferred Stock, par value $.01 per share. Authorized 1,300,000 share and 626,600 shares outstanding at April 30, 2015                                                              |  |      | 1,857   |   |      |  
|Common stock, par value $1.00 per share. Authorized 54,000,000 shares and 2,776,012 issued and outstanding at April 30, 2015 and 2,410,512 issued and outstanding on April 30, 2014 |  |      | 2,776   |   |      |  
|Additional paid-in capital                                                                                                                                                          |  |      | 21,864  |   |      |  
|Accumulated deficit                                                                                                                                                                 |  |      | (24,491 | ) |      |  
|Shares to be issued                                                                                                                                                                 |  |      | 111     |   |      |  
|Total stockholders’ equity                                                                                                                                                          |  |      | 2,117   |   |      |  
|                                                                                                                                                                                    |  | $    | 6,275   |   |      | $



See accompanying notes to consolidated financial
statements.



38







DATARAM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Years ended April 30, 2015 and 2014
(In thousands, except per share amounts)





|                                          |  | 2015 |        |   | 2014 |  
|----------------------------------------- |  | ---- | ------ | - | ---- | -
|                                          |  |      |        |   |      |  
|Revenues                                  |  | $    | 28,258 |   |      | $
|Costs and expenses:                       |  |      |        |   |      |  
|Cost of sales                             |  |      | 24,068 |   |      |  
|Engineering                               |  |      | 768    |   |      |  
|Selling, general and administrative       |  |      | 6,171  |   |      |  
|                                          |  |      | 31,007 |   |      |  
|Loss from operations                      |  |      | (2,749 | ) |      |  
|                                          |  |      |        |   |      |  
|Other income (expense):                   |  |      |        |   |      |  
|Interest income                           |  |      | —      |   |      |  
|Interest expense                          |  |      | (1,001 | ) |      |  
|Currency gain  (loss)                     |  |      | (76    | ) |      |  
|                                          |  |      | (1,077 | ) |      |  
|                                          |  |      |        |   |      |  
|Loss before income tax expense            |  |      | (3,826 | ) |      |  
|                                          |  |      |        |   |      |  
|Income tax expense                        |  |      | 3      |   |      |  
|                                          |  |      |        |   |      |  
|Net loss                                  |  | $    | (3,829 | ) |      | $
|Less preferred stock dividends            |  |      | 1,759  |   |      |  
|Net loss allocated to common shareholders |  | $    | (5,588 | ) |      | $
|                                          |  |      |        |   |      |  
|Net loss per common share:                |  |      |        |   |      |  
|Basic                                     |  | $    | (2.20  | ) |      | $
|Diluted                                   |  | $    | (2.20  | ) |      | $



See accompanying notes to consolidated financial statements.



39







DATARAM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended April 30, 2015 and 2014
(In thousands)





|                                                                            |  | 2015 |        |   | 2014 |  
|--------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | -
|                                                                            |  |      |        |   |      |  
|Cash flows from operating activities:                                       |  |      |        |   |      |  
|Net loss                                                                    |  | $    | (3,829 | ) |      | $
|Adjustments to reconcile net loss to net cash used in operating activities: |  |      |        |   |      |  
|Depreciation and amortization                                               |  |      | 127    |   |      |  
|Bad debt expense                                                            |  |      | 50     |   |      |  
|Stock-based compensation expense                                            |  |      | 14     |   |      |  
|Amortization of deferred gain in sale leaseback                             |  |      | (71    | ) |      |  
|Gain on sale of property and equipment                                      |  |      | —      |   |      |  
|Impairment of goodwill                                                      |  |      | —      |   |      |  
|Amortization of Debt discount                                               |  |      | 750    |   |      |  
|Changes in assets and liabilities                                           |  |      |        |   |      |  
|Decrease (increase) in accounts and notes receivable                        |  |      | 1,442  |   |      |  
|Decrease  in inventories                                                    |  |      | 202    |   |      |  
|Decrease (increase) in other current assets                                 |  |      | (62    | ) |      |  
|Decrease in other assets                                                    |  |      | 1      |   |      |  
|Increase (decrease) in accounts payable                                     |  |      | (558   | ) |      |  
|Increase (decrease) in accrued liabilities                                  |  |      | (647   | ) |      |  
|Net cash used in operating activities                                       |  |      | (2,581 | ) |      |  
|                                                                            |  |      |        |   |      |  
|Cash flows from investing activities:                                       |  |      |        |   |      |  
|Additions to property and equipment                                         |  |      | (29    | ) |      |  
|Software development costs                                                  |  |      | (365   | ) |      |  
|Proceeds from sale of property and equipment                                |  |      | —      |   |      |  
|Net cash provided by (used in) investing activities                         |  |      | (394   | ) |      |  
|                                                                            |  |      |        |   |      |  
|Cash flows from financing activities:                                       |  |      |        |   |      |  
|Net borrowings (repayments) under revolving credit line                     |  |      | (861   | ) |      |  
|Proceeds from issuance of notes and warrants                                |  |      | 750    |   |      |  
|Repayment of convertible notes                                              |  |      | (42    | ) |      |  
|Net proceeds from sales of preferred shares                                 |  |      | 2,832  |   |      |  
|Payment of related party note payable                                       |  |      | —      |   |      |  
|Net proceeds from sale of common stock                                      |  |      | 365    |   |      |  
|Net cash provided by financing activities                                   |  |      | 3,044  |   |      |  
|                                                                            |  |      |        |   |      |  
|Net (decrease) increase in cash and cash equivalents                        |  |      | 69     |   |      |  
|Cash and cash equivalents at beginning of year                              |  |      | 258    |   |      |  
|Cash and cash equivalents at end of year                                    |  | $    | 327    |   |      | $
|                                                                            |  |      |        |   |      |  
|Supplemental disclosure of non-cash financing activities:                   |  |      |        |   |      |  
|                                                                            |  |      |        |   |      |  
|Debt discount on convertible notes payable                                  |  | $    | 750    |   |      | $
|Non-cash preferred stock dividends                                          |  | $    | 1,759  |   |      | $
|                                                                            |  |      |        |   |      |  
|Supplemental disclosures of cash flow information:                          |  |      |        |   |      |  
|Cash paid during the year for:                                              |  |      |        |   |      |  
|Interest                                                                    |  | $    | 251    |   |      | $
|Income taxes                                                                |  | $    | 3      |   |      | $



See accompanying notes to consolidated financial statements.



40







DATARAM CORPORATION AND SUBSIDIARIES

Consolidated Statements of Stockholders’
Equity

Years ended April 30, 2015 and 2014

(In thousands)



|                                                                 |  | Common Stock |       |  | APIC |   |        | Preferred Stock |  |   | Shares to be Issued |  |  | Retained Deficit |     |  | Total Equity |  
|---------------------------------------------------------------- |  | ------------ | ----- |  | ---- | - | ------ | --------------- |  | - | ------------------- |  |  | ---------------- | --- |  | ------------ | -
|Balance at April 30, 2013                                        |  | $            | 1,755 |  |      | $ | 19,288 |                 |  | $ | —                   |  |  | $                | —   |  |              | $
|                                                                 |  |              |       |  |      |   |        |                 |  |   |                     |  |  |                  |     |  |              |  
|Net loss                                                         |  |              |       |  |      |   |        |                 |  |   |                     |  |  |                  |     |  |              |  
|                                                                 |  |              |       |  |      |   |        |                 |  |   |                     |  |  |                  |     |  |              |  
|Stock-based compensation expense                                 |  |              |       |  |      |   | 43     |                 |  |   |                     |  |  |                  |     |  |              |  
|                                                                 |  |              |       |  |      |   |        |                 |  |   |                     |  |  |                  |     |  |              |  
|Issuance of shares and warrants under registered direct offering |  |              | 656   |  |      |   | 905    |                 |  |   |                     |  |  |                  |     |  |              |  
|                                                                 |  |              |       |  |      |   |        |                 |  |   |                     |  |  |                  |     |  |              |  
|Balance at April 30, 2014                                        |  |              | 2,411 |  |      |   | 20,236 |                 |  |   | —                   |  |  |                  | —   |  |              |  
|                                                                 |  |              |       |  |      |   |        |                 |  |   |                     |  |  |                  |     |  |              |  
|Net loss                                                         |  |              |       |  |      |   |        |                 |  |   |                     |  |  |                  |     |  |              |  
|                                                                 |  |              |       |  |      |   |        |                 |  |   |                     |  |  |                  |     |  |              |  
|Stock-based compensation expense                                 |  |              |       |  |      |   | 14     |                 |  |   |                     |  |  |                  |     |  |              |  
|                                                                 |  |              |       |  |      |   |        |                 |  |   |                     |  |  |                  |     |  |              |  
|Fair value detachable warrants                                   |  |              |       |  |      |   | 562    |                 |  |   |                     |  |  |                  |     |  |              |  
|                                                                 |  |              |       |  |      |   |        |                 |  |   |                     |  |  |                  |     |  |              |  
|Beneficial conversion feature of convertible notes payable       |  |              |       |  |      |   | 188    |                 |  |   |                     |  |  |                  |     |  |              |  
|                                                                 |  |              |       |  |      |   |        |                 |  |   |                     |  |  |                  |     |  |              |  
|Common shares issued in connection with sales of preferred stock |  |              | 182   |  |      |   | (182   | )               |  |   |                     |  |  |                  |     |  |              |  
|                                                                 |  |              |       |  |      |   |        |                 |  |   |                     |  |  |                  |     |  |              |  
|Common sales issued                                              |  |              | 183   |  |      |   | 183    |                 |  |   |                     |  |  |                  |     |  |              |  
|                                                                 |  |              |       |  |      |   |        |                 |  |   |                     |  |  |                  |     |  |              |  
|Preferred shares issued                                          |  |              |       |  |      |   | 974    |                 |  |   | 1,857               |  |  |                  |     |  |              |  
|                                                                 |  |              |       |  |      |   |        |                 |  |   |                     |  |  |                  |     |  |              |  
|Non-cash preferred stock dividend                                |  |              |       |  |      |   | (111   | )               |  |   |                     |  |  |                  | 111 |  |              |  
|                                                                 |  |              |       |  |      |   |        |                 |  |   |                     |  |  |                  |     |  |              |  
|Balance at April 30, 2015                                        |  | $            | 2,776 |  |      | $ | 21,864 |                 |  | $ | 1,857               |  |  | $                | 111 |  |              | $



See accompanying notes to consolidated financial statements



41







Dataram Corporation and Subsidiaries
Notes to Consolidated Financial Statements



(1) Description of Business and Significant Accounting Policies



Since 1967, Dataram Corporation
(“Dataram” or the “Company”) has been a leading independent manufacturer of memory products and provider
of performance solutions. The Company provides customized memory solutions for original equipment manufacturers (OEMs) and compatible
memory for leading brands including Cisco, Dell, Fujitsu, HP, IBM, Lenovo and Oracle as well as a line of memory products for Intel
and AMD motherboard based servers.  Dataram manufactures its memory in-house to meet three key criteria - quality, compatibility,
and selection - and tests its memory for performance and original equipment manufacturer (OEM) compatibility as part of the production
process.  With memory designed for over 50,000 systems and with products that range from energy-efficient DDR4 modules to
legacy SDR offerings, Dataram offers one of the most complete portfolios in the industry.   Backed by in-depth quality
test programs, nearly fifty years of manufacturing expertise, and a limited lifetime warranty, Dataram memory products are built
to last.  The company is a CMTL Premier Participant and ISO 9001 (2008 Certified). Its products are fully compliant with JEDEC
Specifications.



Dataram’s customers
include an international network of distributors, resellers, retailers, OEM customers and end users.



Dataram competes with several
other large independent memory manufacturers and the OEMs noted above.  The primary raw material used in producing memory
boards is dynamic random access memory (DRAM) chips. The purchase cost of DRAMs is the largest single component of the total cost
of a finished memory board. Consequently, average selling prices for computer memory boards are significantly dependent on the
pricing and availability of DRAM chips.



Liquidity and Basis of Presentation



The
Company's financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally
accepted in the United States of America and have been prepared on a going concern basis, which contemplates the realization of
assets and the settlement of liabilities in the normal course of business. For the fiscal years ended April 30, 2015 and 2014,
the Company incurred losses in the amounts of approximately $3,829,000 and $2,609,000, respectively. Net cash used in operating
activities totaled approximately $2,581,000 and $1,554,000, for the fiscal years ended April 30, 2015 and 2014, respectively.



Our
continuation as a going concern is dependent upon obtaining the additional working capital necessary to sustain our operations.
Our future is dependent upon our ability to obtain financing, raise capital through the sales of equity and or debt securities
and upon future profitable operations. There is no assurance that our current operations will be profitable or we will raise sufficient
funds to continue operating. The Company continues to seek out opportunities to trim overhead expenses to meet revenues.



If
current and projected revenue growth does not meet estimates, the Company may continue to choose to raise additional capital through
debt and/or equity transactions, reduce certain overhead costs through the deferral of salaries and other means, and settle liabilities
through negotiation. Currently, the Company does not have any commitments or assurances for additional capital, nor can the Company
provide assurance that such financing will be available to it on favorable terms, or at all. These factors raise doubt about the
Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary
in the event we cannot continue in existence.

42







Principles of Consolidation



The consolidated financial
statements have been prepared in conformity with accounting principles generally accepted in the United States of America and include
the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been
eliminated in consolidation.



Cash and Cash Equivalents



Cash and cash equivalents
consist of unrestricted cash and money market accounts. To the extent that the Company’s cash
deposits exceed FDIC insurance limits they are uninsured



Accounts Receivable



Accounts receivable consist of the following:



|                                                  |  | April 30, 2015 |           |   | April 30, 2014 |  
|------------------------------------------------- |  | -------------- | --------- | - | -------------- | -
|Trade receivables                                 |  | $              | 2,151,000 |   |                | $
|VAT receivable                                    |  |                | 160,000   |   |                |  
|Allowance for doubtful accounts and sales returns |  |                | (140,000  | ) |                |  
|                                                  |  | $              | 2,171,000 |   |                | $



Bad debt expense in the
fiscal year ended April 30, 2015 was approximately $50,000 compared to $186,000 in fiscal year ended April 30, 2014. As disclosed
in Note 2, the Company wrote off approximately $162,000 note receivable Shoreline Capital Management Ltd in fiscal 2014’s
second quarter.



Inventories



Inventories, consisting
of materials, labor and manufacturing overhead, are stated at the lower of cost or market, with cost determined by the first-in,
first-out method. Management provides a reserve against inventory for known or expected inventory
obsolescence. The reserve is determined by specific review of inventory items for product age and quality which may affect salability.



Property and Equipment



Property and equipment
is recorded at cost. Depreciation is computed on the straight-line basis. Depreciation and amortization rates are based on the
estimated useful lives, which range from two to five years for machinery and equipment and five to six years for leasehold improvements.
When property or equipment is retired or otherwise disposed of, related costs and accumulated depreciation and amortization are
removed from the accounts. Depreciation and amortization expense related to property and equipment for the fiscal years ended April
30, 2015 and 2014 totaled $127,000 and $167,000, respectively.



Repair and maintenance
costs are charged to operations as incurred.



43







Long-Lived Assets



Long-lived assets, such
as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable.



Recoverability of assets to be held and used is measured by a comparison
of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the
carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which
the carrying amount of the asset exceeds the estimated fair value of the asset. Assets to be disposed of would be separately presented
in the consolidated balance sheets and reported at the lower of the carrying amount or fair value less cost to sell, and no longer
depreciated. The Company considers various valuation factors, principally undiscounted cash flows, to assess the fair values of
long-lived assets.



Goodwill and Intangible Assets



Goodwill:



Goodwill – The carrying
value of goodwill is not amortized, but is tested annually as of March 31 as well as whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable using a two-step process. As of April 30, 2015, management has concluded
that no impairment of goodwill is required.



The following table outlines
the changes in goodwill for the year ended April 30, 2015:



|                          |  | 2015 |           |  | 2014 |  
|------------------------- |  | ---- | --------- |  | ---- | -
|Opening balance May 1     |  | $    | 1,083,000 |  |      | $
|Contingent purchase price |  |      | —         |  |      |  
|Impairment charge         |  |      | —         |  |      |  
|Goodwill balance April 30 |  | $    | 1,083,000 |  |      | $



Intangible Assets:



Intangible assets with
determinable lives, other than customer relationships, are amortized on a straight-line basis over their estimated period of benefit,
ranging from four to five years. Customer relationships are amortized over a two-year period at a rate of 65% of the gross value
acquired in the first year subsequent to their acquisition and 35% of the gross value acquired in the second year. The Company
evaluates the recoverability of intangible assets periodically and takes into account events or circumstances that warrant revised
estimates of useful lives or that indicate that impairment exists.



The Company estimates that
it has no significant residual value related to its intangible assets. Intangible assets amortization expense was $nil for fiscal
year ended April 30, 2015, $133,000 for fiscal year ended April 30, 2014. As of April 30, 2015, the components of finite-lived
intangible assets acquired are as follows:



44







As
of April 30, 2015 the components of finite-lived intangible assets acquired were as follows:



|                       |  | Gross    |           |  | Weighted |  |         |              |  |   | Net       | 
|---------------------- |  | -------- | --------- |  | -------- |  | ------- | ------------ |  | - | --------- | 
|                       |  | Carrying |           |  | Average  |  |         | Accumulated  |  |   | Carrying  | 
|                       |  | Amount   |           |  | Life     |  |         | Amortization |  |   | Amount    | 
|Customer relationships |  | $        | 758,000   |  |          |  | 2 Years |              |  | $ | 758,000   | 
|Trade names            |  |          | 733,000   |  |          |  | 5 Years |              |  |   | 733,000   | 
|Non-compete agreement  |  |          | 68,000    |  |          |  | 4 Years |              |  |   | 68,000    | 
|                       |  | $        | 1,559,000 |  |          |  |         |              |  | $ | 1,559,000 | 



Fair Value of Financial Instruments:



Fair value measurements
and disclosures establish a hierarchy that prioritizes fair value measurements based on the type of inputs used for the various
valuation techniques (market approach, income approach and cost approach). The levels of hierarchy are described below:



| | • | Level 1: Observable inputs such as quoted market prices in active markets for identical assets
or liabilities.
| | - | --------------------------------------------------------------------------------------------------------------



| | • | Level 2: Inputs other than quoted market prices that are observable for the asset or liability,
either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets, such as interest
rates and yield curves that are observable at commonly-quoted intervals.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions, as there
is little, if any, related market activity.
| | - | --------------------------------------------------------------------------------------------------------------------------------------



The Company’s assessment of the significance
of a particular input to the fair value measurement requires judgment, and may affect the valuation of assets and liabilities and
their placement within the fair value hierarchy.



The following table sets forth the assets and
liabilities measured at fair value on a nonrecurring basis, by input level, in the consolidated balance sheets at April 30, 2015:



|                                           |  | Quoted                |   |  |                   |   |           |                  |  |   |                |  |  | Total          |          
|------------------------------------------ |  | --------------------- | - |  | ----------------- | - | --------- | ---------------- |  | - | -------------- |  |  | -------------- | ---------
|                                           |  | Prices in             |   |  |                   |   |           |                  |  |   |                |  |  | Reduction      |          
|                                           |  | Active Markets for    |   |  | Significant Other |   |           | Significant      |  |   |                |  |  | in Fair value  |          
|Balance Sheet                              |  | Identical Assets or   |   |  | Observable Inputs |   |           | Unobservable     |  |   | April 30, 2015 |  |  | Recorded as of |          
|Location                                   |  | Liabilities (Level 1) |   |  | (Level 2)         |   |           | Inputs (Level 3) |  |   | Total          |  |  | April 30, 2015 |          
|Assets:                                    |  |                       |   |  |                   |   |           |                  |  |   |                |  |  |                |          
|Goodwill                                   |  | $                     | — |  |                   | $ | —         |                  |  | $ | 1,083,000      |  |  | $              | 1,083,000
|Convertible notes payable, net of discount |  | $                     | — |  |                   | $ | 708,000   |                  |  | $ | —              |  |  | $              | 708,000  
|Preferred stock                            |  | $                     | — |  |                   | $ | 1,857,000 |                  |  | $ | —              |  |  | $              | 1,857,000



Revenue Recognition



Revenue is recognized when
title passes upon shipment of goods to customers. The Company’s revenue earning activities involve delivering or producing
goods. The following criteria are met before revenue is recognized: persuasive evidence of an arrangement exists, shipment has
occurred, selling price is fixed or determinable and collection is reasonably assured. The Company does experience a minimal level
of sales returns and allowances for which the Company accrues a reserve at the time of sale. Estimated warranty costs are accrued
by management upon product shipment based on an estimate of future warranty claims.



45







Engineering and Research and Development



Research and development
costs are expensed as incurred, including Company-sponsored research and development and costs of patents and other intellectual
property that have no alternative future use when acquired and in which we had an uncertainty of receiving future economic benefits.
Development costs of a computer software product to be sold, leased, or otherwise marketed are subject to capitalization beginning
when a product’s technological feasibility has been established and ending when a product is available for general release
to customers. Technological feasibility of a computer software product is established when all planning, designing, coding and
testing activities that are necessary to establish that the product can be produced to meet its design specifications (including
functions, features and technical performance requirements) are completed. The Company has capitalized approximately $365,000 of
cost related to the maintenance and development of our RAMDisk product in the fiscal year ended April 30, 2015.



Advertising



Advertising is expensed
as incurred and amounted to $89,000 and $139,000 in the fiscal years ended April 30, 2015 and 2014, respectively.



Income Taxes



The Company utilizes the
asset and liability method of accounting for income taxes in accordance with the provisions of the Expenses – Income Taxes
Topic of the FASB ASC. Under the asset and liability method, deferred income tax assets and liabilities are recognized for the
estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. A valuation allowance is provided when it is more likely than not that some portion
or all of the deferred income tax assets will not be realized. The Company considers certain tax planning strategies in its assessment
as to the recoverability of its tax assets. Deferred income tax assets and liabilities are measured using enacted tax rates in
effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred income
tax assets and liabilities of a change in tax rates is recognized in earnings in the period that the tax rate changes. The Company
recognizes, in its consolidated financial statements, the impact of a tax position, if that position is more likely than not to
be sustained on audit, based on the technical merits of the position. There are no material unrecognized tax positions in the financial
statements.



Concentrations of Credit Risk



Financial instruments that
potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.
The Company maintains its cash and cash equivalents in financial institutions and brokerage accounts. To the extent that such deposits
exceed the maximum insurance levels, they are uninsured. The Company performs ongoing evaluations of its customers’ financial
condition, as well as general economic conditions and, generally, requires no collateral from its customers. At April 30, 2015
and 2014, amounts due from one customer totaled approximately 16% and 30%, respectively, of accounts receivable.



In fiscal years ended April
30, 2015 and 2014, the Company had sales to one customer that accounted for approximately 20% and 15%, respectively, of revenues.



Net Income (Loss) Per Share



Basic
net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding
during the period. Diluted net income (loss) per share is calculated in a manner consistent with basic net income (loss) per share
except that the weighted average number of common shares outstanding also includes the dilutive effect of stock options outstanding
(using the treasury stock method).



46







The
following presents a reconciliation of the numerator and denominator used in computing basic and diluted net loss per share.



|                                                                                                            |  | Year ended April 30, 2015 |           
|----------------------------------------------------------------------------------------------------------- |  | ------------------------- | ----------
|                                                                                                            |  | Loss                      |           
|                                                                                                            |  | (numerator)               |           
|Basic net loss per share-net loss and weighted average common shares outstanding                            |  | $                         | (5,588,000
|Effect of dilutive securities-stock options                                                                 |  |                           | —         
|Diluted net loss per share-net loss, weighted average common shares outstanding and effect of stock options |  | $                         | (5,588,000



|                                                                                                            |  | Year ended April 30, 2014 |           
|----------------------------------------------------------------------------------------------------------- |  | ------------------------- | ----------
|                                                                                                            |  | Loss                      |           
|                                                                                                            |  | (numerator)               |           
|Basic net loss per share-net loss and weighted average common shares outstanding                            |  | $                         | (2,609,000
|Effect of dilutive securities-stock options                                                                 |  |                           | —         
|Diluted net loss per share -net loss weighted average common shares outstanding and effect of stock options |  | $                         | (2,609,000



Diluted net loss per common
share does not include the effect of options to purchase 134,079 and 272,580 shares of Common Stock for the years ended April 30,
2015 and 2014, respectively, because they are anti-dilutive. Diluted net loss per common share for the years ended April 30, 2015
and 2014 also does not include the effect of warrants to purchase 3,358,275 and 485,775 shares, respectively, because they are
anti-dilutive.



Product Warranty



The majority of the Company’s
products are intended for single use; therefore, the Company requires limited product warranty accruals. The Company accrues estimated
product warranty cost at the time of sale and any additional amounts are recorded when such costs are probable and can be reasonably
estimated.



|                          |  | Balance   |        |  | Charges to |   |        |            |  |   | Balance |  
|------------------------- |  | --------- | ------ |  | ---------- | - | ------ | ---------- |  | - | ------- | -
|                          |  | Beginning |        |  | Costs and  |   |        |            |  |   | End     |  
|                          |  | of Year   |        |  | Expenses   |   |        | Deductions |  |   | of Year |  
|                          |  |           |        |  |            |   |        |            |  |   |         |  
|Year Ended April 30, 2015 |  | $         | 69,000 |  |            | $ | 11,000 |            |  | $ | (70,000 | )
|                          |  |           |        |  |            |   |        |            |  |   |         |  
|Year Ended April 30, 2014 |  | $         | 69,000 |  |            | $ | 9,000  |            |  | $ | (9,000  | )



Use of Estimates



The preparation of financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, including deferred tax asset valuation allowances
and certain other reserves 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. Estimates and assumptions are reviewed periodically and
the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary.
Some of the more significant estimates made by management include the allowance for doubtful accounts and sales returns, the deferred
income tax asset valuation allowance and other operating allowances and accruals. Actual results could differ from those estimates.



47







Stock-Based Compensation



At April 30, 2015, the
Company has stock-based employee and director compensation plans, which are described more fully in Note 6. New shares of the Company’s
Common Stock are issued upon exercise of stock options.



The accounting for transactions
in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that
are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity
instruments are accounted for using a fair value-based method with a recognition of an expense for compensation cost related to
share-based payment arrangements, including stock options and employee stock purchase plans.



The Company’s consolidated
statement of operations for fiscal year ended April 30, 2015 includes $14,000 of stock based compensation expense. Stock based
compensation expense is recognized in the results of operations on a ratable basis over the vesting periods. These stock option
grants have been classified as equity instruments, and as such, a corresponding increase has been reflected in additional paid-in
capital in the accompanying balance sheet as of April 30, 2015. In fiscal 2014, stock-based compensation expense totaled $43,000.
A corresponding increase is reflected in additional paid-in capital for these years. The fair value of each stock option granted
is estimated on the date of grant using the Black-Scholes option pricing model.



A summary of option activity
for the fiscal year ended April 30, 2015 is as follows:



|                           |  |        |          |   |                |   |       | Weighted         |  |  |           | 
|-------------------------- |  | ------ | -------- | - | -------------- | - | ----- | ---------------- |  |  | --------- | 
|                           |  |        |          |   | Weighted       |   |       | average          |  |  | Aggregate | 
|                           |  |        |          |   | average        |   |       | remaining        |  |  | intrinsic | 
|                           |  | Shares |          |   | exercise price |   |       | contractual life |  |  | value(1)  | 
|                           |  |        |          |   |                |   |       |                  |  |  |           | 
|Balance April 30, 2014     |  |        | 264,244  |   |                | $ | 12.42 |                  |  |  | 4.46      | 
|                           |  |        |          |   |                |   |       |                  |  |  |           | 
|Granted                    |  |        |          |   |                | $ |       |                  |  |  |           | 
|Exercised                  |  |        |          |   |                |   |       |                  |  |  |           | 
|Expired                    |  |        | (138,498 | ) |                | $ | 16.00 |                  |  |  | —         | 
|                           |  |        |          |   |                |   |       |                  |  |  |           | 
|Balance April 30, 2015     |  |        | 125,746  |   |                | $ | 8.48  |                  |  |  | 3.59      | 
|                           |  |        |          |   |                |   |       |                  |  |  |           | 
|Exercisable April 30, 2015 |  |        | 125,746  |   |                | $ | 8.48  |                  |  |  | 3.59      | 
|                           |  |        |          |   |                |   |       |                  |  |  |           | 
|Vested  April 30, 2015     |  |        | 125,746  |   |                | $ | 8.48  |                  |  |  | 3.59      | 



(1) These amounts represent
the difference between the exercise price and the closing price of Dataram Common Stock as of the end of the reporting period,
$2.17 on April 30, 2015 as reported on the NASDAQ Stock Markets. There are no in-the-money options outstanding at April 30, 2015.



During fiscal 2015, 12,500
options completed vesting. As of April 30, 2015, all compensation expense related to stock options was recognized. At April 30,
2015, 258,333 shares were authorized for future grant under the Company’s stock option plans.



48







(2) Financing Agreements



The Company amended and
restated its Note and Security Agreement with Mr. Sheerr as of October 31, 2013; the Company sold certain equipment and furniture
for a purchase price of $500,000 under a sale leaseback transaction to Mr. Sheerr. The Company used the proceeds of the purchase
price received from Mr. Sheerr to reduce the remaining principal amount of the original loan by an amount equal to $500,000. The
principal amount was reduced to approximately $966,667 at October 31, 2013. The Company was obligated to pay monthly interest equal
to 10% per annum calculated on a 360 day year of the outstanding loan balance. Principal was payable in 29 equal monthly installments
of $33,333, beginning on November 15, 2013 and subsequently on the 15th day of each month thereafter, until paid in full. On April
30, 2014 the note was paid in full. Interest expense recorded for the Note in the fiscal year ended April 30, 2014 was approximately
$122,000.



As of October 31, 2013,
the Company also entered into an agreement with Mr. Sheerr to leaseback the aforementioned equipment and furniture that was sold
to Mr. Sheerr on October 31, 2013. The lease is for a term of 60 months and the Company is obligated to pay approximately $7,500
per month for the term of the lease. The Company has an option to extend the lease for an additional two year period. The transactions
described have been accounted for as a sale-leaseback transaction. Accordingly, the Company recognized a gain on the sale of assets
of approximately $139,000, which is the amount of the gain on sale in excess of present value of the future lease payments and
will recognize the remaining approximately $322,000 in proportion to the related gross rental charged to expense over the term
of the lease, 60 months. The current portion of $72,000 deferred gain is reflected in accrued liabilities and the long term portion
of $250,000 is reflected in other liabilities long term in the consolidated balance sheet as of April 30, 2014.The current
portion of $72,000 deferred gain is reflected in accrued liabilities and the long term portion of $179,000 is reflected in other
liabilities long term in the consolidated balance sheet as of April 30, 2015.



On July 30, 2012, a Convertible
Senior Promissory Note was executed by and between Shoreline Memory, Inc. (“Shoreline”) and the Company whereby the
Company could lend up to $1,500,000 to Shoreline in exchange for interest payments at prime plus 3.0% and the right to convert
the amount outstanding into Common Stock of Shoreline on or before its maturity date. Each time the Company advanced money under
the note, the Company was granted 1% of the outstanding Common Stock of Shoreline for every $100,000 advanced up to a maximum of
15%. This was in addition to the 15% allowable under the conversion of the note and the warrant to acquire 30% of Shoreline Common
Stock. The conversion is at the rate of 1% of the outstanding Common Stock for each $100,000 converted up to a maximum of 15%.
This note had a maturity date of three years and at such time Shoreline would have had to repay the note or the Company would have
had to convert the note into Common Stock. The note was secured by all the assets of Shoreline and Shoreline Capital Management
Ltd. (“Shoreline Capital”) as guarantor. Also executed with the note was a warrant to purchase 30% of the outstanding
Common Stock of Shoreline at the time of exercise and the warrant expires sixty days after the third anniversary of the closing
of the transaction. The warrant prescribed a formula to determine the price per share at the time of exercise. If all the amounts
under the note were advanced and converted and the full warrant was exercised, the Company would have owned 60% of the outstanding
Common Stock of Shoreline. The note was executed simultaneously with a Master Services Agreement which details the parameters under
which the Company and Shoreline would have fulfilled orders from Shoreline’s primary customer. On July 31, 2012, the Company
advanced $375,000 under the note and an additional $375,000 on August 1, 2012. The purpose of the loan was to fund startup expenses
and to prepay initial orders. On February 19, 2013, the Company received $50,000 from Shoreline and, on February 22, 2013, the
Company received an additional $200,000 from Shoreline as a partial repayment of their loan. On March 27, 2013, the Company reached
an agreement to terminate its relationship with Shoreline. At closing, the Company received an additional $225,000 as a partial
repayment of the loan in connection with the termination of all agreements with Shoreline. The promissory note bears interest at
the rate of 6% and is guaranteed by Shoreline Memory, Inc., Shoreline Capital Management Ltd and Trevor Folk. All agreements with
Shoreline have been terminated with the exception of the amended and restated promissory note. The remaining $275,000 was scheduled
to be repaid in accordance with the amended and restated promissory note on July 31, 2013. Shoreline Memory defaulted on the note.
The Company fully reserved the $275,000 balance on the amended and restated promissory note at July 31, 2013. During fiscal 2014’s
second quarter the Company agreed to settle the amount due on the defaulted note for approximately $162,000. The funds were received
in escrow on October 31, 2013 and forwarded to the Company on November 1, 2013.



49







On November 6, 2013, the
Company entered into a new financing agreement (the “Financing Agreement”) with Rosenthal & Rosenthal, Inc. to
replace the existing loan agreement. The Financing Agreement provides for a revolving loan with a maximum borrowing capacity of
$3,500,000. The loans under the Financing Agreement mature on November 30, 2016 unless such Financing Agreement is either earlier
terminated or renewed. Loans outstanding under the Financing Agreement bear interest at a rate of the Prime Rate (as defined in
the Financing Agreement) plus 3.25% (the “Effective Rate”) or on Over-advances (as defined in the Financing Agreement),
if any, at a rate of the Effective Rate plus 3%. The Financing Agreement contains other financial and restrictive covenants, including,
among others, covenants limiting our ability to incur indebtedness, guarantee obligations, sell assets, make loans, enter into
mergers and acquisition transactions and declare or make dividends. Borrowings under the Financing Agreement are collateralized
by substantially all the assets of the Company. On April 29, 2014, the Company entered into an amendment (the "Amendment")
to the Financing Agreement. The Amendment provides for advances against inventory balances based on prescribed formulas of raw
materials and finished goods. The maximum borrowing capacity remains at $3,500,000. Borrowings at April 30, 2015 totaled
approximately $2,109,000 and there was no additional availability on that date.



The weighted average interest
rate on amounts borrowed under these agreements at April 30, 2015 and 2014 was 8.5% and 9.4%, respectively. The average dollar
amounts borrowed under these agreements for the fiscal years ended April 30, 2015and 2014 were $3,091,000 and $3,327,000, respectively.



(3) Securities Purchase Agreement



On September 18, 2013,
the Company and certain investors entered into a securities purchase agreement (the “Purchase Agreement”) in connection
with the offering, pursuant to which the Company agreed to sell an aggregate of 350,931 shares of its common stock and warrants
to purchase a total of 350,931 shares of its common stock to such investors for aggregate net proceeds, after deducting fees to
the Placement Agent and other estimated offering expenses payable by the Company, of approximately $807,000. The common stock and
warrants were sold in fixed combinations, with each combination consisting of one share of common stock and one warrant, with each
warrant exercisable for one share of common stock. The purchase price was $2.30 per fixed combination. On September 23, 2013 the
offering of 350,000 shares and warrants was closed with net proceeds to the Company of approximately $695,491 after accounting
for all expenses of the offering. The exercise price of the warrants is subject to adjustment in the case of stock splits, stock
dividends, combinations of shares and similar recapitalization transactions. The exercisability of the warrants may be limited
if, upon exercise, the holder or any of its affiliates would beneficially own more than 4.99% of the Common Stock. After the one
year anniversary of the initial exercise date of the warrants, the Company had the right to call the warrants for cancellation
for $.001 per share in the event that the volume weighted average price of the Common Stock for 20 consecutive trading days exceeds
$10.00.



On March 20, 2014,
the Company and certain investors entered into a common stock purchase agreement (the “Purchase Agreement”) in connection
with the offering, pursuant to which the Company agreed to sell an aggregate of 219,754 shares of its common stock to such investors
for aggregate proceeds, after deducting fees to the Placement Agent and other estimated offering expenses payable by the Company,
of approximately $559,000. The purchase price was $3.00 per share.



On March 20, 2014, holders
of warrants issued in connection with the sale of common stock on September 18, 2013, exercised 86,100 of those warrants at the
exercise price of $3.50 per share resulting in net proceeds of approximately $306,350. The exercise of these warrants resulted
in the issuance of 86,100 shares of the Company’s common stock.



50







On July 15, 2014, the Company
entered into the Purchase Agreement governing the issuance of $750,000 aggregate principal amount of Bridge Notes and Bridge Warrants.
The Bridge Notes and Bridge Warrants were issued on July 15, 2014.  The Company issued $600,000 aggregate principal amount
of the Bridge Notes to certain Institutional investors and $150,000 aggregate principal amount of the Bridge Notes to certain members
of Management. The Bridge Notes, the initial maturity date of which was October 15, 2014 (which was subject to a three-month extension
at the option of the holders that occurred; see below), are convertible into shares of the Company’s common stock. The initial
conversion price for Institutional Investors is $2.50 per share (which was subsequently reduced; see below), and the initial conversion
price for Management is equal to the closing price of the Company’s common stock on the closing date of the Purchase Agreement,
$2.94. The Bridge Notes are secured obligations of the Company and bear interest at a rate of 8% per year. The Bridge Warrants
are exercisable for five years after the closing date of the Purchase Agreement, or July 15, 2019. For each $1,000 of principal
amount of Bridge Notes, the holder received 1,200 Bridge Warrants, each exercisable for the purchase of one share of the Company’s
common stock. Each holder is entitled to exercise one-third of all Bridge Warrants received at an exercise price of $3.00, one-third
of all Bridge Warrants received at an exercise price of $3.50, and one-third of all Bridge Warrants received at an exercise price
that is equal to the closing price on the closing date of the Purchase Agreement, $2.94. Pursuant to the terms of the Purchase
Agreement, the Company has agreed to register for re-sale the shares underlying the Bridge Notes and the Bridge Warrants.



On October 15, 2014, the
original maturity date of the Bridge Notes, the maturity date of the Bridge Notes was extended to January 15, 2015 for all holders
of the Bridge Notes. On November 17, 2014 the Company closed the sale of 600,000 shares of its Series A Stock, which resulted in
the reduction of the conversion price of the Bridge Notes held by the institutional investors to $2.00 from $2.50 to equal the
conversion price of the Series A Preferred Stock (see below). In addition, two additional 90-day extensions were provided to the
institutional investors, which could extend the final maturity date to July 15, 2015. The extensions expired on January 15, 2015
and at the quarter ended January 31, 2015 the Bridge Notes were in default. The Company paid off approximately $42,500 of the notes
and received extensions from all Bridge note holders except for one holder of an $80,000 Bridge Note, which extend the maturity
date to January 15, 2016 from the Bridge Note holders prior to this filing. The Company continues to accrue interest on the Bridges
Notes. In the event the Bridge Notes are converted to equity, their incremental fair value will be recognized in the consolidated
statement of operations. The Company has also advised Rosenthal and Rosenthal, Inc. of the default on the Bridge Notes which is
a default under our finance agreement.



The pricing model the Company
used for determining fair values of the Bridge Warrants is the Black-Scholes Pricing Model. The model uses market-sourced inputs
such as interest rates, dividend yields, market prices and volatilities. The risk-free interest rate used of 1.26% is based on
the rate of U.S Treasury zero-coupon issues with a remaining term equal to the expected life of the Bridge Warrants. Expected dividend
yield assumes the current dividend rate of zero. Expected volatility of approximately 100% was calculated using the daily closing
price over a five-year period of the Company’s Common Stock.



The value of the Bridge
Warrants was derived and used as a basis to allocate the proceeds received between the Bridge Warrants and Bridge Notes. The proportionate
value ascribed to the Bridge Warrants amounted to approximately $562,000 and was reflected as a discount on notes payable. Further
the Company estimated a value of beneficial conversion feature of approximately $188,000 (limited to the amount of proceeds allocated
to the notes payable) and reflected such as an additional discount on the bridge notes. The discount on notes payable is being
amortized using the straight line amortization over ninety days. This resulted in a non-cash interest charge of approximately $617,000
in the quarter ended October 31, 2014 and approximately $133,000 in this year’s fiscal first quarter ended July 31, 2014.



51







On October 15, 2014, the
original maturity date of the Bridge Notes, the maturity date of the Bridge Notes was extended to January 15, 2015 for all holders
of the Bridge Notes. On November 12, 2014 the Company closed the sale of 600,000 shares of its Series A Preferred Stock, which
resulted in the reduction of the conversion price of the Bridge Notes held by the institutional investors to $2.00 from $2.50 to
equal the conversion price of the Series A Preferred Stock (see below). In addition, two additional 90 extensions were provided
to the institutional investors, which could extend the final maturity date to July 15, 2015.



On November 12, 2014, the
Company completed a private placement of 600,000 shares of its Series A Preferred Stock (“Series A Stock”) together
with Warrants to purchase shares of its common stock (“Preferred Warrant”) at a price of $5.00 per share, in accordance
with the Series A Preferred Stock Purchase Agreement dated October 20, 2014 (the “Purchase Agreement”). The net proceeds
to the Company from the sale of the Series A Stock and Preferred Warrant, after deducting the estimated offering expenses incurred
by the Company were approximately $2,700,000. At any time from November 17, 2014, the date of Closing, and prior to October 20,
2019 (the “Put/Call Exercise Period”), and the investors may exercise a right to purchase and require the Company to
sell up to an additional 700,000 shares of Series A Stock. If the investors have not exercised this right during the Put/Call Exercise
Period, the Company may exercise a right to cause and require the investors to purchase up to an additional 700,000 shares of Series
A Stock, for an aggregate purchase price of $3,500,000. Holders of the Series A Stock shall initially have the right to convert
such shares of Series A Stock into the number of authorized but previously unissued shares of the Company’s common stock
obtained by dividing the stated value of each share of Series A ($5.00) by $2.00. For each share of Series A Stock, the investors
will receive 2.5 Preferred Warrants to purchase the Company’s common stock at an exercise price of $2.50 per share. The Preferred
Warrants are exercisable immediately for a period of five years from the date of closing. The exercise price of the Preferred Warrants
is subject to adjustments in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.
The exercisability of the Preferred Warrants may be limited if upon exercise, the warrant holder or any of its affiliates would
beneficially own more than 4.99% of the Company’s Common Stock. The Holders of the Series A Stock will receive preferential
cumulative dividends at the rate of 8% per annum (equivalent to a fixed annual payment of $0.40 per share). The dividends are payable
in shares of common stock and shall be valued at the weighted average price of the Company’s common stock over the ten (10)
consecutive trading days ended on the second trading day immediately before the payment date.



The
company also issued 182,500 common shares and 90,000 warrants for common shares in exchange for professional services and fees
related to the sale of the Series A Stock. The fair value of the warrants is recorded as a simultaneous increase and decrease to
additional paid in capital and is therefore not presented on the consolidated statement of stockholders’ equity. The fair
value of the common shares is presented as a charge to APIC,with
a corresponding increase to common stock related to the par value of the shares issued. The proceeds from the private placement
were allocated between the Series A Stock, warrants and the put/call feature based upon their relative fair values. The fair value
of the preferred stock was determined utilizing the ‘as converted’ method as the prominent feature driving the value
of the instrument was deemed to be underlying value of the common stock to which the instrument was convertible into.



Fair value of the warrants
was determined using the Black-Scholes Pricing Model. The model uses market-sourced inputs such as interest rates, dividend yields,
market prices and volatilities. The risk-free interest rate used of 1.64% is based on the rate of U.S Treasury zero-coupon issues
with a remaining term equal to the expected life of the Warrants. Expected dividend yield assumes the current dividend rate of
zero. Expected volatility of approximately 93% was calculated using the daily closing price over a five year period of the Company’s
Common Stock. The warrants have a strike price of $2.50 and are exercisable for a period of 5 years.



52







Fair value of the put and
call was determined using the Black-Scholes Pricing Model. The model uses market-sourced inputs such as interest rates, dividend
yields, market prices and volatilities. The risk-free interest rate used of 1.64% is based on the rate of U.S Treasury zero-coupon
issues with a remaining term equal to the expected life of the Put/Call. Expected dividend yield assumes the contracted rate of
8%. Expected volatility of approximately 93% was calculated using the daily closing price over a five year period of the Company’s
Common Stock. The Put/Call has a strike price of $5.00 and is exercisable for a period of approximately 5 years. The fair value
of the underlying preferred shares was based on the as converted value of the underlying common shares which was approximately
$5.58 as of the issuance date.



Post allocation of proceeds,
the Company evaluated the embedded conversion feature within the Series A stock and determined that based upon its effective conversion
rate that a beneficial conversion feature existed and required recognition. Such beneficial conversion feature was measured as
the intrinsic value between the market price of the common stock on the commitment date and the effective conversion rate of the
instrument and amounted to $1,568,000. Given the Preferred A Stock does not have a stated redemption date, this entire discount
was immediately recognized as a non-cash dividend. Such dividend was recognized as a reduction to additional paid in capital due
to the retained deficit position of the company. Accordingly, the recognition of the beneficial conversion feature resulted in
a simultaneous increase and decrease to APIC for $1,568,000 and is therefore not presented on the consolidated statement of stockholders’
equity.



On February 2, 2015, the
Company completed a private placement of 26,600 shares of its Series A Stock together with Preferred Warrants to purchase shares
of its common stock at a price of $5.00 per share, in accordance with the Purchase Agreement. The net proceeds to the Company from
the sale of the Series A Stock and Preferred Warrant were approximately $133,000. The proceeds from the private placement were
allocated between the Series A Stock and the warrants based upon their relative fair values. The fair value of the preferred stock
was determined utilizing the ‘as converted’ method as the prominent feature driving the value of the instrument was
deemed to be underlying value of the common stock to which the instrument was convertible into.



Fair value of the warrants
was determined using the Black-Scholes Pricing Model. The model uses market-sourced inputs such as interest rates, dividend yields,
market prices and volatilities. The risk-free interest rate used of 1.19% is based on the rate of U.S Treasury zero-coupon issues
with a remaining term equal to the expected life of the Warrants. Expected dividend yield assumes the current dividend rate of
zero. Expected volatility of approximately 90.5% was calculated using the daily closing price over a five year period of the Company’s
Common Stock. The warrants have a strike price of $2.50 and are exercisable for a period of 5 years.



Post allocation of proceeds,
the Company evaluated the embedded conversion feature within the Series A stock and determined that based upon its effective conversion
rate that a beneficial conversion feature existed and required recognition. Such beneficial conversion feature was measured as
the intrinsic value between the market price of the common stock on the commitment date and the effective conversion rate of the
instrument and amounted to $78,700. Given the Preferred A Stock does not have a stated redemption date, this entire discount was
immediately recognized as a non-cash dividend. Such dividend was recognized as a reduction to additional paid in capital due to
the retained deficit position of the company. Accordingly, the recognition of the beneficial conversion feature resulted in a simultaneous
increase and decrease to APIC for $78,700 and is therefore not presented on the consolidated statement of stockholders’ equity.



53







On February 2, 2015, the
Company issued and sold an aggregate of 183,000 restricted shares of its common stock at a price of $2.00 per share and five-year
warrants to purchase and additional 316,000 shares with an exercise price of $2.50 per share, of which 50,000 shares were purchased
by David A Moylan the Company’s CEO. The net proceeds to the Company from the sale of the restricted common stock and warrants
(exclusive of any exercise thereof) were approximately $365,000.



Fair value of the warrants
was determined using the Black-Scholes Pricing Model. The model uses market-sourced inputs such as interest rates, dividend yields,
market prices and volatilities. The risk-free interest rate used of 1.19% is based on the rate of U.S Treasury zero-coupon issues
with a remaining term equal to the expected life of the Warrants. Expected dividend yield assumes the current dividend rate of
zero. Expected volatility of approximately 90.5% was calculated using the daily closing price over a five year period of the Company’s
Common Stock. The warrants have a strike price of $2.50 and are exercisable for a period of 5 years. The warrants have been recognized
through a simultaneous increase and decrease to APIC for approximately $215,000 and is therefore not presented on the consolidated
statement of stockholders’ equity



At April 30, 2015 the Company
had 3,358,275 warrants outstanding with exercise prices between $13.56 and $2.00.



(4) Related Party Transactions



During the fiscal years
ended April 30, 2015 and 2014, the Company purchased inventories for resale totaling approximately $1,348,000 and $3,144,000, respectively,
from Sheerr Memory, LLC (“Sheerr Memory”). Sheerr Memory’s owner (“Mr. Sheerr”) is employed by the
Company and is the former general manager of the acquired MMB business unit. When the Company acquired certain assets of MMB, it
did not acquire any of its inventories. However, the Company informally agreed to purchase such inventory on an as needed basis,
provided that the offering price was a fair market value price. The inventory acquired was purchased subsequent to the acquisition
of MMB at varying times and consisted primarily of raw materials and finished goods used to produce products sold by the MMB business
unit. Approximately $15,000 and $271,000 respectively, of accounts payable in the Company’s consolidated balance sheets as
of April 30, 2015 and 2014 is payable to Sheerr Memory. Sheerr Memory offers the Company trade terms of net 30 days and all invoices
are settled in the normal course of business. No interest is paid. The Company has made further purchases from Sheerr Memory subsequent
to April 30, 2015 and management anticipates that the Company will continue to do so, although the Company has no obligation to
do so.



During the fiscal years
ended April 30, 2015 and 2014, the Company purchased inventories for resale totaling approximately $1,150,000 and $1,058,000, respectively,
from Keystone Memory Group (“Keystone Memory”). Keystone Memory’s owner is a relative of Mr. Sheerr. Approximately
$32,000 of accounts payable in the Company’s consolidated balance sheets as of April 30, 2015 is payable to Keystone Memory.
At April 30, 2014 approximately $27,000 of accounts payable were due Keystone Memory. Keystone Memory offers the Company trade
terms of net due and all invoices are settled in the normal course of business. No interest is paid. The Company has made further
purchases from Keystone Memory subsequent to April 30, 2015 and management anticipates that the Company will continue to do so,
although the Company has no obligation to do so.



On December 14, 2011, the
Company entered into a Note and Security Agreement with Mr. Sheerr. The agreement provided for secured financing of up to $2,000,000.
The Company was obligated to pay monthly interest equal to 10% per annum calculated on a 360 day year of the outstanding loan balance.
Principal was payable in sixty equal monthly installments, beginning on July 15, 2012. The Company had borrowed the full $2,000,000
available under this agreement. Principal amounts due under this obligation were $33,333 per month which began on July 15, 2012.



54







The Company amended and
restated its Note and Security Agreement with Mr. Sheerr as of October 31, 2013; the Company sold certain equipment and furniture
for a purchase price of $500,000 under a sale leaseback transaction to Mr. Sheerr. The Company used the proceeds of the purchase
price received from Mr. Sheerr to reduce the remaining principal amount of the original loan by an amount equal to $500,000. The
principal amount was reduced to approximately $966,667 at October 31, 2013. The Company was obligated to pay monthly, interest
equal to 10% per annum calculated on a 360 day year of the outstanding loan balance. Principal was payable in 29 equal monthly
installments of $33,333, beginning on November 15, 2013 and subsequently on the 15th day of each month thereafter, until paid in
full. On April 30, 2014 the note was paid in full. Interest expense recorded for the Note in the fiscal years ended April 30, 2014
was approximately $122,000.



As of October 31, 2013,
the Company also entered into an agreement with Mr. Sheerr to leaseback the aforementioned equipment and furniture that was sold
to Mr. Sheerr on October 31, 2013. The lease is for a term of 60 months and the Company is obligated to pay approximately $7,500
per month for the term of the lease. The Company has an option to extend the lease for an additional two year period. The transactions
described have been accounted for as a sale-leaseback transaction. Accordingly, the Company recognized a gain on the sale of assets
of approximately $139,000, which is the amount of the gain on sale in excess of present value of the future lease payments and
will recognize the remaining approximately $322,000 in proportion to the related gross rental charged to expense over the term
of the lease, 60 months. The current portion of $72,000 deferred gain is reflected in accrued liabilities and the long term portion
of $179,000 is reflected in other liabilities long term in the consolidated balance sheet as of April 30, 2015.



(5) Income Taxes



Income tax expense for the years ended April
30 consists of the following:



|                         |  | 2015 |       |  | 2014 |   |      
|------------------------ |  | ---- | ----- |  | ---- | - | -----
|Current:                 |  |      |       |  |      |   |      
|Federal                  |  | $    | —     |  |      | $ | —    
|State                    |  |      | 3,000 |  |      |   | 5,000
|                         |  |      | 3,000 |  |      |   | 5,000
|Deferred:                |  |      |       |  |      |   |      
|Federal                  |  |      | —     |  |      |   | —    
|State                    |  |      | —     |  |      |   | —    
|                         |  |      | —     |  |      |   | —    
|Total income tax expense |  | $    | 3,000 |  |      | $ | 5,000



Income tax expense differs
from “expected” tax expense (computed by applying the applicable U.S. statutory Federal income tax rate to earnings
before income taxes) as follows:



|                                                                            |  | 2015 |            |   | 2014 |   |           
|--------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ----------
|Federal income tax at statutory rates                                       |  | $    | (1,301,000 | ) |      | $ | (879,000  
|State income taxes (net of federal income tax benefit)                      |  |      | (99,000    | ) |      |   | (179,000  
|Impact of change in state rate                                              |  |      | 1,330,000  |   |      |   |           
|Other                                                                       |  |      | 249,000    |   |      |   | (105,000) 
|                                                                            |  |      |            |   |      |   |           
|Total income tax expense (benefit) before provision for valuation allowance |  |      | 179,000    |   |      |   | (1,163,000
|Changes in valuation allowance                                              |  |      | (176,000   | ) |      |   | 1,163,000 
|Total income tax expense                                                    |  | $    | 3,000      |   |      | $ | 0         



55







The tax effect of temporary
differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:



|                                                                                                 |  | 2015 |             |   | 2014 |  
|------------------------------------------------------------------------------------------------ |  | ---- | ----------- | - | ---- | -
|Deferred tax assets:                                                                             |  |      |             |   |      |  
|Compensated absences and severance, principally due to accruals for financial reporting purposes |  | $    | 3,000       |   |      | $
|Stock-based compensation expense                                                                 |  |      | 1,151,000   |   |      |  
|Accounts receivable, principally due to allowance for doubtful accounts and sales returns        |  |      | 49,000      |   |      |  
|Property and equipment, principally due to differences in depreciation                           |  |      | 216,000     |   |      |  
|Intangible assets                                                                                |  |      | 53,000      |   |      |  
|Inventories                                                                                      |  |      | 54,000      |   |      |  
|Domestic net operating losses                                                                    |  |      | 10,609,000  |   |      |  
|Alternative minimum tax                                                                          |  |      | 438,000     |   |      |  
|Capitalized R & D cost                                                                           |  |      | 128,000     |   |      |  
|Other                                                                                            |  |      | 23,000      |   |      |  
|Net deferred tax assets                                                                          |  |      | 12,724,000  |   |      |  
|                                                                                                 |  |      |             |   |      |  
|Valuation allowance                                                                              |  |      | (12,724,000 | ) |      |  
|                                                                                                 |  |      |             |   |      |  
|Net deferred tax assets                                                                          |  | $    | —           |   |      | $



The Company recorded a
valuation allowance of ($176,000) and $1,163,000 for the fiscal years ended April 30, 2015 and 2014, respectively. Management believes
sufficient uncertainty exists regarding the realization of the deferred tax asset items and that a valuation allowance is required.
Management considers projected future taxable income and tax planning strategies in making this assessment. The amount of deferred
tax assets considered realizable could materially change in the future if estimates of future taxable income change.



The Company has Federal
and state net operating loss carry-forwards of approximately $29,900,000 and $29,400,000, respectively. These can be used to offset
future taxable income and expire between 2023 and 2035 for Federal tax purposes and 2016 and 2035 for state tax purposes.



The Company adopted Financial
Accounting Standards Board (“FASB”) guidance for accounting for uncertainty in income taxes on May 1, 2008. The implementation
of this guidance did not result in a material adjustment to the Company’s liability for unrecognized income tax benefits.
At the time of adoption and as of April 30, 2015, the Company currently was not and is not engaged in an income tax examination
by any tax authority. The Company recognizes interest and penalties on unpaid taxes in its income tax expense. No interest or penalties
were recognized during the Company’s fiscal years ended April 30, 2015, 2014 or 2013. The Company files income tax returns
in the United States and in various states. The Company’s significant tax jurisdictions are the U.S. Federal, New Jersey,
Pennsylvania and California. The tax years subsequent to 2010 remain open to examination by the taxing authorities.



56







(6) Stock Options



The Company has
a 2001 incentive and non-statutory stock option plan for the purpose of permitting certain key employees to acquire equity in the
Company and to promote the growth and profitability of the Company by attracting and retaining key employees. In general, the plan
allows granting of up to 300,000 shares of the Company’s Common Stock at an option price to be no less than the fair market
value of the Company’s Common Stock on the date such options are granted. Currently, options granted under the plan vest
ratably on the annual anniversary date of the grants. Vesting periods for options currently granted under the plan range from one
to five years. At April 30, 2014, 239,246 of the outstanding options are exercisable. No further options may be granted under this
plan. The Company also has a 2011 incentive and non-statutory stock option plan for the purpose of permitting certain key employees
and consultants to acquire equity in the Company and to promote the growth and profitability of the Company by attracting and retaining
key employees. No executive officer or director of the Company is eligible to receive options under the 2011 plan. In general,
the plan allows granting of up to 33,333 shares of the Company’s Common Stock at an option price to be no less than the fair
market value of the Company’s Common Stock on the date such options are granted. Options granted under the plan vest ratably
on the annual anniversary date of the grants. There have been 25,000 shares granted under this plan. At April 30, 2015, 25,000
of the outstanding options are exercisable.



The Company’s
has a 2014 Equity Incentive Plan (the “Plan”), and reserves for issuance 250,000 shares of our common stock. Equity
incentive awards play a significant role in the compensation provided to executive officers and employees in the current market.
We intend on relying on equity compensation in order to attract and retain key employees, align the interests of our executive
officers with those of our shareholders and to provide executive officers and other employees with the opportunity to accumulate
retirement income. The Plan is designed to provide flexibility to meet our need to remain competitive in the marketplace in order
to attract and retain executive talent and other key employees.



The Board of
Directors has exclusive authority to determine which officers, employees, and directors who provide services to the Company will
be entitled to receive a benefit under the Plan and to administer awards under the Plan to those eligible individuals. The Board
retains the authority to appoint a Compensation Committee at any time, consisting of one or more Board members, to determine awards
under the Plan. The Compensation Committee will determine, among things, the selection of those individuals to be granted awards
under the Plan among those individuals eligible for participation, the level of participation of each participant, when and how
each award under the plan will be granted, and what type or combination of types of awards will be granted.



The Plan provides
for the granting of qualified and non qualified stock options Incentive stock options may be granted only to participants who meet
the definition of “employees” under Section 3401(c) of the Code and bonus shares.



Stock Options-
Stock options provide the recipient with the right to purchase shares of common stock at a price not less than their fair market
value on the date of the grant. The stock option price is payable in cash, by tendering previously acquired shares of common stock
having an aggregate fair market value at the time of exercise equal to the option price, by cashless (broker-assisted) exercise,
or any other method approved by the Board. No stock option may be exercised more than 10 years from the date of grant.



Stock
options granted under the Plan may be stock options that are intended to qualify as incentive stock options within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). Incentive stock options may be granted
only to participants who meet the definition of “employees” under Section 3401(c) of the Code. In addition, in
order to qualify for incentive stock option treatment, in the case of options granted to a holder of 10% or more of the company’s
common stock, the stock option price may not be less than 110% of the fair market value of the stock on the date the stock option
is granted.



57







Stock Appreciation
Rights. A Stock Appreciation Right (“SAR”) provides the recipient with the right to receive from us an amount, determined
by the Board and expressed as a percentage (not exceeding 100%), of the difference between the base price established for the appreciation
rights and the market value of the common stock on the date the rights are exercised. Appreciation rights can be tandem (i.e.,
granted with option rights to provide an alternative to the exercise of the option rights) or free-standing. Tandem appreciation
rights may only be exercised at a time when the related option right is exercisable and the spread is positive, and requires that
the related option right be surrendered for cancellation. Free-standing appreciation rights must have a base price per right that
is not less than the fair market value of the common stock on the grant date, must specify the period of continuous employment
that is necessary before such appreciation rights become exercisable and may not be exercisable more than 10 years from the grant
date.



Bonus Shares.
Bonus Shares are an award to an eligible person of shares for services to be rendered or for past services already rendered to
the Company. The Board will determine the number of shares to be awarded to the eligible individual, in accordance with any restrictions
thereon. These restrictions may be based upon completion of a specified number of years of service with the Company or upon satisfaction
of performance goals based on performance factors. Payment for the Bonus Shares may be made in the form of cash, whole shares,
or a combination thereof, based on the fair market value of the shares on the date of payment, as determined in the sole discretion
of the Board.



The status of
these plans for the years ended April 30, 2015 and April 30, 2014 is as follows:



|                       |  | Options Outstanding |         
|---------------------- |  | ------------------- | --------
|                       |  |                     |         
|                       |  |                     |         
|                       |  | Shares              |         
|Balance April 30, 2013 |  |                     | 280,242 
|                       |  |                     |         
|Granted                |  |                     | —       
|Exercised              |  |                     | —       
|Expired                |  |                     | (34,665 
|Balance April 30, 2014 |  |                     | 245,577 
|                       |  |                     |         
|Granted                |  |                     | —       
|Exercised              |  |                     | —       
|Expired                |  |                     | (119,831
|Balance April 30, 2015 |  |                     | 125,746 



The Company periodically
grants nonqualified stock options to non-employee directors of the Company. These options are granted for the purpose of retaining
the services of directors who are not employees of the Company and to provide additional incentive for such directors to work to
further the best interests of the Company and its shareholders. The options granted to these non-employee directors are exercisable
at a price representing the fair value at the date of grant, and expire either five or ten years after date of grant. Vesting periods
for options currently granted under the plan range from one to two years. At April 30, 2015, 125,746 of the outstanding options
are exercisable.



58







The status of the non-employee
director options for the years ended April 30, 2015 and April 30, 2014 is as follows:



|                       |  | Options Outstanding |        
|---------------------- |  | ------------------- | -------
|                       |  |                     |        
|                       |  |                     |        
|                       |  | Shares              |        
|Balance April 30, 2013 |  |                     | 31,333 
|                       |  |                     |        
|Granted                |  |                     | —      
|Exercised              |  |                     | —      
|Expired                |  |                     | (12,666
|Balance April 30, 2014 |  |                     | 18,667 
|                       |  |                     |        
|Granted                |  |                     | —      
|Exercised              |  |                     | —      
|Expired                |  |                     | (18,667
|Balance April 30, 2015 |  |                     | —      



Other Stock Option Expense



During the first quarter
of the fiscal year ended April 30, 2009, the Company granted options to purchase 8,333 shares of the Company’s Common Stock
to a privately held company in exchange for certain patents and other intellectual property. The options granted are exercisable
at a price representing the fair value at the date of grant, were 100% exercisable on the date of grant and expire ten years after
the date of grant. The calculated fair value of these options was approximately $121,000 and was determined using the Black-Scholes
option-pricing model.



(7) Accrued Liabilities



Accrued liabilities consist
of the following at April 30:



|                                |  | 2015 |         |  | 2014 |  
|------------------------------- |  | ---- | ------- |  | ---- | -
|Payroll, including vacation     |  | $    | 27,000  |  |      | $
|Commissions                     |  |      | 10,000  |  |      |  
|Bonuses                         |  |      | —       |  |      |  
|Lease legal settlement          |  |      | —       |  |      |  
|Deferred gain on equipment sale |  |      | 72,000  |  |      |  
|Accounting and audit            |  |      | 53,000  |  |      |  
|Other                           |  |      | 120,000 |  |      |  
|                                |  | $    | 282,000 |  |      | $



59







(8) Commitments and contingencies



Leases



The Company and its subsidiaries
occupy various facilities and operate various equipment under operating lease arrangements. Rent charged to operations pursuant
to such operating leases amounted to approximately $443,000 in 2015 and $419,000 in 2014.



Future minimum lease payments
under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) as of April 30, 2015 are as
follows:



|                      |  | Non-Related |         |  | Related |   |         |       | 
|--------------------- |  | ----------- | ------- |  | ------- | - | ------- | ----- | 
|                      |  | Party       |         |  | Party   |   |         | Total | 
|Year ending April 30: |  |             |         |  |         |   |         |       | 
|2016                  |  |             | 169,000 |  |         |   | 90,000  |       | 
|2017                  |  |             | 82,000  |  |         |   | 90,000  |       | 
|2018                  |  |             | 84,000  |  |         |   | 90,000  |       | 
|2019                  |  |             | 85,000  |  |         |   | 45,000  |       | 
|2020                  |  |             | 86,000  |  |         |   | —       |       | 
|Thereafter            |  |             |         |  |         |   |         |       | 
|Total                 |  | $           | 506,000 |  |         | $ | 315,000 |       | 



Purchases



At April 30, 2015, the
Company had open purchase orders outstanding totaling $83,000 primarily for inventory items to be delivered in the first three
months of the fiscal year ending April 30, 2016. These purchase orders are cancelable.



License Agreements



The Company has entered
into certain licensing agreements with varying terms and conditions. The Company is obligated to pay royalties on certain of these
agreements. Royalties charged to operations pursuant to such agreements amounted to approximately $57,000 in 2015 and $60,000 in
2014.



Legal Proceedings



Effective as of the close
of business on December 17, 2014, we terminated our agreement with MPP Associates, Inc., pursuant to which Marc P. Palker had been
providing CFO services to us. On April 8, 2015, MPP Associates, Inc. and Mr. Palker filed a complaint, styled MPP Associates, Inc.
and Marc Palker v. Dataram Corporation, Jon Isaac, David Moylan, Michael Markulec and Richard Butler, in the Superior Court of
the State of New Jersey, Essex County, Docket No. ESX-L-002413-15. MPP Associates, Inc. asserts claims for breach of contract against
Dataram for breach of contract and breach of the covenant of good faith and fair dealing.  Mr. Palker asserts a claim against
Dataram for breach of contract, alleging that he is a third party beneficiary of the agreement between MPP Associates, Inc. and
Dataram.  Mr. Palker also asserts a claim against Dataram and Messrs. Isaac, Moylan, Markulec and Butler for violation of
the New Jersey Conscientious Employee Protection Act (“CEPA”), alleging that he was an “employee” of Dataram
under the law and that his employment was terminated in retaliation for making lawfully protected objections concerning certain
conduct. Plaintiffs do not demand a specific amount damages, but instead seek legal damages, compensatory damages, lost earnings
and benefits, punitive damages, attorney’s fees with enhancement, costs of suit, and pre-judgment and post-judgment interest.
We believe that the allegations are fully without merit and will defend ourselves vigorously in this action.



60







Effective as of the close
of business on January 22, 2015, the company terminated the employment agreement with John H. Freeman, our former Chief Executive
Officer. On April 9, 2015, styled John Freeman v. Dataram Corporation, David A. Moylan, Jon Isaac, and John Does 1-5, in the Superior
Court of the State of New Jersey, Essex County, Docket No. ESX-L-002471-15. Mr. Freeman asserts claims for breach of contract against
Dataram for breach of his employment agreement and breach of a promissory note. Mr. Freeman asserts claims against the company
and Messrs. Moylan and Isaac for defamation per se and defamation. Mr. Freeman similarly asserts a claim for defamation against
the John Doe defendants. Mr. Freeman does not demand a specific amount damages, but instead seeks compensatory damages, punitive
damages, attorney’s fees, costs of suit, and pre-judgment interest. We believe that the allegations are fully without merit
and will defend ourselves vigorously in this action.



Similarly,
on April 10, 2015, the company filed an action against Mr. Freeman, Mr. Palker and MPP Associates, Inc., styled as Dataram Corporation
v. John Freeman, Marc Palker and MPP Associates, Inc., in the Superior Court of the State of New Jersey, Mercer County, Docket
No. ESX-L-000886-15. The company asserts claims against Mr. Freeman for breach of the duty of loyalty and misappropriation of corporate
property/conversion, claims against Messrs. Freeman and Palker for breach of fiduciary duty, and claims against Messrs. Freeman
and Palker and MPP Associates, Inc. for fraud.  The company seeks at least $110,640.52 against Mr. Freeman and legal damages,
compensatory, consequential, and punitive damages, attorney’s fees, costs of suit, and interest against all defendants.



On
June 26, 2015, Alethea Douglas, a former employee, filed a complaint against the Company with the U.S. Equal Employment Opportunity
Commission, alleging a claim for age discrimination in connection with the termination of her employment effective May 20, 2015.
We believe that the allegations are fully without merit and will defend ourselves vigorously in this action.



(9) Employee Benefit Plan



The Company has a defined
contribution plan (the “Plan”) which is available to all qualified employees. Employees may elect to contribute a portion
of their compensation to the Plan, subject to certain limitations. The Company contributes a percentage of the employee’s
contribution, subject to a maximum of 4.5 percent. The Company’s matching contributions aggregated approximately $151,000
and $180,000 in 2015 and 2014 respectively.



(10) Revenues by Geographic Location



The Company operates in
one business segment and develops, manufactures and markets a variety of memory systems for use with servers and workstations which
are manufactured by various companies. Revenues, total assets and long lived assets for 2015 and 2014 by geographic region is as
follows:



|                  |  | United |            |  |        |   |           |        |  |   |              | 
|----------------- |  | ------ | ---------- |  | ------ | - | --------- | ------ |  | - | ------------ | 
|                  |  | States |            |  | Europe |   |           | Other* |  |   | Consolidated | 
|April 30, 2015    |  |        |            |  |        |   |           |        |  |   |              | 
|Revenues          |  | $      | 23,285,000 |  |        | $ | 3,785,000 |        |  | $ | 1,188,000    | 
|Total assets      |  | $      | 6,269,000  |  |        | $ | 6,000     |        |  | $ | 0            | 
|Long lived assets |  | $      | 1,498,000  |  |        | $ | 0         |        |  | $ | 0            | 
|                  |  |        |            |  |        |   |           |        |  |   |              | 
|April 30, 2014    |  |        |            |  |        |   |           |        |  |   |              | 
|Revenues          |  | $      | 24,917,000 |  |        | $ | 3,431,000 |        |  | $ | 2,051,000    | 
|Total assets      |  | $      | 7,556,000  |  |        | $ | 16,000    |        |  | $ | 0            | 
|Long lived assets |  | $      | 1,353,000  |  |        | $ | 0         |        |  | $ | 0            | 
|                  |  |        |            |  |        |   |           |        |  |   |              | 



*Principally Asia Pacific Region



61







(11) Subsequent Event



On July 29, 2015, we entered into separate
Common Purchase Agreements, pursuant to which we sold and issued 500,000 shares of our Common Stock to 5 accredited investors. 
Gross proceeds of the Common Stock offering were $500,000.



We are not using the services of an investment
banker and no finder was involved in the Common Stock Offering.



In May 2015, Dataram filed an application with
the state of NJ for the transfer of some or all of its New Jersey Net Operating Losses (NOLs) for which the Company is waiting
for approval.  At this time we cannot guarantee approval of our application, nor the success of the transfer, and we do not
know what the size of the NOL transfer the state of New Jersey will approve. The Company has engaged Source Capital Group, Inc.
on a best efforts basis to transfer the NJ NOL to the highest bidder for the New Jersey Net Operating Losses. Today, we cannot
provide any certainty on the dollar amount or timing of the sale of the NOLs.



62







Item 9.  CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE



Not applicable.



Item 9A.  CONTROLS
AND PROCEDURES



The Chief Executive Officer
and Chief Accounting Officer of the Company have evaluated the effectiveness of our disclosure controls and procedures as required
by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive
Officer and Chief Accounting Officer have concluded that these disclosure controls and procedures are effective. There were no
changes in our internal control over financial reporting during the quarter ended April 30, 2015 that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.



REPORT OF MANAGEMENT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING



Our management is responsible
for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial
reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes
in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting
includes maintaining records that in reasonable detail accurately and fairly reflect transactions; providing reasonable assurance
that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts
and expenditures of Company assets are made in accordance with management authorization; and providing reasonable assurance that
unauthorized acquisition, use or disposition of Company assets that could have a material effect on our financial statements would
be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not
intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.



Management has conducted
an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control
- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation,
management concluded that the Company's internal control over financial reporting was effective as of April 30, 2015. This Annual
Report does not include an attestation report of the Company's independent registered public accounting firm regarding internal
control over financial reporting as it is not required.



Item 9B.  OTHER INFORMATION



None.



63







PART III



Item 10.  DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCE



Incorporated by reference
herein is the information set forth in the Definitive Proxy Statement under the captions "Executive Officers of the Company",
"Nominees for Director" and "Section 16 Compliance." The Company's "Code of Ethics", within the meaning
of Item 406 of Registered S-K, is posted on the Company's web site at www.dataram.com.



Item 11.  EXECUTIVE COMPENSATION



Incorporated by reference
herein is the information set forth in the Definitive Proxy Statement under the caption "Executive Compensation."



Item 12.  SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS



Incorporated by reference
herein is the information set forth in the Definitive Proxy Statement under the captions "Security Ownership of Certain Beneficial
Owners and Management" and "Equity Plan Compensation Information."



Item 13.  CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE



Incorporated by reference
herein is the information set forth in the Definitive Proxy Statement under the captions "Executive Compensation," "Board
of Directors" And "Related Party Transactions."



Item 14.  PRINCIPAL ACCOUNTING
FEES AND SERVICES



Incorporated by reference
herein is the information set forth in the Definitive Proxy Statement under the caption "Principal Accountant Fees and Services."





PART IV



Item 15.  EXHIBITS, FINANCIAL
STATEMENT SCHEDULES



The following documents
are filed as part of this report:



1.  Financial
Statements incorporated by reference into Part II of this Report.



2.  The
documents identified in the Exhibit Index which appears on page [*].





64









SIGNATURES



Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.



|      |                |  | DATARAM CORPORATION                                  
|----- | -------------- |  | -----------------------------------------------------
|      |                |  | (Registrant)                                         
|      |                |  |                                                      
|      |                |  |                                                      
|Date: | August 7, 2015 |  | By: /s/ David A. Moylan                              
|      |                |  | David A. Moylan, Chairman and Chief Executive Officer



Pursuant to the requirements
of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Company and in the
capacities and on the dates indicated.





|Date: | August 7, 2015 |  | By: /s/ Michael E. Markulec  
|----- | -------------- |  | -----------------------------
|      |                |  | Michael E. Markulec, Director



|Date: | August 7, 2015 |  | By: /s/ Richard D. Butler, Jr.  
|----- | -------------- |  | --------------------------------
|      |                |  | Richard D. Butler, Jr., Director



|Date: | August 7, 2015 |  | By: /s/ Trent D. Davis  
|----- | -------------- |  | ------------------------
|      |                |  | Trent D. Davis, Director



|Date: | August 7, 2015 |  | By: /s/ Edward M. Karr. 
|----- | -------------- |  | ------------------------
|      |                |  | Edward M. Karr, Director



|Date: | August 7, 2015 |  | By: /s/ Anthony M. Lougee 
|----- | -------------- |  | --------------------------
|      |                |  | Anthony M. Lougee         
|      |                |  | Controller                
|      |                |  | (Chief Accounting Officer)



65







EXHIBIT INDEX



|3(a)  | Restated Certificate of Incorporation, as amended.                                                                                                                                                                                                                                                                                                        
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                           
|3(b)  | By-Laws. Incorporated by reference from Exhibits to an Annual Report on Form 10-K for the year ended April 30, 2008, filed with the Securities and Exchange Commission, SEC file number 001-08266, on July 25, 2008.                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                                                                                           
|4(d)  | Form of Common Stock Purchase Warrant. Incorporated by reference from Exhibits to a Current Report on Form 8-K with the Securities and Exchange Commission, SEC file number 001-08266, filed on May 12, 2011.                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                           
|10(a) | 2001 Stock Option Plan.* Incorporated by reference from Exhibits to a Definitive Proxy Statement for an Annual Meeting of Shareholders held on September 12, 2001, filed with the Securities and Exchange Commission, SEC file number 001-08266, on July 26, 2001.                                                                                        
|      |                                                                                                                                                                                                                                                                                                                                                           
|10(b) | Savings and Investment Retirement Plan, January 1, 2001 Restatement.* Incorporated by reference from Exhibits to an Annual Report on Form 10-K for the year ended April 30, 2003, filed with the Securities and Exchange Commission, SEC file number 001-08266, on July 29, 2003.                                                                         
|      |                                                                                                                                                                                                                                                                                                                                                           
|10(c) | 2011 Stock Option Plan.* Incorporated by reference from Exhibits to a Definitive Proxy Statement for an Annual Meeting of Shareholders held on September 22, 2011, filed with the Securities and Exchange Commission, SEC file number 001-08266, on August 16, 2011.                                                                                      
|      |                                                                                                                                                                                                                                                                                                                                                           
|10(d) | 2014 Equity Incentive Plan.* Incorporated by reference from Exhibits to a Definitive Proxy Statement for an Annual Meeting of Shareholders held on November 10, 2014, filed with the Securities and Exchange Commission, SEC file number 001-08266, on October 21, 2014.                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                           
|10(e) | Lease Agreement dated as of April 4, 2011, between Hillier Properties, L.L.C., and Dataram Corporation. Incorporated by reference from Exhibits to an Annual Report on Form 10-K for the year ended April 30, 2011, filed with the Securities and Exchange Commission, SEC file number 001- 08266, on July 28, 2011.                                      
|      |                                                                                                                                                                                                                                                                                                                                                           
|10(f) | Lease Agreement, dated December 31, 2000, between Nappen & Associates and Micro Memory Bank, Inc. and assigned to Dataram Corporation. Incorporated by reference from Exhibits to an Annual Report on Form 10-K for the year ended April 30, 2009, filed with the Securities and Exchange Commission, SEC file number 001-08266, on July 28, 2009.        
|      |                                                                                                                                                                                                                                                                                                                                                           
|10(g) | Lease Renewal Agreement, dated February 13, 2006, between Nappen & Associates and Micro Memory Bank, Inc. and assigned to Dataram Corporation. Incorporated by reference from Exhibits to an Annual Report on Form 10-K for the year ended April 30, 2009, filed with the Securities and Exchange Commission, SEC file number 001-08266, on July 28, 2009.
|      |                                                                                                                                                                                                                                                                                                                                                           
|10(h) | Lease Renewal Agreement, dated February 10, 2011, between Nappen & Associates and Dataram Corporation. Incorporated by reference from Exhibits to an Annual Report on Form 10-K for the year ended April 30, 2011, filed with the Securities and Exchange Commission, SEC file number 001-08266, on July 28, 2011.                                        
|      |                                                                                                                                                                                                                                                                                                                                                           

66







|10(i) | Employment Agreement of Jeffrey H. Duncan dated as of February 1, 2005.* Incorporated by reference from Exhibits to an Annual Report on Form 10-K for the year ended April 30, 2005, filed with the Securities and Exchange Commission, SEC file number 001-08266, on July 28, 2005.                             
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                  
|10(j) | Employment Agreement of David Sheerr dated as of March 31, 2009.* Incorporated by reference from Exhibits to an Annual Report on Form 10-K for the year ended April 30, 2010, filed with the Securities and Exchange Commission, SEC file number 001-08266, July 29, 2010.                                       
|      |                                                                                                                                                                                                                                                                                                                  
|10(k) | Product Consignment And Sale Agreement, dated as of July 27, 2010, Between Sheerr Memory, Inc. and Dataram Corporation. Incorporated by reference from Exhibits to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on July 29, 2010.                  
|      |                                                                                                                                                                                                                                                                                                                  
|10(l) | Note and Security Agreement, dated as of December 14, 2011, by and among David Sheerr and Dataram Corporation. Incorporated by reference from Exhibits to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on December 15, 2011.                       
|      |                                                                                                                                                                                                                                                                                                                  
|10(m) | Consignment Termination letter, dated December 14, 2011, between Sheerr Memory, Inc. and Dataram corporation. Incorporated by reference from Exhibits to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on December 15, 2011.                        
|      |                                                                                                                                                                                                                                                                                                                  
|10(n) | Patent Purchase Agreement, dated as of March 29, 2012, by and between Dataram Corporation and Phan Tia Group Pte, LLC.                                                                                                                                                                                           
|      |                                                                                                                                                                                                                                                                                                                  
|10(o) | Securities Purchase Agreement, dated September 18, 2013, by and between  Dataram Corporation and certain investors. Incorporated by reference from Exhibits to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on September 19, 2013.                 
|      |                                                                                                                                                                                                                                                                                                                  
|10(p) | Subordinated Secure Convertible Bridge Note purchase agreement dated July 14, 2015 by and between Dataram Corporation and certain investors. Incorporated by reference from Exhibits to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, July 18, 2014.
|      |                                                                                                                                                                                                                                                                                                                  
|10(q) | Series A Preferred Stock Purchase agreement dated as of October 20, 2014, by and between Dataram Corporation Incorporated by reference from Exhibits to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on October 21, 2014.                          
|      |                                                                                                                                                                                                                                                                                                                  
|10(r) | Severance Payment Agreement dated September 24, 2014 by and between Anthony M. Lougee and Dataram Corporation.*Incorporated by reference from Exhibits to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on September 24, 2014.                      
|      |                                                                                                                                                                                                                                                                                                                  

67







|10(s)     | Employment Agreement  dated June 8, 2015 by and between David A. Moylan and Dataram Corporation.* Incorporated by reference from Exhibits to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on June 12, 2015.
|--------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|          |                                                                                                                                                                                                                                                                          
|14(a)     | Code of Ethics. Incorporated by reference from Exhibits to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on June 20, 2005.                                                                                  
|          |                                                                                                                                                                                                                                                                          
|31(a)     | Rule 13a-14(a) Certification of David A. Moylan                                                                                                                                                                                                                          
|          |                                                                                                                                                                                                                                                                          
|31(b)     | Rule 13a-14(a) Certification of Anthony M. Lougee                                                                                                                                                                                                                        
|          |                                                                                                                                                                                                                                                                          
|32(a)     | Section 1350 Certification of David A. Moylan (Furnished not Filed)                                                                                                                                                                                                      
|          |                                                                                                                                                                                                                                                                          
|32(b)     | Section 1350 Certification of Anthony M. Lougee (Furnished not Filed)                                                                                                                                                                                                    
|          |                                                                                                                                                                                                                                                                          
|101.INS** | XBRL Instance Document                                                                                                                                                                                                                                                   
|          |                                                                                                                                                                                                                                                                          
|101.SCH** | XBRL Taxonomy Extension Schema Document                                                                                                                                                                                                                                  
|          |                                                                                                                                                                                                                                                                          
|101.CAL** | XBRL Taxonomy Extension Calculation Link base Document                                                                                                                                                                                                                   
|          |                                                                                                                                                                                                                                                                          
|101.LAB** | XBRL Taxonomy Extension Label Link base Document                                                                                                                                                                                                                         
|          |                                                                                                                                                                                                                                                                          
|101.PRE** | XBRL Taxonomy Extension Presentation Link base Document                                                                                                                                                                                                                  
|          |                                                                                                                                                                                                                                                                          
|101.DEF** | XBRL Taxonomy Extension Definition Link base Document                                                                                                                                                                                                                    



*Management Contract or Compensatory Plan
or Arrangement

** To be filed by amendment





68