iSign Solutions Inc. - Quarter Report: 2015 March (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| X | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended:March 31, 2015
OR
| 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:000-19301
COMMUNICATION INTELLIGENCE CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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94-2790442
|
|||
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(State or other jurisdiction of
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(I.R.S. Employer
|
|||
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incorporation or organization)
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Identification No.)
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275 Shoreline Drive, Suite 500, Redwood Shores, CA 94065-1413
(Address of principal executive offices) (Zip Code)
(650) 802-7888
Registrant's telephone number, including area code
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.
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Yes
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X
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No
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
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Yes
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X
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No
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
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large accelerated filer
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accelerated filer
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non-accelerated filer
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X
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Smaller reporting Company
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Indicate by check mark whether the registrant is a shell company (as defined in Section 12b-2 of the exchange Act)
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Yes
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No
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X
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Number of shares outstanding of the issuer's Common Stock, as of May 15, 2015: 234,307,542.
INDEX
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Page No.
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|
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PART I. FINANCIAL INFORMATION
|
|
|
Item 1. Financial Statements
|
|
|
Condensed Consolidated Balance Sheets at March 31, 2015 (unaudited) andDecember 31, 2014
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3
|
|
Condensed Consolidated Statements of Operations for the Three-Month Periods Ended March 31, 2015 and 2014 (unaudited)
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4
|
|
Condensed Consolidated Statements of Comprehensive Loss for the Three-Month Periods Ended March 31, 2015 and 2014 (unaudited)
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5
|
|
Condensed Consolidated Statements of Cash Flows for the Three-Month Periods Ended March 31, 2015 and 2014 (unaudited)
|
6
|
|
Notes to Unaudited Condensed Consolidated Financial Statements
|
8
|
|
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
|
15
|
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
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18
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|
Item 4. Controls and Procedures
|
19
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PART II. OTHER INFORMATION
|
|
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Item 1. Legal Proceedings
|
19
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Item 1A. Risk Factors
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19
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Item 2. Unregistered Sale of Securities and Use of Proceeds
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19
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Item 3. Defaults Upon Senior Securities
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20
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Item 4. Mine Safety Disclosures
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20
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Item 5. Other Information
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20
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Item 6. Exhibits
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|
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(a) Exhibits
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20
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Signatures
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23
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2
PART I–FINANCIAL INFORMATION
Item 1. Financial Statements.
Communication Intelligence Corporation
Condensed Consolidated Balance Sheets
(In thousands, except par value amounts)
|
March 31,
|
December 31,
|
|||||||
|
2015
|
2014
|
|||||||
|
Assets
|
Unaudited
|
|||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$
|
1,289
|
$
|
775
|
||||
|
Accounts receivable, net of allowance of $40 at March 31, 2015 and $22 at December 31, 2014
|
254
|
122
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||||||
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Prepaid expenses and other current assets
|
104
|
80
|
||||||
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Total current assets
|
1,647
|
977
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||||||
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Property and equipment, net
|
13
|
11
|
||||||
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Patents, net
|
846
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933
|
||||||
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Other assets
|
29
|
29
|
||||||
|
Total assets
|
$
|
2,535
|
$
|
1,950
|
||||
|
Liabilities and Equity (Deficit)
|
||||||||
|
Current liabilities:
|
||||||||
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Accounts payable
|
$
|
432
|
$
|
328
|
||||
|
Accrued compensation
|
282
|
293
|
||||||
|
Other accrued liabilities
|
377
|
338
|
||||||
|
Deferred revenue
|
433
|
257
|
||||||
|
Total current liabilities
|
1,524
|
1,216
|
||||||
|
Deferred revenue long-term
|
595
|
700
|
||||||
|
Deferred rent
|
30
|
41
|
||||||
|
Derivative liability
|
2
|
18
|
||||||
|
Other long-term liabilities
|
28
|
28
|
||||||
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Total liabilities
|
2,179
|
2,003
|
||||||
|
Commitments and contingencies
|
||||||||
|
Equity (Deficit):
|
||||||||
|
Series A-1 Preferred Stock, $.01 par value; 2,000 shares authorized; 892 and 875 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively ($892 liquidation preference at March 31, 2015)
|
892
|
875
|
||||||
|
Series B Preferred Stock, $.01 par value; 14,000 shares authorized; 12,554 and 12,251 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively ($18,830 liquidation preference at March 31, 2015)
|
10,683
|
10,381
|
||||||
|
Series C Preferred Stock, $.01 par value; 9,000 shares authorized; 5,097 and 4,975 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively ($7,646 liquidation preference at March 31, 2015)
|
5,675
|
5,553
|
||||||
|
Series D-1 Preferred Stock, $.01 par value; 10,000 shares authorized; 7,178 and 5,800 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively ($7,178 liquidation preference at March 31, 2015)
|
6,119
|
5,139
|
||||||
|
Series D-2 Preferred Stock, $.01 par value; 10,000 shares authorized; 5,921 and 5,720 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively ($5,921 liquidation preference at March 31, 2015)
|
4,813
|
4,671
|
||||||
|
Common Stock, $.01 par value; 2,000,000 shares authorized; 234,308 shares issued and outstanding at March 31, 2015 and December 31, 2014
|
2,407
|
2,407
|
||||||
|
Treasury shares, 6,500 shares at March 31, 2015 and December 31, 2014
|
(325
|
)
|
(325
|
)
|
||||
|
Additional paid in capital
|
94,844
|
94,995
|
||||||
|
Accumulated deficit
|
(124,202
|
)
|
(123,199
|
)
|
||||
|
Accumulated other comprehensive loss
|
(14
|
)
|
(14
|
)
|
||||
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Total CIC stockholders' equity
|
892
|
483
|
||||||
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Non-Controlling interest
|
(536
|
)
|
(536
|
)
|
||||
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Total equity (deficit)
|
356
|
(53
|
)
|
|||||
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Total liabilities and equity (deficit)
|
$
|
2,535
|
$
|
1,950
|
||||
See accompanying notes to these Condensed Consolidated Financial Statements
3
Communication Intelligence Corporation
Condensed Consolidated Statements of Operations
Unaudited
(In thousands, except per share amounts)
|
Three Months Ended
|
||||||||
|
March 31,
|
||||||||
|
2015
|
2014
|
|||||||
|
Revenue:
|
||||||||
|
Product
|
$
|
230
|
$
|
128
|
||||
|
Maintenance
|
216
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173
|
||||||
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Total revenue
|
446
|
301
|
||||||
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Operating costs and expenses:
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||||||||
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Cost of sales:
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||||||||
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Product
|
111
|
4
|
||||||
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Maintenance
|
12
|
54
|
||||||
|
Research and development
|
522
|
540
|
||||||
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Sales and marketing
|
298
|
308
|
||||||
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General and administrative
|
521
|
463
|
||||||
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Total operating costs and expenses
|
1,464
|
1,369
|
||||||
|
Loss from operations
|
(1,018
|
)
|
(1,068
|
)
|
||||
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Other income (expense), net
|
(1
|
)
|
2
|
|||||
|
Gain on derivative liability
|
16
|
5
|
||||||
|
Net loss
|
(1,003
|
)
|
(1,061
|
)
|
||||
|
Accretion of beneficial conversion feature, Preferred Stock:
|
||||||||
|
Related party
|
(458
|
)
|
(73
|
)
|
||||
|
Other
|
(69
|
)
|
(301
|
)
|
||||
|
Preferred stock dividends:
|
||||||||
|
Related party
|
(354
|
)
|
(328
|
)
|
||||
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Other
|
(376
|
)
|
(293
|
)
|
||||
|
Income tax
|
−
|
−
|
||||||
|
Net loss before non-controlling interest
|
(2,260
|
)
|
(2,056
|
)
|
||||
|
Net loss attributable to non-controlling interest
|
−
|
−
|
||||||
|
Net loss attributable to common stockholders
|
$
|
(2,260
|
)
|
$
|
(2,056
|
)
|
||
|
Basic and diluted net loss per common share
|
$
|
(0.01
|
)
|
(0.01
|
)
|
|||
|
Weighted average common shares outstanding, basic and diluted
|
234,308
|
232,560
|
||||||
See accompanying notes to these Condensed Consolidated Financial Statements
4
Communication Intelligence Corporation
Condensed Consolidated Statements of Comprehensive Loss
Unaudited
(In thousands, except per share amounts)
|
Three Months Ended
|
||||||||
|
March 31,
|
||||||||
|
2015
|
2014
|
|||||||
|
Net loss
|
$
|
(1,003
|
)
|
$
|
(1,061
|
)
|
||
|
Other comprehensive loss, net of tax:
|
||||||||
|
Foreign currency translation adjustment
|
−
|
−
|
||||||
|
Total comprehensive loss
|
$
|
(1,003
|
)
|
$
|
(1,061
|
)
|
||
See accompanying notes to these Condensed Consolidated Financial Statements
5
Communication Intelligence Corporation
Condensed Consolidated Statements of Cash Flows
Unaudited
(In thousands)
|
Three Months Ended
March 31,
|
||||||||
|
2015
|
2014
|
|||||||
|
Cash flows from operating activities:
|
||||||||
|
Net loss
|
$
|
(1,003
|
)
|
$
|
(1,061
|
)
|
||
|
Adjustments to reconcile net loss to net cash
used for operating activities:
|
||||||||
|
Depreciation and amortization
|
89
|
92
|
||||||
|
Stock-based compensation
|
213
|
92
|
||||||
|
Gain on derivative liability
|
(16
|
)
|
(5
|
)
|
||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Accounts receivable
|
(132
|
)
|
132
|
|||||
|
Prepaid expenses and other assets
|
(24
|
)
|
(1
|
)
|
||||
|
Accounts payable
|
104
|
(142
|
)
|
|||||
|
Accrued compensation
|
(11
|
)
|
(4
|
)
|
||||
|
Other accrued and long-term liabilities
|
28
|
(3
|
)
|
|||||
|
Deferred revenue
|
71
|
(33
|
)
|
|||||
|
Net cash used for operating activities
|
(681
|
)
|
(933
|
)
|
||||
|
Cash flows from investing activities:
Acquisition of property and equipment
|
(5
|
)
|
(4
|
)
|
||||
|
Net cash used for investing activities
|
(5
|
)
|
(4
|
)
|
||||
|
Cash flows from financing activities:
|
||||||||
|
Proceeds from issuance of Series D preferred Stock, net of issuance costs of $33 and $51, respectively
|
1,200
|
1,139
|
||||||
|
Net cash provided by financing activities
|
1,200
|
1,139
|
||||||
|
Effect of exchange rate changes on cash and cash equivalents
|
−
|
−
|
||||||
|
Net increase in cash and cash equivalents
|
514
|
202
|
||||||
|
Cash and cash equivalents at beginning of period
|
775
|
945
|
||||||
|
Cash and cash equivalents at end of period
|
$
|
1,289
|
$
|
1,147
|
||||
See accompanying notes to these Condensed Consolidated Financial Statements
6
Communication Intelligence Corporation
Condensed Consolidated Statements of Cash Flows (Continued)
Unaudited
(In thousands)
|
Three Months Ended
March 31,
|
||||||||
|
2015
|
2014
|
|||||||
|
Supplementary disclosure of cash flow information
|
||||||||
|
Interest paid
|
$
|
1
|
$
|
−
|
||||
|
Income taxes paid
|
−
|
−
|
||||||
|
Non-cash financing and investing transactions:
|
||||||||
|
Dividends on Preferred Stock
|
$
|
730
|
$
|
621
|
||||
|
Accretion of beneficial conversion feature on issuance of convertible Preferred Stock
|
$
|
498
|
$
|
306
|
||||
|
Accretion of beneficial conversion feature on issuance of Preferred Stock dividends
|
$
|
29
|
$
|
68
|
||||
See accompanying notes to these Condensed Consolidated Financial Statements
7
Communication Intelligence Corporation
Notes to Unaudited Condensed Consolidated Financial Statements
(In thousands, except per share amounts)
| 1. | Nature of business and summary of significant accounting policies |
Nature of Business
Communication Intelligence Corporation and its subsidiary (the "Company" or "CIC") is a leading provider of digital transaction management (DTM) software enabling fully digital (paperless) business processes. The Company's solutions encompass a wide array of functionality and services, including electronic signatures, biometric authentication and simple-to-complex workflow management. These solutions are available across virtually all enterprise, desktop and mobile environments as a seamlessly integrated platform for both ad-hoc and fully automated transactions. The Company's platform can be deployed both on-premise and as a cloud-based service, with the ability to easily transition between deployment models. To date, the Company primarily has delivered its solutions to channel partners and end-user customers in the financial services industry. The Company's products include SignatureOne® Ceremony™ Server, the iSign® suite of products and services, including iSign® Enterprise and iSign® Console™, and Sign-it® programs.
Basis of Presentation
The financial information contained herein should be read in conjunction with the Company's consolidated audited financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2014.
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America ("GAAP") for complete consolidated financial statements. In the opinion of management, the unaudited condensed consolidated financial statements included in this quarterly report reflect all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair presentation of its financial position at the dates presented and the Company's results of operations and cash flows for the periods presented. The Company's interim results are not necessarily indicative of the results to be expected for the entire year.
Going Concern
The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred significant cumulative losses since its inception and, at March 31, 2015 the Company's accumulated deficit was $124,202. The Company has primarily met its working capital needs through the sale of debt and equity securities. As of March 31, 2015, the Company's cash balance was $1,289. These factors raise substantial doubt about the Company's ability to continue as a going concern.
There can be no assurance that the Company will be successful in securing adequate capital resources to fund planned operations or that any additional funds will be available to the Company when needed, or if available, will be available on favorable terms or in amounts required by the Company. If the Company is unable to obtain adequate capital resources to fund operations, it may be required to delay, scale back or eliminate some or all of its operations, which may have a material adverse effect on the Company's business, results of operations and ability to operate as a going concern. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
8
Communication Intelligence Corporation
Notes to Unaudited Condensed Consolidated Financial Statements
(In thousands, except per share amounts)
| 1. | Nature of business and summary of significant accounting policies (continued) |
Accounting Changes and Recent Accounting Pronouncements
Accounting Standards Issued But Not Yet Adopted
Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company's financial position, results of operations and cash flows.
2.Concentrations
The following table summarizes accounts receivable and revenue concentrations:
|
Accounts Receivable
As of March 31,
|
Total Revenue
for the three months
ended March 31,
|
|||
|
2015
|
2014
|
2015
|
2014
|
|
|
Customer #1
|
35%
|
−
|
27%
|
−
|
|
Customer #2
|
28%
|
32%
|
15%
|
12%
|
|
Customer #3
|
−
|
−
|
−
|
12%
|
|
Customer #4
|
−
|
26%
|
−
|
−
|
|
Customer #5
|
−
|
18%
|
−
|
22%
|
|
Total concentration
|
63%
|
76%
|
42%
|
46%
|
| 3. | Patents |
The Company performs an intangible asset impairment analysis at least annually or whenever circumstances or events indicate such assets might be impaired. The Company would recognize an impairment charge in the event the net book value of such assets exceeded the future undiscounted cash flows attributable to such assets.
Management completed an analysis of the Company's patents as of December 31, 2014. Based on that analysis, the Company concluded that no impairment of the carrying value of the patents existed. The Company believes that no events or circumstances changed during the three months ended March 31, 2015 that would impact this conclusion.
Amortization of patent costs was $87 for the three months ended March 31, 2015 and $89 for the three months ended March 31, 2014, respectively.
Intangible Assets
The following table summarizes intangible assets:
|
March 31, 2015
|
December 31, 2014
|
|||||||||||||||
|
Carrying Amount
|
Accumulated Amortization
|
Carrying Amount
|
Accumulative Amortization
|
|||||||||||||
|
Amortizable intangible assets:
|
||||||||||||||||
|
Patents
|
$
|
6,745
|
$
|
(5,899
|
)
|
$
|
6,745
|
$
|
(5,812
|
)
|
||||||
9
Communication Intelligence Corporation
Notes to Unaudited Condensed Consolidated Financial Statements
(In thousands, except per share amounts)
| 4. | Net loss per share |
The Company calculates basic net loss per share based on the weighted average number of shares outstanding, and when applicable, diluted income per share, which is based on the weighted average number of shares and potential dilutive shares outstanding.
The following table lists shares and warrants that were excluded from the calculation of dilutive earnings per share as the exercise of such options and warrants and the conversion of such preferred shares would be anti-dilutive:
|
For the three Months Ended
|
||
|
March 31, 2015
|
March 31, 2014
|
|
|
Stock options
|
107,645
|
72,037
|
|
Warrants
|
230,012
|
94,240
|
|
Preferred shares as if converted
|
||
|
Series A-1 Preferred Stock
|
6,375
|
7,513
|
|
Series B Preferred Stock
|
289,722
|
17,065
|
|
Series C Preferred Stock
|
226,555
|
205,294
|
|
Series D-1 Preferred Stock
|
319,033
|
191,189
|
|
Series D-2 Preferred Stock
|
118,428
|
106,069
|
| 5. | Equity |
Stock-based compensation expense is based on the estimated grant date fair value of the portion of stock-based payment awards that are ultimately expected to vest during the period. The grant date fair value of stock-based awards to employees and directors is calculated using the Black Scholes Merton valuation model.
Forfeitures of stock-based payment awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The estimated average forfeiture rate for the three months ended March 31, 2015 and 2014 was approximately 7.57% and 9.76%, respectively, based on historical data.
Valuation and Expense Information:
The weighted-average fair value of stock-based compensation is based on the Black Scholes Merton valuation model. Forfeitures are estimated and it is assumed no dividends will be declared. The estimated fair value of stock-based compensation awards to employees is amortized over the vesting period of the options. The fair value calculations are based on the following assumptions:
|
Three Months Ended
March 31, 2015
|
Three Months Ended
March 31, 2014
|
||
|
Risk free interest rate
|
0.04% – 3.73%
|
0.04% – 4.92%
|
|
|
Expected term (years)
|
3.26 – 7.00
|
3.33 – 6.21
|
|
|
Expected volatility
|
91.99% – 198.38%
|
91.99% – 198.38%
|
|
|
Expected dividends
|
None
|
None
|
The Company granted 35,633 stock options during the three months ended March 31, 2015 at a weighted average exercise price of $0.0225 per share. No stock options were exercised during the three month period ended March 31, 2015.
10
Communication Intelligence Corporation
Notes to Unaudited Condensed Consolidated Financial Statements
(In thousands, except per share amounts)
| 5. | Equity (continued) |
The Company granted 2,500 stock options during the three months ended March 31, 2014 at a weighted average exercise price of $0.027 per share. No stock options were exercised during the month period ended March 31, 2014.
The following table summarizes the allocation of stock-based compensation expense related to stock option grants for the three months ended March 31:
|
2015
|
2014
|
|||||||
|
Research and development
|
$
|
65
|
$
|
27
|
||||
|
Sales and marketing
|
52
|
12
|
||||||
|
General and administrative
|
80
|
48
|
||||||
|
Director
|
16
|
5
|
||||||
|
Total stock-based compensation
|
$
|
213
|
$
|
92
|
||||
A summary of option activity under the Company's plans as of March 31, 2015 and 2014 is as follows:
|
2015
|
2014
|
|||||||||||||||||||||||||||||||
|
Options
|
Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Term
|
Aggregate Intrinsic Value
|
Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Term
|
Aggregate Intrinsic Value
|
||||||||||||||||||||||||
|
Outstanding at January 1
|
72,012
|
$
|
0.04
|
69,537
|
$
|
0.05
|
||||||||||||||||||||||||||
|
Granted
|
35,633
|
$
|
0.02
|
2,500
|
$
|
0.03
|
$
|
7
|
||||||||||||||||||||||||
|
Exercised
|
−
|
$
|
−
|
−
|
$
|
-
|
||||||||||||||||||||||||||
|
Forfeited or expired
|
−
|
$
|
−
|
−
|
$
|
−
|
||||||||||||||||||||||||||
|
Outstanding at March 31
|
107,645
|
$
|
0.04
|
4.87
|
72,037
|
$
|
0.05
|
4.85
|
$
|
7
|
||||||||||||||||||||||
|
Vested and expected to vest at March 31
|
104,018
|
$
|
0.04
|
4.82
|
$
|
−
|
65,007
|
$
|
0.05
|
4.41
|
$
|
7
|
||||||||||||||||||||
|
Exercisable at March 31
|
59,733
|
$
|
0.05
|
3.67
|
48,445
|
$
|
0.05
|
5.05
|
$
|
−
|
||||||||||||||||||||||
The following table summarizes significant ranges of outstanding and exercisable options as of March 31, 2015:
|
Options Outstanding
|
Options Exercisable
|
|||||||||||||||||||||
|
Range of Exercise Prices
|
Number Outstanding
|
Weighted Average Remaining Contractual Term (in years)
|
Weighted Average Exercise Price
|
Number Outstanding
|
Weighted Average Exercise Price
|
|||||||||||||||||
|
$
|
0.02 – $0.50
|
107,645
|
4.87
|
$
|
0.04
|
59,733
|
$
|
0.05
|
||||||||||||||
11
Communication Intelligence Corporation
Notes to Unaudited Condensed Consolidated Financial Statements
(In thousands, except per share amounts)
| 5. | Equity (continued) |
A summary of the status of the Company's non-vested shares as of March 31, 2015 is as follows:
|
Non-vested Shares
|
Shares
|
Weighted Average
Grant-Date
Fair Value
|
||||||
|
Non-vested at January 1, 2015
|
14,954
|
$
|
0.04
|
|||||
|
Granted
|
35,633
|
$
|
0.02
|
|||||
|
Exercised
|
−
|
$
|
−
|
|||||
|
Forfeited
|
−
|
$
|
−
|
|||||
|
Vested
|
(2,675
|
)
|
$
|
0.04
|
||||
|
Non-vested at March 31, 2015
|
47,912
|
$
|
0.03
|
|||||
As of March 31, 2015, there was $592 of total unrecognized compensation expense related to non-vested stock-based compensation arrangements granted under the plans. The unrecognized compensation expense is expected to be realized over a weighted average period of 2.95 years.
Preferred Stock
Information with respect to the classes of Preferred Stock as of March 31, 2015 is as follows:
|
Class of Preferred Stock
|
Annual Dividend
|
Annual Dividend Payable, in Cash or In Kind
|
Liquidation Preference
|
Conversion Price
|
Total Preferred Shares Outstanding
|
Common Shares to be issued if Fully Converted
|
|||||||||||||||
|
Series A-1
|
8
|
%
|
Quarterly in Arrears
|
$
|
1.00
|
$
|
0.1400
|
892
|
6,375
|
||||||||||||
|
Series B
|
10
|
%
|
Quarterly in Arrears
|
$
|
1.50
|
$
|
0.0433
|
12,554
|
289,722
|
||||||||||||
|
Series C
|
10
|
%
|
Quarterly in Arrears
|
$
|
1.50
|
$
|
0.0225
|
5,097
|
226,555
|
||||||||||||
|
Series D-1
|
10
|
%
|
Quarterly in Arrears
|
$
|
1.00
|
$
|
0.0225
|
7,178
|
319,033
|
||||||||||||
|
Series D-2
|
10
|
%
|
Quarterly in Arrears
|
$
|
1.00
|
$
|
0.0500
|
5,921
|
118,428
|
||||||||||||
Information with respect to dividends issued on the Company's Preferred stock for the period ended March 31 is as follows:
|
March 31,
|
March 31,
|
|||||||||||||||
|
2015
|
2014
|
2015
|
2014
|
|||||||||||||
|
Dividends
|
Beneficial Conversion Feature Related to dividends
|
|||||||||||||||
|
Series A-1
|
$
|
17
|
$
|
20
|
$─
|
$─
|
||||||||||
|
Series B
|
302
|
274
|
─
|
─
|
||||||||||||
|
Series C
|
123
|
111
|
13
|
37
|
||||||||||||
|
Series D-1
|
145
|
93
|
16
|
31
|
||||||||||||
|
Series D-2
|
143
|
123
|
─
|
─
|
||||||||||||
|
Total
|
$
|
730
|
$
|
621
|
$
|
29
|
$
|
68
|
||||||||
12
Communication Intelligence Corporation
Notes to Unaudited Condensed Consolidated Financial Statements
(In thousands, except per share amounts)
| 5. | Equity (continued) |
Series D Preferred Stock
On February 7, 2014, the Company sold for $733 in cash, net of a $47 administrative fee paid in cash to SG Phoenix and a nonrelated third party, 520 Shares of Series D-1 preferred Stock and 260 shares of Series D-2 Preferred Stock. The investors received one hundred percent (100%) warrant coverage. These warrants are immediately exercisable and expire December 31, 2016. The warrants are exercisable in whole or in part and contain a cashless exercise provision.
On March 6, 2014, the Company sold for $406 in cash, net of $4 in administrative fees paid in cash to an unrelated third party, 273 Shares of Series D-1 preferred Stock and 137 shares of Series D-2 Preferred Stock. The investors received one hundred percent (100%) warrant coverage. These warrants are immediately exercisable and expire December 31, 2016. The warrants are exercisable in whole or in part and contain a cashless exercise provision.
SG Phoenix received warrants to purchase 3,000 shares of Common stock, and two unrelated parties received warrants to purchase an aggregate of 1,600 shares of Common Stock in payment of administrative and finder's fees associated with the financings, in addition to the cash payments discussed above. These warrants are immediately exercisable and expire three (3) years from the date of issuance. The warrants are exercisable in whole or in part and contain a cashless exercise provision.
On March 24, 2015, the Company sold for $1,200 in cash, net of $33 in administrative fees paid in cash to SG Phoenix, 1,233 Shares of Series D-1 preferred Stock. The investors received 27,400 warrants, immediately exercisable into Common Stock of the Company at $0.0225 per share. The warrants expire March 23, 2018. The Company ascribed a value of $366 to the warrants using the Black Scholes Merton pricing model. See the warrant table below for more detail. The warrants are exercisable in whole or in part and contain a cashless exercise provision.
Warrants
On February 23, 2015, the Company and Venture Champion Asia Limited, an affiliate of IGC Global Limited, mutually agreed to terminate the $2,000 Credit Agreement signed in May 2014. At the time of the termination of the Credit Agreement, no amount was owed by the Company under the Credit Agreement, and contemporaneously with the termination of the Credit Agreement, the 10,909 warrants were likewise terminated.
A summary of the warrant activity is as follows:
|
March 31, 2015
|
March 31, 2014
|
|||||||||||||||
|
Warrants
|
Weighted Average Exercise Price
|
Warrants
|
Weighted Average Exercise Price
|
|||||||||||||
|
Outstanding at beginning of period
|
213,521
|
$
|
0.0289
|
77,155
|
$
|
0.0289
|
||||||||||
|
Issued
|
27,400
|
$
|
0.0225
|
21,418
|
$
|
0.0225
|
||||||||||
|
Expired/Canceled
|
(10,909
|
)
|
$
|
−
|
(4,333
|
)
|
$
|
0.0225
|
||||||||
|
Outstanding at end of period
|
230,012
|
$
|
0.0277
|
94,240
|
$
|
0.0289
|
||||||||||
|
Exercisable at end of period
|
230,012
|
$
|
0.0277
|
94,240
|
$
|
0.0289
|
||||||||||
13
Communication Intelligence Corporation
Notes to Unaudited Condensed Consolidated Financial Statements
(In thousands, except per share amounts)
| 5. | Equity (continued) |
A summary of the status of the warrants outstanding and exercisable as of March 31, 2015 is as follows:
|
Number of Warrants
|
Weighted Average Remaining Life
|
Weighted Average Exercise Price per share
|
||||||||
|
27,400
|
3.00
|
$
|
0.0225
|
|||||||
|
193,968
|
1.77
|
$
|
0.0275
|
|||||||
|
8,644
|
0.28
|
$
|
0.0500
|
|||||||
|
230,012
|
1.87
|
$
|
0.0277
|
|||||||
14
Communication Intelligence Corporation
FORM 10-Q
(In thousands, except per share amounts)
Forward Looking Statements
Certain statements contained in this quarterly report on Form 10-Q, including, without limitation, statements containing the words "believes", "anticipates", "hopes", "intends", "expects", and other words of similar import, constitute "forward looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors which may cause actual events to differ materially from expectations. Such factors include those set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, including the following:
| · | Technological, engineering, manufacturing, quality control or other circumstances that could delay the sale or shipment of products; |
| · | Economic, business, market and competitive conditions in the software industry and technological innovations that could affect the Company's business; |
| · | The Company's inability to protect its trade secrets or other proprietary rights, operate without infringing upon the proprietary rights of others and prevent others from infringing on the proprietary rights of the Company; and |
| · | General economic and business conditions and the availability of sufficient financing. |
Except as otherwise required by applicable laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements, as a result of new information, future events or otherwise.
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with the Company's unaudited condensed consolidated financial statements and notes thereto included in Part 1, Item 1 of this quarterly report on Form 10-Q and "Management's Discussion and Analysis of Financial Condition and Results of Operations" set forth in the Company's Annual report on Form 10-K for the fiscal year ended December 31, 2014.
Overview
The Company is a leading supplier of digital transaction management (DTM) software enabling the paperless, secure and cost-effective management of document-based transactions. CIC's solutions encompass a wide array of functionality and services, including electronic signatures, biometric authentication and simple-to-complex workflow management. These solutions are available across virtually all enterprise, desktop and mobile environments as a seamlessly integrated platform for both ad-hoc and fully automated transactions. CIC's platform can be deployed both on-premise and as a cloud-based service, with the ability to easily transition between deployment models.
The Company was incorporated in Delaware in October 1986. Except for the year ended December 31, 2004, in each year since its inception the Company has incurred losses. For the two-year period ended December 31, 2014, net losses attributable to common stockholders aggregated approximately $15,478, and, at March 31, 2015, the Company's accumulated deficit was approximately $124,202.
For the three months ended March 31, 2015, total revenue was $446, an increase of $145, or 48%, compared to total revenue of $301 in the prior year period. The increase in revenue is primarily attributable to an increase in the Company's product sales for the quarter.
For the three months ended March 31, 2015, the loss from operations was $1,018, a decrease of $50, or 5%, compared with a loss from operations of $1,068 in the prior year period. The decrease in the loss from operations is primarily attributable to the increase of $145, or 48%, in revenue, partially offset by an increase of $95, or 7%, in operating expenses including cost of sales, compared to the prior year period. The beneficial conversion feature on the Company's Preferred Stock with an accounting conversion price less than the closing market price on the issuance date (Series C and Series D-1 Preferred Stock issuances and shares issued as dividends in kind), for the three months ended March 31, 2015, was $527, an increase of $153, or 41%, compared to a beneficial conversion feature of $374 in the prior year period. The increase is due primarily to the closing of a Series D Preferred Stock financing round in March 2015.
15
Communication Intelligence Corporation
FORM 10-Q
(In thousands, except per share amounts)
Critical Accounting Policies and Estimates
Refer to Item 7, "Management Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 2014 Form 10-K.
Effect of Recent Accounting Pronouncement
In the first quarter of 2015, the adoption of accounting standards had no material impact on our financial position, results of operations or cash flows.
Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on our financial position, results of operations and cash flows.
Results of Operations
Revenue
For the three months ended March 31, 2015, product revenue was $230, an increase of $102, or 80%, compared to product revenue of $128 in the prior year period. The increase in product revenue is primarily due to the timing of the Company's sales opportunities for the quarter. For the three months ended March 31, 2015, maintenance revenue was $216, an increase of $43, or 25%, compared to maintenance revenue of $173 in the prior year period. The increase in maintenance revenue is primarily due to new maintenance contracts on product revenue recognized in the fourth quarter of 2014.
Cost of Sales
For the three months ended March 31, 2015, cost of sales was $123, an increase of $65, or 112%, compared to cost of sales of $58 in the prior year period. The increase in cost of sales is primarily attributable to an increase in direct engineering costs associated with non-recurring engineering product activities compared to the prior year period.
Operating expenses
Research and Development Expenses
For the three months ended March 31, 2015, research and development expense was $522, a decrease of $18, or 3%, compared to research and development expense of $540 in the prior year period. Research and development expenses consist primarily of salaries and related costs, outside engineering, maintenance items, and allocated facilities expenses. The decrease is primarily due to an increase in costs allocated to cost of sales of $80, or 138%, compared to the prior year. Other engineering expenses, including payroll and related expense travel, services and subscriptions and allocated facilities expense, increased $61, or 10%, compared to the prior year period, due to an increase in the use of outside engineering services.
Sales and Marketing Expenses
For the three months ended March 31, 2015, sales and marketing expense was $298, a decrease of $10, or 3%, compared to $308 in the prior year period. The decrease in sales and marketing expenses was due to a decrease of $48, or 67%, in general overhead expenses including facilities allocation, partially offset by an increase in salaries and related costs, commissions on increased sales and professional services of $38, or 16%, compared to the prior year period.
16
Communication Intelligence Corporation
FORM 10-Q
(In thousands, except per share amounts)
General and Administrative Expenses
For the three months ended March 31, 2015, general and administrative expense was $521, an increase of $58, or 13%, compared to general and administrative expense of $463 in the prior year period. The increase was primarily due to an increase of $34, or 42%, in stock compensation expense related to options grants to employees and administrative consultants, and to increases in other general corporate expenses of $25, or 7%, primarily related to stock option compensation expense to outside directors and allocated facilities expenses, compared to the prior year period.
Other income and expense
Other expense for the three months ended March 31, 2015 was $1, a decrease of $3, or 150%, compared to other income of $2 in the prior year period. The decrease was due to payments received in the prior year period for interest billed on past due accounts receivable during the prior year period.
For the three months ended March 31, 2015, the gain on derivative liability was $16, an increase of $11, or 220%, compared to the gain on derivative liability of $5 in the prior year period. The increase in the gain on derivative liability is primarily due to the decrease in the number of outstanding derivatives and shorter remaining lives of the derivatives at March 31, 2015 compared to the prior year period.
For the three months ended March 31, 2015, accretion of the beneficial conversion feature on the Company's Preferred Stock, with an accounting conversion price less than the closing market price on the issuance date (Series C and Series D-1 Preferred Stock), that was issued in the Series D Preferred Stock financing in March 2015 (see Liquidity and Capital Resources), as well as dividends issued in kind was $527, an increase of $153, or 41%, compared to $374 in the prior year period. The increase is due to the financing mentioned above. The accretion of the beneficial conversion feature on the Company's Series C and Series D-1 Preferred Stock that were issued as dividends in kind and in the Series D financing that were associated with related parties at March 31, 2015, was $458 and the non-related party expense was $69, compared to $73 and $301, in the prior year period.
Liquidity and Capital Resources
At March 31, 2015, cash and cash equivalents totaled $1,289, compared to cash and cash equivalents of $775 at December 31, 2014. The increase in cash was primarily due to cash provided by financing activities of $1,200, partially offset by cash used in operating activities of $681 and cash used in investing activities of $5. At March 31, 2015, total current assets were $1,647, compared to total current assets of $977 at December 31, 2014. At March 31, 2015, the Company's principal sources of funds included its cash and cash equivalents aggregating $1,289.
At March 31, 2015, accounts receivable net, was $254, an increase of $132, or 108%, compared to accounts receivable net of $122 at December 31, 2014. The increase is due primarily to the increase in product sales during the latter half of the first quarter ended March 31, 2015.
At March 31, 2015, prepaid expenses and other current assets were $104, an increase of $24, or 30%, compared to prepaid expenses and other current assets of $80 at December 31, 2014. The increase is due primarily to the prepayment of the office rent for April 2015.
At March 31, 2015, accounts payable were $432, an increase of $104, or 32%, compared to accounts payable of $328 at December 31, 2014. The increase is due primarily to professional service and engineering fees incurred in the first quarter of 2015. At March 31, 2015, accrued compensation was $282, a decrease of $11, or 4%, compared to accrued compensation of $293 at December 31, 2014. The decrease is due primarily to the payment of accrued commission on a large maintenance renewal contract that occurred in December 2014.
At March 31, 2015, total current liabilities were $1,524, an increase of $308, or 25%, compared to total current liabilities of $1,216 at December 31, 2014. At March 31, 2015, current deferred revenue was $433, an increase of $176, or 68%, compared to current deferred revenue of $257 at December 31, 2014. Deferred revenue primarily reflects advance payments for maintenance fees from the Company's licensees that are generally recognized as revenue
17
Communication Intelligence Corporation
FORM 10-Q
(In thousands, except per share amounts)
by the Company when all obligations are met or over the term of the maintenance agreement, whichever is longer. Deferred revenue is recorded when the Company receives advance payment from its customers.
For the three months ended March 31, 2015, the Company exercised its option to pay in kind the accrued dividends on Preferred Stock. For the three months ended March 31, 2015, the Company issued an aggregate of 17 shares of Series A-1 Preferred Stock, 302 shares of Series B Preferred Stock, 123 shares of Series C Preferred Stock, 145 shares of Series D-1 Preferred Stock and 143 shares of Series D-2 Preferred Stock in payment of dividends.
On February 23, 2015, the Company and Venture Champion Asia Limited, an affiliate of IGC Global Limited, mutually agreed to terminate the $2,000 Credit Agreement signed in May 2014. At the time of the termination of the Credit Agreement, no amount was owed by the Company under the Credit Agreement, and contemporaneously with the termination of the Credit Agreement, the 10,909 warrants were likewise terminated.
On March 24, 2015, the Company sold for $1,200 in cash, net of $33 in administrative fees paid in cash to SG Phoenix, 1,233 Shares of Series D-1 preferred Stock. The investors received 27,400 warrants, immediately exercisable into Common Stock of the Company at $0.0225 per share. The warrants expire March 23, 2018. The Company ascribed a value of $366 to the warrants using the Black Scholes Merton pricing model. The warrants are exercisable in whole or in part and contain a cashless exercise provision.
The Company is using the funds received from the above financing for working capital and general corporate purposes.
The Company incurred $1 of interest expense and no amortization of debt discount or deferred financing costs for the three months ended March 31, 2015 and 2014.
The Company had the following material commitments as of March 31, 2015:
|
Contractual obligations
|
Total
|
2015
|
2016
|
Thereafter
|
||||||||||||
|
Operating lease commitments (1)
|
$
|
470
|
$
|
220
|
$
|
250
|
$
|
-
|
||||||||
| 1. | The Company extended the lease on its offices in April 2010. The base rent decreased by approximately 6% in November 2011 and will increase by approximately 3% per annum over the term of the new lease, which expires on October 31, 2016. |
The Company has experienced recurring losses from operations that raise a substantial doubt about its ability to continue as a going concern. There can be no assurance that the Company will have adequate capital resources to fund planned operations or that any additional funds will be available to it when needed, or if available, will be available on favorable terms or in amounts required by it. If the Company is unable to obtain adequate capital resources to fund operations, it may be required to delay, scale back or eliminate some or all of its operations, which may have a material adverse effect on the Company's business, results of operations and ability to operate as a going concern.
Item 3.Quantitative and Qualitative Disclosures About Market Risk.
Interest Rate Risk
The Company did not enter into any short-term security investments during the three months ended March 31, 2015.
Foreign Currency Risk
From time to time, the Company makes certain capital equipment or other purchases denominated in foreign currencies. As a result, the Company's cash flows and earnings are exposed to fluctuations in interest rates and foreign currency exchange rates. The Company attempts to limit these exposures through operational strategies and generally has not hedged currency exposures. During the three months ended March 31, 2015 and 2014, foreign currency translation gains and losses were insignificant.
18
Communication Intelligence Corporation
FORM 10-Q
(In thousands, except per share amounts)
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
The Company carried out an evaluation as of the end of the period covered by this report, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to paragraph (b) of Rule 13a-15 and 15d-15 under the Exchange Act of 1934 (the "Exchange Act"). Based on that evaluation and because of the material weaknesses in our internal control over financial reporting described below, the Chief Executive Officer and the Chief Financial Officer have concluded that our disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act (1) is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and (2) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
Management identified the following control deficiencies that constitute material weaknesses that are not fully remediated as of the filing date of this report:
As a small company with limited resources that are mainly focused on the development and sales of software products and services, CIC does not employ a sufficient number of staff in its finance department to possess an optimal segregation of duties or to provide optimal levels of oversight. This has resulted in certain audit adjustments and management believes that there may be a possibility for a material misstatement to occur in future periods while it employs the current number of personnel in its finance department.
The Company does not expect that its disclosure controls and procedures will prevent all error and all fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control procedures are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The Company considered these limitations during the development of its disclosure controls and procedures, and will continually reevaluate them to ensure they provide reasonable assurance that such controls and procedures are effective.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended March 31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Part II-Other Information
Item 1.Legal Proceedings.
None.
Item 1A.Risk Factors
Not applicable.
Item 2.Unregistered Sale of Securities and Use of Proceeds.
None.
19
Communication Intelligence Corporation
FORM 10-Q
(In thousands, except per share amounts)
Item 3.Defaults Upon Senior Securities.
None.
Item 4.Mine Safety Disclosures
Not applicable
Item 5.Other Information.
None.
Item 6.Exhibits.
(a)Exhibits.
|
Exhibit Number
|
Document
|
|
3.1
|
Certificate of Incorporation of the Company, as amended, incorporated herein by reference to Exhibits 3.1, 3.2, 3.3 and 3.4 to the Company's Registration Statement on Form 10 (File No. 0‑19301).
|
|
3.2
|
Certificate of Amendment to the Company's Certificate of Incorporation (authorizing the reclassification of the Class A Common Stock and Class B Common Stock into one class of Common Stock) as filed with the Delaware Secretary of State's office on November 1, 1991, incorporated herein by reference to Exhibit 3 to Amendment 1 on Form 8 to the Company's Form 8‑A (File No. 0‑19301).
|
|
3.3
|
By‑laws of the Company adopted on October 6, 1986, incorporated herein by reference to Exhibit 3.5 to the Company's Registration Statement on Form 10 (File No. 0‑19301).
|
|
3.4
|
By‑laws of the Company adopted on October 6, 1986, incorporated herein by reference to Exhibit 3.5 to the Company's Registration Statement on Form 10 (File No. 0‑19301).
|
|
3.5
|
Certificate of Amendment to the Company's Amended and Restated Certificate of Incorporation dated January 24, 2001, incorporated herein by reference to Exhibit 3.5 to the Company's Registration Statement on Form S/1, filed December 28, 2007.
|
|
3.6
|
Certificate of Elimination of the Company's Certificate of Designation of the Series A Preferred Stock dated August 17, 2001, incorporated herein by reference to Exhibit 3.6 to the Company's Registration Statement on Form S/1, filed December 28, 2007.
|
|
3.7
|
Certificate of Amendment to the Company's Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State August 17, 2007, incorporated herein by reference to Exhibit 3.7 to the Company's Registration Statement on Form S/1 filed on December 28, 2007.
|
|
3.8
|
Amended and Restated Certificate of Incorporation of the Company filed with the Delaware Secretary of State on May 18, 1995, incorporated herein by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2008.
|
|
3.9
|
Certificate of Designations, Powers, Preferences and Rights of the Series A Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on June 4, 2008, incorporated herein by reference to Exhibit 4.23 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2008.
|
|
3.10
|
Certificate of Amendment to the Company's Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on June 30, 2008, incorporated herein by reference to Exhibit 3.7 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2008.
|
|
3.11
|
Certificate of Designations, Powers, Preferences and Rights of the Series A-1 Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on October 30, 2008, incorporated herein by reference to Exhibit 3.11 to the Company's Annual Report on Form 10-K filed on March 12, 2009.
|
20
Communication Intelligence Corporation
FORM 10-Q
(In thousands, except per share amounts)
|
Exhibit Number
|
Document
|
|
3.12
|
Certificate of Elimination of the Company's Series A Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on December 30, 2008, incorporated herein by reference to Exhibit 3.12 to the Company's Annual Report on Form 10-K filed on March 12, 2009.
|
|
3.13
|
Certificate of Amendment to the Company's Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on June 30, 2009, incorporated herein by reference to Exhibit 3.13 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2009.
|
|
3.14
|
Amendment No. 1 to By-laws dated June 17, 2010, incorporated herein by reference to Exhibit 3.14 to the Company's Quarterly Report on Form 10-Q filed on August 16, 2010.
|
|
3.15
|
Certificate of Amendment to the Company's Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on August 4, 2010, incorporated herein by reference to Exhibit 3.15 to the Company's Quarterly Report on Form 10-Q filed on November 12, 2010.
|
|
3.16
|
Amended and Restated Certificate of Designation of Series A-1 Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on August 4, 2010, incorporated herein by reference to Exhibit 3.16 to the Company's Quarterly Report on Form 10-Q filed on November 12, 2010.
|
|
3.17
|
Certificate of Designation of Series B Participating Convertible Preferred Stock filed with the Delaware Secretary of State on August 4, 2010, incorporated herein by reference to Exhibit 3.17 to the Company's Quarterly Report on Form 10-Q filed on November 12, 2010.
|
|
3.18
|
Certificate of Amendment to Amended And Restated Certificate of Incorporation filed with the Delaware Secretary of State on December 31, 2010, incorporated herein by reference to Exhibit 3.18 to the Company's Annual Report on Form 10-K filed on March 30, 2011.
|
|
3.19
|
Second Amended and Restated Certificate of Designation of Series A-1 Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on December 31, 2010, incorporated herein by reference to Exhibit 3.19 to the Company's Annual Report on Form 10-K filed on March 30, 2011.
|
|
3.20
|
Second Amended and Restated Certificate of Designation of Series B Participating Convertible Preferred Stock filed with the Delaware Secretary of State on December 31, 2010, incorporated herein by reference to Exhibit 3.20 to the Company's Annual Report on Form 10-K filed on March 30, 2011.
|
|
3.21
|
Certificate of Designation of Series C Participating Convertible Preferred Stock filed with the Delaware Secretary of State on December 31, 2010, incorporated herein by reference to Exhibit 3.21 to the Company's Annual Report on Form 10-K filed on March 30, 2011.
|
|
3.22
|
Amendment to the Amended And Restated Certificate of Designation of the Series B Participating Convertible Preferred Stock, incorporated herein by reference to Exhibit 10.59 to the Company's Current Report on Form 8-K filed March 31, 2011.
|
|
3.23
|
Amendment to the Amended And Restated Certificate of Designation of the Series C Participating Convertible Preferred Stock, incorporated herein by reference to Exhibit 10.60 to the Company's Current Report on Form 8-K filed March 31, 2011.
|
|
3.24
|
Certificate of Amendment to Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on November 13, 2012, incorporated herein by reference to Appendix A to the Company's Definitive Proxy Statement filed on Schedule 14A on October 22, 2012.
|
|
3.25
|
Third Amended and Restated Certificate of Designation of Series A-1 Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on November 13, 2012, incorporated herein by reference to Exhibit 3.25 to the Company's Form 10-K filed March 31, 2014.
|
|
3.26
|
Second Amended and Restated Certificate of Designation of Series B Participating Convertible Preferred Stock filed with the Delaware Secretary of State on November 13, 2012, incorporated herein by reference to Exhibit 3.26 to the Company's Form 10-K filed March 31, 2014.
|
|
3.27
|
Amended and Restated Certificate of Designation of Series C Participating Convertible Preferred Stock filed with the Delaware Secretary of State on November 13, incorporated herein by reference to Exhibit 3.27 to the Company's Form 10-K filed March 31, 2014.
|
21
Communication Intelligence Corporation
FORM 10-Q
(In thousands, except per share amounts)
|
Exhibit Number
|
Document
|
|
3.28
|
Certificate of Designation of Series D Convertible Preferred Stock filed with the Delaware Secretary of State on November 13, 2012, incorporated herein by reference to Exhibit 3.28 to the Company's Form 10-K filed March 31, 2014.
|
|
3.29
|
Certificate of Amendment to Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on December 10, 2013, incorporated herein by reference to Appendix A to the Company's Definitive Proxy Statement filed on Schedule 14A on November 1, 2013.
|
|
3.30
|
Certificate of Amendment to Certificate of Designation of Series D Convertible Preferred Stock filed with the Delaware Secretary of State on December 31, 2013, incorporated herein by reference to Exhibit 3.30 to the Company's Form 10-K filed March 31, 2014.
|
|
3.31
|
Certificate of Amendment to Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on December 16, 2014, incorporate herein by reference to Appendix A to the Company's Definitive Proxy Statement filed on Schedule 14A on October 17, 2014.
|
|
*3.32
|
Certificate of Amendment to Certificate of Designation of Series D Convertible Preferred Stock filed with the Delaware Secretary of State on March 24, 2015.
|
|
10.59
|
Amendment to the Amended And Restated Certificate of Designation of the Series B Participating Convertible Preferred Stock, incorporated herein by reference to Exhibit 10.59 to the Company's Current Report on Form 8-K filed March 31, 2011.
|
|
10.60
|
Amendment to the Amended And Restated Certificate of Designation of the Series C Participating Convertible Preferred Stock, incorporated herein by reference to Exhibit 10.60 to the Company's Current Report on Form 8-K filed March 31, 2011.
|
|
10.61
|
Form Of Subscription Agreement, incorporated herein by reference to Exhibit 10.61 to the Company's Current Report on Form 8-K filed on April 4, 2011.
|
|
10.62
|
Amendment No. 1 to the Registration Rights Agreement dated March 31, 2011, incorporated herein by reference to Exhibit 10.62 to the Company's Current Report on Form 8-K filed on April 4, 2011
|
|
10.63
|
Note and Warrant Purchase Agreement dated April 23, 2012, incorporated herein by reference to Exhibit 10.63 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2012.
|
|
10.64
|
Form of Subscription Agreement dated September 14, 2012, incorporated herein by reference to Exhibit 10.64 to the Company's Quarterly Report on Form 10-Q filed on November 14, 2012.
|
|
10.65
|
Form of Unsecured Convertible Promissory Note dated September 14, 2012, incorporated herein by reference to Exhibit 10.65 to the Company's Quarterly Report on Form 10-Q filed on November 14, 2012.
|
|
10.66
|
Form of Subscription Agreement dated May 17, 2013, incorporated herein by reference to Exhibit 10.66 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2013.
|
|
10.67
|
Form of Subscription Agreement dated December 31, 2013, incorporated herein by reference to Exhibit 10.67 to the Company's Form 10-K filed March 31, 2014.
|
|
10.68
|
Credit Agreement with Venture Champion Asia Limited dated May 6, 2014, incorporated herein by reference to Exhibit 10.68 to the Company's Form 10-Q filed August 15, 2014.
|
|
10.69
|
Form of Subscription Agreement dated August 5, 2014, incorporated herein by reference to Exhibit 10.69 to the Company's Form 10-K filed March 31, 2015.
|
|
*10.70
|
Form of Subscription Agreement dated March 24, 2015.
|
|
*31.1
|
Certification of Company's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
*31.2
|
Certificate of Company's Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
*32.1
|
Certification of Chief Executive Officer pursuant to 18 USC Section 1750, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
*32.2
|
Certification of Chief Financial Officer pursuant to 18 USC Section 1750, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
| * | Filed herewith. |
22
Communication Intelligence Corporation
FORM 10-Q
(In thousands, except per share amounts)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
COMMUNICATION INTELLIGENCE CORPORATION
|
||
|
Registrant
|
||
|
May 15, 2015
|
/s/ Andrea Goren
|
|
|
Date
|
Andrea Goren
|
|
|
(Principal Financial Officer and Officer Duly Authorized to Sign on Behalf of the Registrant)
|
23