Delaware
(State or other jurisdiction of incorporation or organization)
|
94‑2790442
(I.R.S. Employer Identification No.)
|
275 Shoreline Drive, Suite 500 Redwood Shores, California
(Address of principal executive offices)
|
94065
(Zip Code)
|
Page
|
|
PART I
|
3
|
Item 1. Business
|
3
|
Item 1A. Risk Factors
|
7
|
Item 1B. Unresolved Staff Comments
|
7
|
Item 2. Properties
|
8
|
Item 3. Legal Proceedings
|
8
|
Item 4. Mine Safety Disclosures
|
8
|
PART II
|
8
|
Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
8
|
Item 6. Selected Financial Data
|
9
|
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
|
9
|
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
|
16
|
Item 8. Financial Statements and Supplementary Data
|
16
|
Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure
|
16
|
Item 9A. Controls and Procedures
|
17
|
Item 9B. Other Information
|
19
|
PART III
|
19
|
Item 10. Directors, Executive Officers and Corporate Governance
|
19
|
Item 11. Executive Compensation
|
21
|
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
23
|
Item 13. Certain Relationships and Related Transactions and Director Independence
|
28
|
Item 14. Principal Accountant Fees and Services
|
30
|
PART IV
|
31
|
Item 15. Exhibits, Financial Statement Schedules
|
31
|
SignatureOne
®
Ceremony
®
Server
|
The SignatureOne
®
Ceremony
®
Server ("Ceremony Server") provides a highly secure, scalable, patent-protected and streamlined electronic signature solution. Its flexible, easy-to-configure and agile workflow can be rapidly integrated via standard Web services to become an ultimate and cost efficient endpoint in true straight-through processing (the complete removal of paper from business processes) and to facilitate end-to-end management of multi-party approvals for PDF and XHTML documents. The Ceremony Server contains CIC's core esignature engine and signature ceremony management tools, and can be seamlessly integrated with numerous ancillary products. Its key features include:
•
Consent/disclosure management – integral part of audit record; easily reproducible in the event of a dispute;
•
Configurable document presentment – signatory receipt, access and viewing of document tracked in audit trail;
•
Multi-party ceremonies – complex processes, simplified; allows for dynamic, multi-channel workflow changes, including remote, face-to-face and mobile scenarios;
•
Supports complex business rules and dynamic user behaviors;
•
Configurable branding and workflow;
•
Flexible tracking and reporting – includes event notification service
•
Extensive audit trail – embedded in individual document in a tamper evident digital seal; and
•
Support for multiple signature methods – click-to-sign; biometric; and others.
|
iSign
®
Console
™
|
The iSign
®
Console
™
("Console") leverages the Ceremony Server's core signature engine and is ideal for organizations looking for a standalone electronic signature solution. Through its intuitive graphical interface, the Console allows users to upload documents for signature, select signers and signature methods, and manage and enforce document workflow for routing, reviewing, signing and notifications. The Console offers a secure and intuitive solution that requires no integration and is available on-premise or in the cloud.
|
iSign® Enterprise
|
iSign® Enterprise incorporates the features and function of the Ceremony Server and the Console.
|
iSign
®
Family
|
The growing suite of iSign
®
products and service includes iSign
®
Mobile (for signing on iOS and Android mobile devices), iSign
®
Forms (for integrated use of templates and forms), and iSign
®
Live (CIC's patent-pending co-browsing solution for simultaneous browsing signature ceremonies).
|
Sign-it
®
|
Sign-it
®
is a family of desktop software products that enable the real-time capture of electronic and digital signatures, as well as their verification and binding within a standard set of applications, including Adobe Acrobat and Microsoft Word, web-based applications using HTML, XML and XHTML, and custom applications for .NET, C# and similar development environments for the enterprise market. The Sign-it
®
family of products combines the strengths of biometrics, and other forms of electronic signatures, with cryptography in a patented process that insures the creation of documents containing legally compliant electronic signatures. These signatures have the same legal standing as a traditional so-called wet signature on paper and are created pursuant to the Electronic Signature in National and Global Commerce Act, as well as other related legislation and regulations. With Sign-it
®
products, organizations wishing to process electronic forms, requiring varying levels of security, can reduce the cost and other inefficiencies inherent with paper documents by adding electronic signature technologies to their workflow solutions.
|
iSign
®
Toolkits
|
The iSign
®
suite of application development tools for electronic signature capture, encryption and verification in custom applications and web-based processes captures and analyzes the image, speed, stroke sequence and acceleration of a person's handwritten electronic signature. This capability offers an effective and inexpensive solution for immediate authentication of handwritten signatures. iSign
®
toolkits also store certain forensic elements of an electronic signature for use in determining whether a person's electronic signature is legally valid. They also include software libraries for industry standard encryption and hashing to protect a user's signature, as well as the data captured in the Ceremony
®
process.
|
Sign-it® for Acrobat®
|
9.3
|
iSign® for Windows®
|
4.8
|
Patent No.
|
Expiration
|
||
5818955
|
2015
|
||
5933514
|
2016
|
||
6064751
|
2017
|
||
6091835
|
2017
|
||
6212295
|
2018
|
||
6381344
|
2019
|
||
6487310
|
2019
|
Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Sale Price
Per Share
|
|||
Year
|
Period
|
High
|
Low
|
2013
|
First Quarter
|
$
0.05
|
$
0.03
|
Second Quarter
|
$
0.04
|
$
0.03
|
|
Third Quarter
|
$
0.04
|
$
0.03
|
|
Fourth Quarter
|
$
0.04
|
$
0.02
|
|
2014
|
First Quarter
|
$
0.03
|
$
0.02
|
Second Quarter
|
$
0.03
|
$
0.02
|
|
Third Quarter
|
$
0.04
|
$
0.02
|
|
Fourth Quarter
|
$
0.03
|
$
0.01
|
·
|
legal, regulatory or contractual provisions known to the Company that limit the useful life of any patent to less than the assigned useful life;
|
·
|
whether the Company needs to incur material costs or make modifications in order for it to continue to be able to realize the protection afforded by the patents;
|
·
|
effects of obsolescence or significant competitive pressure on the Company's current or future products are expected to reduce the anticipated cash flow from the products covered by the patents;
|
·
|
demand for products utilizing the patented technology will diminish, remain stable or increase; and
|
·
|
whether the current markets for the products based on the patented technology will remain constant or will change over the useful lives assigned to the patents.
|
December 31
|
||||||||
2014
|
2013
|
|||||||
Series A-1
|
$
|
82
|
$
|
78
|
||||
Series B
|
1,149
|
1,044
|
||||||
Series C
|
468
|
433
|
||||||
Series D-1
|
472
|
131
|
||||||
Series D-2
|
541
|
402
|
||||||
Total
|
$
|
2,712
|
$
|
2,088
|
Contractual obligations
|
Total
|
2015
|
2016
|
Thereafter
|
|
Operating lease commitments (1)
|
$543
|
$293
|
$250
|
-
|
1.
|
The Company extended the lease on its offices in April 2010. The base rent decreased by approximately 6% in November 2011 and will increase by approximately 3% per annum over the term of the new lease, which expires on October 31, 2016.
|
Name
|
Age
|
Positions with the Company
|
Philip S. Sassower, Chairman
|
74
|
Chairman and Chief Executive Officer
|
Andrea Goren
|
47
|
Director and Chief Financial Officer
|
William Keiper
|
64
|
President and Chief Operating Officer
|
Stanley Gilbert
|
75
|
Director
|
Jeffrey Holtmeier
|
57
|
Director
|
David E. Welch
|
68
|
Director
|
Name and
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($) (4)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Change in
Pension Value
And
Nonqualified
Deferred Compensation
Earnings
($)
|
All Other
Compensation
($)
|
Total
($)
|
Philip S
Sassower,
Chairman and CEO
|
2014
2013
|
−(1)
−
(1)
|
−
−
|
−
−
|
$
─
$
273,000
|
−
−
|
−
−
|
−
−
|
$
−
$273,000
|
William Keiper, President
|
2014
2013
|
−(2)
−(2)
|
−
−
|
−
−
|
$
─
$
168,000
|
−
−
|
−
−
|
−
−
|
$ −
$168,000
|
Andrea Goren, CFO
|
2014
2013
|
-(3)
-(3)
|
−
−
|
−
−
|
$
─
$126,000
|
−
−
|
−
−
|
−
−
|
$
−
$126,000
|
1.
|
Mr. Sassower was appointed Chairman of the Board and Chief Executive Officer on August 5, 2010, and receives no compensation.
|
2.
|
Mr. Keiper was appointed President and Chief Operating Officer on December 7, 2010. Mr. Keiper receives no salary compensation from the Company.
|
3.
|
Mr. Goren was appointed Chief Financial Officer on December 7, 2010. Mr. Goren receives no compensation from the Company.
|
4.
|
The amounts provided in this column represent the aggregate grant date fair value of option awards granted to our officers, as calculated in accordance with FASB ASC Topic 718, Stock Compensation. Mr. Sassower has 5,334,199 options that are vested and exercisable within sixty days of December 31, 2014. Mr. Keiper has 10,667,199 options that are vested and exercisable within sixty days of December 31, 2014. Mr. Goren has 8,000,399 options that are vested and exercisable within sixty days of December 31, 2014. In accordance with applicable regulations, the value of such options does not reflect an estimate for features related to service-based vesting used by the Company for financial statement purposes. See footnote 9 in the Notes to Consolidated Financial Statements included with this report on Form 10-K.
|
Name and
Principal
Position
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Option
Exercise
Price ($)
|
Option
Expiration
Date
|
|
Philip S. Sassower,
Chairman and CEO
|
1,000,000(1)
3,792,749(2)
|
─ (1)
2,707,251(2)
|
$
0.0649
$
0.0450
|
01/28/2018
01/03/2020
|
|
William Keiper,
President and COO
|
8,000,000(3)
2,333,999(4)
|
─
(3)
1,666,001(4)
|
$
0.0250
$
0.0450
|
08/11/2018
01/03/2020
|
|
Andrea Goren,
Chief Financial Officer
|
1,000,000(5)
5,000,000(6)
1,750,499(7)
|
─
(5)
─
(6)
1,249,501(7)
|
$
0.0649
$
0.0250
$
0.0450
|
01/28/2018
08/11/2018
01/03/2020
|
(1)
|
Mr. Sassower's 1,000,000 options were granted on January 28, 2011, vest pro rata quarterly over three years, and expire on January 28, 2018.
|
(2)
|
Mr. Sassower's 6,500,000 options were granted on January 3, 2013, vest pro rata quarterly over three years, and expire on January 3, 2020.
|
(3)
|
Mr. Keiper's 8,000,000 options were granted on August 11, 2011, vest pro rata monthly over two years, and expire on August 11, 2018
|
(4)
|
Mr. Keiper's 4,000,000 options were granted on January 3, 2013, vest pro rata quarterly over three years, and expire on January 3, 2020.
|
(5)
|
Mr. Goren's 1,000,000 options were granted on January 28, 2011, vest pro rata quarterly over three years, and expire on January 28, 2018.
|
(6)
|
Mr. Goren's 5,000,000 options were granted on August 11, 2011, vest pro rata quarterly over three years, and expire on August 11, 2018.
|
(7)
|
Mr. Goren's 3,000,000 options were granted on January 3, 2013, vest pro rata quarterly over three years, and expire on January 3, 2020.
|
Name
Current Directors
|
Fees Earned or Paid in Cash(1)
|
Stock Awards
|
Option Awards
|
Non-Equity Incentive Plan Compensation
|
Non-qualified Deferred Compensation Earnings
|
All Other Compensation
|
Total
|
|
|||||||
Stanley Gilbert
|
$
1,000
|
$
─
|
$
─
|
$
─
|
$
─
|
$
─
|
$
1,000
|
Jeffrey Holtmeier
|
$
1,000
|
$
─
|
$
─
|
$
─
|
$
─
|
$
─
|
$
1,000
|
David Welch
|
$
1,000
|
$
─
|
$
─
|
$
─
|
$
─
|
$
─
|
$
1,000
|
(1)
|
The amounts provided in this column represent the fees paid for attendance at the November 11, 2014 Board of Directors Meeting.
|
1.
|
Shares of Common Stock beneficially owned and the respective percentages of beneficial ownership of Common Stock assumes the exercise or conversion of all options, warrants and other securities convertible into Common Stock, including shares of Series A-1 Convertible Preferred Stock (the "Series A-1 Preferred"), Series B Participating Convertible Preferred Stock (the "Series B Preferred"), Series C Participating Convertible Preferred Stock (the "Series C Preferred") and Series D Preferred Stock beneficially owned by such person or entity currently exercisable or exercisable within 60 days of March 25, 2015. Shares issuable pursuant to the exercise of stock options and warrants exercisable within 60 days of March 25, 2015, or securities convertible into Common Stock within 60 days of March 25, 2015 are deemed outstanding and held by the holder of such shares of Common Stock, options, warrants, or the other convertible securities listed above for purposes of computing the percentage of outstanding Common Stock beneficially owned by such person, but are not deemed outstanding for computing the percentage of outstanding Common Stock beneficially owned by any other person. The percentage of beneficial ownership of Common Stock beneficially owned is based on 234,307,542 shares of Common Stock, 875,238 shares of Series A-1 Preferred Stock, 12,251,579 shares of Series B Preferred Stock, 4,974,831 shares of Series C Preferred Stock, and 12,753,451 shares of Series D Preferred Stock outstanding as of March 25, 2015. The shares of Common Stock beneficially owned and the respective percentages of beneficial ownership of Common Stock stated in these columns assume conversion of shares of Series A-1 Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock.
|
2.
|
Each outstanding share of Series A-1 Preferred Stock is presently convertible into 7.1429 shares of Common Stock. The shares of Series A-1 Preferred Stock beneficially owned and the respective percentages of beneficial ownership of Series A-1 Preferred Stock stated in these columns reflect ownership of shares of Series A-1 Preferred Stock, and not shares of Common Stock issuable upon conversion of shares of Series A-1 Preferred Stock at this ratio. The percentage of beneficial ownership of Series A-1 Preferred Stock beneficially owned is based on 875,238 shares of Series A-1 Preferred Stock outstanding as of March 25, 2015.
|
3.
|
Each outstanding share of Series B Preferred Stock is presently convertible into 23.0947 shares of Common Stock. The shares of Series B Preferred Stock beneficially owned and the respective percentages of beneficial ownership of Series B Preferred Stock stated in these columns reflect ownership of shares of Series B Preferred Stock, and not shares of Common Stock issuable upon conversion of shares of Series B Preferred Stock at this ratio. The percentage of beneficial ownership of Series B Preferred Stock beneficially owned is based on 12,251,579 shares of Series B Preferred Stock outstanding as of March 25, 2015.
|
4.
|
Each outstanding share of Series C Preferred Stock is presently convertible into 44.444 shares of Common Stock. The shares of Series C Preferred Stock beneficially owned and the respective percentages of beneficial ownership of Series C Preferred Stock stated in these columns reflect ownership of shares of Series C Preferred Stock, and not shares of Common Stock issuable upon conversion of shares of Series C Preferred Stock at this ratio. The percentage of beneficial ownership of Series C Preferred Stock beneficially owned is based on 4,974,831 shares of Series C Preferred Stock outstanding as of March 25, 2015.
|
5.
|
Each share of Series D-1 Preferred Stock is presently convertible into 44.444 shares of Common Stock and each share of Series D-2 Preferred Stock is presently convertible into 20.000 shares of Common Stock. There are 7,032,886 shares of Series D-1 Preferred Stock, and 5,720,565 shares of Series D-2 Preferred Stock outstanding as of March 25, 2015. The shares of Series D Preferred Stock beneficially owned and the respective percentages of beneficial ownership of Series D Preferred Stock stated in these columns reflect ownership of shares of Series D Preferred Stock, and not shares of Common Stock issuable upon conversion of shares of Series D Preferred Stock at the above ratios. The percentage of beneficial ownership of Series D Preferred Stock beneficially owned is based on 12,753,451 shares of Series D Preferred Stock outstanding as of March 25, 2014.
|
6.
|
Represents (a) 61,131,612 shares of Common Stock, (b) 6,126,749 shares issuable to Mr. Sassower upon the exercise of options exercisable within 60 days of March 25, 2015, (c) 167,956,552 shares of Common Stock issuable upon the conversion of 7,272,515 shares of Series B Preferred Stock, (d) 97,739,369 shares of Common Stock issuable upon the conversion of 2,199,138 shares of Series C Preferred Stock, (e) 60,548,028 shares of Common Stock issuable upon the conversion of 1,362,332 shares of Series D-1 Preferred Stock (f) 3,687,400 shares of Common Stock issuable upon the conversion of 184,370 shares of Series D-2 Preferred Stock and (g) 24,519,536 shares of Common Stock issuable upon the exercise of warrants (see table below for details), including securities beneficially owned by Phoenix Venture Fund LLC (Phoenix), SG Phoenix Ventures LLC, SG Phoenix LLC, Phoenix Banner Holdings LLC and Phoenix Enterprises Family Fund. Please see footnote 13 below for information concerning shares of Common Stock beneficially owned by Phoenix. Along with Mr. Goren, Mr. Sassower is the co-manager of SG Phoenix Ventures LLC, which has the shared power to vote and dispose of the shares of Common Stock held by Phoenix and Phoenix Banner Holdings LLC, and, accordingly, Mr. Sassower may be deemed to be the beneficial owner of the shares owned by Phoenix and Phoenix Banner Holdings LLC. SG Phoenix Ventures LLC, Mr. Goren and Mr. Sassower each disclaim beneficial ownership of the shares owned by Phoenix and Phoenix Banner Holdings LLC, except to the extent of their respective pecuniary interests therein. Mr. Sassower's address is 110 East 59th Street, Suite 1901, New York, NY 10022.
|
Philip Sassower
|
SG Phoenix Ventures LLC
|
SG Phoenix LLC
|
Phoenix Venture Fund LLC
|
Phoenix Enterprises Family Fund LLC
|
Phoenix Banner Holdings LLC
|
Total
|
|
Common Shares
|
2,555,556
|
2,792,494
|
55,783,562
|
61,131,612
|
|||
Stock Options
|
6,126,749
|
6,126,749
|
|||||
Series B Preferred Stock As If Converted to Common Stock
|
167,956,552
|
167,956,552
|
|||||
Series C Preferred Stock As If Converted to Common Stock
|
95,485,771
|
2,253,598
|
97,739,369
|
||||
Series D-1 Preferred Stock As If Converted to Common Stock
|
21,299,045
|
39,248,983
|
60,548,028
|
||||
Series D-2 Preferred Stock As If Converted to Common Stock
|
1,772,080
|
1,915,320
|
3,687,400
|
||||
Warrants
|
8,463,325
|
2,425,000
|
13,631,211
|
24,519,536
|
|||
Total
|
40,216,755
|
2,425,000
|
2,792,494
|
319,225,885
|
2,253,598
|
54,795,514
|
421,709,246
|
7.
|
Represents (a) 58,595,056 shares of Common Stock, (b) 8,551,619 shares issuable upon the exercise of options exercisable within 60 days of March 25, 2015, (c) 168,674,012 shares of Common Stock issuable upon the conversion of 7,303,581 shares of Series B Preferred Stock, (d) 96,217,992 shares of Common Stock issuable upon the conversion of 2,215,613 shares of Series C Preferred Stock, (e) 42,920,713 shares of Common Stock issuable upon the conversion of 965,717 shares of Series D-1 Preferred Stock (f) 2,074,280 shares of Common Stock issuable upon the conversion of 103,714 shares of Series D-2 Preferred Stock and (g) 17,183,483 shares of Common Stock issuable upon the exercise of warrants (see table below for details), including securities beneficially owned by Phoenix, SG Phoenix Ventures LLC, SG Phoenix LLC, Phoenix Banner Holdings LLC, Andax LLC and Mr. Goren. Please see footnote 13 below for information concerning Phoenix's beneficial ownership. Mr. Goren is managing member of Andax LLC and disclaims beneficial ownership of the shares except to the extent of his pecuniary interest therein. Along with Mr. Sassower, Mr. Goren is the co-manager of SG Phoenix Ventures LLC, which has the power to vote and dispose of the shares held by Phoenix and by Phoenix Banner Holdings LLC, and accordingly, Mr. Goren may be deemed to be the beneficial owner of the shares owned by Phoenix and Phoenix Banner Holdings LLC. SG Phoenix Ventures LLC, Mr. Goren and Mr. Sassower each disclaim beneficial ownership of the shares owned by Phoenix and Phoenix Banner Holdings LLC, except to the extent of their respective pecuniary interests therein. Mr. Goren's address is 110 East 59th Street, Suite 1901, New York, NY 10022.
|
Andrea Goren
|
Andax, LLC
|
SG Phoenix Ventures LLC
|
SG Phoenix LLC
|
Phoenix Venture Fund LLC
|
Phoenix Banner Holdings LLC
|
Total
|
|
Common Shares
|
19,000
|
2,792,494
|
55,783,562
|
58,595,056
|
|||
Stock Options
|
8,551,619
|
8,551,619
|
|||||
Series B Preferred Stock As If Converted to Common Stock
|
717,460
|
167,956,552
|
168,674,012
|
||||
Series C Preferred Stock As If Converted to Common Stock
|
732,221
|
95,485,771
|
96,217,992
|
||||
Series D-1 Preferred Stock As If Converted to Common Stock
|
3,671,730
|
39,248,983
|
42,920,713
|
||||
Series D-2 Preferred Stock As If Converted to Common Stock
|
158,960
|
1,915,320
|
2,074,280
|
||||
Warrants
|
1,127,272
|
2,425,000
|
13,631,211
|
17,183,483
|
|||
Total
|
8,570,619
|
6,407,643
|
2,425,000
|
2,792,494
|
319,225,885
|
54,795,514
|
394,217,155
|
8.
|
Represents (a) 9,976,813 shares of Common Stock, (b) 1,458,750 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of March 25, 2015, (c) 3,587,184 shares of Common Stock issuable upon the conversion of 155,325 shares of Series B Preferred Stock, (d) 19,634,515 shares of Common Stock issuable upon the conversion of 441,781 shares of Series C Preferred Stock, (e) 6,063,511 shares of Common Stock issuable upon the conversion of 136,429 shares of Series D-1 Preferred Stock, (f) 2,852,860 shares of Common Stock issuable upon the conversion of 142,643 shares of Series D-2 Preferred Stock and (g) 5,713,535 shares of Common Stock issuable upon the exercise of warrants (see table below for details). As manager of Galaxy LLC, Mr. Gilbert has the power to vote and dispose of the shares of Common Stock held by Galaxy LLC, and, accordingly, Mr. Gilbert may be deemed to be the beneficial owner of the shares owned by Galaxy LLC.
|
Stanley Gilbert
|
Stanley Gilbert PC
|
Galaxy LLC
|
Mrs. Gilbert
|
Total
|
|
Common Shares
|
6,018,176
|
28,485
|
1,783,035
|
2,147,117
|
9,976,813
|
Stock Options
|
1,458,750
|
1,458,750
|
|||
Series B Preferred Stock As If Converted to Common Stock
|
3,587,184
|
3,587,184
|
|||
Series C Preferred Stock As If Converted to Common Stock
|
19,634,515
|
19,634,515
|
|||
Series D-1 Preferred Stock As If Converted to Common Stock
|
6,063,511
|
6,063,511
|
|||
Series D-2 Preferred Stock As If Converted to Common Stock
|
2,852,860
|
2,852,860
|
|||
Warrants
|
5,713,535
|
5,713,535
|
|||
Total
|
45,328,531
|
28,485
|
1,783,035
|
2,147,117
|
49,287,168
|
9.
|
Represents 1,458,750 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of March 25, 2014, and 547,940 shares of Common Stock issuable upon the conversion of 27,397 shares of Series D Preferred Stock owned by Genext, LLC ("Genext"). As manager of Genext, Mr. Holtmeier has the power to vote and dispose of the shares of Common Stock held by Genext, and, accordingly, Mr. Holtmeier may be deemed to be the beneficial owner of the shares owned by Genext.
|
10.
|
Represents 1,510,424 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of March 25, 2015.
|
11.
|
Represents 11,402,159 shares of Common Stock issuable upon the exercise of options owned by Mr. Keiper, exercisable within 60 days of March 25, 2015, and 12,377,565 shares issuable upon the conversion of 278,498 shares of Series C Preferred Stock owned by FirstGlobal. As manager of FirstGlobal, Mr. Keiper has the power to vote and dispose of the shares of Common Stock held by FirstGlobal and, accordingly, Mr. Keiper may be deemed to be the beneficial owner of the shares owned by FirstGlobal.
|
12.
|
Includes shares of Common Stock beneficially owned by Phoenix. Please see footnote 13 below for information concerning shares of Common Stock beneficially owned by Phoenix. Mr. Sassower and Mr. Goren are the co-managers of SG Phoenix Ventures LLC, which has the shared power to vote and dispose of the shares of Common Stock held by Phoenix and, accordingly, Mr. Sassower and Mr. Goren may be deemed to be the beneficial owner of the shares owned by Phoenix. SG Phoenix Ventures LLC, Mr. Sassower and Mr. Goren each disclaim beneficial ownership of the shares owned by Phoenix, except to the extent of their respective pecuniary interests therein. The amount stated above includes 30,508,451 shares issuable upon the exercise of options within 60 days of March 25, 2015.
|
13.
|
SG Phoenix Ventures LLC is the Managing Member of Phoenix, with the power to vote and dispose of the shares of Common Stock held by Phoenix. Accordingly, SG Phoenix Ventures LLC may be deemed to be the beneficial owner of such shares. Andrea Goren is the co-manager of SG Phoenix Ventures LLC, has the shared power to vote and dispose of the shares of Common Stock held by Phoenix and, as such, may be deemed to be the beneficial owner of the common shares owned by Phoenix and by SG Phoenix LLC, of which he is a member. Philip Sassower is the co-manager of SG Phoenix Ventures LLC, has the shared power to vote and dispose of the shares of Common Stock held by Phoenix and, as such, may be deemed to be the beneficial owner of the common shares owned by Phoenix and by SG Phoenix LLC, of which he is a member. SG Phoenix Ventures LLC, Mr. Goren and Mr. Sassower each disclaim beneficial ownership of the shares owned by Phoenix, and Mr. Goren and Mr. Sassower each disclaim beneficial ownership of the shares owned by SG Phoenix LLC, except to the extent of their respective pecuniary interests therein. The address of these stockholders is 110 East 59th Street, Suite 1901, New York, NY 10022.
|
Phoenix Venture Fund LLC
|
SG Phoenix Ventures LLC
|
SG Phoenix LLC
|
Total
|
|
Common Shares
|
55,783,562
|
2,792,494
|
58,576,056
|
|
Stock Options
|
|
-
|
||
Series B Preferred Stock As If Converted to Common Stock
|
167,956,552
|
167,956,552
|
||
Series C Preferred Stock As If Converted to Common Stock
|
95,485,771
|
95,485,771
|
||
Series D Preferred Stock As If Converted to Common Stock
|
|
|||
Warrants
|
2,425,000
|
2,425,000
|
||
Total
|
319,225,885
|
2,425,000
|
2,792,494
|
324,443,379
|
14.
|
Represents (a) 8,964,953 shares of Common Stock beneficially owned by Mr. Engmann, (b) 3,724,208 shares of Common Stock issuable upon the conversion of 521,386 shares of Series A-1 Preferred Stock beneficially owned by Mr. Engmann, (c) 13,544,788 shares of Common Stock issuable upon the conversion of 586,489 shares of Series B Preferred Stock beneficially owned by Mr. Engmann, (d) 6,738,925 shares of Common Stock issuable upon the conversion of 151,626 shares of Series C Preferred Stock beneficially owned by Mr. Engmann, (e) 87,177,956 shares of Common Stock issuable upon the conversion of 1,961,504 shares of Series D-1 Preferred Stock, (f) 5,649,160 shares of Common Stock issuable upon the conversion of 282,458 shares of Series D-2 Preferred Stock beneficially owned by Mr. Engmann, and (f) an aggregate of 64,437,243 shares of Common Stock issuable upon exercise of warrants exercisable within 60 days of March 25, 2015 beneficially owned by Mr. Engmann. See the following table for more detail. Mr. Engmann's address is 220 Bush Street, No. 660, San Francisco, CA 94104.
|
Michael Engmann
|
MDNH Partners, LP
|
KENDU Partners Company
|
Total
|
|
Common Shares
|
3,680,249
|
4,041,140
|
1,243,564
|
8,964,953
|
Stock Options
|
||||
Series A-1 Preferred Stock As If Converted to Common Stock
|
2,000,891
|
1,723,317
|
-
|
3,724,208
|
Series B Preferred Stock As If Converted to Common Stock
|
2,615,475
|
10,929,313
|
-
|
13,544,788
|
Series C Preferred Stock As If Converted to Common Stock
|
141,065
|
6,597,860
|
-
|
6,738,925
|
Series D-1 Preferred Stock As If Converted to Common Stock
|
87,177,956
|
-
|
-
|
87,177,956
|
Series D-2 Preferred Stock As If Converted to Common Stock
|
5,649,160
|
5,649,160
|
||
Warrants
|
64,437,243
|
-
|
-
|
64,437,243
|
Total
|
165,702,039
|
23,291,630
|
1,243,564
|
190,237,233
|
Number of Securities To Be Issued Upon Exercise of Outstanding Options and Rights
|
Weighted-Average Exercise Price Of Outstanding Options and Rights
|
Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans
|
|
Equity Compensation Plans Approved by Security Holders
|
|||
1999 Stock Option Plan
|
25
|
$
0.20
|
−
|
2011 Stock Compensation Plan
|
71,438
|
$
0.05
|
78,500
|
Equity Compensation Plans Not Approved by Security Holders
|
|||
2009 Stock Compensation Plan
|
425
|
0.11
|
6,502
|
Non Plan Stock Options
|
125
|
0.15
|
−
|
Total:
|
72,013
|
$
0.04
|
85,002
|
Date of Issue
|
Expiration Date
|
Exercise Price
|
Andax LLC
|
Michael Engmann
|
Philip Sassower
|
Phoenix Banner Holdings
|
Stanley Leon Gilbert
|
5/15/2014
|
12/31/2016
|
$0.0275
|
182
|
5,526
|
2,050
|
2,366
|
455
|
8/14/2014
|
12/31/2016
|
$0.0275
|
182
|
5,526
|
2,050
|
2,366
|
455
|
11/14/2014
|
12/31/2016
|
$0.0275
|
181
|
5,526
|
2,049
|
2,366
|
454
|
Total
|
545
|
16,578
|
6,149
|
7,098
|
1,364
|
Date
|
Phoenix Banner Holdings LLC
|
Michael W. Engmann
|
Kendu Partners Company
|
Philip Sassower
|
||||
Note Amount
|
Warrants
|
Note Amount
|
Warrants
|
Note Amount
|
Warrants
|
Note Amount
|
Warrants
|
|
8/2/2013
|
$250
|
|||||||
9/3/2013
|
$250
|
|||||||
9/27/2013
|
$250
|
|||||||
11/6/2013
|
4,167
|
4,167
|
4,167
|
|||||
12/3/2013
|
$150
|
5,000
|
||||||
12/17/2013
|
$125
|
2,083
|
||||||
Total
|
$250
|
4,167
|
$400
|
9,167
|
$250
|
4,167
|
$125
|
2,083
|
Nature of Service
|
Armanino LLP
|
PMB Helin Donovan
|
|||
2014
|
2014
|
2013
|
|||
Audit Fees
|
$14,433 (100%)
|
$83,445(92%)
|
$
94,800 (91%)
|
||
Audit-Related Fees
|
$ −
|
$ −
|
$
1,900 (2%)
|
||
Tax Fees
|
$
−
|
$ 7,300 (8%)
|
$
7,500
(7%)
|
||
All Other Fees
|
$ −
|
$ −
|
$ −
|
||
Total
|
$14,443 (100%)
|
$90,745 (100%)
|
$
104,200 (100%)
|
Page
|
||
(a)(1)
|
Financial Statements
|
|
Reports of Independent Registered Public Accounting Firms
|
F-1
|
|
Consolidated Balance Sheets at December 31, 2014 and 2013
|
F-3
|
|
Consolidated Statements of Operations for the years ended December 31, 2014 and 2013
|
F-4
|
|
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2014 and 2013
|
F-5
|
|
Consolidated Statements of Changes in Equity (Deficit) for the years ended December 31, 2014 and 2013
|
F-6
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013
|
F-8
|
|
Notes to Consolidated Financial Statements
|
F-10
|
(3)
|
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. 000‑19301).
|
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) filed with the Delaware Secretary of State 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. 000‑19301).
|
Exhibit
Number
|
Document
|
3.3
|
Certificate of Amendment to the Company's Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State June 12, 1998, incorporated herein by reference to Exhibit 10.24 to the Company's 1998 Form 10-K filed on April 6, 1999.
|
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. 000‑19301).
|
3.5
|
Certificate of Amendment to the Company's Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State January 24, 2001, incorporated herein by reference to Exhibit 3.5 to the Company's Registration Statement on Form S/1 filed on December 28, 2007.
|
3.6
|
Certificate of Elimination of the Company's Certificate of Designation of the Series A Preferred Stock filed with the Delaware Secretary of State August 17, 2001, incorporated herein by reference to Exhibit 3.6 to the Company's Registration Statement on Form S/1 filed on 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.
|
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 3.17to 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.
|
Exhibit
Number
|
Document
|
3.20
|
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.
|
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, incorporated herein by reference to Appendix A to the Company's Definitive Proxy Statement filed on Schedule 14A on October 17, 2014
|
†4.10
|
1999 Stock Option Plan, as amended, incorporated herein by reference to Exhibit 4.2 to the Company's Form S-8 filed on September 19, 2008.
|
4.11
|
Form of Convertible Promissory Note issued by the Company, incorporated herein by reference to Exhibit 10.3 to the Company's Form 8‑K filed on November 3, 2004.
|
4.12
|
Form of Warrant issued by the Company, incorporated herein by reference to Exhibit 10.4 to the Company's Form 8‑K filed on November 3, 2004.
|
4.13
|
Form of Promissory Note issued by the Company, incorporated herein by reference to Exhibit 10.36 to the Company's Form 8‑K filed on August 12, 2006.
|
4.14
|
Form of Warrant issued by the Company, incorporated herein by reference to Exhibit 10.37 to the Company's Form 8‑K filed on August 12, 2006.
|
4.15
|
Form of Promissory Note issued by the Company, incorporated herein by reference to Exhibit 10.36 to the Company's Form 8-K filed on February 9, 2007.
|
4.16
|
Form of Warrant issued by the Company, incorporated herein by reference to Exhibit 10.37 to the Company's Form 8-K filed on February 9, 2007.
|
4.17
|
Form of Promissory Note issued by the Company, incorporated herein by reference to Exhibit 10.36 to the Company's Form 8-K filed on June 20, 2007.
|
4.18
|
Form of Warrant issued the Company, incorporated herein by reference to Exhibit 10.37 to the Company's Form 8-K filed on June 20, 2007.
|
Exhibit
Number
|
Document
|
4.19
|
Form of Common Stock Purchase Warrant issued by the Company, incorporated herein by reference to Exhibit 4.19 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2008.
|
4.20
|
Form of Additional Common Stock Purchase Warrant, incorporated herein by reference to Exhibit 4.20 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2008.
|
4.21
|
Form of Secured Promissory Note issued by the Company dated June 5, 2008, incorporated herein by reference to Exhibit 4.21 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2008.
|
4.22
|
Form of Additional Secured Promissory Note, incorporated herein by reference to Exhibit 4.22 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2008.
|
4.23
|
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 4.23 to the Company's Annual Report on Form 10-K filed on March 12, 2009.
|
4.24
|
Form of Secured Promissory Note issued by the Company dated May 28, 2009, incorporated herein by reference to Exhibit 4.24 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2009.
|
4.25
|
Form of Additional Secured Promissory Note, incorporated herein by reference to Exhibit 4.25 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2009.
|
4.26
|
Form of Common Stock Purchase Warrant issued by the Company, incorporated herein by reference to Exhibit 4.26 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2009.
|
4.27
|
Form of Additional Common Stock Purchase Warrant, incorporated herein by reference to Exhibit 4.27 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2009.
|
††10.19
|
Software Development and License Agreement dated December 4, 1998 between Ericsson Mobile Communications AB and the Company incorporated herein by reference to Exhibit 10.26 of the Company's 1998 Form 10‑K (File No. 0‑19301).
|
10.24
|
Form of Note and Warrant Purchase Agreement dated October 28, 2004, by and among the Company and the Purchasers identified therein, incorporated herein by reference to Exhibit 10.1 to the Company's Form 8‑K filed on November 3, 2004.
|
10.25
|
Form of Registration Rights Agreement dated October 28, 2004, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.2 to the Company's Form 8‑K filed on November 3, 2004.
|
10.26
|
Form of Note and Warrant Purchase Agreement dated August 10, 2006, by and among the Company and the Purchasers identified therein, incorporated herein by reference to Exhibit 10.34 to the Company's Form 8‑K filed on August 12, 2006.
|
10.26
|
Form of Note and Warrant Purchase Agreement dated August 10, 2006, by and among the Company and the Purchasers identified therein, incorporated herein by reference to Exhibit 10.34 to the Company's Form 8‑K filed on August 12, 2006.
|
10.27
|
Form of Registration Rights Agreement dated August 10, 2006, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.35 to the Company's Form 8‑K filed on August 12, 2006.
|
†††10.28
|
Amendment dated May 31, 2005 to the License agreement dated December 22, 2000 between the Company and eCom Asia Pacific, Ltd., incorporated by reference to Exhibit 10.26 of the Company's Form 10-K/A filed on September 15, 2005.
|
†††10.29
|
License agreement dated June 2, 2005 between the Company and SnapOn Credit LLC, incorporated herein by reference to Exhibit 10.27 of the Company's Form 10-K/A filed on September 15, 2005.
|
†10.30
|
Amendment to employment agreement with Guido DiGregorio, incorporated herein by reference to the Company's Form 8‑K filed on September 21, 2005.
|
†10.31
|
Amendment to employment agreement with Francis V. Dane, incorporated herein by reference to the Company's Form 8‑K filed on September 21, 2005.
|
†10.32
|
Form of stock option agreement dated August 31, 2005 with Russell L. Davis, incorporated by reference to Exhibit 10.30 of the Company's Form 10-K/A filed on September 15, 2006.
|
Exhibit
Number
|
Document
|
†10.33
|
Form of stock option agreement dated December 19, 2005 with Guido DiGregorio, incorporated by reference to Exhibit 10.30 of the Company's Form 10-K/A filed on September 15, 2006.
|
†10.34
|
Form of stock option agreement dated August 31, 2005 with Francis V. Dane, incorporated by reference to Exhibit 10.30 of the Company's Form 10-K/A filed on September 15, 2006.
|
†10.35
|
Form of stock option agreement dated August 31, 2005 with C. B. Sung, incorporated by reference to Exhibit 10.30 of the Company's Form 10-K/A filed on September 15, 2006.
|
10.36
|
Form of Note and Warrant Purchase Agreement dated February 5, 2007, by and among the Company and the Purchasers identified therein, incorporated herein by reference to Exhibit 10.34 to the Company's Form 8‑K filed on February 5, 2007.
|
10.37
|
Form of Registration Rights Agreement dated February 5, 2007, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.35 to the Company's Form 8‑K filed on February 5, 2007.
|
10.38
|
Amendment to the Note and Warrant Purchase Agreement dated February 5, 2007, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 99.1 to the Company's Form 8‑K filed on March 15, 2007.
|
10.39
|
Form of Note and Warrant Purchase Agreement dated June 15, 2007, by and among the Company and the Purchasers identified therein, incorporated herein by reference to Exhibit 10.34 to the Company's Form 8‑K filed on June 15, 2007.
|
10.40
|
Form of Registration Rights Agreement dated June 15, 2007, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.35 to the Company's Form 8‑K filed on June 15, 2007.
|
10.41
|
Form of Securities Purchase and Registration Rights Agreement dated August 24, 2007, by and among the Company and Phoenix Venture Fund LLC, incorporated herein by reference to Exhibit 10.36 to the Company's Form 8‑K filed on August 27, 2007.
|
†10.42
|
Consulting Agreement dated January 9, 2008 between the Company and GS Meyer & Associates LLC - Incorporated by reference to Exhibit 10.42 to the Company's Annual Report on Form 10-K filed on March 12, 2007.
|
10.43
|
Credit Agreement dated June 5, 2008, by and among the Company and the Lenders Party Hereto and SG Phoenix as Collateral Agent, incorporated herein by reference to Exhibit 10.41 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2008.
|
10.44
|
Pledge and Security Agreement dated June 5, 2008, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.42 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2008.
|
10.44
|
Securities Purchase Agreement dated June 5, 2008, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.43 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2008.
|
10.45
|
Registration Rights Agreement dated June 5, 2008, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.44 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2008.
|
10.46
|
Amendment No. 1 to Credit Agreement dated May 28, 2009, by and among the Company, the Lenders and Additional Lenders Parties Hereto and SG Phoenix as Collateral Agent, incorporated herein by reference to Exhibit 10.46 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2009.
|
10.47
|
Amendment No. 1 to Registration Rights Agreement dated May 28, 2009, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.47 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2009.
|
10.48
|
Salary Reduction Plan for Executive Officers of Communication Intelligence Corporation under Amendment No. 1 to Credit Agreement dated May 28, 2009, incorporated herein by reference to Exhibit 10.48 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2009.
|
10.53
|
Amendment No. 3 to Credit Agreement dated July 22, 2010, by and among the Company, the Lenders and Additional Lenders Parties Hereto and SG Phoenix as Collateral Agent, incorporated herein by reference to Exhibit 10.53 to the Company's Quarterly Report on Form 10-Q filed on November 12, 2010.
|
Exhibit
Number
|
Document
|
10.54
|
Amendment No. 3 to Registration Rights Agreement dated July 22, 2010, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.54 to the Company's Quarterly Report on Form 10-Q filed on November 12, 2010.
|
10.55
|
Registration Rights Agreement dated August 5, 2010, by and among the Company and the Persons Executing the Agreement as Investors, incorporated herein by reference to Exhibit 10.55 to the Company's Quarterly Report on Form 10-Q filed on November 12, 2010.
|
10.56
|
Investor Rights Agreement dated August 5, 2010, by and among the Company and Phoenix Venture Fund LLC, SG Phoenix LLC, Michael Engmann, Ronald Goodman, Kendu Partners Company and MDNH Partners L.P., incorporated herein by reference to Exhibit 10.56 to the Company's Quarterly Report on Form 10-Q filed on November 12, 2010.
|
10.57
|
Securities Purchase Agreement dated December 9, 2010, by and among the Company, Phoenix Venture Fund LLC, and the Investors signatory thereto, incorporated herein by reference to Exhibit 10.57 to the Company's Current Report on Form 8-K filed on December 9, 2010.
|
10.58
|
Registration Rights Agreement dated December 31, 2010, by and among the Company and the Persons Executing the Agreement as Investors, incorporated herein by reference to Exhibit 10.58 to the Company's Current Report on Form 8-K filed on January 6, 2011.
|
10.59
|
Form of Subscription Agreement dated March 31, 2011, by and among the Company and the Person Executing the Agreement as Subscribers, incorporated herein by reference to Exhibit 10.61 to the Company's Current Report on Form 8-K filed on April 4, 2011.
|
10.60
|
Amendment No. 1 to Registration Rights Agreement dated March 31, 2011, by and among the Company and the Persons Executing the Agreement as Required Holders, incorporated herein by reference to Exhibit 10.62 to the Company's Current Report on Form 8-K filed on April 4, 2011.
|
10.61
|
Note and Warrant Purchase Agreement dated September 20, 2011,
incorporated herein by reference to Exhibit 10.61 to the Company's Quarterly Report on Form 10-Q filed on November 14, 2011.
|
10.62
|
Note and Warrant Purchase Agreement dated December 2, 2011, incorporated herein by reference to Exhibit 10.62 to the Company's Annual Report on Form 10-K filed on March 30, 2012.
|
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
|
14.1
|
Code of Ethics, incorporated by reference to Exhibit 14 to the Company's Annual Report on Form 10-K filed on March 30, 2004.
|
*21.1
|
Schedule of Subsidiaries.
|
*23.1
|
Consent of PMB Helin Donovan, LLP, Independent Registered Public Accounting Firm.
|
*23.2
|
Consent of Armanino LLP, Independent Registered Public Accounting Firm.
|
*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. |
† | Indicates management contract or compensatory plan, contract or arrangement . |
†† | Confidential treatment of certain portions of this exhibit have been requested from the SEC pursuant to a request for confidentiality dated March 30, 1999, filed pursuant to the Exchange Act. |
††† | Confidential treatment of certain portions of this exhibit have been requested from the SEC pursuant to a request for confidentiality dated March 30, 2006 filed pursuant to the Exchange Act. |
Communication Intelligence Corporation
|
||
By:
|
/s/ Andrea Goren
Andrea Goren
(Principal Financial Officer and Officer Duly Authorized to Sign on Behalf of the Registrant)
|
Date
|
Signature
|
Title
|
|||
March 31, 2015
|
/s/
Philip S. Sassower
Philip S. Sassower
|
Chairman and Chief Executive Officer
(Principal Executive Officer)
|
|||
March 31, 2015
|
/s/
Andrea Goren
Andrea Goren
|
Director, Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|||
March 31, 2015
|
/s/
Stanly Gilbert
Stanley Gilbert
|
Director
|
|||
March 31, 2015
|
/s/
Jeffrey Holtmeier
Jeffrey Holtmeier
|
Director
|
|||
March 31, 2015
|
/s/
David Welch
David Welch
|
Director
|
December 31,
|
||||||||
2014
|
2013
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
775
|
$
|
945
|
||||
Accounts receivable, net of allowance of $22 and $22 at December 31, 2014 and 2013
|
122
|
410
|
||||||
Prepaid expenses and other current assets
|
80
|
57
|
||||||
Total current assets
|
977
|
1,412
|
||||||
Property and equipment, net
|
11
|
17
|
||||||
Patents, net
|
933
|
1,290
|
||||||
Other assets
|
29
|
29
|
||||||
Total assets
|
$
|
1,950
|
$
|
2,748
|
||||
Liabilities and Equity (Deficit)
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
328
|
327
|
||||||
Accrued compensation
|
293
|
315
|
||||||
Other accrued liabilities
|
338
|
232
|
||||||
Deferred revenue
|
257
|
490
|
||||||
Total current liabilities
|
1,216
|
1,364
|
||||||
Deferred revenue long-term
|
700
|
74
|
||||||
Deferred rent
|
41
|
86
|
||||||
Derivative liability
|
18
|
25
|
||||||
Other long-term liabilities
|
28
|
−
|
||||||
Total liabilities
|
2,003
|
1,549
|
||||||
Commitments and contingencies (Note 10)
|
−
|
−
|
||||||
Equity (deficit):
|
||||||||
Series A-1 Preferred Stock, $.01 par value; 2,000 shares authorized; 875 and 1,031shares issued and outstanding at December 31, 2014 and 2013, respectively ($875 liquidation preference at December 31, 2014)
|
875
|
1,031
|
||||||
Series B Preferred Stock, $.01 par value; 14,000 shares authorized; 12,251 and 11,102 shares issued and outstanding at December 31, 2014 and 2013, respectively ($18,377 liquidation preference at December 31, 2014)
|
10,381
|
9,232
|
||||||
Series C Preferred Stock, $.01 par value; 9,000 shares authorized; 4,975 and 4,508 shares issued and outstanding at December 31, 2014 and 2013, respectively ($7,462 liquidation preference at December 31, 2014)
|
5,553
|
5,086
|
||||||
Series D-1 Preferred Stock, $.01 par value; 10,000 shares authorized; 5,800 and 3,415 shares issued and outstanding at December 31, 2014 and 2013, respectively ($5,800 liquidation preference at December 31, 2014)
|
5,139
|
3,345
|
||||||
Series D-2 Preferred Stock, $.01 par value; 10,000 shares authorized; 5,720 and 4,783 shares issued and outstanding at December 31, 2014 and 2013, respectively ($5,779 liquidation preference at December 31, 2014)
|
4,671
|
4,002
|
||||||
Common stock, $.01 par value; 2,000,000 shares authorized; 234,306 and 232,558 shares issued and outstanding at December 31, 2014 and 2013, respectively
|
2,407
|
2,390
|
||||||
Treasury shares, 6,500 at December 31, 2014 and December 31, 2013 respectively
|
(325
|
)
|
(325
|
)
|
||||
Additional paid‑in‑capital
|
94,995
|
96,172
|
||||||
Accumulated deficit
|
(123,199
|
)
|
(119,184
|
)
|
||||
Accumulated other comprehensive loss
|
(14
|
)
|
(14
|
)
|
||||
Total CIC stockholder' equity
|
483
|
1,735
|
||||||
Non-controlling interest
|
(536
|
)
|
(536
|
)
|
||||
Total equity (deficit)
|
(53
|
)
|
1,199
|
|||||
Total liabilities and equity (deficit)
|
$
|
1,950
|
$
|
2,748
|
Years Ended December 31,
|
||||||||
2014
|
2013
|
|||||||
Revenue:
|
||||||||
Product
|
$
|
766
|
$
|
728
|
||||
Maintenance
|
749
|
690
|
||||||
1,515
|
1,418
|
|||||||
Operating costs and expenses:
|
||||||||
Cost of sales:
|
||||||||
Product
|
199
|
64
|
||||||
Maintenance
|
191
|
280
|
||||||
Research and development
|
1,931
|
2,073
|
||||||
Sales and marketing
|
1,264
|
1,272
|
||||||
General and administrative
|
1,743
|
2,026
|
||||||
5,328
|
5,715
|
|||||||
Loss from operations
|
(3,813
|
)
|
(4,297
|
)
|
||||
Other income (expense), net
|
50
|
(23
|
)
|
|||||
Interest expense:
|
||||||||
Related party
|
−
|
(436
|
)
|
|||||
Other
|
(259
|
)
|
−
|
|||||
Amortization of debt discount and deferred financing cost:
|
||||||||
Related party
|
−
|
(44
|
)
|
|||||
Loss on extinguishment of debt, related party
|
−
|
(67
|
)
|
|||||
Gain on derivative liability
|
7
|
103
|
||||||
Net loss
|
(4,015
|
)
|
(4,764
|
)
|
||||
Preferred stock:
|
||||||||
Accretion of beneficial conversion feature:
|
||||||||
Related party
|
(208
|
)
|
(599
|
)
|
||||
Other
|
(444
|
)
|
(648
|
)
|
||||
Preferred stock dividends:
|
||||||||
Related party
|
(1,364
|
)
|
(1,140
|
)
|
||||
Other
|
(1,348
|
)
|
(948
|
)
|
||||
Income tax expense
|
−
|
−
|
||||||
Net loss before non-controlling interest
|
(7,379
|
)
|
(8,099
|
)
|
||||
Net loss attributable to non-controlling interest
|
−
|
−
|
||||||
Net loss attributable to common stockholders
|
$
|
(7,379
|
)
|
$
|
(8,099
|
)
|
||
Basic and diluted loss per common share
|
$
|
(0.03
|
)
|
$
|
(0.04
|
)
|
||
Weighted average common shares outstanding, basic and diluted
|
232,878
|
226,225
|
||||||
Years Ended December 31,
|
||||||||
2014
|
2013
|
|||||||
Net loss:
|
$
|
(4,015
|
)
|
$
|
(4,764
|
)
|
||
Other comprehensive income, net of tax
|
||||||||
Foreign currency translation adjustment
|
−
|
15
|
||||||
Total comprehensive loss
|
$
|
(4,015
|
)
|
$
|
(4,749
|
)
|
||
Series A-1 Preferred
Shares
Outstanding
|
Series A-1 Preferred
Shares
Amount
|
Series B Preferred
Shares
Outstanding
|
Series B Preferred
Shares
Amount
|
Series C Preferred
Shares
Outstanding
|
Series C Preferred
Shares
Amount
|
Series D-1 Preferred
Shares
Outstanding
|
Series D-1 Preferred
Shares
Amount
|
Series D-2 Preferred
Shares
Outstanding
|
Series D-2 Preferred
Shares
Amount
|
Common
Shares
Outstanding
|
Common
Stock
Amount
|
Treasury
Stock
|
Additional
Paid‑In
Capital
|
Accumulated
Deficit
|
Non-Controlling Interest
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total
|
|
Balance as of December 31, 2012
|
953
|
$
953
|
10,058
|
$8,188
|
4,175
|
$4,753
|
1,124
|
$2,159
|
3,302
|
$3,073
|
224,523
|
$2,309
|
$(325)
|
$95,262
|
$(114,420)
|
$(536)
|
$(29)
|
$1,387
|
Stock-based employee compensation
|
819
|
819
|
||||||||||||||||
Common shares issued in connection with the cashless exercise of warrants
|
2,283
|
23
|
(23)
|
−
|
||||||||||||||
Common shares issued in connection with the exercise of warrants for cash
|
1,300
|
13
|
16
|
29
|
||||||||||||||
Common shares issued in connection with the conversion of Series C preferred shares
|
(100)
|
(100)
|
4,452
|
45
|
55
|
−
|
||||||||||||
Series D-1 preferred shares issued in a private placement upon the conversion of short-term debt plus accrued interest
|
786
|
786
|
786
|
|||||||||||||||
Cost of warrants issued with Series D-1 preferred shares upon the conversion of short-term debt plus accrued interest
|
(391)
|
391
|
−
|
|||||||||||||||
Beneficial conversion feature on Series D-1 preferred shares upon the conversion of short term debt plus accrued interest
|
(395)
|
395
|
−
|
|||||||||||||||
Accretion of beneficial conversion feature on Series D-1 preferred shares upon the conversion of short term debt plus accrued interest
|
395
|
(395)
|
−
|
|||||||||||||||
Series D-2 preferred shares upon the conversion of short-term debt plus accrued interest
|
393
|
393
|
393
|
|||||||||||||||
Cost of warrants issued with Series D-2 preferred shares upon the conversion of short-term debt plus accrued interest
|
(196)
|
196
|
−
|
|||||||||||||||
Beneficial conversion feature on Series D-1 preferred shares upon the conversion of short term debt plus accrued interest
|
(39)
|
39
|
−
|
|||||||||||||||
Accretion of beneficial conversion feature on Series D-1 preferred shares upon the conversion of short term debt plus accrued interest
|
39
|
(39)
|
−
|
|||||||||||||||
Series D-1 preferred shares issued in a private placement for cash, net of offering expenses of $26
|
837
|
810
|
810
|
|||||||||||||||
Cost of warrants issued with Series D-1 preferred shares issued in a private placement for cash
|
(302)
|
302
|
−
|
|||||||||||||||
Beneficial conversion feature on Series D-1 preferred shares issued in a private placement for cash
|
(381)
|
381
|
−
|
|||||||||||||||
Accretion of beneficial conversion feature on Series D-1 preferred shares issued in a private placement for cash
|
381
|
(381)
|
−
|
|||||||||||||||
Series D-2 preferred shares issued in a private placement for cash, net of offering expenses of $13
|
1,223
|
1,210
|
1,210
|
|||||||||||||||
Cost of warrants issued with Series D-2 preferred shares issued in a private placement for cash
|
(151)
|
151
|
−
|
|||||||||||||||
Beneficial conversion feature on Series D-1 preferred shares issued in a private placement for cash
|
(30)
|
30
|
−
|
|||||||||||||||
Accretion of beneficial conversion feature on Series D-1 preferred shares issued in a private placement for cash
|
30
|
(30)
|
−
|
|||||||||||||||
Exchange of Series D-2 Preferred Stock for shares of Series D-1 Preferred Stock issued in May 2013
|
537
|
537
|
(537)
|
(537)
|
−
|
|||||||||||||
Cost of warrants issued on exchange of Series D Preferred Stock
|
(385)
|
(192)
|
577
|
−
|
||||||||||||||
Beneficial conversion feature on exchange of Series D Preferred Stock
|
(152)
|
152
|
−
|
|||||||||||||||
Accretion of beneficial conversion feature on exchange of Series D Preferred Stock
|
152
|
-
|
(152)
|
−
|
||||||||||||||
Preferred share dividends, paid in kind
|
78
|
78
|
1,044
|
1,044
|
433
|
433
|
131
|
131
|
402
|
402
|
(2,088)
|
−
|
||||||
Beneficial conversion feature on preferred shares dividends issued in kind
|
(191)
|
(59)
|
250
|
−
|
||||||||||||||
Accretion of beneficial conversion feature on preferred shares dividends issued in kind
|
191
|
59
|
(250)
|
−
|
||||||||||||||
Warrants issued with short term debt
|
403
|
403
|
||||||||||||||||
Loan discount on demand notes
|
111
|
111
|
||||||||||||||||
Net loss attributable to non-controlling interest
|
−
|
−
|
||||||||||||||||
Comprehensive loss:
|
||||||||||||||||||
Net loss
|
(4,764)
|
(4,764)
|
||||||||||||||||
Foreign currency translation adjustment
|
15
|
15
|
||||||||||||||||
Balance as of December 31, 2013
|
1,031
|
$1,031
|
11,102
|
$9,232
|
4,508
|
$5,086
|
3,415
|
$3,345
|
4,783
|
$4,002
|
232,558
|
$2,390
|
$(325)
|
$96,172
|
$(119,184)
|
$(536)
|
$(14)
|
$1,199
|
Stock-based employee compensation
|
298
|
298
|
||||||||||||||||
Common shares issued in connection with the conversion of Series A-1 preferred shares
|
(238)
|
(238)
|
1,701
|
17
|
221
|
−
|
||||||||||||
Common shares issued in connection with the conversion of Series C preferred shares
|
(1)
|
(1)
|
47
|
-
|
1
|
−
|
||||||||||||
Series D-1 preferred shares issued in a private placement for cash, net of offering expenses of $85
|
1,913
|
1,828
|
1,828
|
|||||||||||||||
Series D-2 preferred shares issued in a private placement for cash, net of offering expenses of $16
|
397
|
381
|
381
|
|||||||||||||||
Beneficial conversion feature on Series D-1 preferred shares issued in a private placement for cash
|
(253)
|
253
|
−
|
|||||||||||||||
Accretion of beneficial conversion feature on Series D-1 preferred shares issued in a private placement for cash
|
253
|
(253)
|
−
|
|||||||||||||||
Beneficial conversion feature on Series D-2 preferred shares issued in a private placement for cash
|
(52)
|
52
|
−
|
|||||||||||||||
Accretion of beneficial conversion feature on Series D-2 preferred shares issued in a private placement for cash
|
52
|
(52)
|
−
|
|||||||||||||||
Cost of warrants issued with Series D-1 preferred shares issued in a private placement for cash
|
(506)
|
506
|
−
|
|||||||||||||||
Cost of warrants issued with Series D-2 preferred shares issued in a private placement for cash
|
(253)
|
253
|
−
|
|||||||||||||||
Cost of warrants issued in connection with a line of credit
|
258
|
258
|
Preferred share dividends, paid in kind
|
82
|
82
|
1,149
|
1,149
|
468
|
468
|
472
|
472
|
540
|
541
|
(2,712)
|
-
|
||||||
-
|
||||||||||||||||||
Beneficial conversion feature on preferred shares dividends issued in kind
|
(152)
|
(195)
|
347
|
−
|
||||||||||||||
Accretion of beneficial conversion feature on preferred shares dividends issued in kind
|
152
|
195
|
(347)
|
−
|
||||||||||||||
Change in derivative value of expired warrants
|
(2)
|
(2)
|
||||||||||||||||
Net loss attributable to non-controlling interest
|
−
|
-
|
||||||||||||||||
Comprehensive loss
|
||||||||||||||||||
Net loss
|
(4,015)
|
(4,015)
|
||||||||||||||||
Foreign currency translation adjustment
|
−
|
-
|
||||||||||||||||
Balance as of December 31, 2014
|
875
|
$
875
|
12,251
|
$10,381
|
4,975
|
$5,553
|
5,800
|
$5,139
|
5,720
|
$4,671
|
234,306
|
$2,407
|
$(325)
|
$94,995
|
$(123,199)
|
$(536)
|
$(14)
|
$
(53)
|
December 31,
|
||||||||
2014
|
2013
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(4,015
|
)
|
$
|
(4,764
|
)
|
||
Adjustments to reconcile net loss to net cash used for operating activities:
|
||||||||
Depreciation and amortization
|
367
|
381
|
||||||
Amortization of debt discount and deferred financing costs
|
−
|
44
|
||||||
Loss on extinguishment of debt
|
−
|
67
|
||||||
Stock-based employee compensation
|
298
|
819
|
||||||
Warrants issued in connection with line of credit
|
258
|
|||||||
Warrants issued with demand notes
|
−
|
436
|
||||||
Gain on derivative liability
|
(7
|
)
|
(103
|
)
|
||||
Gain on sale of trademark
|
(50
|
)
|
−
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable, net
|
288
|
291
|
||||||
Prepaid expenses and other current assets
|
(23
|
)
|
16
|
|||||
Accounts payable
|
1
|
252
|
||||||
Accrued compensation
|
(22
|
)
|
26
|
|||||
Other accrued liabilities
|
87
|
54
|
||||||
Deferred revenue
|
393
|
(254
|
)
|
|||||
Net cash used for operating activities
|
(2,425
|
)
|
(2,735
|
)
|
||||
Cash flows from investing activities:
Acquisition of property and equipment
|
(4
|
)
|
(5
|
)
|
||||
Net cash used for investing activities
|
(4
|
)
|
(5
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Net proceeds from issuance of short-term debt
|
−
|
1,460
|
||||||
Net proceeds from issuance of Series D-1 preferred shares
|
1,828
|
810
|
||||||
Net proceeds from issuance of Series D-2 preferred shares
|
381
|
1,210
|
||||||
Proceeds from exercise of warrants for cash
|
−
|
29
|
||||||
Proceeds from sale of trademark
|
50
|
−
|
||||||
Principal payments on short term notes payable
|
−
|
(310
|
)
|
|||||
Net cash provided by financing activities
|
2,259
|
3,199
|
||||||
Net increase (decrease) in cash and cash equivalents
|
(170
|
)
|
459
|
|||||
Cash and cash equivalents at beginning of period
|
945
|
486
|
||||||
Cash and cash equivalents at end of period
|
$
|
775
|
$
|
945
|
||||
December 31,
|
||||||||
2014
|
2013
|
|||||||
Supplementary disclosure of cash flow information
|
||||||||
Interest paid
|
$
|
1
|
$
|
1
|
||||
Income taxes paid
|
$
|
−
|
$
|
−
|
||||
Non-cash financing and investing transactions
|
||||||||
Cashless exercise of warrants
|
$
|
−
|
$
|
23
|
||||
Dividends on preferred shares
|
$
|
2,712
|
$
|
2,088
|
||||
Conversion of Series A-1 Preferred shares into Common Stock
|
$
|
238
|
$
|
−
|
||||
Conversion of Series C Preferred Stock into CommonStock
|
$
|
1
|
$
|
100
|
||||
Debt discount recorded in connection
with short-term debt
|
$
|
−
|
$
|
111
|
||||
Conversion of short term notes plus accrued interest into Series D-1 preferred shares
|
$
|
−
|
$
|
786
|
||||
Conversion of short term notes plus accrued interest into Series D-2 preferred shares
|
$
|
−
|
$
|
393
|
||||
Accretion of beneficial conversion feature on Preferred
Share dividends
|
||||||||
Series C Preferred Stock
|
$
|
152
|
$
|
191
|
||||
Series D-1 Preferred Stock
|
$
|
195
|
$
|
59
|
||||
Accretion of beneficial conversion feature on Preferred
Shares issued
|
||||||||
Series D-1 Preferred Stock
|
$
|
253
|
$
|
958
|
||||
Series D-2 Preferred Stock
|
$
|
52
|
$
|
39
|
||||
Warrants issued in connection with:
|
||||||||
Series D financing subscription agreements
|
$
|
759
|
$
|
453
|
||||
Debt conversion
|
$
|
−
|
$
|
587
|
||||
Exchange of May Series D financing
|
$
|
−
|
$
|
575
|
2014
|
2013
|
|||||||
Cash in bank
|
$
|
775
|
$
|
945
|
||||
Money market funds
|
–
|
–
|
||||||
Cash and cash equivalents
|
$
|
775
|
$
|
945
|
||||
Year Ended December 31,
|
||||
2015
|
$
|
342
|
||
2016
|
323
|
|||
2017
|
268
|
|||
Total
|
$
|
933
|
December 31,
2014
|
December 31,
2013
|
|||||||
Common Stock subject to outstanding options
|
72,012
|
69,537
|
||||||
Series A-1 Preferred Stock
|
6,252
|
7,368
|
||||||
Series B Preferred Stock
|
282,750
|
256,241
|
||||||
Series C Preferred Stock
|
221,104
|
200,354
|
||||||
Series D-1 Preferred Stock
|
257,773
|
151,766
|
||||||
Series D-2 Preferred Stock
|
114,400
|
95,682
|
||||||
Warrants outstanding
|
213,521
|
77,155
|
||||||
2.
|
Concentrations:
|
Accounts Receivable
As of December 31,
|
Total Revenue
for the year
ended December 31,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Customer #1
|
44
|
%
|
47
|
%
|
−
|
15
|
%
|
|||||||||
Customer #2
|
−
|
15
|
%
|
−
|
10
|
%
|
||||||||||
Customer #3
|
19
|
%
|
19
|
%
|
12
|
%
|
16
|
%
|
||||||||
Customer #4
|
−
|
−
|
−
|
10
|
%
|
|||||||||||
Customer #5
|
−
|
−
|
−
|
12
|
%
|
|||||||||||
Customer #6
|
−
|
−
|
12
|
%
|
−
|
|||||||||||
Customer #7
|
−
|
−
|
11
|
%
|
−
|
|||||||||||
Customer #8
|
10
|
%
|
−
|
−
|
−
|
|||||||||||
Total concentration
|
73
|
%
|
81
|
%
|
35
|
%
|
63
|
%
|
December 31,2014
|
December 31, 2013
|
|||||||
Sales within the United States
|
99
|
%
|
98
|
%
|
||||
Sales outside of the United States
|
1
|
%
|
2
|
%
|
||||
Total
|
100
|
%
|
100
|
%
|
3.
|
Property and equipment:
|
2014
|
2013
|
|||||||
Machinery and equipment
|
$
|
1,235
|
$
|
1,231
|
||||
Office furniture and fixtures
|
435
|
435
|
||||||
Leasehold improvements
|
90
|
90
|
||||||
Purchased software
|
323
|
323
|
||||||
2,083
|
2,079
|
|||||||
Less accumulated depreciation and amortization
|
(2,072
|
)
|
(2,062
|
)
|
||||
$
|
11
|
$
|
17
|
|||||
4.
|
Patents:
|
Expiration
|
Estimated Original
Life
|
2014
|
2013
|
|||||||||||||||
Patent (Various)
|
Various
|
5
|
$
|
9
|
$
|
9
|
||||||||||||
Patent (Various)
|
Various
|
7
|
476
|
476
|
||||||||||||||
5544255
|
2013
|
13
|
93
|
93
|
||||||||||||||
5647017
|
2014
|
14
|
187
|
187
|
||||||||||||||
5818955
|
2015
|
15
|
373
|
373
|
||||||||||||||
6064751
|
2017
|
17
|
1,213
|
1,213
|
||||||||||||||
6091835
|
2017
|
17
|
4,394
|
4,394
|
||||||||||||||
6,745
|
6,745
|
|||||||||||||||||
Less accumulated amortization
|
(5,812
|
)
|
(5,455
|
)
|
||||||||||||||
$
|
933
|
$
|
1,290
|
|||||||||||||||
5.
|
Chinese Joint Venture (Non-Controlling Interest):
|
6.
|
Other accrued liabilities:
|
2014
|
2013
|
|||||||
Accrued professional services
|
$
|
8
|
$
|
8
|
||||
Rents
|
44
|
35
|
||||||
Management fees
|
280
|
180
|
||||||
Other
|
6
|
9
|
||||||
Total
|
$
|
338
|
$
|
232
|
7.
|
Debt:
|
Phoenix Banner Holdings LLC
|
Michael W. Engmann
|
Kendu Partners Company
|
JAG Multi Investments
|
Philip Sassower
|
||||||
Date
|
Note Amount
|
Warrants
|
Note Amount
|
Warrants
|
Note Amount
|
Warrants
|
Note Amount
|
Warrants
|
Note Amount
|
Warrants
|
8/2/2013
|
$250
|
|||||||||
9/3/2013
|
$250
|
|||||||||
9/27/2013
|
$
250
|
|||||||||
11/1/2013
|
$
125
|
2,083
|
||||||||
11/6/2013
|
4,167
|
4,167
|
4,167
|
|||||||
12/13/2013
|
$
150
|
5,000
|
||||||||
12/17/2013
|
$
125
|
2,083
|
||||||||
Total
|
$250
|
4,167
|
$
400
|
9,167
|
$250
|
4,167
|
$
125
|
2,083
|
$
125
|
2,083
|
7.
|
Debt:
|
8.
|
Derivative liabilities:
|
8.
|
Derivative liabilities:
|
Issue
Date
|
Reason for issuance
|
Number of warrants issued
|
Exercise price
|
Risk free interest rate
|
Expected volatility
|
Derivative liability value on date of issue
|
|||||||||||||||
4/23/2012
|
Bridge financing warrants
|
5,000
|
$
|
0.050
|
1.78
|
%
|
205.3
|
%
|
$
|
50
|
|||||||||||
4/23/2012
|
Finder's fee warrants
|
349
|
$
|
0.050
|
1.78
|
%
|
205.3
|
%
|
$ ˗
|
||||||||||||
11/15/2012
|
Administrative fee warrants
|
3,000
|
$
|
0.050
|
1.58
|
%
|
202.2
|
%
|
$
|
8
|
|||||||||||
11/15/2012
|
Finder's fee warrants
|
294
|
$
|
0.050
|
1.58
|
%
|
202.2
|
%
|
$
|
-
|
Derivative Liability
|
||||
Balance at January 1, 2013
|
$
|
25
|
||
Gain on derivative liability
|
(7
|
)
|
||
Balance at December 31, 2014
|
$
|
18
|
Value at
December 31, 2014
|
Quoted prices in active markets
|
Significant other observable inputs
|
Significant unobservable inputs
|
||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||
Derivative liability
|
$18
|
$
−
|
$
−
|
$
18
|
9.
|
Stockholders' equity:
|
9.
|
Stockholders' equity:
|
1999 Option Plan
|
2009 Stock Compensation Plan
|
2011 Stock Compensation Plan
|
Individual Plans
|
|
Shares authorized for issuance
|
4,000
|
7,000
|
150,000
|
−
|
Option vesting period
|
Quarterly over 3 years
|
Quarterly over 3 years
|
Immediate/Quarterly over 3 years
|
Quarterly over 3 years
|
Date adopted by shareholders
|
June 2009
|
−
|
November 2011
|
−
|
Option term
|
7 Years
|
7 Years
|
7 Years
|
7 Years
|
Options outstanding
|
25
|
425
|
71,437
|
125
|
Options exercisable
|
25
|
425
|
56,483
|
125
|
Weighted average exercise price
|
$0.200
|
$0.105
|
$0.046
|
$0.15
|
Year Ended
December 31, 2014
|
Year Ended
December 31, 2013
|
||
Risk free interest rate
|
0.04% - 3.73%
|
0.40% - 4.92%
|
|
Expected life (years)
|
3.26 – 7.00
|
2.82 – 7.00
|
|
Expected volatility
|
91.99% - 198.38%
|
91.99% - 198.38%
|
|
Expected dividends
|
None
|
None
|
|
Estimated average forfeiture rate
|
10%
|
10%
|
Year Ended
December 31, 2014
|
Year Ended
December 31, 2013
|
|||||||
Research and development
|
$
|
77
|
$
|
262
|
||||
Sales and marketing
|
72
|
100
|
||||||
General and administrative
|
134
|
410
|
||||||
Director options
|
15
|
47
|
||||||
Stock-based compensation expense included in operating expenses
|
$
|
298
|
$
|
819
|
9.
|
Stockholders' equity:
|
December 31, 2014
|
December 31, 2013
|
|||||||
Shares
|
Weighted
Average
Exercise Price
|
Aggregate Intrinsic Value
|
Weighted Average Remaining Contractual Life
|
Shares
|
Weighted
Average
Exercise Price
|
Aggregate Intrinsic Value
|
Weighted Average Remaining Contractual Life
|
|
Outstanding at beginning of period
|
69,537
|
$0.05
|
44,529
|
$0.05
|
||||
Granted
|
4,500
|
$0.02
|
$
27
|
26,553
|
$0.04
|
─
|
||
Forfeited/ Cancelled
|
(2,025)
|
$0.11
|
(1,545)
|
$0.11
|
||||
Outstanding at period end
|
72,012
|
$0.04
|
─
|
4.18
|
69,537
|
$0.05
|
─
|
5.02
|
Options vested and exercisable at period end
|
57,058
|
$0.05
|
$
7
|
3.86
|
43,379
|
$0.05
|
─
|
4.61
|
Weighted average grant-date fair value of options granted during the period
|
$0.04
|
$0.04
|
Options Outstanding
|
Options Exercisable
|
|||||
Range of Exercise Prices
|
Options
Outstanding
|
Weighted Average Remaining Contractual Life (in years)
|
Weighted Average Exercise Price
|
Number Outstanding
|
Weighted Average Exercise Price
|
|
$0.00 – $0.50
|
72,012
|
4.18
|
$
0.04
|
57,058
|
$
0.05
|
Non-vested Shares
|
Shares
|
Weighted Average
Grant-Date
Fair Value
|
||||||
Non-vested at January 1, 2013
|
26,158
|
$
|
0.04
|
|||||
Granted
|
4,500
|
$
|
0.04
|
|||||
Forfeited
|
(598
|
)
|
$
|
0.03
|
||||
Vested
|
(15,106
|
)
|
$
|
0.04
|
||||
Non-vested at December 31, 2014
|
14,954
|
$
|
0.05
|
9.
|
Stockholders' equity:
|
Class of Preferred Stock
|
Issue Date
|
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
|
May 2008
|
8%
|
Quarterly in Arrears
|
$1.00
|
$0.1400
|
875
|
6,252
|
Series B
|
August 2010
|
10%
|
Quarterly in Arrears
|
$1.50
|
$0.0433
|
12,251
|
282,750
|
Series C
|
December/March 2011
|
10%
|
Quarterly in Arrears
|
$1.50
|
$0.0225
|
4,975
|
221,104
|
Series D-1
|
November 2012/May and December 2013
|
10%
|
Quarterly in Arrears
|
$1.00
|
$0.0225
|
5,800
|
257,773
|
Series D-2
|
November 2012/May and December 2013
|
10%
|
Quarterly in Arrears
|
$1.00
|
$0.0500
|
5,720
|
114,400
|
Total
|
882,279
|
9.
|
Stockholders' equity:
|
9.
|
Stockholders' equity:
|
9.
|
Stockholders' equity:
|
December 31,2014
|
December 31, 2013
|
|||||||||||||||||||||||
Warrants
|
Common Shares Issued
|
Cash received
|
Warrants
|
Common Shares Issued
|
Cash received
|
|||||||||||||||||||
−
|
−
|
$
|
−
|
1,300
|
1,300
|
$
|
29
|
|||||||||||||||||
−
|
−
|
$
|
−
|
11,111
|
2,283
|
$
|
−
|
|||||||||||||||||
Total
|
−
|
−
|
$
|
−
|
12,411
|
3,583
|
$
|
29
|
December 31, 2014
|
December 31, 2013
|
|||||||||||||||||||||||
Related Party
|
Other
|
Total
|
Related Party
|
Other
|
Total
|
|||||||||||||||||||
Warrants issued in connection with Notes
|
˗
|
˗
|
˗
|
19,584
|
2,083
|
21,667
|
||||||||||||||||||
Warrants issued with purchase of Series D Preferred
|
6,159
|
15,259
|
21,418
|
9,561
|
9,428
|
18,989
|
||||||||||||||||||
Warrants issued in the December Series D Preferred exchange
|
2,827
|
7,627
|
10,454
|
|||||||||||||||||||||
Warrants issued with line of credit
|
-
|
11,564
|
11,564
|
-
|
-
|
-
|
||||||||||||||||||
Contingent Warrants issued
|
34,062
|
86,723
|
120,785
|
-
|
-
|
-
|
||||||||||||||||||
Total
|
40,221
|
113,546
|
153,767
|
31,972
|
19,138
|
51,110
|
December 31, 2014
|
December 31, 2013
|
|||||||||||||||
Warrants
|
Weighted Average Exercise Price
|
Warrants
|
Weighted Average Exercise Price
|
|||||||||||||
Outstanding at beginning of period
|
77,155
|
$
|
0.0289
|
151,722
|
$
|
0.0269
|
||||||||||
Issued
|
153,767
|
$
|
0.0275
|
51,110
|
$
|
0.0283
|
||||||||||
Exercised
|
˗
|
$
|
˗ |
(12,411
|
)
|
$
|
0.0225
|
|||||||||
Expired
|
(17,401
|
)
|
$
|
0.0225
|
(113,266
|
)
|
$
|
0.0230
|
||||||||
Outstanding at end of period
|
213,521
|
$
|
0.0284
|
77,155
|
$
|
0.0289
|
||||||||||
Exercisable at end of period
|
213,521
|
$
|
0.0284
|
77,155
|
$
|
0.0289
|
9.
|
Stockholders' equity:
|
Number of Warrants Outstanding and Exercisable
|
Weighted Average Remaining Life
|
Weighted Average Exercise Price per share
|
8,643
|
1.95
|
$
0.0275
|
204,878
|
0.52
|
$
0.0500
|
213,521
|
1.89
|
$
0.0284
|
10.
|
Commitments and Contingencies:
|
Contractual obligations
|
Total
|
2015
|
2016
|
Thereafter
|
||
Operating lease commitments
|
$543
|
$293
|
$250
|
-
|
11.
|
Income taxes:
|
2014
|
2013
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss carry-forwards
|
$
|
23,114
|
$
|
27,266
|
||||
Credit carry-forwards
|
-
|
137
|
||||||
Accruals and reserves
|
141
|
|||||||
Deferred revenue
|
382
|
224
|
||||||
Intangibles
|
273
|
1,046
|
||||||
Other, net
|
-
|
373
|
||||||
Fixed Assets
|
894
|
-
|
||||||
Gross tax assets
|
24,804
|
29,046
|
||||||
Valuation allowance
|
(24,804
|
)
|
(29,046
|
)
|
||||
Net deferred tax assets
|
$
|
-
|
$
|
-
|
|
|
2014
|
2013
|
|||||||
Income tax benefit at the federal statutory rate
|
$
|
(1,364
|
)
|
$
|
(2,668
|
)
|
||
State income tax benefit
|
(233
|
)
|
(458
|
)
|
||||
Credits
|
-
|
-
|
||||||
Prior year true up to return
|
5,758
|
1,416
|
||||||
Permanent items and other
|
81
|
1,391
|
||||||
Change in valuation allowance
|
(4,242
|
)
|
319
|
|||||
Income tax expense
|
$
|
–
|
$
|
–
|
12.
|
Subsequent events:
|
Subscriber Information
Name:________________________________________________________
Address:______________________________________________________
Email: ____________________________________
|
Total Investment
$ _________________________
|