UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): December 2, 2011
Communication Intelligence Corporation
(Exact name of registrant as specified in its charter)
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Delaware
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000-19301
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94-2790442
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(State or other
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(Commission File Number)
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(I.R.S. Employer
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jurisdiction of
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Identification No.)
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incorporation)
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275 Shoreline Drive, Suite 500
Redwood Shores, CA 94065
(Address of principal executive offices)
(650) 802-7888
Registrant’s telephone number, including area code
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into Material Definitive Agreement
Item 3.02 Unregistered Sales of Equity Securities
On December 2, 2011, Communication Intelligence Corporation (the “Company”) entered into a Note and Warrant Purchase Agreement (the “Purchase Agreement”) with several investors (each an “Investor,” and, collectively, the “Investors”), including persons and entities affiliated with the Company’s largest stockholder, Phoenix Venture Fund LLC (“Phoenix”). Under the terms of the Purchase Agreement, the Company issued unsecured convertible promissory notes in the aggregate amount of $500,000 (the “Notes”) to the Investors. The Notes bear interest at the rate of 10% per annum, and have a maturity date of December 2, 2012. The Notes are also convertible at the option of the Investors into securities sold in the Company’s next equity financing with gross proceeds to the Company in excess of $100,000. In connection with the issuance of the Notes, the Company also issued to the Investors warrants to purchase an aggregate of 5,555,557 shares of the Company’s Common Stock at an exercise price of $0.0225 per share. The warrants are exercisable for a period of three years.
The Company intends to use the net proceeds from the transaction for working capital and general corporate purposes.
Transactions With Related Persons
As indicated above, certain Investors are affiliates of Phoenix. In particular, Philip Sassower, the Company’s Chief Executive Officer and Chairman of the Board of Directors, participated in the financing as an Investor. Andax LLC, an entity controlled by Andrea Goren, the Company’s Chief Financial Officer, participated in the financing as an Investor. In addition, Mr. Goren has ownership interests in another entity which participated in the financing as an Investor, although Mr. Goren does not have the power to vote or dispose of the securities purchased by that entity. Philip Sassower and Andrea Goren are the co-managers of SG Phoenix Ventures LLC, which is the Managing Member of Phoenix. Phoenix has participated in several of the Company’s previous financing transactions, and is the Company’s largest stockholder.
The Note and the warrant, and the shares of Common Stock issuable upon conversion or exercise thereof, were offered and sold to the Investor in reliance on the exemptions provided by Section 4 (2) of the Securities Act of 1933, as amended (the “Securities Act"), and Regulation D promulgated under the Securities Act and in reliance on similar exemptions under applicable state laws. Certificates representing such securities contain restrictive legends preventing sale, transfer or disposition unless registered under the Securities Act or pursuant to an exemption thereunder.
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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 hereunto duly authorized.
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Communication Intelligence Corporation
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December 8, 2011
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By:
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/s/ Craig Hutchison
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Craig Hutchison
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Vice President and Assistant Treasurer
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