☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 11-2920559 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S Employer Identification Number) |
8000 Regency Parkway, Suite 542, Cary, North Carolina | 27518 | |
(Address of principal executive offices) | (Zip Code) |
PART I. Financial Information | Page Number | |
3 | ||
3 | ||
4 | ||
5 | ||
6 | ||
7 | ||
PART II. Other Information | ||
Item 3. Defaults Upon Senior Securities | 24 | |
Item 4. Mine Safety Disclosures | 24 | |
Item | ||
6. Exhibits | ||
SIGNATURE | ||
March 31 2016 | December 31, 2015 | |||||||
ASSETS | (unaudited) | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,121 | $ | 1,009 | ||||
Trade accounts receivable | 137 | 256 | ||||||
Prepaid expenses and other current assets | 289 | 235 | ||||||
Total current assets | 1,547 | 1,500 | ||||||
Property and equipment, net | 11 | 11 | ||||||
Goodwill (Note 2) | 1,658 | 1,658 | ||||||
Total assets | $ | 3,216 | $ | 3,169 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
Liabilities: | ||||||||
Short-term debt less unamortized debt discount of $205 (Note 3) | $ | 2,561 | $ | 2,098 | ||||
Accounts payable | 1,187 | 1,336 | ||||||
Accrued expenses: | ||||||||
Salaries, wages, and related items | 1,557 | 1,601 | ||||||
Accrued interest | 2,029 | 2,021 | ||||||
Other | 650 | 653 | ||||||
Deferred revenue | 930 | 605 | ||||||
Total current liabilities | 8,914 | 8,314 | ||||||
Long-term debt (Note 3) | 2,132 | 2,132 | ||||||
Total liabilities | 11,046 | 10,446 | ||||||
Commitments and Contingencies (Note 7 and 8) | ||||||||
Stockholders' deficit: | ||||||||
Convertible preferred stock, $0.001 par value, 10,000,000 shares authorized No shares issued and outstanding at March 31, 2016 and December 31, 2015 | -- | -- | ||||||
Common stock, $0.001 par value, 600,000,000 shares authorized, 192,253,005 issued and outstanding at March 31, 2016 and December 31, 2015 (Note 4) | 192 | 192 | ||||||
Additional paid-in capital | 246,269 | 246,220 | ||||||
Accumulated deficit | (254,291 | ) | (253,689 | ) | ||||
Total stockholders' deficit | (7,830 | ) | (7,277 | ) | ||||
Total liabilities and stockholders' deficit | $ | 3,216 | $ | 3,169 |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Revenue: | ||||||||
Software | $ | 11 | $ | 86 | ||||
Maintenance | 389 | 367 | ||||||
Services | 7 | 7 | ||||||
Total operating revenue | 407 | 460 | ||||||
Cost of revenue | ||||||||
Software | -- | -- | ||||||
Maintenance | 50 | 30 | ||||||
Services | 143 | 148 | ||||||
Total cost of revenue | 193 | 178 | ||||||
Gross margin | 214 | 282 | ||||||
Operating expenses: | ||||||||
Sales and marketing | 148 | 281 | ||||||
Research and product development | 304 | 341 | ||||||
General and administrative | 258 | 291 | ||||||
Total operating expenses | 710 | 913 | ||||||
Loss from operations | (496 | ) | (631 | ) | ||||
Other income/(expense): | ||||||||
Interest expense | (106 | ) | (234 | ) | ||||
Total other income/(expense) | (106 | ) | (234 | ) | ||||
Net loss | (602 | ) | (865 | ) | ||||
8% preferred stock Series B dividend | -- | 31 | ||||||
Net loss applicable to common stockholders | $ | (602 | ) | $ | (896 | ) | ||
Loss per share applicable to common stockholders: | ||||||||
Basic and Diluted | $ | 0.00 | $ | (0.01 | ) | |||
Weighted average shares outstanding: | ||||||||
Basic and Diluted | 192,253 | 85,848 |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (602 | ) | $ | (865 | ) | ||
Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
Depreciation and amortization | 2 | 4 | ||||||
Stock compensation expense | (1 | ) | -- | |||||
Amortization of debt discount | 64 | -- | ||||||
Changes in assets and liabilities: | ||||||||
Trade accounts receivable | 119 | 985 | ||||||
Prepaid expenses and other current assets | (54 | ) | (73 | ) | ||||
Accounts payable and accrued expenses | (188 | ) | 378 | |||||
Deferred revenue | 325 | (18 | ) | |||||
Net cash generated/(used) by operating activities | (335 | ) | 411 | |||||
Cash flows from investing activities: | ||||||||
Purchases of equipment | (2 | ) | (6 | ) | ||||
Net cash used by investing activities | (2 | ) | (6 | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings under debt | 453 | 260 | ||||||
Repayments of debt | (4 | ) | (15 | ) | ||||
Net cash generated by financing activities | 449 | 245 | ||||||
Net increase in cash | 112 | 650 | ||||||
Cash: | ||||||||
Beginning of period | 1,009 | 20 | ||||||
End of period | $ | 1,121 | $ | 670 |
June 30, | December 31, | |
2016 | 2015 | |
ASSETS | (unaudited) | |
Current assets: | ||
Cash and cash equivalents | $657 | $1,009 |
Trade accounts receivable | 37 | 256 |
Prepaid expenses and other current assets | 68 | 235 |
Total current assets | 762 | 1,500 |
Property and equipment, net | 11 | 11 |
Goodwill (Note 2) | 1,658 | 1,658 |
Total assets | $2,431 | $3,169 |
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||
Liabilities: | ||
Short-term debt less unamortized debt discount of $137 at June 30, 2016 and $219 at December 31, 2015 (Note 3) | $4,761 | $2,098 |
Accounts payable | 961 | 1,336 |
Accrued expenses: | ||
Salaries, wages, and related items | 1,548 | 1,601 |
Accrued interest | 2,069 | 2,021 |
Other | 670 | 653 |
Deferred revenue | 820 | 605 |
Total current liabilities | 10,829 | 8,314 |
Long-term debt (Note 3) | -- | 2,132 |
Total liabilities | 10,829 | 10,446 |
Commitments and Contingencies (Note 7 and 8) | ||
Stockholders' deficit: | ||
Convertible preferred stock, $0.001 par value, 10,000,000 shares authorized | ||
No shares issued and outstanding at June 30, 2016 and December 31, 2015 | -- | -- |
Common stock, $0.001 par value, 600,000,000 shares authorized, | 192 | 192 |
192,253,005 issued and outstanding at June 30, 2016 and December 31, 2015 (Note 4) | ||
Additional paid-in capital | 246,269 | 246,220 |
Accumulated deficit | (254,859) | (253,689 ) |
Total stockholders' deficit | (8,398) | (7,277 ) |
Total liabilities and stockholders' deficit | $2,431 | $3,169 |
Common Stock | Preferred Stock | Additional Paid-in | Accumulated | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | (Deficit) | Total | ||||||||||||||||||||||
Balance at December 31, 2015 | 192,253,005 | $ | 192 | -- | -- | $ | 246,220 | $ | (253,689 | ) | $ | (7,277 | ) | |||||||||||||||
Options issued as compensation | (1 | ) | (1 | ) | ||||||||||||||||||||||||
Debt discount due to imputed interest | 50 | 50 | ||||||||||||||||||||||||||
Net loss | (602 | ) | (602 | ) | ||||||||||||||||||||||||
Balance at March 31, 2016 (unaudited) | 192,253,005 | $ | 192 | -- | -- | $ | 246,269 | $ | (254,291 | ) | $ | (7,830 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | |||
2016 | 2015 | 2016 | 2015 | |
Revenue: | ||||
Software | $12 | $119 | $23 | $205 |
Maintenance | 256 | 368 | 645 | 735 |
Services | 78 | 22 | 85 | 28 |
Total operating revenue | 346 | 509 | 753 | 968 |
Cost of revenue: | ||||
Software | -- | -- | -- | -- |
Maintenance | 48 | 27 | 97 | 56 |
Services | 98 | 141 | 242 | 289 |
Total cost of revenue | 146 | 168 | 339 | 345 |
Gross margin | 200 | 341 | 414 | 623 |
Operating expenses: | ||||
Sales and marketing | 182 | 338 | 331 | 619 |
Research and product development | 290 | 408 | 594 | 749 |
General and administrative | 187 | 216 | 445 | 507 |
Total operating expenses | 659 | 962 | 1,370 | 1,875 |
Loss from operations | (459) | (621) | (956) | (1,252) |
Other income/(expense): | ||||
Interest expense | (109) | (49) | (214) | (283) |
Total other income/(expense) | (109) | (49) | (214) | (283) |
Net loss | (568) | (670) | (1,170) | (1,535) |
8% preferred stock Series B dividend | -- | 31 | -- | 62 |
Net loss applicable to common stockholders | $(568) | $(701) | $(1,170) | $(1,597) |
Loss per share applicable to common stockholders: | ||||
Basic and Diluted | $(0.00) | $(0.00) | $(0.01) | $(0.01) |
Weighted average shares outstanding: | ||||
Basic and Diluted | 192,253 | 150,007 | 192,253 | 118,105 |
Six Months Ended June 30, | ||
2016 | 2015 | |
Cash flows from operating activities: | ||
Net loss | $(1,170) | $(1,535) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and amortization | 2 | 7 |
Amortization of debt discount | 131 | -- |
Changes in assets and liabilities: | ||
Trade accounts receivable | 219 | 929 |
Prepaid expenses and other current assets | 167 | 6 |
Accounts payable and accrued expenses | (363) | 436 |
Deferred revenue | 215 | (358) |
Net cash used by operating activities | (799) | (515) |
Cash flows from investing activities: | ||
Purchases of equipment | (2) | (8) |
Net cash used by investing activities | (2) | (8) |
Cash flows from financing activities: | ||
Borrowings under debt | 453 | 575 |
Repayments of debt | (4) | (15) |
Net cash generated by financing activities | 449 | 560 |
Net increase/(decrease) in cash | (352) | 37 |
Cash: | ||
Beginning of period | 1,009 | 20 |
End of period | $657 | $57 |
Common Stock | Preferred Stock | ||||||
Shares | Amount | Shares | Amount | Additional Paid-in Capital | Accumulated (Deficit) | Total | |
Balance at December 31, 2015 | 192,253,005 | $192 | -- | -- | $246,220 | $(253,689) | $(7,277) |
Imputed interest on debt discount | 49 | 49 | |||||
Net loss | (1,170) | (1,170) | |||||
Balance at June 30, 2016 (unaudited) | 192,253,005 | $192 | -- | -- | $246,269 | $(254,859) | $(8,398) |
March 31, 2016 | December 31, 2015 | |||||||
Fair Value | $ | 2,073,629 | $ | 2,061,598 | ||||
Carrying Value | $ | 2,132,457 | $ | 2,132,457 |
Shares | ||||
Outstanding on December 31, 2015 | 3,657,110 | |||
Granted | -- | |||
Exercised | -- | |||
Forfeited | (290,599 | ) | ||
Outstanding on March 31, 2016 | 3,366,511 | |||
Weighted average exercise price of outstanding options | $ | 0.22 | ||
Aggregate Intrinsic Value | $ | 0 | ||
Shares available for future grants on March 31, 2016 | 1,133,489 | |||
Weighted average of remaining contractual life | 4.10 |
Shares | |
Outstanding on December 31, 2015 | 3,657,110 |
Granted | -- |
Exercised | -- |
Forfeited | (545,898) |
Outstanding on June 30, 2016 | 3,111,212 |
Weighted average exercise price of outstanding options | $0.23 |
Aggregate Intrinsic Value | $0 |
Shares available for future grants on June 30, 2016 | 1,388,788 |
Weighted average of remaining contractual life | 3.72 |
Goodwill | ||||
Balance at December 31, 2015 | $ | 1,658,000 | ||
Additions | -- | |||
Impairment | -- | |||
Balance at March 31, 2016 | $ | 1,658,000 |
Goodwill | |
Balance at December 31, 2015 | $1,658,000 |
Additions | -- |
Impairment | -- |
Balance at June 30, 2016 | $1,658,000 |
March 31, 2016 | December 31, 2015 | June 30, 2016 | December 31, 2015 | |||||||
Note payable – asset purchase agreement (a) | $ | 1,518 | $ | 1,518 | $1,518 | |||||
Note payable – related parties (b) | 2,294 | 1,845 | 2,294 | 1,845 | ||||||
Notes payable (c) | 1,086 | 1,086 | 1,086 | |||||||
Unamortized debt discount (b) | (205 | ) | (219 | ) | (137) | (219) | ||||
Total debt | 4,693 | 4,230 | 4,761 | 4,230 | ||||||
Less current portion | (2,561 | ) | (2,098 | ) | (4,761) | (2,098) | ||||
Total long term debt | $ | 2,132 | $ | 2,132 | $-- | $2,132 |
(c) The Company has issued a series of short-term unsecured promissory notes with private lenders, which provide for short term borrowings. The notes in the aggregate amount of $50,000 of principal and $53,000 of interest and $50,000 of principal and $58,000 of interest, respectively, as of December |
Lease Commitments | Lease Commitments | ||||
2016 | $ | 77 | $52 | ||
2017 | 106 | 106 | |||
2018 | 89 | 89 | |||
$ | 272 | $247 |
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Three months ended March 31, | Three months ended June 30, | Six months ended June 30, | ||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||
Total revenue | $ | 407 | $ | 460 | $346 | $509 | $753 | $968 | ||||
Total cost of revenue | 193 | 178 | 146 | 168 | 339 | 345 | ||||||
Gross margin | 214 | 282 | 200 | 341 | 414 | 623 | ||||||
Total operating expenses | 710 | 913 | 659 | 962 | 1,370 | 1,875 | ||||||
Loss from operations | $ | (496 | ) | $ | (631 | ) | ||||||
Income/(loss) from operations | $(459) | $(621) | $(956) | $(1,252) |
Exhibit No. | Description | |
Certification of Chief Executive Officer/Chief Financial Officer pursuant to Rule 13a-14(a) (filed herewith). | ||
Certification of Chief Executive Officer/Chief Financial Officer pursuant to 18 USC § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002 (filed herewith). |
CICERO INC. | |||