SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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) July 22, 2010
Communication Intelligence Corporation
(Exact Name of Registrant as Specified in its Charter)
| Delaware | | 0-19301 | | 94-2790442 |
| (State or Other Jurisdiction | | (Commission File Number) | | (I.R.S. Employer |
| of Incorporation) | | | | Identification No.) |
275 Shoreline Drive, Suite 500
Redwood Shores, CA 94065
(Address of Principal Executive Offices)
(Zip Code)
(650) 802-7888
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former name or former address, if changed from 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 (see General Instruction A.2. below):
o Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c))
Item 1.01 Entry into an Amendment of Material Definitive Agreement
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off- Balance Sheet Arrangement of a Registrant
Item 3.02 Unregistered Sales of Equity Securities
Entry into Amendment No. 3 to the Credit Agreement
On July 22, 2010, Communications Intelligence Corporation (the “Company”) entered into a third amendment (“Amendment No. 3 to the Credit Agreement”) of the Credit Agreement dated June 5, 2008 (“Credit Agreement”) by and among the Company and Phoenix Venture Fund LLC (“Phoenix”), Michael Engmann and Ronald Goodman (each a “Lender” and collectively the “Lenders”), which Credit Agreement had previously been amended by the parties thereto on May 28, 2009 in connection with a previous financing transaction and on May 4, 2010 in connection with a bridge financing transaction. Under Amendment No. 3 to the Credit Agreement, the Company incurred an additional $300,000 in secured indebtedness through the issuance of an additional secured promissory note to a new i nvestor on July 22, 2010. In connection with the issuance of this additional secured promissory note, the Company also issued a warrant to purchase 2,000,000 shares of the Company’s Common Stock. The additional secured promissory note matures on December 31, 2010, and bears interest at eight percent (8%) per annum. The warrant is exercisable at $0.06 per share, and expires three years after the date of issuance..
The Company may use the funds received under Amendment No. 3 to the Credit Agreement to make payments on the Company’s existing indebtedness and accrued interest on that indebtedness, for working capital and general corporate purposes, in each case in the ordinary course of business, and to pay fees and expenses in connection with the Company’s entry into Amendment No. 3 to the Credit Agreement.
In connection with the Company’s entry into Amendment No. 3 to the Credit Agreement, the Company also entered into a third amendment to the Registration Rights Agreement dated June 5, 2008 in order to provide for certain registration rights for the shares of Common Stock issuable upon exercise of the warrant issuable under Amendment No. 3 to the Credit Agreement.
Transactions With Related Persons
Certain parties to Amendment No. 3 to the Credit Agreement have a pre-existing relationship with the Company and, with respect to such parties, the Company’s entry into Amendment No. 3 to the Credit Agreement and other related agreements may be considered related party transactions. Phoenix, Michael Engmann and certain entities controlled by Mr. Engmann are lenders to the Company under the Credit Agreement, as amended, as well as in several previous financing transactions.
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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| Date: July 26, 2010 | | Communication Intelligence Corporation |
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| | | By: | | /s/ Francis V. Dane |
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| | | | | Francis V. Dane |
| | | | | Chief Financial Officer |
