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SEC Filings

10-Q
INCONTACT, INC. filed this Form 10-Q on 11/09/2016
Entire Document
 

 

Interest Expense:

The following table presents the components of interest expense incurred on the Convertible Notes and on other borrowings (in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

2.50% Convertible Notes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense at 2.50% coupon rate

 

$

725

 

 

$

725

 

 

$

2,166

 

 

$

1,449

 

Amortization of debt discount

 

 

995

 

 

 

921

 

 

 

2,940

 

 

 

1,843

 

Amortization of deferred debt issuance costs

 

 

96

 

 

 

92

 

 

 

290

 

 

 

193

 

Total interest from 2.50% convertible notes

 

 

1,816

 

 

 

1,738

 

 

 

5,396

 

 

 

3,485

 

Other Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest from other borrowings

 

 

-

 

 

 

-

 

 

 

4

 

 

 

455

 

Total interest expense

 

$

1,816

 

 

$

1,738

 

 

$

5,400

 

 

$

3,940

 

 

 

NOTE 9. CAPITAL TRANSACTIONS

During the nine months ended September 30, 2016, we received 153,000 shares of our common stock from cancelled restricted stock awards from separated employees and for the settlement of $1.3 million in payroll taxes, associated with the lapsing of the selling restriction of restricted stock units.

From the exercise of stock options, we issued 412,000 shares of common stock and 118,000 shares of treasury stock for proceeds of $3.4 million during the nine months ended September 30, 2016.  We issued 214,000 shares of common stock and 26,000 shares of treasury stock as a result of the vesting of restricted stock units.  We issued 96,000 shares of common stock and 9,000 shares of treasury stock for proceeds of $0.8 million under the employee stock purchase plan during the nine months ended September 30, 2016.

 

 

NOTE 10. COMMITMENTS AND CONTINGENCIES

Litigation

In May 2009, inContact was served in a lawsuit titled California College, Inc., et al., v. UCN, Inc., et al. In the lawsuit, California College alleges that (1) inContact made fraudulent and/or negligent misrepresentations in connection with the sale of its services with those of Insidesales.com, Inc., another defendant in the lawsuit, (2) that inContact breached its service contract with California College and an alleged oral contract between the parties by failing to deliver contracted services and product and failing to abide by implied covenants of good faith and fair dealing, and (3) the conduct of inContact interfered with prospective economic business relations of California College with respect to enrolling students.   California College filed an amended complaint that has been answered by Insidesales.com and inContact.  California College originally sought damages in excess of $20.0 million.  Furthermore, Insidesales.com and inContact filed cross-claims against one another, which they subsequently agreed to dismiss with prejudice.  In October 2011, California College reached a settlement with Insidesales.com, the terms of which have not been disclosed and remain confidential.  In June of 2013, California College amended its damages claim to $14.4 million, of which approximately $5.0 million was alleged pre-judgment interest. On September 10, 2013, the court issued an order on inContact's Motion for Partial Summary Judgment.  The court determined that factual disputes exist as to several of the claims, but dismissed California College's cause of action for intentional interference with prospective economic relations and the claim for prejudgment interest.  Dismissing the claim for prejudgment interest effectively reduced the claim for damages to approximately $9.2 million.  In February 2016 the trial court granted the inContact motion to stay the trial without date pending an interlocutory appeal to the Utah Supreme Court of the trial court’s December 2015 ruling with respect to allowing California College’s experts to testify at trial.  The interlocutory appeal was referred to the Utah Court of Appeals and the briefs will be filed in the matter in December 2016 and January 2017. inContact has denied all of the substantive allegations of the complaint and continues to defend the claims.  Management believes the claims against inContact are without merit.  We cannot determine at this time whether the chance of success on one or more of inContact’s defenses or claims is either probable or remote, and are unable to estimate the potential loss or range of loss should it not be successful.  The Company believes that this matter will not have a material impact on our financial position, liquidity or results of operations.

On January 15, 2014, Microlog Corporation (“Microlog”) filed a patent infringement suit against inContact in the United States District Court for the District of Delaware, Case No. 1:99-mc-09999, alleging that we are infringing one or more claims made in U.S. Patent No. 7,092,509 (the “’509 Patent”), entitled “Contact Center System Capable of Handling Multiple Media Types of Contacts and Method for Using the Same.”  Microlog is seeking a declaratory judgment, injunctive relief, damages and an ongoing royalty, and

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