-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MEuHI2Wf6uOitMmgzFl6uKcnImci1nJdWk5PRa/Fp3Hrt2zPti+ErbOfW8Y8TcTv pMuRYUX/+MTZdeBHCd6mUw== 0000905718-07-000053.txt : 20070208 0000905718-07-000053.hdr.sgml : 20070208 20070208090420 ACCESSION NUMBER: 0000905718-07-000053 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20070208 DATE AS OF CHANGE: 20070208 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GALLEN JONATHAN CENTRAL INDEX KEY: 0001069726 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: BUSINESS PHONE: 2128912132 MAIL ADDRESS: STREET 1: 450 PARK AVENUE STREET 2: 28TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CICERO INC CENTRAL INDEX KEY: 0000945384 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 112920559 STATE OF INCORPORATION: DE FISCAL YEAR END: 1206 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-48463 FILM NUMBER: 07590280 BUSINESS ADDRESS: STREET 1: 8000 REGENCY PARKWAY STREET 2: SUITE 542 CITY: CARY STATE: NC ZIP: 27518 BUSINESS PHONE: 9194612574 MAIL ADDRESS: STREET 1: 8000 REGENCY PARKWAY STREET 2: SUITE 542 CITY: CARY STATE: NC ZIP: 27518 FORMER COMPANY: FORMER CONFORMED NAME: LEVEL 8 SYSTEMS INC DATE OF NAME CHANGE: 19990112 FORMER COMPANY: FORMER CONFORMED NAME: ACROSS DATA SYSTEMS INC DATE OF NAME CHANGE: 19950517 SC 13D 1 cicero13djan07.txt SC13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Cicero, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.001 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 171708100 - -------------------------------------------------------------------------------- (CUSIP Number) with a copy to: Mr. Jonathan Gallen Robert G. Minion, Esq. Ahab Capital Management, Inc. Lowenstein Sandler PC 299 Park Avenue 65 Livingston Avenue New York, New York 10171 Roseland, New Jersey 07068 (212) 653-1017 (973) 597-2424 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) January 4, 2007 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule l3G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Cusip No. 171708100 - -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only): Jonathan Gallen - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions): (a) Not (b) Applicable - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions): WC, OO - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): Not Applicable - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization: United States - -------------------------------------------------------------------------------- Number of 7. Sole Voting Power: 6,067,404* ------------------------------------------ Shares Beneficially 8. Shared Voting Power: 0 ------------------------------------------ Owned by Each Reporting 9. Sole Dispositive Power: 6,067,404* ------------------------------------------ Person With 10. Shared Dispositive Power: 0 ------------------------------------------ - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 6,067,404* - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): Not Applicable - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11): 17.2%* - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions): IA, IN - -------------------------------------------------------------------------------- * As of January 4, 2007, Queequeg Partners, L.P. ("Partners"), Queequeg, Ltd. ("Limited," and collectively with Partners, the "Funds") held in the aggregate (i) 6,032,034 shares of common stock, par value $0.001 per share (the "Shares"), of Cicero, Inc., a Delaware corporation formerly known as Level 8 Systems, Inc. (the "Company"), (ii) 14.836 Shares of the Series A-1 Convertible Preferred Stock, par value $0.001 per share, convertible into 14,836 Shares, (iii) warrants to acquire 901 Shares at $37 per Share, which warrants expire on January 9, 2007, (iv) warrants to acquire 383 Shares at $38 per Share, which warrants expire on August 14, 2007, (v) warrants to acquire 4,914 Shares at $40 per Share, which warrants expire on October 8, 2008 and (vi) warrants to acquire 14,336 Shares at $2 per Share, which warrants expire on January 4, 2011. Jonathan Gallen possesses sole power to vote and direct the disposition of all securities of the Company held by the Funds. Accordingly, for the purposes of Rule 13d-3 under the Securities Exchange Act of 1934, as amended, Mr. Gallen may be deemed to beneficially own 6,067,404 Shares. Item 1. Security and Issuer. ------------------- The class of equity securities to which this Schedule 13D relates is the common stock, par value $0.001 per share (the "Shares"), of Cicero, Inc., a Delaware corporation formerly known as Level 8 Systems, Inc. (the "Company"). The principal executive offices of the Company are located at 1433 Highway 34, Building C, Farmingdale, New Jersey 07727. Item 2. Identity and Background. ----------------------- The person filing this statement is Jonathan Gallen, whose business address is c/o Queequeg Partners, L.P., 299 Park Avenue, New York, New York 10171. Mr. Gallen serves, indirectly through one or more entities, as the investment adviser for, and exercises sole voting and investment authority with respect to the securities held by, each of Queequeg Partners, L.P., a Delaware limited partnership ("Partners"), and Queequeg, Ltd., a corporation organized under the laws of the Bahamas ("Limited," and, together with Partners, the "Funds"). The Funds are engaged in the investment in personal property of all kinds, including but not limited to capital stock, depository receipts, investment companies, mutual funds, subscriptions, warrants, bonds, notes, debentures, options and other securities of whatever kind and nature. Mr. Gallen also invests his personal funds and provides investment management services for various other third parties. Mr. Gallen has never been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors), nor has he been a party to any civil proceeding commenced before a judicial or administrative body of competent jurisdiction as a result of which he was or is now subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Mr. Gallen is a citizen of the United States. Item 3. Source and Amount of Funds or Other Consideration. ------------------------------------------------- All funds used to purchase the securities of the Company set forth herein on behalf of the Funds have come directly from the assets of the Funds. The aggregate amount of funds used in purchasing the securities reported and/or included in this Schedule 13D was approximately $818,875. Item 4. Purpose of Transaction. ---------------------- The acquisition of the securities referred to herein is for investment purposes on behalf of the Funds. Mr. Gallen intends to closely evaluate the performance of the Shares, including but not limited to the continued analysis and assessment of the Company's business, assets, operations, financial condition, capital structure, management and prospects. He intends to pursue and continue active discussions with the Company's existing management with respect to actions which might be taken by the Company to maximize shareholder value. Other than as set forth herein, Mr. Gallen has no present plans or intentions which relate to or would result in any of the transactions required to be described in Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer. ------------------------------------ Based upon information provided by the Company, there were 35,150,852 Shares issued and outstanding as of January 4, 2007. As of January 4, 2007, the Funds held in the aggregate (i) 6,032,034 Shares, (ii) 14.836 Shares of the Series A-1 Convertible Preferred Stock, par value $0.001 per share (the "Series A-1 Preferred"), convertible into 14,836 Shares, (iii) warrants to acquire 901 Shares at $37 per share, which warrants expire on January 9, 2007, (iv) warrants to acquire 383 Shares at $38 per share, which warrants expire on August 14, 2007, (v) warrants to acquire 4,914 Shares at $40 per share, which warrants expire on October 8, 2008 and (vi) warrants to acquire 14,336 Shares at $2 per share, which warrants expire on January 4, 2011. Jonathan Gallen possesses sole power to vote and direct the disposition of all securities of the Company held by the Funds. Accordingly, for the purposes of Rule 13d-3 under the Securities Exchange Act of 1934, as amended, Mr. Gallen may be deemed to beneficially own 6,067,404 Shares. During the sixty days on or prior to January 4, 2007, the only transactions in Shares, or securities convertible into, exercisable for or exchangeable for Shares, by Mr. Gallen or any other person or entity controlled by him or any person or entity for which he possesses voting or investment control over the securities thereof, were as follows, all of which were effected in connection with the Company's recapitalization (the "Recapitalization"), as detailed in the Company's Proxy Statement on Schedule 14A, as filed with the Securities and Exchange Commission on October 17, 2006: (i) a convertible promissory note in the principal amount of $750 million was converted into 5,644,374 post-Recapitalization Shares; (ii) an aggregate of 5,001 shares of the Company's pre-Recapitalization Series B-3 Convertible Redeemable Preferred Stock and 58 shares of the Company's pre-Recapitalization Series C Convertible Redeemable Preferred Stock were converted into an aggregate of 14.836 shares of the Company's Series A-1 Preferred, convertible into 14,836 Shares; (iii) a promissory note in the principal amount of $105,021 was converted into 387,660 Shares; (iv) certain pre-Recapitalization warrants were re-set, and the Funds received warrants to acquire an aggregate of 901 Shares at $37 per Share, which warrants expire on January 9, 2007; (v) certain pre-Recapitalization warrants were re-set, and the Funds received warrants to acquire an aggregate of 383 Shares at $38 per Share, which warrants expire on August 14, 2007; (vi) certain pre-Recapitalization warrants were re-set, and the Funds received warrants to acquire an aggregate of warrants to acquire 4,914 Shares at $40 per Share, which warrants expire on October 8, 2008; and (vii) the Funds received warrants to acquire an aggregate of 14,336 Shares at $2 per Share, which warrants expire on January 4, 2011. Each of the transactions described above was effected in connection with the Company's Recapitalization. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. ---------------------------------------------------------------------- Not applicable. Item 7. Material to be Filed as Exhibits. -------------------------------- Not applicable. Signature --------- After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. February 7, 2007 /s/ Jonathan Gallen ------------------------------------ Jonathan Gallen, in his capacity as the investment adviser for Queequeg Partners, L.P. and Queequeg, Ltd. Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001). -----END PRIVACY-ENHANCED MESSAGE-----