As filed with the Securities and Exchange Commission on December 4, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under the Securities Act of 1933
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Xiox Corporation
(Exact name of Registrant as specified in its charter)
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Delaware 95-3824750
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
577 Airport Boulevard, Suite 700
Burlingame, California 94010
(650) 375-8188
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
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William H. Welling
President and Chief Executive Officer
Xiox Corporation
577 Airport Boulevard, Suite 700
Burlingame, California 94010
(650) 375-8188
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
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Copies to:
Blair W. Stewart, Jr., Esq.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304-1050
(650) 493-9300
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.[ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
============================================================================================
Proposed
Proposed Maximum
Title of Each Class Amount Maximum Aggregate Amount of
of Securities to to be Offering Price Offering Registration
be Registered Registered Per Share(1) Price Fee
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<S> <C> <C> <C> <C>
Common Stock
$0.01 par value,
1,907,989 of which
are issuable upon
conversion of
Series A Preferred
Stock............. 2,693,686 shares (2) $7.8125 $21,044,421.87 $5,850.35
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Common Stock
$0.01 par value
issuable upon
exercise of
September 1998
warrants........... 50,000 shares (3) $7.8125 $390,625.00 $108.59
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<FN>
(1) Estimated solely for the purpose of computing the amount of the registration fee
pursuant to Rule 457 promulgated under the Securities Act of 1933.
(2) In the event of a stock split, stock dividend or similar transaction involving our
common stock, the number of shares of common stock registered hereunder shall be
automatically increased to cover the additional shares that would be issued, in
accordance with Rule 416(a) promulgated under the Securities Act of 1933.
(3) Pursuant to Rule 416 promulgated under the Securities Act of 1933, there are also being
registered such indeterminate number of additional shares as may become issuable
pursuant to the anti-dilution provisions of the Warrants.
</FN>
</TABLE>
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The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE>
The information contained in this prospectus is not complete and may be amended.
These securities may not be sold until the related registration statement filed
with the SEC or any applicable state securities commission becomes effective.
This prospectus is not an offer to sell nor is it seeking an offer to buy any
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED December 4, 1998
PROSPECTUS
Xiox Corporation
2,743,686 Shares of Common Stock
The shareholders of Xiox listed below are offering and selling up to
2,743,686 shares of common stock under this prospectus. We will not receive any
part of the proceeds from this offering.
We issued the securities covered by this prospectus to the selling
shareholders in connection with either stock purchase agreements or warrants
between us and the selling shareholders. The selling shareholders will receive
certain shares covered by this prospectus upon the conversion of preferred stock
and the exercise of warrants. The precise number of shares of common stock which
the selling shareholders will receive upon conversion of preferred stock cannot
be determined at this time. Accordingly, the actual number of shares issued may
be higher or lower than the number specified above.
The selling shareholders may offer their shares through public or
private transactions, on or off the Nasdaq SmallCap Market, at prevailing market
prices or privately negotiated prices. No period of time has been fixed within
which the shares may be offered or sold.
We have agreed to bear the expense of the registration and sale of the
shares being offered by the selling shareholders (other than selling
commissions, and the fees and expenses of counsel and other advisers to the
selling shareholders). We have agreed to indemnify the selling shareholders
against certain liabilities, including liabilities under the Securities Act of
1933, as amended.
Our common stock is quoted on the Nasdaq SmallCap Market and is traded
under the symbol "XIOX." On December 1, 1998, the average of the high and low
sale prices of one share of our stock on the Nasdaq Small Cap Market was $8.03.
-----------------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is December 4, 1998
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from the SEC's web site at http://www.sec.gov.
Our common stock is quoted on the Nasdaq SmallCap Market. Reports and
other information concerning us may be inspected at the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to documents we file with the SEC. The information incorporated by
reference is considered to be part of this prospectus. Information that we file
later with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until the selling shareholders sell all of the
shares covered by this prospectus:
(1) our Forms 8-K filed on October 8, 1998 and September 24, 1998;
(2) our Annual Report on Form 10-K405 for the fiscal year ended
December 31, 1997;
(3) our Quarterly Reports on Forms 10-QSB and 10-QSB/A for the quarters
ended March 31, 1998, June 30, 1998, and September 30, 1998; and
(4) our Proxy Statement on Form 14A as filed on April 7, 1998.
This prospectus is part of a registration statement we filed with the
SEC. You may request a copy of the registration statement or any of the above
filings, at no cost, by writing or telephoning the Chief Financial Officer at
the following address:
Xiox Corporation
577 Airport Boulevard, Suite 700
Burlingame, California 94010
(650) 375-8188
You should rely only on the information or representations provided in
this prospectus or incorporated by reference. We have not authorized anyone else
to provide you with different information. The selling shareholders will not
make an offer of these shares in any state where the offer is not permitted. You
should not assume that the information in this prospectus is accurate as of any
date other than the date on the front of this document.
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<PAGE>
Prospectus Summary
BECAUSE THIS IS A SUMMARY, IT DOES NOT INCLUDE ALL THE INFORMATION THAT
MAY BE IMPORTANT TO YOU. YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY BEFORE
YOU DECIDE TO INVEST.
In addition, you should be aware that this prospectus constitutes part
of a registration statement on Form S-3, together with all of its amendments and
exhibits. This prospectus does not contain all of the information set forth in
the registration statement, certain parts of which are omitted in accordance
with the rules and regulations of the SEC. For further information, please refer
to the registration statement, copies of which may be obtained from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549,
upon payment of the fees prescribed by the SEC.
Statements contained in this prospectus about the contents of any
document filed as an exhibit to the registration statement, or incorporated by
reference in the registration statement, must be read in the context of the
registration statement and as qualified in all respects by that context.
We have registered as United States trademarks Xiox Hacker Tracker(R),
Summa Pro(R), Summa Suite(R), Hacker Tracker(R), Hacker Preventer(R), Hacker
Deadbolt(R), Fort Knox(R), Prophet Writer(R), and the OpenWindow and Curtain
logo. Xiox(TM) and Summa Voice(TM) are our trademarks.
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<PAGE>
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About Xiox Corporation
Xiox Corporation, a Delaware corporation, was incorporated in
California in September 1982 and became a publicly held company in February
1986. Our stock is quoted under the symbol "XIOX" on the Nasdaq SmallCap Market.
We design, develop, manufacture and market telecommunications
management software and hardware systems which operate on personal computers,
Local Area Networks and stand-alone proprietary hardware. Our systems
efficiently provide information to facilitate telephone expense control; client,
department or project billback; call traffic monitoring and analysis; and fraud
control prevention. These systems can meet the simple needs of a 25 person
office or the complex needs of a multi-site Fortune 500 corporation. In
addition, we market voice mail and a complete family of telephone and network
security products.
Since our incorporation, our product line has expanded from a single
software system to a full range of Telecommunication Management Systems, each of
which has been designed to address the needs of small or large businesses in
many different industries. In addition to our software and hardware-based
systems, we also provide call costing rate tables and system enhancements to end
users under subscription arrangements. Our products are sold to the commercial
and hospitality markets and are comprised of six product categories:
Call Accounting
Traffic Engineering
Facilities and Alarm Management
PBX Security
Voice Mail / Auto Attendant
Answer Detection Systems
We market our systems through a direct sales force, dealers,
subsidiaries of the regional bell operating companies and original equipment
manufacturers.
Our address and telephone number are: Xiox Corporation, 577 Airport
Boulevard, Suite 700, Burlingame, California 94010, (650) 375-8188.
The Offering
This prospectus relates to the sale of up to 2,743,686 shares of our
common stock by the selling shareholders named below.
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3
<PAGE>
RISK FACTORS
BEFORE YOU INVEST IN OUR COMMON STOCK, YOU SHOULD BE AWARE AN
INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK, AND THAT THERE
ARE VARIOUS RISKS, INCLUDING THOSE DESCRIBED BELOW. YOU SHOULD CONSIDER
CAREFULLY THESE RISK FACTORS, AND THE OTHER INFORMATION INCLUDED IN THIS
PROSPECTUS BEFORE YOU DECIDE TO PURCHASE SHARES OF OUR COMMON STOCK.
SOME OF THE INFORMATION IN THIS DOCUMENT MAY CONTAIN FORWARD-LOOKING
STATEMENTS. YOU CAN IDENTIFY SUCH STATEMENTS BY NOTING THE USE OF
FORWARD-LOOKING TERMS SUCH AS "BELIEVES," "EXPECTS," "PLANS," "ESTIMATES" AND
OTHER SIMILAR WORDS. CERTAIN RISKS, UNCERTAINTIES OR ASSUMPTIONS THAT ARE
DIFFICULT TO PREDICT MAY AFFECT SUCH STATEMENTS. THE FOLLOWING RISK FACTORS AND
OTHER CAUTIONARY STATEMENTS COULD CAUSE OUR ACTUAL OPERATING RESULTS TO DIFFER
MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENT. WE CAUTION YOU
TO KEEP IN MIND THE FOLLOWING RISK FACTORS AND OTHER CAUTIONARY STATEMENTS AND
TO REFRAIN FROM PLACING UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENTS, WHICH
SPEAK ONLY AS OF THE DATE OF THIS DOCUMENT.
Fluctuations in Quarterly Operating Results; Stock Price Volatility
We typically experience weaker sales in the first quarter of each
calendar year compared to sales for the last quarter of the previous year.
Shortfalls in our revenues or earnings from levels expected in the market could
have an immediate and significant adverse effect on the trading price of our
common stock. Moreover, our stock price is subject to the volatility generally
associated with technology stocks and may also be affected by broader market
trends unrelated to our performance.
Competition
The market for our software products is competitive and is
characterized by change in technology and user needs and the introduction of new
products. In order to remain competitive, we must rapidly respond to such
changes, including the enhancement and upgrading of existing products and the
introduction of new products. Most of our competitors and many potential
competitors have substantially greater financial, marketing and technology
resources than we do. Our major competitors are Telco Research, ISI-Infortext
and Nortel (MAT). We cannot be certain that we will be able to compete
successfully against either current or potential competitors or that competition
will not have a material adverse effect on our business, consolidated results of
operations and financial condition.
Revenue Concentration
Although no single customer accounted for more than 10% of our revenues
in 1996, one customer accounted for 12% of revenue during 1997. We derive a
substantial portion of our revenues from sales of new call accounting products,
updates and rate table renewals. As such, any factor adversely affecting sales
of new call accounting products, updates and rate table renewals, including such
factors as market acceptance, product performance and reliability, reputation,
price competition and competing products, as well as general economic and market
conditions, could have a material adverse effect on our business, consolidated
results of operations and financial condition.
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<PAGE>
Product Development and Introduction
The software products we offer are internally complex and, despite
extensive testing and quality control, may contain errors or defects ("bugs"),
especially when first introduced. Defects or errors could result in corrective
releases to our software products, damage to our reputation, loss of revenues,
an increase in product returns, claims for damages, or lack of market acceptance
of our products, any of which could have a material and adverse effect on our
business, consolidated results of operations and financial condition.
The software industry is characterized by rapid technological change as
well as changes in customer requirements and preferences. We believe that our
future results will depend largely upon our ability to offer products that
compete favorably with respect to price, reliability, performance, range of
useful features, continuing product enhancements, reputation and training.
Delays or difficulties, including the discovery of product defects, may result
in the delay or cancellation of planned development projects and could have a
material and adverse effect on our business, consolidated results of operations
and financial condition. In addition, increased competition in the market for
call accounting products could also have a negative impact on our business,
consolidated results of operations and financial condition.
In 1997, we began a significant development effort in a new product
line addressing the combined telephony and data markets. Although we received in
1997 and 1998 approximately $12.5 million in funding for this development
effort, we will require additional funding before the new product line returns a
profit. The additional funding will be used for marketing, continued
engineering, sales, working capital, and to fund research and development
activities. We cannot be certain that we will be able to obtain the additional
required funding, or that the new product line will become profitable. Moreover,
the introduction of the new product line may result in new competition. Even if
the new product line is successfully introduced and is profitable, we cannot be
certain that the new product line will result in profitability for Xiox.
Dependence on Distribution Channels
We sell our products primarily through our network of authorized
dealers. Our ability to effectively distribute our products depends in part upon
the financial and business condition of our distribution network. The loss of or
a significant reduction in business with any one of our major dealers could have
a material adverse effect on our business, consolidated results of operations
and financial condition in future periods.
Year 2000 Readiness
Definition. The Year 2000 issue is the result of computer programs
being written using two digits rather than four to define the applicable year.
Computer programs and embedded systems that have time-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. If one
of our internal systems, or those of a customer, supplier or service provider,
do not correctly recognize date information when the year changes to 2000, there
could be an adverse impact on our operations.
We have assessed the capability of our products sold to customers and
believe that for these products we have no exposure to contingencies related to
the Year 2000 issue that would have a material adverse effect on our financial
position or results of operations. A list of Year 2000 Ready products has been
posted on our web site and has been sent to customers and distributors via
company newsletters.
5
<PAGE>
Products. Our products receive data from other equipment such as PC's
and PBX's and can only properly handle Year 2000 dates if they receive Year 2000
compliant data. Some systems we sell or have sold with computer BIOS
manufactured prior to 1996 will need to have the internal clock reset or the
BIOS modified in order to ensure proper performance.
We believe that the likelihood of a material adverse impact due to
problems with products sold to customers is low and expect that any costs to be
incurred to assure Year 2000 capability relating to product released or in
development will not have a material adverse effect on our financial position,
results of operations or cash flow.
Internal Systems. During the nine months ending September 30, 1998, we
continued our efforts to assess and remediate our computer systems,
telecommunications systems, software systems and related equipment to ensure
each system will function properly as the Year 2000 approaches. The Year 2000
program is being conducted in four phases: (a) Identification, (b) Assessment,
(c) Remediation, and (d) Testing.
o The Identification Phase is nearing completion for all currently
installed systems. The target for completion of this phase is 12/31/98.
All new systems acquired after this date will be subject to assessment
prior to purchase.
o The Assessment Phase is estimated at 75% complete and is targeted for
completion by 12/31/98 for all systems currently implemented.
o The Remediation Phase is estimated at 50% complete based on the systems
requiring patches or upgrades. The primary system requiring attention
is our Manufacturing and Financial Management System, Macola. The
upgrade to this system is scheduled for completion in the first quarter
of 1999.
o The Testing Phase is currently in a preliminary stage. Testing of
systems and interfaces will occur near the end of the Remediation
Phase.
We currently believe our information systems will be Year 2000
compliant by the end of the second quarter of 1999.
External Suppliers. We have begun the process of identifying our top
suppliers and seeking confirmation on their Year 2000 compliance. For those with
sizeable volume or that are single source for components or services, we will be
sending these suppliers a Year 2000 compliance survey. We expect this process to
be completed by mid-1999.
We have received information that the most critical systems, services
or products supplied to us by external sources are Year 2000 ready or are
expected to be Year 2000 ready by mid 1999.
We will be developing contingency plans for systems and services
provided by vendors that do not respond to our requests or fail in their
readiness efforts.
State of Readiness. As of this date, we have made significant progress
in the process of identifying systems, completing an assessment and implementing
solutions for the high priority internal systems so that our computer systems
will function properly with respect to dates in the year 2000 and thereafter.
We are actively participating with customers and suppliers to ensure
progress is being made and that the dates forecast are reasonable and
attainable.
6
<PAGE>
Costs. Other than time spent by our internal information technology and
other personnel, we have not incurred any significant costs in identifying,
assessing and remediating year 2000 issues.
Because we are in a growth phase, systems improvement initiatives are
underway to improve our primary business systems. We do not anticipate any
significant costs related to remediation efforts because planned systems
improvements shall include year 2000 readiness as a standard requirement.
This statement assumes that third party suppliers have accurately
assessed the compliance of their products and that they will successfully
correct any issues in non-compliant products. Because of the complexity of
correcting the Year 2000 issue, actual costs may vary from estimates.
Although the total cost to obtain Year 2000 compliance is not known at
this time, we currently expect the cost to be less than $150,000. The actual
cost, however, could exceed this estimate. These costs are not expected to have
a material effect on our financial position, results of operations or cash
flows.
Contingency Plans. Based upon the progress of our plan, we expect that
we will not experience a material disruption of our operations as a result of
the change to the new millennium. However, we cannot be certain that the third
parties who have supplied technology used in our mission critical systems will
be successful in taking corrective action in a timely manner.
We are developing contingency plans with respect to certain key
technology used in our mission critical systems, which are intended to enable us
to continue to operate.
The contingency plans include performing certain processes manually,
repairing systems and changing suppliers if necessary, although we cannot be
certain that these contingency plans will successfully avoid service disruption
in the operation of business as usual.
FORWARD-LOOKING STATEMENTS
This Prospectus, including, but not limited to the above section
discussing risk factors, as well as the information incorporated by reference
herein, contains forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act. Actual results could
differ materially from those projected in the forward-looking statements as a
result of many factors, including the risk factors set forth above. Reference is
made in particular to the forward looking statements set forth under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Annual Report on Form 10-K405 for the fiscal year ending
December 31, 1997, and the Quarterly Reports on Form 10-QSB for the quarters
ending March 31, 1998, June 30, 1998, and September 30, 1998, as well as all
other documents filed after the date hereof by Xiox, all of which are
incorporated herein by reference. In connection with the forward-looking
statements which appear or are incorporated by reference herein, prospective
purchasers of the common stock offered hereby should carefully consider both the
factors set forth above under "Risk Factors" and the risk factors described in
the documents incorporated by reference.
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<PAGE>
SELLING SHAREHOLDERS
The following table provides the names of the selling shareholders and
the number of shares being offered by each of them. After completion of this
offering, assuming all the shares offered hereby are sold, no selling
shareholder will hold any Xiox securities except as set forth in the footnotes
below.
Selling Shareholders No. of Shares Offered
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Intel Corporation (a Delaware corporation) 1,005,989
Flanders Language Valley Fund CVA (incorporated
under the laws of Belgium) 985,697
Zero Stage Capital (a Massachusetts partnership) 200,000
Lagunitas Partners (a California partnership) 120,000
Gruber and McBaine International (a Grand Cayman corporation) 80,000
Compass Chicago Partners (a Delaware limited partnership) 80,000
Compass Technology Partners (a Delaware limited partnership) 40,000
Roy and Ruth Rogers Unit Trust UTD 9/28/89 (a California trust) 40,000
The Rogers Family Trust UTD 1/21/81 (a California trust) 30,000
Yu Hong Co., Ltd. (incorporated under the laws of Taiwan) 30,000
Ho Hong Investment Co., Ltd. (incorporated under the
laws of Taiwan) 30,000
Bay Area Microcap Fund, L.P., (a California limited partnership) 30,000
China First Steel Ropes Manufacturing Co., Ltd.
(incorporated under the laws of Taiwan) 20,000
Robert and Virginia McAfee Declaration and Agreement
of Trust DTD 2/15/91 (a California trust) 2,000
Brian G. Swift 30,000(2)
John J. Early 10,000(2)
Jay L. Hayes 10,000(2)
No selling shareholder has held any position, office or other material
relationship with us or any of our affiliates within the past three years,
except for Robert McAfee, who is a director of the Company, and Philip
- --------------------------
1 Bay Area Microcap Fund owns 268,564 shares of common stock in addition to
the shares offered hereby.
2 These holders will own their shares upon the exercise of warrants.
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Vermeulen, who is one of our directors and is the managing director of FLV. Mr.
Vermeulen disclaims beneficial ownership of the shares held by FLV except to the
extent of his proportionate ownership interest in FLV.
We sold 625,820 shares of Series A Preferred Stock on September 21,
1998, and 1,282,169 shares of Series A Preferred Stock on October 5, 1998 to
certain of the selling shareholders in private transactions. On September 21,
1998 we granted warrants to purchase 50,000 shares of common stock to certain of
the selling shareholders in private transactions. The shares of Series A
Preferred Stock are convertible into an equivalent number of shares of common
stock. Such shares of common stock, issuable upon either conversion of the
Series A Preferred Stock or exercise of the Warrants, are registered hereunder.
In addition, we sold 40,000 shares of common stock to FLV on July 7,
1997, and sold an additional 534,400 to FLV on September 24, 1997, subject to
future adjustment. On March 25, 1998, FLV acquired an additional 211,297 shares
of common stock as a result of a purchase price adjustment for the shares
purchased on September 24, 1997. These shares of common stock are registered
hereunder.
Each selling shareholder has represented to us that he, she, or it
purchased the securities described above for investment, with no present
intention of distribution. However, in recognition of the fact that investors,
even though purchasing the securities described above for investment, may wish
to be legally permitted to sell their securities when they deem appropriate, we
have filed with the Commission under the Securities Act the Registration
Statement with respect to the sale of the common stock covered hereby from time
to time in through public or private transactions, on or off the Nasdaq SmallCap
Market, at prevailing market prices or privately negotiated prices, through the
writing of options on the securities owned by the selling shareholders, or
through a combination of the foregoing. We have agreed to prepare and file such
amendments and supplements to the Registration Statement as may be necessary to
keep the Registration Statement effective until October 5, 2002.
PLAN OF DISTRIBUTION
Any or all of the shares may be sold from time to time by each selling
shareholder, its pledgees, donees, transferees, distributees or
successors-in-interest. Each selling shareholder may sell all or a portion of
the shares from time to time while the registration statement of which this
prospectus is a part remains effective. The Company has agreed that it will use
its best efforts to keep the registration statement effective until October 5,
2002 (or a shorter period if all the shares have been sold or disposed of prior
to such time). The aggregate proceeds to a selling shareholder from the sale of
shares offered by it hereby will be the prices at which such shares are sold,
less any commissions.
Each selling shareholder may sell shares on the Nasdaq Smallcap Market,
in privately negotiated transactions or otherwise, at fixed prices that may be
changed, at market prices prevailing at time of sale, at prices related to such
market prices or at negotiated prices. Shares may be sold by one or more of the
following methods, without limitation: (a) block trades in which the broker or
dealer so engaged will attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction, (b)
purchases by a broker or dealer as principal and resale by such broker or dealer
for its account pursuant to this prospectus, (c) ordinary brokerage transactions
and transactions in which the broker solicits purchasers, (d) privately
negotiated transactions, and (e) a combination of any such methods of sale. In
effecting sales, brokers and dealers engaged by the selling shareholder may
arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions or discounts from the selling shareholder (or, if any such
broker-dealer acts as agent for the purchaser of such shares, from such
purchaser) in amounts to be negotiated which are not expected to exceed those
customary in the types of transactions involved. Broker-dealers may agree with
the selling shareholder to sell a specified number of shares at a stipulated
price per share, and, to the extent such broker-dealer is unable to do so acting
as agent for the selling shareholder, to purchase as principal any unsold
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shares at the price required to fulfill the broker-dealer commitment to the
selling shareholder. Broker-dealers who acquire shares as principal may
thereafter resell such shares from time to time in transactions (which may
involve block transactions and sales to and through other broker-dealers,
including transactions of the nature described above) in the over-the-counter
market or otherwise at prices and on terms then prevailing at the time of sale,
at prices then related to the then-current market price or in negotiated
transactions and, in connection with such resales, may pay to or receive from
the purchasers of such shares commissions as described above. Each selling
shareholder may also sell shares in accordance with Rule 144 under the
Securities Act, rather than pursuant to this prospectus.
In connection with distributions of shares or otherwise, a selling
shareholder may enter into hedging transactions with broker-dealers or other
financial institutions. In connection with such transactions, broker-dealers or
other financial institutions may engage in short sales of the Company's common
stock in the course of hedging the positions they assume with the selling
shareholder. The selling shareholder may also sell the Company's common stock
short and deliver shares to close out such short positions. The selling
shareholder may also enter into option or other transactions with broker-dealers
or other financial institutions which require the delivery to such
broker-dealers or other financial institutions of shares offered hereby, which
shares such broker-dealers or other financial institutions may resell pursuant
to this prospectus. The selling shareholder may also pledge shares to a
broker-dealer or other financial institution, and, upon default, such
broker-dealer or other financial institution may effect sales of the pledged
shares pursuant to this prospectus.
The selling shareholder and any brokers and dealers through whom sales
of the shares are made may be deemed to be "underwriters" within the meaning of
the Securities Act, and the commissions or discounts and other compensation paid
to such persons may be regarded as underwriters' compensation. The Company will
pay all expenses of registration (including the fees and expenses of the selling
shareholder's counsel) incurred in connection with this offering, but the
selling shareholder will pay all underwriting discounts, brokerage commissions
and other similar expenses incurred by the selling shareholder. The Company has
agreed to indemnify the selling shareholder against certain losses, claims,
damages and liabilities, including those arising under the Securities Act.
The selling shareholder may sell the shares at any price. Sales of the
shares at less than market prices may depress the market price of the Company's
common stock. Moreover, generally, selling shareholders are not restricted as to
the number of shares which may be sold at any one time, and it is possible that
a significant number of shares could be sold at the same time.
LEGAL MATTERS
For the purposes of this offering, Wilson Sonsini Goodrich & Rosati,
Professional Corporation, Palo Alto, California, is giving its opinion on the
validity of the shares and certain legal matters pertaining to Xiox.
EXPERTS
The consolidated financial statements of Xiox Corporation as of
December 31, 1997 and 1996, and for each of the years in the two year period
ended December 31, 1997, have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
10
<PAGE>
========================================== ====================================
No dealer, salesperson or other
person has been authorized in connection
with any offering made hereby to give any
information or to make any
representations other than those
contained in or incorporated by reference
in this Prospectus, and, if given or
made, such information or representations
must not be relied upon as having been
authorized. This Prospectus does not
constitute an offer to sell or a
solicitation of an offer to buy any
security other than the securities Xiox Corporation
offered hereby, nor does it constitute an
offer to sell or a solicitation of any
offer to buy any of the securities
offered hereby to any person in any
jurisdiction in which such offer or
solicitation would be unlawful or to any
person to whom it is unlawful. Neither
the delivery of this Prospectus nor any 2,743,686 Shares of Common Stock
offer or sale made hereunder shall, under
any circumstances, create any implication
that there has been no change in the
affairs of Xiox or that the information
contained herein is correct as of any
time subsequent to the date hereof.
----------------- -----------------
TABLE OF CONTENTS
----------------- PROSPECTUS
-----------------
Page
- ----
Where You Can Find More Information .. 1
Prospectus Summary ................... 2
Risk Factors ......................... 4
Forward Looking Statements ........... 7
Selling Shareholders ................. 8
Plan of Distribution ................. 9
Legal Matters ........................ 10
Experts .............................. 10 December 4, 1998
---------------
========================================== ====================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses in connection with
the sale and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are estimates
except the Securities and Exchange Commission registration fee and the Nasdaq
SmallCap Market listing fee.
Securities and Exchange Commission registration fee ...... $5,959
Nasdaq SmallCap Market listing fee ....................... 7,500
Printing and engraving expenses .......................... 1,500
Legal fees and expenses .................................. 10,000
Accounting fees and expenses ............................. 3,000
Transfer agent and registrar fees and expenses ........... 1,500
Miscellaneous ............................................ 1,500
-------
Total ............................................... $30,959
=======
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law permits a
corporation to include in its charter documents, and in agreements between the
corporation and its directors and officers, provisions expanding the scope of
indemnification beyond that specifically provided by the current law.
Article VI of the Registrant's Certificate of Incorporation provides
for the indemnification of directors to the fullest extent permissible under
Delaware law.
Article VI of the Registrant's Bylaws provides for the indemnification
of officers, directors and third parties acting on behalf of the corporation if
such person acted in good faith and in a manner reasonably believed to be in and
not opposed to the best interest of the corporation, and, with respect to any
criminal action or proceeding, the indemnified party had no reason to believe
his or her conduct was unlawful.
The Registrant has entered into indemnification agreements with its
directors and executive officers, in addition to indemnification provided for in
the Registrant's Bylaws, and intends to enter into indemnification agreements
with any new directors and executive officers in the future.
II-1
<PAGE>
Item 16. Exhibits
Exhibit
Number Description
- ------------- -----------------------------------------------------------------
1.1 (1) Stock Purchase and Investor Rights Agreement dated September 21,
1998 between the Registrant and certain investors and the
exhibits thereto
4.1 (2) Restated Certificate of Incorporation of Registrant
4.2 (3) Certificate of Designations, Preferences and Other Rights dated
September 17, 1998
4.3 (4) Right of First Refusal and Co-Sale Agreement dated September 21,
1998 between the Registrant and certain investors
4.4 Form of Common Stock Certificate
4.5 (5) Bylaws of Registrant, as amended
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation
23.1 Consent of KPMG Peat Marwick LLP, independent certified public
accountants
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (Included in Exhibit 5.1 hereto)
24.1 Power of Attorney (included on P. II-4)
- ---------------------
(1) Filed as exhibit 4.5 to the Registrant's Report on Form 8-K filed with the
Commission on September 24, 1998 and incorporated herein by reference.
(2) Filed as exhibit 3.3 to the Registrant's Report on Form 8-K filed with the
Commission on September 24, 1998 and incorporated herein by reference.
(3) Filed as exhibit 3.4 to the Registrant's Report on Form 8-K filed with the
Commission on September 24, 1998 and incorporated herein by reference.
(4) Filed as exhibit 4.6 to the Registrant's Report on Form 8-K filed with the
Commission on September 24, 1998 and incorporated herein by reference.
(5) Filed as exhibit 3.2 to the Registrant's Annual Report on Form 10-K405 for
the fiscal year ended December 31, 1997 filed with the Commission on March
31, 1998 and incorporated herein by reference.
Item 17. Undertaking
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and persons controlling the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer of controlling persons of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-2
<PAGE>
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.
4. For purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
5. To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14a-c
under the Securities Exchange Act or 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Xiox
Corporation certifies that it has reasonable grounds to believe that it meets
all requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Burlingame, State of California, on this 4th day of
December 1998.
Xiox Corporation
By: / / William H. Welling
-----------------------------------------
William H. Welling
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints William H. Welling, as his
attorney-in-fact, with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this Registration Statement and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by our said attorney to any and
all amendments to said Registration Statement.
<TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<CAPTION>
Signature Title Date
- -------------------------------- ------------------------------------------ -----------------
<S> <C> <C>
/ / William H. Welling President and Chief Executive Officer and December 4, 1998
- -------------------------------- Director (Principal Executive Officer)
(William H. Welling)
/ / Melanie D. Johnson Chief Financial Officer December 4, 1998
- --------------------------------
(Melanie D. Johnson)
/ / Mark A. Parrish, Jr. Director December 4, 1998
- --------------------------------
(Mark A. Parrish, Jr.)
/ / Robert K. McAfee Director December 4, 1998
- --------------------------------
(Robert K. McAfee)
/ / Bernard T. Marren Director December 4, 1998
- --------------------------------
(Bernard T. Marren)
/ / Atam Lalchandani Director December 4, 1998
- --------------------------------
(Atam Lalchandani)
/ / Philip Vermeulen Director December 4, 1998
- --------------------------------
(Philip Vermeulen)
</TABLE>
II-4
<PAGE>
Exhibit Index
Exhibit
Number Description
- ----------- -------------
1.1 (1) Stock Purchase and Investor Rights Agreement dated September 21,
1998 between the Registrant and certain investors and the
exhibits thereto
4.1 (2) Restated Certificate of Incorporation of Registrant
4.2 (3) Certificate of Designations, Preferences and Other Rights dated
September 17, 1998
4.3 (4) Right of First Refusal and Co-Sale Agreement dated September 21,
1998 between the Registrant and certain investors
4.4 Form of Common Stock Certificate
4.5 (5) Bylaws of Registrant, as amended
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation
23.1 Consent of KPMG Peat Marwick LLP, independent certified public
accountants
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (Included in Exhibit 5.1 hereto)
24.1 Power of Attorney (included on P. II-4)
- --------------------
(1) Filed as exhibit 4.5 to the Registrant's Report on Form 8-K filed with the
Commission on September 24, 1998 and incorporated herein by reference.
(2) Filed as exhibit 3.3 to the Registrant's Report on Form 8-K filed with the
Commission on September 24, 1998 and incorporated herein by reference.
(3) Filed as exhibit 3.4 to the Registrant's Report on Form 8-K filed with the
Commission on September 24, 1998 and incorporated herein by reference.
(4) Filed as exhibit 4.6 to the Registrant's Report on Form 8-K filed with the
Commission on September 24, 1998 and incorporated herein by reference.
(5) Filed as exhibit 3.2 to the Registrant's Annual Report on Form 10-K405 for
the fiscal year ended December 31, 1997 filed with the Commission on March
31, 1998 and incorporated herein by reference.
II-5
- --------------------------------------------------------------------------------
XIOX CORPORATION LOGO
| NUMBER | | SHARES |
| | | |
THIS CERTIFICATE IS TRANSFERABLE IN SEE THE REVERSE FOR A STATEMENT AS TO THE
LOS ANGELES OR NEW YORK RIGHTS, PREFERENCES, PRIVILEGES AND RES-
TRICTIONS OF THE CORPORATION'S SHARES
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
-----------------------------------------------------------------
This certifies that CUSIP 983905 10 0
is the registered owner of
-----------------------------------------------------------------
FULLY-PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, WITH
PAR VALUE OF $01. OF
XIOX CORPORATION
transferable on the share register of the Corporation, in person or by duly
authorized Attorney, upon surrender of this Certificate properly endorsed or
assigned.
This Certificate is not valid until countersigned by the transfer agent and
registered by the registrar.
WITNESS the facsimile seal of Corporation and the facsimile signatures of
its duly authorized officers.
Dated:
/s/ /s/
SECRETARY PRESIDENT
XIOX CORPORATION SEAL
GOES HERE
- --------------------------------------------------------------------------------
<PAGE>
XIOX CORPORATION
A full statement of the rights, preferences, privileges, and restrictions
granted to or imposed upon the respective classes of shares of the Corporation,
including the Common Stock, ownership of which is represented by this
Certificate, and the Preferred Stock, and upon the respective holders thereof,
may be obtained by any shareholder upon request and without charge from the
Secretary of the Corporation, at the principal office of the Corporation.
The Board of Directors has the authority to fix the number of shares of any
series of Preferred Stock, to determine the designation of such series and to
determine or alter the rights, preferences, privileges and restrictions upon
any wholly unissued series of Preferred Stock.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- ..Custodian..
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right under Uniform Gifts to Minors
of survivorship and not as Act ...............
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
For Value Received, ________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------ Shares
of the Common Stock represented by the within certificate, and do hereby
irrevocably constitute and appoint
- ----------------------------------------------------------------------- Attorney
to transfer the said shares on the books of the within named Corporation with
full power of substitution in the premises.
Dated
------------------------------
------------------------------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND
WITH THE NAME AS WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
Exhibit 5.1
December 4, 1998
Xiox Corporation
557 Airport Boulevard, Suite 700
Burlingame, CA 94010
Re: Xiox Corporation (the "Company") Registration Statement on Form S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed
with the Securities and Exchange Commission (the "Registration Statement"), in
connection with the registration under the Securities Act of 1933, as amended,
of a shelf offering of (i) 2,693,686 shares of our common stock, $.01 par value
per share (the "Shares") and (ii) up to 50,000 shares of our common stock, $.01
par value per share, issuable upon exercise of certain warrants to purchase
common stock of the Company (the "Warrant Shares"). As your counsel, we have
examined the proceedings proposed to be taken in connection with the sale and
issuance of the above-referenced securities.
It is our opinion that the Shares are, and that the Warrant Shares when
issued upon exercise of the warrants referred to in the Registration Statement
will be, legally and validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of our name wherever appearing in the
Registration Statement, including the Prospectus constituting a part thereof,
and any amendment thereto.
Very truly yours,
WILSON, SONSINI, GOODRICH & ROSATI
Professional Corporation
/ / Wilson Sonsini Goodrich & Rosati
II-6
Exhibit 23.1
Consent of Independent Auditors
The Board of Directors
Xiox Corporation:
We consent to incorporation by reference in the Registration Statement filed on
December 4, 1998, on Form S-3 of Xiox Corporation of our report dated February
13, 1998, relating to the consolidated balance sheets of Xiox Corporation and
subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
years in the two-year period ended December 31, 1997, which report is
incorporated by reference in the December 31, 1997, Annual Report on Form 10-KSB
of Xiox Corporation and to the reference to our firm under the heading "Experts"
in the Prospectus.
/ / KMPG Peat Marwick LLP
--------------------------
KPMG Peat Marwick LLP
Mountain View, California
December 4, 1998
II-7
