As filed with the Securities and Exchange Commission on February 10, 1999
Registration No. 333-68435
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT 2 TO FORM S-3
REGISTRATION STATEMENT
Under the Securities Act of 1933
Xiox Corporation
(Exact name of Registrant as specified in its charter)
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)
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)
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. [ ]
<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
- ------------------------------------------------------------------------------------------------------------------------------------
<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
Common Stock
$0.01 par value issuable upon
exercise of September 1998
warrants............................. 50,000 shares(3) $7.8125 $ 390,625.00 $ 108.59
====================================================================================================================================
<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>
PROSPECTUS
2,743,686 Shares of Common Stock
($0.01 Par Value)
Xiox Corporation
577 Airport Boulevard, Suite 700
Burlingame, California 94010
(650) 375-8188
The shareholders of Xiox listed on page 8 are 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.
Our common stock is quoted on the Nasdaq SmallCap Market and is traded
under the symbol "XIOX." On February 8, 1999, the average of the high and low
sale prices of one share of our stock on the Nasdaq Small Cap Market was $10.50.
-------------------
These securities involve a high degree of risk. See "Risk Factors"
beginning on page 3.
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 February 10, 1999
<PAGE>
About Xiox Corporation
Xiox Corporation was originally incorporated in California in September
1982, subsequently incorporated in Delaware in April 1987, and became a publicly
held company in February 1986.
We design, develop, manufacture and sell software and hardware systems
that assist companies in managing their telecommunications expenses. These
software and hardware solutions can operate on personal computers, local area
networks and Xiox hardware. Our systems efficiently provide information to
facilitate telephone expense control; client, department or project billback;
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 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 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.
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 on page 8 below.
1
<PAGE>
FORWARD-LOOKING STATEMENTS
This Prospectus, including, but not limited to the section below
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 below.
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.
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 below under "Risk Factors" and the risk factors described in
the documents incorporated by reference.
2
<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.
Our Operating Results May Fluctuate
Our quarterly revenues are likely to fluctuate significantly in the
future due to a number of factors, many of which are outside our control.
Factors that could affect our revenue include:
o variations in the timing of orders and shipments of our products;
o variations in the size of the orders for our products;
o new product introductions by our competitors;
o delays in introducing new products.
Our Stock Price May be Volatile
The trading price of our common stock may be highly volatile and could
fluctuate in response to a variety of factors, including the following:
o actual or anticipated variations in quarterly operating results;
o announcements of technological innovations;
o new products or services offered by us or by our competitors;
o additions or departures of key personnel;
o changes in financial estimates by securities analysts;
o conditions or trends in the telecommunications industry;
o changes in the economic performance and/or market valuations of the
telecommunications industry;
o changes in the economic performance and/or market valuations of other
companies in the telecommunications industry;
o volatility generally associated with technology stocks; and
o other broader market trends unrelated to our operating performance.
We Must Keep Pace with Rapid Technological Change to Remain Competitive
The software industry is characterized by rapid technological change as
well as changes in customer requirements and preferences. In order to remain
competitive, we must quickly respond to such changes, including the enhancement
and upgrading of existing products and the introduction of new products. 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.
Most of Our Competitors Have More Resources
Most of our competitors, particularly our major competitors, Telco
Research, ISI-Infortext and Nortel (MAT), as well as many potential competitors,
have substantially greater financial, marketing and technology resources than we
do. 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.
3
<PAGE>
Over 10% of Our Revenue is From One Customer
One of our customers accounted for 12% of our revenue during 1997. The
loss or serious reduction in business from this customer could have a material
adverse effect on our business, consolidated results of operations and financial
condition in future periods.
We Are Dependent 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, which is
outside of our control. 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.
We Need to Increase Our Sales
Our future success will depend on deriving a substantial portion of our
revenues from sales of call accounting products to new customers as well as
updates and rate table renewals to existing customers. As a result, any factor
adversely affecting these sales, including 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.
Our Business is Subject to the Risk of Defects in Software Products
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.
Our Business is Subject to the Risks of Delays in Product Development Schedules
Delays or difficulties in the execution of product development may
occur, which may result in the cancellation of planned development projects and
could have a material and adverse effect on our business, consolidated results
of operations and financial condition.
Our New Product Line Requires Additional Funding and Entails New Risks
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 a new group of
competitors.
4
<PAGE>
Our Business Could Be Adversely Affected by Year 2000 Issues
Definition. The Year 2000 issue is the result of computer programs
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,
does not correctly recognize date information when the year changes to 2000,
there could be system failures or malfunctions that result in 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.
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. If the data received from
PBX equipment or PC's which are not Year 2000 compliant is incorrect, Xiox
products could generate erroneous information. If PC's on which Xiox software
operates are not Year 2000 compliant, Xiox products could also generate
erroneous information. 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 and Assessment phases have been completed. All new
systems acquired after this date will be subject to assessment prior to
purchase.
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. However, we cannot be
certain that the Company's internal systems will be Year 2000 compliant in a
timely manner. The potential risks include the inability to process and report
financial and other transactions in a timely and accurate manner. Management
does not believe that this will have a material adverse effect on the Company's
business or consolidated financial statements.
5
<PAGE>
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. However, we cannot be certain that the Company's external
suppliers will be Year 2000 compliant in a timely manner. The potential risks
include the production of inaccurate rate tables and delays in product
deliveries. Management does not believe that this will have a material adverse
effect on the Company's business or consolidated financial statements.
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.
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.
6
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
This prospectus 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 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 Small-Cap 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
7
<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
-------------------- ---------------------
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(1)
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.
8
<PAGE>
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. Xiox Corporation 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:
o 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,
o purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this prospectus,
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers,
o privately negotiated transactions, and
o a combination of any such methods of sale.
9
<PAGE>
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 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 Xiox Corporation's
common stock in the course of hedging the positions they assume with the selling
shareholder. The selling shareholder may also sell Xiox Corporation'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. Xiox Corporation
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. Xiox
Corporation 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 Xiox
Corporation'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.
10
<PAGE>
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 LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
11
<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 offered hereby, nor does it
constitute an offer to sell or a Xiox Corporation
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 2,743,686 Shares of Common Stock
nor any 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.
PROSPECTUS
TABLE OF CONTENTS
Page
----
Forward Looking Statements...........2
Risk Factors.........................3
Where You Can Find More
Information........................7
Selling Shareholders ................8
Plan of Distribution.................9
Legal Matters.......................10
Experts.............................11 February 10, 1999
======================================== =======================================
<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 ................................. 5,500
Transfer agent and registrar fees and expenses ............... 1,500
Miscellaneous ................................................ 1,500
-------
Total ............................................... $33,459
=======
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 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 or 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 14c-3
under the Securities Exchange Act of 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 10th day of
February 1999.
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 February 10, 1999
- ------------------------------------ Director (Principal Executive Officer)
(William H. Welling)
/ / Melanie D. Johnson Chief Financial Officer February 10, 1999
- ------------------------------------
(Melanie D. Johnson)
/ / Mark A. Parrish, Jr. Director February 10, 1999
- ------------------------------------
(Mark A. Parrish, Jr.)
/ / Robert K. McAfee Director February 10, 1999
- ------------------------------------
(Robert K. McAfee)
/ / Bernard T. Marren Director February 10, 1999
- ------------------------------------
(Bernard T. Marren)
/ / Atam Lalchandani Director February 10, 1999
- ------------------------------------
(Atam Lalchandani)
/ / Philip Vermeulen Director February 10, 1999
- ------------------------------------
(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 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
EX-4.4
FORM OF COMMON STOCK CERTIFICATE
- --------------------------------------------------------------------------------
XIOX CORPORATION LOGO
NUMBER SHARES
THIS CERTIFICATE IS TRANSFERABLE IN SEE THE REVERSE FOR A STATEMENT AS TO
LOS ANGELES OR NEW YORK THE RIGHTS, PREFERENCES, PRIVILEGES
AND RESTRICTIONS 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
- --------------------------------------------------------------------------------
II-6
<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 GIT 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.
II-7
EX-5.1
Opinion of Wilson Sonsini Goodrich & Rosati
Exhibit 5.1
February 10, 1999
Xiox Corporation
557 Airport Boulevard, Suite 700
Burlingame, CA 94010
Re: Xiox Corporation (the "Company") Registration Statement on
Amendment 2 to Form S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Amendment 2 to 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 the Company's
common stock, $.01 par value per share (the "Shares") and (ii) up to 50,000
shares of the Company's 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-8
EX-23.1
Consent of Independent Auditors
Exhibit 23.1
The Board of Directors
Xiox Corporation:
We consent to incorporation by reference in the Registration Statement filed on
or about February 10, 1999, on Amendment No. 2 to 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.
/ / KPMG LLP
------------------
KPMG LLP
Mountain View, California
February 10, 1999
II-9
