<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended December 31, 1996
-----------------------
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ____________________
Commission File Number 333-08393
----------------
VOXWARE, INC.
-------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 36-3934824
------------------------------- ----------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
---------------------
305 College Road East
Princeton, New Jersey 08540
609-514-4100
---------------------
(Address, including zip code, and telephone
number (including area code) of registrant's
principal executive office)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the last 90 days. YES X NO *
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Shares Outstanding at February 12, 1997
--------------------- ---------------------------------------
Common Stock, $.001 par value 12,466,983
================================================================================
1
<PAGE>
VOXWARE, INC.
INDEX
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements Page No.
--------
Statements of Operations (unaudited)
Three and Six Months Ended December 31, 1996 and 1995.... 3
Balance Sheets
December 31, 1996 (unaudited) and June 30, 1996.......... 4
Statements of Cash Flows (unaudited)
Six Months Ended December 31, 1996 and 1995.............. 5
Notes to Unaudited Financial Statements.................... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................. 7
PART II - OTHER INFORMATION
- ---------------------------
Other Information.......................................... 12
Signatures................................................. 13
2
<PAGE>
PART I - FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
Voxware, Inc.
Statements of Operations
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
----------------------- ------------------------
1996 1995 1996 1995
---- ---- ---- ----
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Revenues:
Product revenues $ 1,436 $ 107 $ 2,587 $ 200
Service revenues 76 1 128 1
--------- ---------- --------- ---------
Total revenues 1,512 108 2,715 201
--------- ---------- --------- ---------
Cost of revenues:
Cost of product revenues 21 3 45 6
Cost of service revenues 51 3 77 5
--------- ---------- --------- ---------
Total cost of revenues 72 6 122 11
--------- ---------- --------- ---------
Gross profit 1,440 102 2,593 190
--------- ---------- --------- ---------
Operating expenses:
Research and development 2,074 324 3,938 573
Sales and marketing 1,086 199 1,887 306
General and administrative 878 165 1,735 240
--------- ---------- --------- ---------
Total operating expenses 4,038 688 7,560 1,119
--------- ---------- --------- ---------
Operating loss (2,598) (586) (4,967) (929)
Interest income 189 16 226 34
--------- ---------- --------- ---------
Net loss $(2,409) $ (570) $(4,741) $ (895)
========= ========== ========= =========
Net loss per share (unaudited) $ (0.21) $ (0.07) $ (0.46) $ (0.11)
========= ========== ========= =========
Shares used in computing
net loss per share (unaudited) 11,269 8,273 10,270 8,241
========= ========== ========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
Voxware, Inc.
Balance Sheets
(In thousands, except share data)
<TABLE>
<CAPTION>
December 31, June 30,
1996 1996
------------ ----------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,038 $ 3,837
Short-term investments 18,603 -
Accounts receivable, net of allowance for doubtful
accounts of $200,000 and $25,000 1,154 470
Prepaid expenses 80 54
------------- ----------
Total current assets 20,875 4,361
Property and equipment, net 656 611
Other assets, net 467 364
------------- ----------
$21,998 $ 5,336
============= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $ 2,283 $ 365
Deferred revenues 244 109
------------- ----------
Total current liabilities 2,527 474
Deferred rent 146 -
------------- ----------
Total liabilities 2,673 474
------------- ----------
Redeemable Series A Convertible Preferred Stock - 5,938
------------- ----------
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, $.001 par value, 10,000,000
shares authorized; none and 6,000,000 Redeemable
Series A Convertible shares issued and
outstanding - -
Common stock, $.001 par value, 30,000,000 shares
authorized; 12,466,983 and 5,947,496 shares
issued and outstanding 12 6
Additional paid-in capital 28,317 3,177
Accumulated deficit (9,004) (4,259)
------------- ----------
Total stockholders' equity (deficit) 19,325 (1,076)
------------- ----------
$21,998 $ 5,336
============= ==========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
Voxware, Inc.
Statements of Cash Flows
(In thousands, except share and warrant data)
<TABLE>
<CAPTION>
Six Months Ended
December 31,
-------------------------
1996 1995
---- ----
(unaudited)
<S> <C> <C>
Operating activities:
Net loss $ (4,741) $ (895)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 113 18
Provision for doubtful accounts 175 -
Changes in assets and liabilities:
Accounts receivable (859) (61)
Prepaid expenses (26) (8)
Other assets (104) -
Accounts payable and accrued expenses 1,918 175
Deferred revenues 135 (71)
Deferred rent 146 -
----------- -----------
Net cash used in operating activities (3,243) (842)
----------- -----------
Investing activities:
Purchases of short-term investments (61,146) -
Maturities of short-term investments 42,543 -
Purchases of property and equipment (157) (69)
----------- -----------
Net cash used in investing activities (18,760) (69)
----------- -----------
Financing activities:
Proceeds from issuance of common stock, net 18,442 -
Proceeds from exercise of common stock warrants 762 -
Proceeds from sale of Redeemable Series A
Convertible Preferred Stock - 3,954
----------- -----------
Net cash provided by financing activities 19,204 3,954
----------- -----------
Increase (decrease) in cash and cash equivalents (2,799) 3,043
Cash and cash equivalents, beginning of period 3,837 1,523
----------- -----------
Cash and cash equivalents, end of period 1,038 4,566
Short-term investments, end of period 18,603 -
----------- -----------
Cash and short-term investments, end of period $ 19,641 $ 4,566
=========== ===========
SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS:
Conversion of Redeemable Series A Convertible Preferred Stock
to Common Stock $ 5,938 $ -
Accretion of redemption premium on Redeemable Series A
Convertible Preferred Stock $ 4 $ -
Cashless exercise of 377,500 warrants, converted at a rate of
one-half share of Common Stock per warrant (converted to 188,750
shares of Common Stock) in December 1996 $ - $ -
=========================
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
Voxware, Inc.
Notes To Unaudited Financial Statements
1. BASIS OF PRESENTATION
The financial statements as of December 31, 1996 and for the three and
six month periods ended December 31, 1996 and 1995 are unaudited and
reflect all adjustments (consisting only of normal recurring adjustments)
which are, in the opinion of management, necessary for a fair presentation
of the financial position and operating results for the interim periods.
The financial statements should be read in conjunction with the financial
statements and notes thereto, together with management's discussion and
analysis of financial condition and results of operations, contained in the
Company's Registration Statement on Form S-1 which was declared effective
on October 30, 1996, the Company's Form 10-Q for the quarter ended
September 30, 1996, and in this report on Form 10-Q.
The results of operations for the interim periods ended December 31,
1996 are not necessarily indicative of the results to be expected for the
fiscal year ending June 30, 1997 or any other future periods.
2. SALE OF COMMON STOCK
The Company consummated an Initial Public Offering of Common Stock which
closed on November 4, 1996 and December 4, 1996. The Company offered and
sold an aggregate of 2,823,237 shares of Common Stock at an initial public
offering price of $7.50. The net proceeds to the Company from the initial
public offering, after payment of offering expenses, were approximately
$18,442,000.
3. NET LOSS PER SHARE
Net loss per share was calculated by dividing net loss by the weighted
average number of common shares outstanding for the respective periods
adjusted for the dilutive effect of common stock equivalents, which consist
of stock options and warrants, using the treasury stock method. The
calculation of shares used in computing net loss per share also includes
6,000,000 shares of Redeemable Series A Convertible Preferred Stock which
converted into 3,000,000 shares of Common Stock upon the consummation of
the Initial Public Offering, as if they were converted to Common Stock on
their original date of issuance.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This report contains forward-looking statements which involve risks and
uncertainties. Such statements are subject to certain factors which may cause
the Company's plans and results to differ. Factors that may cause such
differences include, but are not limited to, the rate of progress, if any, of
the Company's product development programs and the uncertainty of acceptance of
the Company's products in the marketplace, the uncertain development of the
Internet and its use as a means for voice communications, the highly competitive
nature of the Company's industry and the Company's ability to compete
successfully, the Company's ability to attract and retain qualified personnel,
the Company's ability to successfully enter into and maintain relationships with
third parties (including Netscape Communications Corporation) and the Company's
dependence on such third parties to develop and market products using the
Company's technology and to develop a recurring revenue stream to the Company,
the Company's ability to manage its growth, the costs involved in obtaining and
enforcing patents and any necessary licenses, the Company's ability to obtain
additional funds, and those other risks discussed in the Company's Registration
Statement on Form S-1, File No. 333-08393.
Overview
The Company develops, markets, licenses and supports a comprehensive,
integrated set of digital speech processing technologies which provide the
ability to compress, model and transform speech. From inception (August 20,
1993) to June 30, 1995, the Company's operating activities related primarily to
performing research and development, recruiting personnel, raising capital and
purchasing operating assets. The Company commenced product releases in July 1995
and, for accounting purposes, emerged from the development stage commencing in
July 1995. Since inception, the Company has raised net proceeds of approximately
$28,329,000 as follows: approximately $8,838,000 through private placements;
approximately $18,442,000 through the Initial Public Offering which was declared
effective on October 30, 1996; and approximately $1,049,000 through other sales
of equity securities, including exercises of all outstanding common stock
warrants.
The Company generates revenues from two sources: fees from product licenses
and fees for services provided. Product revenues account for a majority of the
Company's revenues. The Company's products are licensed primarily to software,
computing and communications companies who incorporate the Company's products
and technologies into their products. The Company generally negotiates contract
terms with customers on a case by case basis, with arrangements that have
historically included a combination of initial license fees and royalties and
other recurring payments. One of the Company's objectives is to develop
recurring revenue through entering into licensing agreements with third parties
which provide for recurring payments such as royalties based on a percentage of
licensees' sales or an agreed-upon amount per unit shipped, or pre-determined
annual or other periodic payments. As a result, the timing and amount of the
Company's revenues are substantially dependent on the timing and efforts of the
Company's licensees in developing and marketing products incorporating the
Company's products and technologies. There can be no assurance as to the timing
or success of any licensee implementation or the timing or amount of recurring
revenues from any licensee product. Since inception, the Company has entered
into approximately 40 license agreements which provide for recurring payments
and has recognized an aggregate of approximately $890,000 in recurring revenues
(which includes royalty revenues and annual or other periodic payments). Service
revenues consist of customer support and engineering fees. Customer support
services include providing updates and technical support to licensees of the
Company's products. Engineering services include providing technical resources
to support customer specific development efforts or porting the Company's
technologies to specific customer platforms.
7
<PAGE>
Software product revenues are generally recognized upon shipment, provided
that there are no significant post-delivery obligations, the payment is due
within one year and collection of the resulting receivable is deemed probable.
If an acceptance period is required, revenues are recognized upon customer
acceptance. Royalty revenues are recognized in the period of customer shipment.
For the three and six months ended December 31, 1996, respectively,
approximately $390,000 and $640,000 of recurring revenues (which includes
royalty revenues and annual or other periodic payments) have been recognized.
Customer support revenues, including amounts bundled with license fees, are
recognized over the term of the support period, which typically ranges from one
to two years. Engineering fees are recognized upon customer acceptance or over
the period in which services are provided if customer acceptance is not
required. All research and development costs have been expensed as incurred.
The Company has only a limited operating history upon which an evaluation
of the Company and its prospects can be based. As of December 31, 1996, the
Company had an accumulated deficit of $9,004,000. Although the Company has
experienced revenue growth in recent periods, the limited operating history of
the Company makes the prediction of future results of operations impossible and,
therefore, the Company's recent revenue growth should not be taken as indicative
of the rate of revenue growth, if any, that can be expected in the future. In
addition, the Company's operating results may fluctuate significantly in the
future as a result of a variety of factors, including the level of usage of the
Internet, the budgeting cycles of potential customers, the volume of, and
revenues derived from sales of products by the Company's licensees that
incorporate the Company's products, the amount and timing of capital
expenditures and other costs relating to the expansion of the Company's
operations, the introduction of new products or services by the Company or its
competitors, pricing changes in the industry, technical difficulties with
respect to the use of products developed by the Company and general economic
conditions.
Results of Operations
Revenues
Total revenues increased $1,404,000 from $108,000 in the three months ended
December 31, 1995 to $1,512,000 in the three months ended December 31, 1996 as a
result of the Company entering into an increasing number of license agreements
providing customers with the right to use the Company's products and related
services. On a year-to-date basis, total revenues increased $2,514,000 from
$201,000 for the six months ended December 31, 1995 to $2,715,000 for the six
months ended December 31, 1996. The Company's largest customer accounted for 17%
and 18% of total revenues in the three and six month periods ended December 31,
1996, respectively.
Product revenues increased $1,329,000 from $107,000 in the three months
ended December 31, 1995 to $1,436,000 in the three months ended December 31,
1996. For the six months ended December 31, 1996, product revenues totaled
$2,587,000 compared to $200,000 for the six months ended December 31, 1995,
reflecting an increase of $2,387,000. These dollar increases in product revenues
were primarily due to the increased volume of licenses of the Company's products
to new customers. Approximately 73% and 75% of the Company's product revenues
were attributable to initial license fees for the three and six month periods
ended December 31, 1996, respectively, and 27% and 25% were attributable to
royalties and annual or other periodic payments, respectively.
Service revenues were $76,000 for the quarter ended December 31, 1996
compared to $1,000 for the quarter ended December 31, 1995 and $128,000 for the
six months ended December 31, 1996 compared to $1,000 for the comparable six
month period in 1995. Service revenues were primarily attributable to customer
support and fees for engineering.
8
<PAGE>
Cost of Revenues
Cost of product revenues increased $18,000 from $3,000 in the three months
ended December 31, 1995 to $21,000 in the three months ended December 31, 1996.
For the six months ended December 31, 1996, cost of product revenues totaled
$45,000 compared to $6,000 for the comparable six month period in 1995,
reflecting an increase of $39,000. These increases in cost of product revenues
were primarily due to the costs of product media and duplication, manuals and
packaging materials related to the increased volume of licenses of the Company's
products to new customers.
Cost of service revenues consists primarily of the expenses associated with
the staffing of a customer support group and engineering services, which consist
primarily of employee compensation and equipment depreciation. Cost of service
revenues increased $48,000 from $3,000 in the three months ended December 31,
1995 to $51,000 in the three months ended December 31, 1996, and increased
$72,000 from $5,000 for the six months ended December 31, 1995 to $77,000 for
the six months ended December 31, 1996. These dollar increases in cost of
service revenues from the three and six months ended December 31, 1995 to the
three and six months ended December 31, 1996 were primarily attributable to
increased staffing of the Company's customer support and engineering groups.
Operating Expenses
The Company's operating expenses have continued to increase in each quarter
since inception. This trend reflects the costs associated with the development
of infrastructure, rapid growth and increased efforts to commercialize the
Company's products and services. The Company believes that continued expansion
of its operations is essential to enhance the Company's products and services
and distribute them in targeted markets and expand the Company's installed user
base. As a result, the Company intends to continue to increase the absolute
dollar level of expenditures in all operating areas in future periods.
Research and development expenses primarily consist of employee
compensation and equipment depreciation related to product research and
development. Research and development expenses increased $1,750,000 from
$324,000 in the three months ended December 31, 1995 to $2,074,000 in the three
months ended December 31, 1996. For the six months ended December 31, 1996,
research and development expenses were $3,938,000 compared to $573,000 for the
six months ended December 31, 1995, reflecting an increase of $3,365,000. These
dollar increases in research and development expenses were primarily due to
increasing the research and development staff from nine at December 31, 1995 to
fifty at December 31, 1996 and the costs associated with developing and
enhancing the functionality of the Company's family of products. The Company
believes that significant investments in research and development are required
to establish and maintain competitive advantage and, as a result, the Company
intends to increase the absolute dollar level of research and development
expenditures in future periods.
Sales and marketing expenses consist primarily of employee compensation
(including direct sales commissions), travel expenses, trade shows and costs of
promotional materials. Sales and marketing expenses increased $887,000 from
$199,000 in the three months ended December 31, 1995 to $1,086,000 in the three
months ended December 31, 1996. On a year-to-date basis, sales and marketing
expenses increased $1,581,000 from $306,000 for the six months ended December
31, 1995 to $1,887,000 for the six months ended December 31, 1996. These dollar
increases in sales and marketing expenses were primarily due to the expansion of
the Company's sales force and marketing staff from three at December 31, 1995 to
fourteen at December 31, 1996, and increased expenses associated with the
promotion and marketing of the Company's products and services. The Company
intends to continue to intensify and expand its direct and tele-sales efforts
and, as a result, intends to increase the absolute dollar level of sales and
marketing expenses in future periods.
9
<PAGE>
General and administrative expenses consist primarily of employee
compensation and fees for insurance, rent, office expenses and professional
services. General and administrative expenses increased $713,000 from
$165,000 in the three months ended December 31, 1995 to $878,000 in the
three months ended December 31, 1996. For the six months ended December
31, 1996, general and administrative expenses totaled $1,735,000 compared
to $240,000 for the six months ended December 31, 1995, reflecting a year-
to-date increase of $1,495,000. These dollar increases in general and
administrative expenses were primarily due to increasing the administrative
staff from three at December 31, 1995 to twenty-one at December 31, 1996
and increased expenses related to insurance, rent, office expenses and
professional services. The Company intends to increase the absolute dollar
level of general and administrative expenses in future periods.
Interest Income
Interest income increased $173,000 to $189,000 for the quarter ended
December 31, 1996 from $16,000 for the quarter ended December 31, 1995. On
a year-to-date basis, interest income increased $192,000 to $226,000 for
the six months ended December 31, 1996 compared to $34,000 for the six
months ended December 31, 1995. These increases in interest income
primarily reflect interest earned on the net proceeds from the Initial
Public Offering closed during November and December 1996 (see "Liquidity
and Capital Resources").
Income Taxes
As of December 31, 1996, the Company had approximately $8,100,000 of
federal net operating loss carryforwards which will begin to expire in 2009
if not utilized. As of December 31, 1996, the Company has provided a full
valuation allowance on the deferred tax asset because of the uncertainty
regarding realizability of these deferred assets, primarily as a result of
considering such factors as the Company's limited operating history, the
volatility of the market in which it competes, the operating losses
incurred to date and the operating losses anticipated in future periods.
Liquidity and Capital Resources
As of December 31, 1996, the Company had $1,038,000 in cash and cash
equivalents and $18,603,000 in short-term investments. The Company's cash
and short-term investments portfolio is liquid and investment grade,
consisting of high-grade money-market funds, United States Government-
backed securities and commercial paper and corporate obligations. Since
inception, the Company has primarily financed its operations through the
sale of equity securities.
Cash of $842,000 and $3,243,000 was used to fund operations for the six
months ended December 31, 1995 and 1996, respectively. For the six months
ended December 31, 1995, cash used in investing activities was $69,000 and
was related to purchases of equipment. For the six months ended December
31, 1996, cash used in investing activities totaled $18,760,000 which
reflects $18,603,000 in net purchases of short-term investments and
$157,000 related to purchases of equipment. For the six months ended
December 31, 1996, cash provided by financing activities totaled
$19,204,000, reflecting $18,442,000 in net proceeds from the Initial Public
Offering and $762,000 in proceeds from the exercise of common stock
warrants. For the six months ended December 31, 1995, cash provided by
financing activities totaled $3,954,000 and was attributable to the
issuance of Series A Preferred Stock. All Series A Preferred Stock
converted into Common Stock upon the closing of the Initial Public
Offering.
The Company maintains a $5,000,000 revolving line of credit and a
$500,000 equipment term loan with Silicon Valley Bank. Borrowings under
the revolving line of credit will bear interest at the bank's prime lending
rate and borrowings under the equipment term loan will bear interest at a
rate of 1.0% over the bank's prime lending rate. As of December 31, 1996,
no borrowings were outstanding.
10
<PAGE>
In November 1996 and December 1996, the Company closed on an initial
public offering of Common Stock. The Company offered and sold 2,823,237
shares of Common Stock at an initial public offering price of $7.50. The
net proceeds to the Company from the Initial Public Offering after payment
of offering expenses were approximately $18,442,000.
The Company has no material commitments other than those under normal
building and equipment operating leases. The Company anticipates a
substantial increase in its capital expenditures and operating lease
arrangements in the year ending June 30, 1997 consistent with its
anticipated growth. The Company anticipates continued major capital
expenditures in the year ending June 30, 1997 primarily for additions to
the Company's internal networking and computing infrastructure. The
Company believes that the net proceeds of $18,442,000 obtained from the
initial public offering and current cash balances will be sufficient to
fund its working capital and capital expenditures requirements, exclusive
of cash required for possible acquisitions of, or investments in
businesses, products and technologies for at least eighteen months beyond
October 30, 1996.
11
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 5. Other Information. None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
11.1 Statement re: Computation of Loss Per Share
27 Financial Data Schedule.
(b) Reports on Form 8-K. None.
12
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: February 12, 1997
VOXWARE, INC.
(Registrant)
By: /s/ Michael Goldstein
--------------------------------------
Michael Goldstein, President and
Chief Executive Officer
By: /s/ Kenneth H. Traub
--------------------------------------
Kenneth H. Traub, Executive Vice President,
Chief Financial Officer and Secretary
(Principal Financial Officer)
By: /s/ Nicholas Narlis
--------------------------------------
Nicholas Narlis, Controller,
Chief Accounting Officer and Treasurer
(Principal Accounting Officer)
13
<PAGE>
Exhibit 11.1
Voxware, Inc.
Statements re: Computation of Loss Per Share
Three and Six Months Ended December 31, 1996 and 1995
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
------------------ ----------------
1996 1995 1996 1995
---- ---- ---- ----
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net Loss $ (2,409) $ (570) $ (4,741) $ (895)
============ ========== ============ ==========
Primary and fully diluted weighted average common
and common equivalent shares oustanding:
Common stock 11,228 6,033 10,185 5,913
Common stock options and warrants (1) 41 2,240 85 2,328
Total primary and fully diluted weighted average
common and common equivalent shares ------------ ---------- ------------ ----------
outstanding 11,269 8,273 10,270 8,241
------------ ---------- ------------ ----------
------------ ---------- ------------ ----------
Loss per share $ (0.21) $ (0.07) $ (0.46) $ (0.11)
============ ========== ============ ==========
</TABLE>
(1) Pursuant to the requirements of the Securities and Exchange Commission,
stock, stock options and warrants issued by the Company during the twelve
months immediately preceding the initial public offering have been included
in computing loss per share as if they were outstanding for all periods
using the treasury stock method, even though their effect is anti-dilutive.
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM VOXWARE INC.
FINANCIAL STATEMENTS FOR THE QUARTER ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> JUN-30-1997 JUN-30-1997
<PERIOD-START> OCT-01-1996 JUL-01-1996
<PERIOD-END> DEC-31-1996 DEC-31-1996
<CASH> 1,038 1,038
<SECURITIES> 18,603 18,603
<RECEIVABLES> 1,354 1,354
<ALLOWANCES> 200 200
<INVENTORY> 0 0
<CURRENT-ASSETS> 20,875 20,875
<PP&E> 888 888
<DEPRECIATION> 232 232
<TOTAL-ASSETS> 21,998 21,998
<CURRENT-LIABILITIES> 2,527 2,527
<BONDS> 0 0
0 0
0 0
<COMMON> 12 12
<OTHER-SE> 19,313 19,313
<TOTAL-LIABILITY-AND-EQUITY> 21,998 21,998
<SALES> 1,512 2,715
<TOTAL-REVENUES> 1,512 2,715
<CGS> 21 45
<TOTAL-COSTS> 72 122
<OTHER-EXPENSES> 4,038 7,560
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (2,409) (4,741)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (2,409) (4,741)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (2,409) (4,741)
<EPS-PRIMARY> (.21) (.46)
<EPS-DILUTED> (.21) (.46)
</TABLE>
