<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 1999
Voxware, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-021403 36-3934824
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
305 College Road East, Princeton, New Jersey 08540
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 514-4100
Not Applicable
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
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As permitted by General Instruction F to Form 8-K promulgated under the
Securities Exchange Act of 1934, as amended, Voxware, Inc., a Delaware
corporation (the "Registrant"), is filing as exhibits to this Current Report on
Form 8-K two press releases issued by the Registrant on February 5, 1999, which
press releases are specifically incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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(1) Not applicable.
(2) Not applicable.
(3) Exhibits.
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99.1 Press release issued February 5, 1999.
99.2 Press release issued February 5, 1999.
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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 hereunto duly authorized.
VOXWARE, INC.
Date: February 8, 1999 By: /s/ Bathsheba J. Malsheen
------------------------------
Bathsheba J. Malsheen, President and
Chief Executive Officer
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INDEX TO EXHIBITS
Exhibit Description
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99.1 Press Release issued February 5, 1999.
99.2 Press Release issued February 5, 1999.
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Exhibit 99.1
CONTACTS:
Voxware, Inc.
Bathsheba J. Malsheen
President & CEO
Nicholas Narlis
Vice President & CFO
609-514-4100
Morgen-Walke Associates
Michele Katz/Cathy Dawson
212-850-5600
VOXWARE ANNOUNCES FISCAL 1999 SECOND QUARTER RESULTS,
PURCHASE OF VOICE RECOGNITION-BASED INDUSTRIAL PRODUCTS BUSINESS
AND SALE OF SPEECH CODING TECHNOLOGY
PRINCETON, NJ--February 5, 1999 -- Voxware/R/, Inc. (Nasdaq: VOXW), a premier
developer of speech technologies and products, today reported financial results
for the fiscal 1999 second quarter. Additionally, Voxware announced today that
it had entered into a definitive agreement to purchase substantially all of the
assets of Verbex Voice Systems, Inc., including Verbex's noise-robust voice
recognition-based industrial products business, and Voxware also announced today
that it had entered into a definitive agreement to sell substantially all of the
Company's speech coding technologies to Ascend Communications, Inc. (Nasdaq:
ASND).
FINANCIAL RESULTS
For the quarter ended December 31, 1998, Voxware recorded total revenues of $0.7
million and a net loss of $0.8 million, or ($0.06) per share. These amounts
compare to total revenues of $1.9 million and a net loss of $0.9 million, or
($0.07) per share for the prior year period. Total revenues for the fiscal 1999
second quarter were comprised of $207,000 of license fees, $181,000 of royalties
and recurring revenues, and $324,000 of service revenues. The Company entered
into two new license agreements and six customers contributed to royalties and
recurring revenues during the quarter. Total operating expenses for the fiscal
1999 second quarter declined to $1.6 million, compared to $2.9 million reported
in the prior year period, primarily as a result of headcount reductions and
other cost reduction initiatives the Company has taken over the past several
quarters.
(More)
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Voxware, Inc. Page 2
Cash, cash equivalents and short-term investments were $11.8 million on December
31, 1998. The Company's cash and short-term investments portfolio consists of
high-grade money market funds, U.S. Government-backed securities and highly
liquid commercial paper and corporate obligations.
CORPORATE TRANSACTIONS
The Company also announced today two separate transactions that will
significantly change Voxware's future business focus. In one transaction,
Voxware has entered into a definitive agreement to sell substantially all of the
assets relating to Voxware's digital speech coding business to Ascend
Communications, Inc. for approximately $5.1 million in cash consideration.
Voxware will obtain a license back from Ascend for certain technology in order
to service Voxware's existing licensees. In addition, subject to Ascend's prior
consent, Voxware will be authorized to license to new customers in certain
markets excluding the Voice over Internet Protocol ("VOIP") market. Voxware will
also retain its existing customer base and contracts, as well as all rights to
its audio compression and voice transformation technologies, which are not part
of the transaction.
Dr. Bathsheba J. Malsheen, President and CEO of Voxware, commented: "We are
pleased to enter into this transaction with Ascend. Based on the competitive
landscape and nature of the markets for speech encoding technologies, we believe
that this transaction is in the best interests of Voxware's shareholders. We
intend to continue to support our existing customer base to help them to ship
products containing the licensed Voxware technologies."
The assets to be sold by Voxware represent substantially all of its operating
business. Voxware has been an OEM licensing company that provides digital
signal processing software to companies building products that require voice and
audio capability. Ascend is acquiring Voxware's core codec technology, also
known as a vocoder or speech compression algorithm. In addition to this core
compression expertise, Voxware also provides companion signal processing
algorithms like echo cancellation, acoustic echo suppression, voice-activity
detection and automatic gain control.
The transaction is subject to customary conditions, including approval of
Voxware's stockholders, and contains customary escrow provisions. Voxware
expects to complete the transaction following approval by its stockholders.
(More)
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Voxware, Inc. Page 3
Voxware also announced today that it has executed an agreement to purchase
substantially all of the assets of Verbex Voice Systems, Inc. for approximately
$5.2 million, signaling Voxware's entrance into the voice recognition-based
industrial products business. The transaction has been approved by the Board of
Directors of Voxware and will be accounted for as a purchase. The transaction is
subject to customary conditions. Voxware expects to complete the transaction
following satisfaction of all conditions to closing.
Verbex Voice Systems, Inc., a privately held company that was founded in 1985,
develops and manufactures speech recognition systems for industrial, commercial,
and other markets. Voxware intends to utilize Verbex's market-leading
technology, which maintains extremely high accuracy in very high noise
environments, in certain vertical markets. Specifically, Voxware plans to
initially focus on the warehouse logistics and manufacturing inspection markets
with applications in picking, receiving, inventory cycle counting, package
sorting and manufacturing inspection. These markets provide opportunities for
Verbex's speech recognition-based industrial products to increase accuracy,
productivity and safety in industrial environments. For the year ended December
31, 1998, Verbex's revenues totaled approximately $2.6 million (unaudited), the
operating loss was approximately $0.6 million (unaudited), and the net loss was
approximately $1.0 million (unaudited).
"After carefully evaluating Voxware's business model over the past several
quarters, we decided to refocus the Company into a new direction. Voxware has
sold the majority of its speech compression technology primarily due to the long
sales and distribution cycle inherent in the previous business model, and the
resource requirements that would be necessary to realize the potential value of
that technology. We have thoroughly investigated the industrial warehouse
market potential for Verbex's products and technology, and believe that there
are significant opportunities to create value for customers in this area,"
stated Dr. Malsheen. "During our extensive due diligence process, we searched
for an appropriate company in a position to take advantage of an existing
growing market. Verbex was the ideal pairing for us because of its unique
background noise filter solution that already has a market demand. In a
warehouse setting, the Verbex MVP (Mobile Voice Pac), a hands and eyes free
portable continuous speech input/output device, can improve efficiency in
warehouse picking, receiving, inventory cycle counting, package sorting and
inspection. The product provides warehouses and distribution centers with
quicker and more accurate warehouse processing, the elimination of paper and
lower headcount requirements," added Dr. Malsheen.
(More)
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Voxware, Inc. Page 4
Voxware (Nasdaq: VOXW) has been a leading developer of speech and audio
compression technologies for consumer devices, multimedia applications, wireless
communications and IP telephony. The Company has licensed its technologies to
software developers, hardware manufacturers and service providers who are
incorporating audio into their applications. Voxware was founded in 1993. Its
corporate headquarters are in Princeton, New Jersey, with regional offices in
Tokyo, Japan and Oxfordshire, England. Additional information about Voxware can
be obtained on the Internet at http://www.voxware.com, by sending e-mail to
[email protected] or by calling (609) 514-4100.
This news release contains forward-looking statements. Such statements are
subject to certain factors which may cause Voxware's plans to differ or results
to vary from those expected including the risks associated with development of
new products and the uncertainty of product acceptance, the uncertainty of
adoption of the Internet as a medium for voice communications, the Company's
reliance on third parties to generate recurring revenues, the competitive nature
of the Company's industry, rapid technological changes, the Company's need to
develop new and enhanced products, government regulations and legal
uncertainties, the Company's dependence on key personnel, uncertainties
regarding patents and proprietary rights, and a variety of risks set forth from
time to time in Voxware's filings with the Securities and Exchange Commission.
Voxware undertakes no obligation to publicity release results of any of these
forward-looking statements which may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unexpected results.
Voxware is a registered trademark of Voxware, Inc. All other product names are
trademarks of their respective owners.
(Tables to follow)
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VOXWARE, INC.
STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1998 1997 1998 1997
------------ ------------ ------------ ------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Revenues:
Product revenues:
License fees $ 207 $ 1,037 $ 451 $ 2,042
Royalties and recurring
revenues 181 581 322 1,232
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Total product revenues 388 1,618 773 3,274
Service revenues 324 239 490 395
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Total revenues 712 1,857 1,263 3,669
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Cost of revenues:
Cost of product revenues - - - 46 - - - 97
Cost of service revenues 164 92 237 146
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Total cost of revenues 164 138 237 243
------------ ------------ ------------ ------------
Gross profit 548 1,719 1,026 3,426
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Operating expenses:
Research and development 434 1,331 1,111 2,775
Sales and marketing 725 995 1,370 2,054
General and administrative 395 553 858 1,150
------------ ------------ ------------ ------------
Total operating expenses 1,554 2,879 3,339 5,979
------------ ------------ ------------ ------------
Operating loss (1,006) (1,160) (2,313) (2,553)
Interest income 171 220 355 442
------------ ------------ ------------ ------------
Net loss $ (835) $ (940) $ (1,958) $ (2,111)
============ ============ ============ ============
Net loss per share $ (0.06) $ (0.07) $ (0.15) $ (0.17)
============ ============ ============ ============
Shares used in computing
net loss per share 13,318 12,780 13,310 12,664
============ ============ ============ ============
</TABLE>
(Table to follow)
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VOXWARE, INC.
Balance Sheets
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
December 31, June 30,
1998 1998
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<S> <C> <C>
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 6,370 $ 9,149
Short-term investments 5,382 4,388
Accounts receivable, net 828 1,254
Prepaid expenses and other current assets 387 268
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Total current assets 12,967 15,059
Property and equipment, net 349 407
Other assets, net 126 91
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$ 13,442 $ 15,557
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 999 $ 1,097
Deferred revenues 148 219
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Total current liabilities 1,147 1,316
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Deferred rent 294 328
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Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value, 10,000,000 shares
authorized; none issued and outstanding - - - - - -
Common stock, $.001 par value, 30,000,000 shares
authorized; 13,343,851 and 13,292,524 shares issued and
outstanding 13 13
Additional paid-in capital 29,965 29,915
Unrealized gain (loss) on available-for-sale securities (2) 2
Accumulated deficit (17,975) (16,017)
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Total stockholders' equity 12,001 13,913
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$ 13,442 $ 15,557
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</TABLE>
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<PAGE>
Exhibit 99.2
[Voxware Logo appears here] Bathsheba J. Malsheen, Ph.D.
President & CEO
(609) 514-4100
CONTACT: Nicholas Narlis
Vice President & CFO
Jeff Hill (609) 514-4100
Director of Marketing
(609) 514-4133
VOXWARE TO ENTER THE INDUSTRIAL SPEECH RECOGNITION MARKETPLACE
Company Agrees to Purchase Substantially All of the Assets of
Verbex Voice Systems, Inc.
PRINCETON, NJ, FEBRUARY 5, 1999 -- Voxware, Inc. (Nasdaq: VOXW), a premier
developer of speech products and technologies, announced that it has entered
into a definitive agreement to purchase for $5.2 million in cash substantially
all of the assets, and to assume certain liabilities, of Verbex Voice Systems,
Inc., a private company headquartered in Edison, New Jersey. Verbex is a leading
provider of noise-robust speech recognition systems, that sells its products
through a network of value-added resellers and systems integrators supplemented
by direct sales to certain strategic accounts.
"It is not uncommon for the cost of warehousing and shipping a product to market
to equal the cost of producing the product, greatly enhancing the importance of
supply chain optimization, " noted Hal Brooker, Principal of Massachusetts-based
Brooker and Associates and long-time warehousing industry consultant.
"Innovative productivity- and accuracy-enhancing products like those built by
Verbex are enabling today's companies to reduce costs, improve customer service
and grow their businesses. I believe voice is the next great technology that
will add to the building blocks of warehouse improvement."
Verbex' product line is spearheaded by the Mobile Voice Pack (MVP), a belt-worn,
rugged, lightweight product that enables industrial workers to interact with
tracking systems using voice commands. The MVP is specifically designed for
industrial workers who need to input and receive information while their hands
and eyes are busy, and when mobility is important. Voxware initially plans to
target picking, receiving, package sorting and cycle counting/inventory
applications in the warehouse and logistics market, and product inspection
applications in the manufacturing marketplace.
<PAGE>
"The warehousing industry is expected to grow significantly over the next five
years," said Rick Morgan, Editor of SCAN: The Data Capture Report, "Robust
speech recognition technology such as that offered by Verbex will play a major
part in many of the new order picking systems that are deployed in the warehouse
environment."
In the fiscal year ended December 31, 1998, Verbex had revenues of approximately
$2.6 million (unaudited), the operating loss was approximately $0.6 million
(unaudited), and the net loss was approximately $1.0 million (unaudited). The
transaction is subject to customary conditions. Voxware expects to complete the
transaction following satisfaction of all conditions to closing.
"We believe that opportunities for productivity-enhancing products in the
industrial/warehousing markets will continue to grow," said Dr. Bathsheba J.
Malsheen, CEO and President of Voxware. "Our extensive evaluation of these
markets resulted in three significant conclusions: that there is an existing
real need for speech-based products, their deployment can result in substantial
savings to customers and that the Verbex products perform remarkably well in
loud, demanding industrial environments."
Verbex is headquartered in Edison, NJ with a principal development and
production facility in Cambridge, MA. Voxware intends to eventually consolidate
its Princeton headquarters with the Verbex offices and will maintain the
Cambridge facility.
"The combination of the robust Verbex industrial speech recognition technology,
and Voxware's strong financial position, international presence, and experienced
management team creates a formidable force in the rapidly emerging industrial
speech recognition solutions marketplace," noted Dr. William Meisel, Editor of
Speech Recognition Update and a leading speech recognition industry expert.
"Voxware is now clearly positioned to take advantage of the substantial, under-
served opportunity for speech recognition solutions in this market segment."
Ladenburg Thalmann & Co. acted as financial advisor to Voxware in connection
with this transaction.
In a separate press release issued today, Voxware also announced that it has
executed a definitive agreement to sell substantially all of its speech coding
assets.
ABOUT VOXWARE, INC.
Voxware (Nasdaq: VOXW) has been a leading developer of speech and audio
compression technologies for consumer devices, multimedia applications, wireless
communications and IP telephony. The Company has licensed its technologies to
software
<PAGE>
developers, hardware manufacturers and service providers who are incorporating
audio into their applications. Voxware was founded in 1993. Its corporate
headquarters are in Princeton, New Jersey, with regional offices in Tokyo, Japan
and Oxfordshire, England. Additional information about Voxware can be obtained
on the Internet at http://www.voxware.com, by sending e-mail to [email protected]
or by calling (609) 514-4100.
This news release contains forward-looking statements. Such statements are
subject to certain factors which may cause Voxware's plans to differ or results
to vary from those expected including the risks associated with development of
new products and the uncertainty of product acceptance, the uncertainty of
adoption of the Internet as a medium for voice communications, the Company's
reliance on third parties to generate recurring revenues, the competitive nature
of the Company's industry, rapid technological changes, the Company's need to
develop new and enhanced products, government regulations and legal
uncertainties, the Company's dependence on key personnel, uncertainties
regarding patents and proprietary rights, and a variety of risks set forth from
time to time in Voxware's filings with the Securities and Exchange Commission.
Voxware undertakes no obligation to publicity release results of any of these
forward-looking statements which may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unexpected results.
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