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As filed with the Securities and Exchange Commission on January 3, 2001.
Registration No. 333-51358
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1 TO THE
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
VOXWARE, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3934824
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
Lawrenceville Office Park
P.O. Box 5363
Princeton, New Jersey 08543-5363
(609) 514-4100
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Bathsheba J. Malsheen
President and Chief Executive Officer
Lawrenceville Office Park
P.O. Box 5363
Princeton, New Jersey 08543-5363
(609) 514-4100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies of all communications, including all communications sent to the agent
for service, should be sent to:
Paul Jacobs, Esq.
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
(212) 318-3000
Approximate date of commencement of proposed sale to the public: From time to
time 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, please 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, as amended, 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. [_]
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.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION DATED JANUARY 3, 2001
VOXWARE, INC.
1,025,000 Shares of Common Stock
The stockholders of Voxware listed in this prospectus are offering and
selling an aggregate of 1,025,000 shares of our common stock. Of those shares,
375,000 are issuable upon the exercise of warrants. These selling stockholders
obtained their shares of common stock and warrants from us in connection with
our acquisition of certain assets of InRoad, Inc. in a private transaction in
February 2000.
The shares of our common stock may be offered and sold from time to time by
stockholders of Voxware, as described in this prospectus. The selling
stockholders will receive all of the proceeds from the sale of the shares. The
selling stockholders will pay all underwriting discounts and selling
commissions, if any, applicable to the sale of the shares. We will not receive
any proceeds from the sale of the shares other than the exercise price payable
to us upon the exercise of the warrants.
Our common stock trades on The Nasdaq National Market under the ticker
symbol "VOXW." On January 2, 2001, the last reported sale price of our common
stock was $0.9688 per share.
The selling stockholders may offer the shares of common stock through
public or private transactions, on or off the United States exchanges, at
prevailing market prices or at privately negotiated prices.
Investing in our common stock involves a high degree of risk. See "Risk
Factors" beginning on page 4 for a discussion of certain factors that you should
consider before you invest in any of the common stock being offered with this
prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is January __, 2001.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
About This Prospectus..................................................... . 1
Voxware, Inc................................................................ 2
Risk Factors................................................................ 4
Special Note Regarding Forward Looking Statements........................... 11
Use of Proceeds............................................................. 11
Recent Developments......................................................... 11
Selling Stockholders........................................................ 19
Plan of Distribution........................................................ 20
Legal Matters............................................................... 20
Experts..................................................................... 20
Where You Can Find More Information......................................... 20
</TABLE>
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ABOUT THIS PROSPECTUS
This prospectus is a part of a registration statement on Form S-3 filed by
us with the Securities and Exchange Commission to register 1,025,000 shares of
our common stock on behalf of the selling stockholders. 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. Accordingly, you should refer to the registration statement and its
exhibits for further information about us and our common stock. Copies of the
registration statement and its exhibits are on file with the SEC. Statements
contained in this prospectus concerning the documents we have filed with the SEC
are not intended to be comprehensive, and in each instance we refer you to the
copy of the actual document filed as an exhibit to the registration statement or
otherwise filed with the SEC.
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VOXWARE, INC.
Voxware was formed in 1993. We design, develop, market and sell voice-based
products for the logistics, distribution and package sorting industries. Our
primary product is called VoiceLogistics, which we introduced in April 2000.
VoiceLogistics is a wireless, web-based interactive device that takes in and
recognizes spoken information and conveys the spoken information to a computer
information system. We currently offer VoiceLogistics in different versions with
numerous features. The purpose of our voice-based systems is to provide large
companies, which operate warehouses and distribution centers, a more efficient
way for their workers to perform a wide variety of logistics tasks and enable
them to enter information into the warehouse management system. Prior to our
introduction of VoiceLogistics, we sold older generation speech recognition
products.
VoiceLogistics is designed primarily to be used by workers performing such
routine logistics tasks as order fulfillment, known as picking, receiving,
returns processing, cycle counting, cross-docking and order entry. These workers
can speak and hear voice instructions through a headset that connects into the
VoiceLogistics device. This enables them to enter information related to the
task they are performing into the warehouse management system as they perform
the task. Without the need to use paper forms or hand-held scanners and other
devices, the workers can freely use both hands to complete their tasks. We
believe that this enables workers to perform their tasks faster and more
accurately, as well as more efficiently and safely than with alternative
methods.
Our products are designed specifically for use in warehouses, distribution
centers and other industrial settings. Therefore, the VoiceLogistics products
are not highly sensitive to noise typically found in industrial environments,
and accurately take in and translate the spoken information regardless of the
presence of operating machinery, personnel, conveyer belts and other sources of
random and non-random noise.
VoiceLogistics consists of software and hardware that is designed to work
with standard computer operating systems and programs which are used in
warehouse management. Our products operate with wireless networking, and web and
speech technology to provide a mobile, networked interface between the warehouse
management system, workers and management. VoiceLogistics is unique in the
industry today because we believe it is the first web-optimized speech
recognition system deployed in an industrial application that delivers a
networked interactive voice interface to computer systems.
VoiceLogistics is designed for use in most major industry sectors,
including consumer goods manufacturers, consumer packaged goods, direct to
consumer, food and grocery, retail, third-party logistics providers and
wholesale distribution. In addition, our older products continue to be deployed
in package handling, mail sorting, manufacturing, inspection and military combat
applications.
We generate revenues primarily from product sales, licenses of our
technology, and development services. Product sales consist of our
VoiceLogistics product suite described above, stationary voice-based devices
primarily used for warehouse receiving and package sorting applications, and
accessories that complement our products. Accessories include microphones,
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headsets and computer hardware. Development services consist of providing
technical assistance to customers in the custom design of their systems. License
fees are generally derived from licensing our voice-based software applications.
Our products are primarily targeted to be sold directly to large customers
with annual revenues in excess of $100 million. However, we also expect to
utilize other third parties such as consultants, value-added resellers, and
system integrators to also sell and/or assist us in selling our products to
these types of large customers. To date, we have signed agreements with several
of these third-party resellers. We expect our revenues from these third parties
to grow in the future as a percentage of our total revenue.
Until February 1999, our business was developing and licensing software for
speech compression to be used in multimedia Websites, Internet telephony and
consumer devices. In February 1999, we acquired the assets and technology on
which VoiceLogistics is based from Verbex Voice Systems. We have since largely
ceased our prior speech compression technology business, and in September 1999
we sold substantially all of the assets related to that business. We still,
however, continue to receive fees from the licensing of our speech compression
technologies to customers in the multimedia and customer devices markets.
Our executive offices are located at 168 Franklin Corner Road,
Lawrenceville, New Jersey 08648, and our telephone number is (609) 514-4100.
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RISK FACTORS
Before you invest in our common stock, you should carefully consider the
following factors and cautionary statements, as well as the other information
set forth herein. If any of the following risks actually occur, our business,
financial condition or results of operations may suffer. As a result, the
trading price of our common stock could decline, and you could lose a
substantial portion of the money you paid to buy our common stock.
If we continue to incur operating losses, we may be unable to continue our
operations.
We have incurred losses since we started our company in August 1993. As of
September 30, 2000, we had an accumulated deficit of $26,794,000. If we continue
to incur operating losses and fail to become a profitable company, we may be
unable to continue our operations. We incurred net losses of approximately
$2,867,000 in fiscal 1996, $6,859,000 in fiscal 1997, $4,894,000 in fiscal 1998,
$4,286,000 in fiscal 1999 and $2,245,000 in fiscal 2000. In addition, we expect
to continue to incur net losses in at least the near term quarters. Our future
profitability depends on our ability to obtain significant customers for our
products, to respond to competition, to introduce new and enhanced products and
to successfully market and support our products. We cannot assure you that we
will achieve or sustain significant sales or profitability in the future.
If we are unable to raise additional capital in the future, we will be
unable to continue our product development, marketing and business generally.
In the future, we will need to raise substantial additional capital to
fund operations, including product development and marketing. Funding from any
source may not be available when needed or on favorable terms. If we cannot
raise adequate funds to satisfy our capital requirements, we may have to limit,
delay, scale-back or eliminate product development programs or marketing or
other activities. We might be forced to sell or license our technologies. Any of
these actions might harm our business. We cannot assure you that any additional
financing will be available or, if available, that the financing will be on
terms favorable to us. If financing is obtained, the financing may be dilutive
to our current stockholders.
If our speech recognition products are not adopted for use in our target
markets, it will be difficult for us to generate revenues and profits.
The speech industry is relatively new and rapidly evolving. Accordingly, it
is difficult to accurately predict demand and market acceptance for our recently
introduced products. The speech industry currently has a limited number of
proven products and popular perceptions about the use of speech recognition
products (including reliability, cost, ease-of-use and quality) may impact the
growth of the market for such products. While we believe that speech recognition
technology offers significant advantages over competing products for a broad
range of warehouse and industrial applications, we cannot assure you that the
market for voice-based products will grow significantly or that our products
will become widely accepted. Therefore, it is difficult to predict the size and
future growth rate, if any, of this market. If the market for our
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products does not develop or if our new products do not achieve market
acceptance, our future financial results will be adversely affected.
If our VoiceLogistics family of products is not successful in the market,
we will not be able to generate substantial revenues or achieve profitability.
Our success is substantially dependent on the success of our VoiceLogistics
family of products. Sales of our older generation voice-based products accounted
for approximately 28%, 47% and 44% of our net revenue for the fiscal years ended
1999 and 2000, and for the three months ended September 30, 2000, respectively.
In addition, 72% and 53% of our net revenues in fiscal 1999 and 2000
respectively, and 56% of our net revenue for the three months ended September
30, 2000 were licensing revenues from our prior business of licensing speech
compression technologies. Since we sold our speech compression business in
September 1999, we expect our revenues from licensing speech compression
technologies to decrease. If our VoiceLogistics products are accepted by the
market, these products will account for a large percentage of our net revenue in
the future. If our VoiceLogistics products are unsatisfactory, or if we are
unable to generate significant demand for these products, or we fail to develop
other significant products, our business will be materially and adversely
affected.
If we are unsuccessful in managing our recently acquired business, we will
be unable to grow the business and generate revenues and profits.
In February 1999, we acquired from Verbex the assets and technology
relating to our business of selling speech recognition-based products for the
warehousing and manufacturing markets and other industrial markets. In September
1999, we also sold the assets relating to our prior business of licensing speech
coding and audio compression technologies. We therefore have very limited
operating history and experience in our primary line of business. In particular,
most of our senior management, including Dr. Bathsheba J. Malsheen, our
President and Chief Executive Officer, have been operating the Verbex business
only since February 1999. Accordingly, we cannot assure you that our management
will be effective in operating our business in order to generate substantial
revenues, or operating or net income.
If we don't develop or acquire and introduce new and enhanced products on a
timely basis, our products may be rendered obsolete.
The markets for our speech recognition products and technologies are
characterized by rapidly changing technology. The introduction of products by
others based on new or more advanced technologies could render our products
obsolete and unmarketable. Therefore, our ability to build on our existing
technologies and products to develop and introduce new and enhanced products in
a cost effective and timely manner will be a critical factor in our ability to
grow and compete. We cannot assure you that we will develop new or enhanced
products successfully and in a timely manner. Further, we cannot assure you that
new or enhanced products will be accepted by the market. Our failure to develop
new or enhanced products, including our failure to develop or acquire the
technology necessary to do so, would have a material, adverse effect on our
business.
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If our competitors introduce better or cheaper products, our products may
not be profitable to sell or to continue to develop.
The business in which we engage is highly competitive. Success is
influenced by advances in technology, product improvements and new product
introductions, as well as marketing and distribution capabilities, and price
competition. Failure to keep pace with product and technological advances could
adversely affect our competitive position and prospects for growth. Our products
compete with those being offered by larger, traditional computer industry
participants who have substantially greater financial, technical, marketing and
manufacturing resources than us. We cannot assure you that we will be able to
compete successfully against these competitors or that competitive pressures
faced by us would not adversely affect our business or operating results.
If we cannot integrate our speech recognition products with other
components of customer systems, we may not be able to sell our products.
Although state-of-the-art speech recognition technology is important to
generating sales in our target markets, other components of a voice-based system
are also necessary. Our products must be easily integrated with customers' asset
management and information systems. The ability to incorporate speech
recognition products into customers' systems quickly and without excessive cost
or disruption will be a key factor in our success. We do not now possess all the
necessary components for system integration. Acquisitions, joint ventures or
other strategic relationships may be required for us to develop or obtain access
to the necessary components to achieve market penetration. We cannot assure you
that our efforts will be successful and, to the extent we are unsuccessful, our
business may be materially, adversely affected.
If our third-party partners do not effectively market and service our
products, we will not generate significant revenues or profits from sales of our
products.
We expect to utilize third parties, such as consultants, value added
resellers, or VARs, and system integrators, to sell and/or assist us in selling
our products. To date, we have signed agreements with several of these third-
party partners. We believe that the establishment of a network of third-party
partners with extensive and specific knowledge of the various applications
critical in the industrial market is important for us to succeed in that market.
Some third-party partners also purchase products from us at a discount and
incorporate them into application systems for various target markets, and/or
consult us in the development of application systems for end users. For the
foreseeable future, we may sell fewer products if we cannot attract and retain
third-party partners to sell and service our products effectively and that
provide timely and cost-effective customer support. An increasing number of
companies compete for access to the types of partners we use. Our current
arrangements with third-party partners generally may be terminated by either
party at any time upon 30 days prior written notice. We cannot assure you that
our partners will continue to purchase and re-sell our products or provide us
with adequate levels of support. If our partner relationships are terminated or
otherwise disrupted our operating performance and financial results will be
adversely affected.
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If we cannot attract and retain management and other personnel with
experience in the areas of our business focus, we will not be able to manage and
grow our business.
We have been developing and selling our speech recognition products and
technologies only since February 1999. Since that time, we have been hiring
personnel with skills and experience relevant to the development and sale of
these products and technologies. If we cannot continue to hire such personnel
and to retain any personnel hired, our ability to operate our business
profitably will be materially adversely affected. Competition for qualified
personnel is intense and we cannot assure you that we will be able to attract,
assimilate or retain qualified personnel.
If we cannot protect our proprietary rights and trade secrets or if we are
found to be infringing on the patents and proprietary rights of others, our
business would be substantially harmed.
Our success depends in part on our ability to protect the proprietary
nature of our products, preserve our trade secrets and operate without
infringing the proprietary rights of others. If others obtain and copy our
technology or others claim that we are making unauthorized use of their
proprietary technology, we may get involved in lengthy and costly disputes to
resolve questions of ownership of the technology. If we are found to be
infringing on the proprietary rights of others, we could be required to seek
licenses to use necessary technology. We cannot assure you that licenses of
third-party patents or proprietary rights would be made available to us on
acceptable terms, if at all. In addition, the laws of certain countries may not
protect our intellectual property. To protect our proprietary rights, we seek
patents and we enter into confidentiality agreements with our employees and
consultants with respect to proprietary rights and unpatented trade secrets. We
cannot assure you that patent applications in which we hold rights will result
in the issuance of patents. We cannot assure you that any issued patents will
provide significant protection for our technology and products. In addition, we
cannot assure you that others will not independently develop competing
technologies that are not covered by our patents. We cannot assure you that
confidentiality agreements will provide adequate protection for our trade
secrets, know-how, or other proprietary information in the event of any
unauthorized use or disclosures. Any unauthorized disclosure and use of our
proprietary technology would have a material adverse effect on our business.
The price of our common stock has been highly volatile due to factors that
will continue to affect the price of our stock.
Our common stock closed as high as $12.50 and as low as $0.594 per share
between January 3, 2000 and January 2, 2001. Historically, the over-the-
counter markets for securities such as our common stock have experienced extreme
price fluctuations. Some of the factors leading to this volatility include:
. Fluctuations in our quarterly revenue and operating results;
. Announcements of product releases by us or our competitors;
. Announcements of acquisitions and/or partnerships by us or our
competitors; and
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. Increases in outstanding shares of common stock upon exercise or
conversion of derivative securities.
These factors may continue to affect the price of our common stock in the
future.
If the trading price of our common stock falls, our stockholders could
experience substantial dilution as result of the terms of our series A preferred
stock and a warrant issued in a private placement in August 2000.
We issued 4,000 shares of our series A preferred stock and a common stock
purchase warrant to Castle Creek Technology Partners LLC in a private placement
on August 15, 2000. The number of shares of common stock issuable by us upon
conversion of the series A preferred stock and exercise of the warrant can
increase substantially in certain events. If these events were to occur, we
would not receive any additional payment from the holders of the series A
preferred stock and the warrant for the additional shares. Any increase in the
number of shares of common stock issuable may result in a decrease in the value
of the outstanding shares of common stock.
The series A preferred stock is initially convertible into 1,322,314 shares
of our common stock and the warrant is initially exercisable for 727,273 shares
of our common stock. The number of shares of common stock which we must issue
upon conversion of the series A preferred stock may increase substantially in
the following events:
. if the market prices of our common stock are generally lower
during the 45 day period following the later of (i) 271 days
after the effective date of a registration statement covering the
resale of the shares of common stock and (ii) August 15, 2001,
than the market price of our common stock as of August 15, 2000;
. if we do not allow conversion of the shares of series A preferred
stock or we fail to deliver a stock certificate for common stock
within the required time periods after we receive notice of an
intent to convert the series A preferred stock;
. if we fail to maintain the effectiveness of our registration
statement on Form S-3 declared effective on September 15, 2000 or
adequately update such registration statement; and
. if we issue securities at a price below the conversion price of
the series A preferred stock, which is initially $3.025, or at
prices below the prevailing market price at the time of issuance.
The number of shares of common stock which we must issue upon exercise of
the warrant may increase substantially in the following events:
. if the market price of our common stock on November 15, 2001 is
lower than the market price of our common stock as of August 15,
2000; and
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. if we issue securities at a price below the exercise price of the
warrant, which is initially $3.4375, or at prices below
prevailing market price at the time of issuance.
The perceived risk of dilution or any actual dilution occasioned by series
A preferred stock or the warrant may cause our stockholders to sell their
shares, which would contribute to the downward movement in stock price of the
common stock. In addition, the significant downward pressure on the trading
price of the common stock could encourage investors to engage in short sales,
which would further contribute to the downward spiraling price of the common
stock.
The perceived risk of dilution or any actual dilution occasioned by the
conversion of series A preferred stock or the warrant could also make it
difficult to obtain additional financing. New investors could either decline to
make an investment in Voxware due to the potential negative effect of the
dilution on a potential investment or require that their investment be on terms
at least as favorable as the terms of the series A preferred stock and the
warrant.
Future sales of our common stock in the public market could adversely
affect the price of our common stock.
Sales of substantial amounts of our common stock in the public market that
is not currently freely tradable, or even the potential for such sales, could
impair the ability of our stockholders to recoup their investment or make a
profit. As of December 4, 2000, these shares consist of:
. approximately 128,718 shares of common stock owned by our
executive officers and directors;
. approximately 650,000 shares of common stock issued to a selling
stockholder which may be sold under this prospectus;
. up to 2,850,412 shares of common stock issuable upon conversion
of the series A preferred stock (if certain adjustment events
take place); and
. approximately 1,115,273 shares issuable to warrant (if certain
adjustment events take place) and option holders, including
375,000 shares issuable to the selling stockholders and which may
be sold under this prospectus.
If the holder of the series A preferred stock and the warrant elects to
have the series A preferred stock and the warrant assumed by a potential
acquirer of Voxware, the acquirer could be deterred from completing the
acquisition.
The series A preferred stock and the warrant permit the holder to elect to
have their shares of series A preferred stock and the warrant remain outstanding
after an acquisition of Voxware, and to have the acquirer assume all of our
obligations to the holder. This could deter a potential acquirer from completing
an acquisition of Voxware.
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Among our obligations which an acquirer might be forced to assume which
would act as a deterrent are:
. the price adjustment provisions which could have an adverse
effect on the market value of the acquirer's outstanding
securities;
. the obligation to register the re-sale of the common stock
issuable upon conversion of the series A preferred stock and the
warrant which could result in the sale of a substantial number of
shares in the market;
. the obligation to pay dividends on the series A preferred stock;
. the obligation to pay the holders of series A preferred stock the
amount invested plus accrued dividends before any other
stockholder receives any payment if we are liquidated; and
. the obligation to seek the consent of the holders of the series A
preferred stock before we can issue securities which have senior
or equal rights as the series A preferred stock, sell all or
substantially all of our assets, or take other actions with
respect to the series A preferred stock or securities which have
less rights than the series A preferred stock.
If our common stock is removed from a national stock exchange, the
marketability of our common stock will be decreased substantially.
Our common stock is currently traded on the National Market segment of
The Nasdaq Stock Market. On November 28, 2000, we received a letter from Nasdaq
notifying us that our net tangible assets had fallen below the minimum net
tangible asset requirement for continued listing on the Nasdaq National Market.
We submitted a plan to achieve and sustain compliance with all Nasdaq
National Market listing requirements, but we cannot ensure that the Nasdaq staff
will accept our plan and allow us to continue to be listed on the Nasdaq
National Market. We are currently awaiting a response from Nadsaq with respect
to our compliance plan. If we are delisted from the Nasdaq National Market, we
intend to apply for listing on the Nasdaq Small Cap Market. In addition, there
can be no assurance that our common stock will maintain the minimum bid price
and continue to be listed on Nasdaq.
In addition, in order to maintain our Nasdaq listing, we are required to
comply with Nasdaq's guidance on "future priced securities." The guidance
relates to Nasdaq listing maintenance requirements that limit the number of
shares of common stock. We believe that the series A preferred stock and the
warrant to Castle Creek contain the required limits and do not violate these
criteria. The requirements for continued listing on such market include, among
other things, a requirement that our common stock maintain a minimum bid price
of $1.00 per share. Our stock has traded at prices below $1.00 per share in the
past. Any removal from a national stock exchange would have a material adverse
effect on both the price and the liquidity of our common stock.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains some "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995 and information relating to
us that are based on the beliefs of our management, as well as assumptions made
by and the information currently available to our management. When used in this
prospectus, the words "estimate," "project," "believe," "anticipate," "intend,"
"expect" and similar expressions are intended to identify forward-looking
statements. These statements reflect our current views with respect to future
events and are subject to risks and uncertainties that could cause actual
results to differ materially from those contemplated in these forward-looking
statements, including those risks discussed in this prospectus.
You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus. Except for
special circumstances in which a duty to update arises when prior disclosure
becomes materially misleading in light of subsequent circumstances, we do not
intend to update any of these forward-looking statements to reflect events or
circumstances after the date of this prospectus or to reflect the occurrence of
unanticipated events.
USE OF PROCEEDS
We will not receive any proceeds from the sale of common stock by the
selling stockholder. All of the net proceeds from the offer and sale of our
common stock will go to the selling stockholders. We will receive the proceeds
from the exercise of warrants by the selling stockholders, if any are exercised.
The 375,000 warrants held by the selling stockholders entitle them to purchase
shares of our common stock at a price of $3.08 per share. Therefore, if all of
the warrants were to be exercised, the aggregate proceeds to us would be
$1,155,000.
RECENT DEVELOPMENTS
Appointment of Bruce Welty to the Board of Directors
On December 21, 2000, we appointed Bruce E. Welty to our Board of
Directors. Mr Welty is one of the co-founders of All-Points Systems, Inc., which
delivers internationally, demand chain solutions for all aspects of fulfillment
operations for net economy companies.
Letter from Nasdaq Regarding Continued Listing on the Nasdaq National
Market
On November 28, 2000 we received a letter from Nasdaq notifying us that
we may not meet the requirements for continued listing on the Nasdaq National
Market because our net tangible assets fell below the $4,000,000 minimum
requirement for continued listing. We are submitted a plan to sustain compliance
on December 12, 2000. We are currently awaiting a response for Nasdaq with
respect to our proposed compliance plan. If, after the conclusion of Nasdaq's
review, its staff determines that our plan does not adequately address the
requirements for continued listing, we may be delisted from the Nasdaq National
Market. If we are delisted from the Nasdaq National Market, we intend to apply
for listing on the Nasdaq SmallCap Market.
Private Placement of Series A Preferred Stock and Warrant to Selling
Stockholder
On August 15, 2000, we completed a private placement pursuant to the
terms and conditions of the Securities Purchase Agreement with Castle Creek
Technology Partners, LLC.
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In the private placement, we offered and sold 4,000 shares of our series A
convertible preferred stock, having a stated value of $1,000 per share, and a
warrant to purchase 727,273 shares of our common stock for an aggregate purchase
price of $4 million. At the time of issuance, the shares of the series A
preferred stock are convertible into shares of our common stock. The shares of
the series A preferred stock and the warrant would have represented
approximately 9.3% and 5.1%, respectively, of the then outstanding shares of our
common stock if converted or exercised. The following is a summary of the
material terms of the series A preferred stock and the warrant:
Series A Preferred Stock
We filed a certificate of designations, preferences and rights, as
amended, for our series A preferred stock with the Delaware secretary of state
on August 15, 2000. We issued all of the 4,000 shares of the series A preferred
stock with a stated value of $1,000 per share, authorized under the certificate
of designations to the selling stockholder. At present, other than the series A
preferred stock, we have no intention to issue any additional shares of
preferred stock.
Dividends. The holder of the series A preferred stock is entitled to
---------
receive cumulative, non-compounded dividends on the shares of series A preferred
stock held by such selling stockholder at the annual rate per share of 7% of the
stated value of such shares, computed on the basis of a 360-day year of twelve
30-day months. Dividends shall be paid upon the sooner to occur of:
. the conversion or redemption of the shares of series A preferred
stock; or
. the liquidation of Voxware.
Upon our liquidation or upon the redemption (as described below) of the shares
of series A preferred stock, any accrued but undeclared dividends will be paid
to the holder of the outstanding shares of series A preferred stock in cash.
At the election of the holder of the series A preferred stock, dividends
shall be paid in shares of common stock or in cash. Dividends paid in shares of
common stock will be paid in full shares only.
Conversion. The series A preferred stock is convertible into common
----------
stock so long as the conversion would not result in the holder being a
beneficial owner of more than 4.99% (9.99% in the case of a mandatory
conversion) of the outstanding shares of common stock. Additionally, at no time
would the series A preferred stock be convertible into a number of shares of
common stock which, when combined, with the number of shares issued or issuable
upon the exercise of the warrant or the conversion of the series A preferred
stock at an exercise or conversion price of less than $3.00 per share, would
represent more than 19.99% of the outstanding shares of common stock on August
15, 2000 (2,850,413 shares of common stock, subject to equitable
12
<PAGE>
adjustments for stock splits, stock, dividends, reclassifications or similar
events). Because of this limitation, we are not required to obtain stockholder
approval under the rules and regulations of the National Association of
Securities Dealers, Inc. for the issuance of the series A preferred stock, the
warrant or the shares of common stock issuable upon the conversion or exercise
thereof.
Optional Conversion. Each holder of series A preferred stock, at its
-------------------
option, may convert any or all of its shares of series A preferred stock into a
number of fully paid and non-assessable shares of common stock determined, for
each share of series A preferred stock to be converted, in accordance with the
following formula:
$1000 + accrued but unpaid dividends (if elected by the holder)
---------------------------------------------------------------
Conversion Price
The conversion price is initially equal to $3.025. The conversion price
adjusts on and as of the first business day (for a 45 business day period)
following August 15, 2001, to the lower of:
. 100% of the average of the closing bid prices for the shares of our
common stock on any five business days which constitute the lowest
five business day average closing bid price of the common stock for
any 10 consecutive business days during the 45 business day period, or
. $3.025.
Mandatory Conversion. Subject to the exchange cap described below and
--------------------
assuming the following four conditions are met, we have the right to require the
mandatory conversion of all of the shares of series A preferred stock. The four
conditions are:
. the resale of all of the common stock issuable upon conversion of the
series A preferred stock must be covered by an effective registration
statement for at least 60 consecutive business days prior to the
notice of mandatory conversion to the holders and for a period of at
least 60 consecutive business days prior to the effective time of the
mandatory conversion that is no less than five business days and more
than 10 business days prior to the date on which such mandatory
conversion is to become effective;
. the closing bid price of the common stock must be greater than $11.00
per share (subject to equitable adjustment for stock splits, stock
dividends, reclassifications or similar events) for 10 consecutive
business days immediately prior to the delivery of notice of mandatory
conversion and for a period of 10 consecutive business days
immediately prior to the effective time of the mandatory conversion
that is no less than five business days and more than 10 business days
prior to the date on which such mandatory conversion is to become
effective;
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. the common stock must be listed for trading on The Nasdaq National
Market or the New York Stock Exchange; and
. we must not have been in violation of any of its material obligations
under the agreements executed in connection with the private placement
at the time of the mandatory conversion and for a period of six months
prior to the mandatory conversion.
Adjustments to Conversion Price; Certain Protections. In addition to the
----------------------------------------------------
conversion price adjustment referred to above, if we fail to:
. allow conversion of shares of series A preferred stock, or
. fail to deliver a stock certificate representing common stock to be
issued to the holder within a period of days after notice of the
holder's intent to convert, we will be required to pay such holder
cash damages equal to the product of:
(A) the stated value of the series A preferred stock to be converted
times,
(B) the number of days the conversion is delayed times,
(C) $0.01.
In addition, if the conversion default continues, the conversion price adjusts
downward at least 1% per day until we cure our failure to deliver the
certificates or until the holder notifies us that it no longer wants to convert
the series A preferred stock.
The conversion price is also subject to adjustment on the occurrence of
the following events:
. Stock Splits, Dividends, Etc. If at any time on or after August 15,
2000, the number of outstanding shares of common stock is changed by
stock split, reverse stock split, stock dividend, combination,
reclassification or other similar event, the conversion price will be
proportionally adjusted.
. Major Transactions. If we complete a merger or other similar
transaction, or a sale of substantially all of its assets, the holder
of the series A preferred stock will be entitled, at its option, to:
. retain the series A preferred with all of its rights (subject to
our redemption of the series A transaction at 115% of the stock
with all of its rights preferred stock at the closing of stated
value plus accrued (subject to our the dividends); or
. receive transaction considerations, as if the holder had
converted the shares as of the day prior to the announcement of
the transaction.
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<PAGE>
. Adjustment Due to Distribution. If we declare or makes any
distribution of our assets (or rights to acquire our assets) to
holders of any class of common stock as a partial liquidating dividend
or a distribution, each holder of the series A preferred stock will be
entitled to receive the amount of assets that each holder could have
acquired if the holder had converted the series A preferred stock into
shares of common stock on the day prior to the date on which a record
is taken to determine which stockholders are entitled to a
distribution, or if no such record is taken, the date as of which
holders of common stock are determined to be entitled to a
distribution.
. Issuance of Common Stock at a Price Below Conversion Price. Except as
stated above, if, at any time prior to August 15, 2001, we issue or
sell any shares of common stock for no consideration or for a
consideration per share less than the then current conversion price,
then effective immediately upon such issuance, the conversion price
will be adjusted to equal the consideration per share received in such
issuance.
. Issuance of Common Stock at a Price Below Market Price. Except as
provided above, if, at any time, we issue or sell any shares of common
stock for no consideration or for a consideration per share less than
the then current market price or dilutive issuance, then effective
immediately upon the issuance, the conversion price will be adjusted
in accordance with the following formula:
E' = (E) (O + P/M) / (CSDO)
where:
E' = the adjusted conversion price E = the then current
conversion price;
M = the then current Market Price;
O = the number of shares of common stock outstanding
immediately prior to the issuance;
P = the aggregate consideration received by us upon such
issuance; and
CSDO = the total number of shares of outstanding immediately
after common stock deemed the issuance.
Exchange Cap. Our obligation to issue common stock upon the conversion
------------
or otherwise, at a conversion price that is less than $3.00 per share, as
adjusted, pursuant to the conversion of series A preferred stock (including
without limitation a mandatory conversion) will be limited to the number of
shares of common stock equal to:
(A) 2,850,413 shares of common stock (as adjusted for stock splits,
stock dividends, reclassifications or similar events) minus,
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<PAGE>
(B) the sum of the shares of common stock previously issued upon the
exercise of the warrant at an exercise price (as described below) that is less
than $3.00 per share, as adjusted, plus,
(C) the number of shares of common stock previously issued upon the
conversion of series A preferred stock at a conversion price that is less than
$3.00 per share, as adjusted.
No holder will be issued, upon conversion of such holder's shares of series A
preferred stock at a conversion price that is less than $3.00, as adjusted,
shares of common stock in an amount greater than such holder's pro rata portion
of 2,850,413 shares of common stock.
Redemption at Maturity. We must redeem all shares of series A preferred
stock on February 15, 2003 for an amount per share equal to the stated value
plus accrued dividends plus unpaid conversion default payments.
Voting Rights. The holders of series A preferred stock have no voting
-------------
rights. The consent of the holders of the series A preferred stock is required,
however, to issue senior or pari passu securities or to sell substantially all
of the assets of Voxware. As a result, the issuance of the newly created series
A preferred stock with conversion rights may adversely affect the voting power
of the holders of our common stock, including loss of voting control to others
upon the conversion of the series A preferred stock into common stock.
Warrant
We also issued a four year warrant to the selling stockholder to
purchase 727,273 shares of our common stock. The initial exercise price of the
warrant is $3.4375 per share, representing 125% of the market price of the
common stock on August 15, 2000.
On November 15, 2001, the exercise price of the warrant will be reset to
the lesser of $3.4375 and the market price of the common stock on such reset
date. The exercise price of the warrant is also subject to anti-dilution
adjustments in the same manner as the conversion price of the series A preferred
stock described in the section entitled "Recent Development" Private Placement
of Series A Preferred Stock and Warrant to Selling Stockholder; Series A
Preferred Stock; Conversion; Adjustments to Conversion Price; Certain
Protections" above.
If we complete a merger or other similar transaction, or a sale of
substantially all of its assets, and the common stock remains outstanding or our
stockholders receive any common stock or substantially similar equity interest,
the selling stockholder will be entitled, at its option, to:
. retain the warrant with all of its rights to such common stock under
the warrant; or
. receive the greater of, at the selling stockholder's sole discretion,
the:
. transaction consideration, as if the selling stockholder had
exercised the warrant as of the day prior to the announcement of
the transaction; or
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<PAGE>
. cash payment equal to the fair value of the warrant based on the
exercise price in effect on the date of the transaction.
We may not effect any such transaction unless prior to its consummation,
the successor corporation (if not us) assumes by written instrument the
obligations of the warrant and the obligations to deliver to the selling
stockholder such shares of stock, securities, or assets as, in accordance with
the provisions of the warrant.
We may cause the mandatory exercise of all or part of the warrant after
August 15, 2001, upon delivery of a mandatory exercise notice, if the following
conditions are met:
. the resale of all of the common stock issuable upon exercise of the
warrant and conversion of the series A preferred stock has been
registered by an effective registration statement for a period of at
least:
. 60 consecutive business days immediately prior to the date of
delivery of the mandatory exercise notice; and
. 60 consecutive business days immediately prior to the effective
time of the mandatory exercise that is no less than five business
days and more than 10 business days prior to the date on which
such mandatory exercise is to become effective,
. the closing bid price of the common stock was greater than $25.00
per share for a period of at least the:
. 10 consecutive business days prior to the date of delivery of the
mandatory exercise notice; and
. 10 day period prior to the date of mandatory exercise,
. the common stock is listed on The Nasdaq National Market or the New
York Stock Exchange, and
. we are not on the date of delivery of mandatory exercise notice or at
the effective time of mandatory exercise (and have not been for the
six consecutive months prior to the date of delivery of the mandatory
exercise notice or the six consecutive months immediately prior to the
date of mandatory exercise) been in violation of any material
obligations under the operative agreements executed in connection with
the private placement.
The warrant is not exercisable by the selling stockholder or subject to
the mandatory exercise if such exercise would make the selling stockholder the
beneficial holder of more than 4.99% (9.99% in the case of a mandatory exercise
by us) of our total outstanding common stock.
Registration Rights
17
<PAGE>
We entered into a registration rights agreement with the selling
stockholder on August 15, 2000. We filed a registration statement covering the
resale of all of the shares of common stock issuable upon full conversion of the
series A preferred stock and full exercise of the warrant purchased and sold
under the private placement. This registration statement was declared effective
on September 15, 2000. We are required to keep registered, pursuant to an
effective registration statement, at least 175% of the aggregate number of
shares of our common stock, issued or issuable upon conversion of the series A
preferred stock and exercise of the warrant, without regard to any limitation on
any conversion or exercise. In the event the number of shares available under
the registration statement is, at any time, insufficient to cover the 175%
requirement, we must amend, if permissible, the registration statement, or file
a new registration statement (on the short form available therefor, if
applicable), or both, so as to cover 200% of the aggregate number of shares of
our common stock issued or issuable upon such exercise or conversion (in each
case, without giving effect to any limitation on conversion or exercise set
forth above), in each case, as soon as practicable, but in any event within five
days of the failure to meet the 175% requirement.
If sales of all the shares of common stock covered by the registration
statement cannot be made pursuant to such registration statement by:
. reason of a stop order;
. our failure to update the registration statement;
. the failure of any post-effective amendment to be declared effective;
or
. any other reason outside the control of the selling stockholders,
then we are required to make payments to the selling stockholder in such amounts
and at such times as partial relief for the damages to the selling stockholder
by reason of any such delay in or reduction of their ability to sell the common
stock covered by the registration statement.
In the event of a registration suspension, we will pay to the selling
stockholder an amount equal to the product of:
(A) the multiplier times,
(B) the funded amount times,
(C) the number of months (prorated per day for partial months),
from (x) the date on which sales of all the common stock first cannot be made to
(y) the date on which sales of all such common stock can again be made.
For any given date, the multiplier is:
. during the first 30 days following the filing deadline, additional
filing deadline and/or the registration deadline, as applicable,
during which there is a registration failure or registration
suspension, 1%,
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<PAGE>
. during the second 30 days following the applicable registration
failure, 1 1/2%, and
. after the 60th day of a registration failure or registration
suspension, 2%.
With respect to any given registration statement, the funded amount is
the aggregate purchase price of the series A preferred stock and the warrant
relating to the common stock registered (or to be registered) on such
registration statement.
Payments shall be made within five days after the end of each period
that gives rise to such obligation, provided that, if any such period extends
for more than 30 days, payments will be made for each such 30 day period within
five days after the end of such 30 day period.
SELLING STOCKHOLDERS
The following table sets forth the common stock ownership of the selling
stockholders as of December __, 2000, as adjusted to reflect the sale of the
common stock in this offering. Except as set forth below, the selling
stockholder have not held any position or office or had any other material
relationship with us or any of our predecessors or affiliates within the past
three years.
Pursuant to the terms of a Stock Restriction and Registration Rights
Agreement that we entered into with the selling stockholders, we must register
these shares by January 4, 2001.
The following table sets forth the aggregate number of shares of common
stock beneficially owned by the selling stockholders as of December 4, 2000
and the percentage of all shares of common stock held by such selling
stockholder prior to and after giving effect to the offering based on
14,411,288 shares of common stock outstanding as of December 4, 2000.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
Name of Selling Shares of Common Number of shares Shares of Common
Stockholder Stock owned of Common Stock offered Stock owned
beneficially before under this registration beneficially after
offering (1) statement offering (2)
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
InRoad, Inc. 975,000 975,000 0
----------------------------------------------------------------------------------------------
Stratos Product 50,000 50,000 0
Development, LLC
----------------------------------------------------------------------------------------------
</TABLE>
(1) Includes 650,000 shares of our Common Stock owned by InRoad, 325,000
shares of common stock issuable upon the exercise of the warrant issued
to InRoad and 50,000 shares of common stock issuable upon the exercise
of the warrant issued to Stratos.
(2) The selling stockholders may offer and sell, all or a part, of the
common stock pursuant to this prospectus, no estimates can be made as to
the amount of shares of common stock that will be held by the selling
stockholders after the completion of this offering.
As part of the transaction, we retained Stratos to reengineer our
wireless portable device to address key human factors, performance, and
reliability issues. We chose Stratos as a
19
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development partner because they are highly skilled and experienced in helping
companies quickly bring creative new products to market using unique and
original hardware platforms.
PLAN OF DISTRIBUTION
The selling stockholders named herein (or plegees, donees, transferees
or other successors-in-interest selling shares received from a named selling
stockholder as a gift, partnership, distribution or other non-sale-related
transfer after the date of this prospectus) may offer their shares at various
times in one or more transactions on the Nasdaq National Market, the Nasdaq
SmallCap Market or such other securities exchange on which the shares are
listed, in special offerings, exchange distributions, secondary distributions,
negotiated transactions, or in a combination of such. They may sell at market
prices at the time of sale, at prices related to the market price or at
negotiated prices. The selling stockholders may use broker-dealers to sell their
shares. If this happens, broker-dealers will either receive discounts or
commissions from the selling stockholders, or they will receive commissions from
the purchasers of shares for whom they acted as agents. Compensation as to a
particular broker-dealer might be in excess of customary commissions and will be
in amounts to be negotiated in connection with the sale. Broker-dealers or
agents and the selling stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act in connection with the sales
of the shares. Accordingly, any such commission, discount or concession received
by them and any profit on the resale of the shares purchased by them may be
deemed to be underwriting discounts or commissions under the Securities Act.
Because selling stockholders may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, the selling stockholders will be
subject to the prospectus delivery requirements of the Securities Act. In
addition, any securities covered by this prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather
than pursuant to this prospectus.
LEGAL MATTERS
The validity of the shares of common stock offered by this prospectus
have been passed upon for us by Fulbright & Jaworski L.L.P., New York, New York.
EXPERTS
The audited consolidated financial statements and schedules incorporated
by reference in this prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated by
reference in reliance upon the authority of said firm as experts in accounting
and auditing in giving said report.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934. Therefore, we file reports, proxy statements and other
information with the SEC. You can read and copy all of our filings at the SEC's
public reference facilities in Washington, D.C., New York, New York and Chicago,
Illinois. You may obtain information on the operation of the
20
<PAGE>
SEC's public reference facilities by calling the SEC at 1-800-SEC-0300. You can
also read and copy all of our filings at the offices of the Nasdaq Stock Market,
1735 K Street N.W., Washington, D.C. 20006. Our common stock is traded on The
Nasdaq National Market under the symbol "VOXW." You may also obtain our SEC
filings from the SEC's Web site on the Internet that is located at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" much of the information
we file with them (File No. 0-021403), which means that we can disclose
important information to you by referring you to those publicly available
documents. The information that we incorporate by reference is considered to be
part of this prospectus. Because we are incorporating by reference our future
filings with the SEC, this prospectus is continually updated and those future
filings may modify or supersede some or all of the information included or
incorporated in this prospectus. This means that you must look at all of the SEC
filings that we incorporate by reference to determine if any of the statements
in this prospectus or in any document previously incorporated by reference have
been modified or superseded. This prospectus incorporates 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 stockholder sells all their shares of common stock:
. our annual report on Form 10-K for the fiscal year ended June 30,
2000, filed on August 31, 2000;
. our quarterly report on Form 10-Q for the quarter ended September 30,
2000, filed on November 14, 2000;
. our current reports on Form 8-K filed on October 6, 1999, August 11,
2000 and August 16, 2000;
. our proxy statement, filed on April 20, 2000; and
. our registration statement on Form 8-A, filed on September 20, 1996.
The information about us contained in this prospectus should be read
together with the information in the documents incorporated by reference. You
may request a copy of any or all of these filings, at no cost, by writing or
telephoning us at
Voxware, Inc.
Lawrenceville Office Park
P.O. Box 5363
Princeton, New Jersey 08543-5363
(609) 514-4100
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. The selling stockholders will
not make an offer of these shares in any state where the offer is not permitted.
You should not assume that information in this prospectus or any supplement is
accurate as of any date other than the date on the front of these documents.
21
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses payable by the registrant in connection with the issuance
and distribution of the securities being registered hereby are as follows:
Amount
------
SEC Registration Fee............................................ $ 3,129
Legal, Accounting and Printing Expenses......................... $52,500
Miscellaneous Expenses.......................................... $ 9,371
------
Total....................................................... $65,000*
------
* Estimated.
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the "DGCL")
empowers a Delaware corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. A
corporation may, in advance of the final disposition of any civil, criminal,
administrative or investigative action, suit or proceeding, pay the expenses
(including attorneys' fees) incurred by any officer, director, employee or agent
in defending such action, provided that the director or officer undertakes to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the corporation. A corporation may indemnify such person
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
A Delaware corporation may indemnify officers and directors in an action
by or in the right of the corporation to procure a judgment in its favor under
the same conditions, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be liable to the
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against the expenses (including attorneys fees) which he actually
and reasonably incurred in connection therewith. The indemnification provided is
not deemed to be exclusive of any other rights to which an officer or director
may be entitled under any corporation's by-law, agreement, vote or otherwise.
22
<PAGE>
The Company's Certificate of Incorporation includes a provision that
eliminates the personal liability of its directors to the Company or its
stockholders for monetary damages for breach of their fiduciary duty to the
maximum extent permitted by the DGCL. The DGCL does not permit liability to be
eliminated (i) for any breach of a director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions, as provided
in Section 174 of the DGCL, or (iv) for any transaction from which the director
derived an improper personal benefit. In addition, as permitted in Section 145
of the DGCL, the Certificate of Incorporation and By-Laws of the Company provide
that the Company shall indemnify its directors and officers to the fullest
extent permitted by the DGCL, including those circumstances in which
indemnification would otherwise be discretionary, subject to certain exceptions.
The By-Laws also provide that the Company shall advance expenses to directors
and officers incurred in connection with an action or proceeding as to which
they may be entitled to indemnification, subject to certain exceptions.
Each of the Employment Agreements with Bathsheba Malsheen and Nicholas
Narlis provides for indemnification to the maximum extent permitted by
applicable law. The Company has also indemnifies each of its directors and
executive officers with the maximum indemnification allowed to directors and
executive officers by the DGCL, subject to certain exceptions, as well as
certain additional procedural protections. In addition, the Company will
generally advance expenses incurred by directors and executive officers in any
action or proceeding as to which they may be entitled to indemnification,
subject to certain exceptions.
The indemnification provisions in the Company's Certificate of
Incorporation and By-Laws also permits indemnification for liabilities arising
under the Securities Act. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised 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.
The Company currently carries director and officer liability insurance
in the amount of $5,000,000.
Item 16. Exhibits
4.1 Form of Stock Purchase Warrant issued to InRoad, Inc. on April 4,
2000. (1)
4.2 Stock Purchase Warrant issued to Stratos Product Development, LLC
on April 4, 2000 (1)
4.3 Stock Restriction and Registration Right Agreement dated as of April
4, 2000, by and among Voxware, Inc., Verbex Acquisition Corporation,
Inroad, Inc. and Stratos Product Development, LLC. (1)
5.1 Opinion of Fulbright & Jaworski L.L.P.
23
<PAGE>
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
-------------------------------------------------------
(1) Incorporated by reference to the registrant's Quarterly Report on Form 10-Q
filed on May 15, 2000.
Item 17. Undertakings
(a) 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:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post- effective amendment thereof) which, individually or together,
represent a fundamental change in the information in the
registration statement;
(iii) 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; provided, however, that paragraphs (a)(1)(i)
and (a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
24
<PAGE>
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective 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 which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, 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 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.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the 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
person 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 of 1933 and will be governed by the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the 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 Princeton, State of New Jersey, on January 2,
2001.
VOXWARE, INC.
(Registrant)
By:/s/ Bathsheba J. Malsheen
--------------------------------
Bathsheba J. Malsheen, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Bathsheba J. Malsheen and Nicholas Narlis, jointly and
severally, his true and lawful attorneys-in-fact and agents, each with full
power of substitution and resubstitution, for him and in his name, place and
stead, 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,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that each of said attorneys-in-fact and agents, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
President, Chief Executive January 2, 2001
/s/ Bathsheba J. Malsheen Officer and Director
------------------------------
Bathsheba J. Malsheen (Principal Executive Officer)
Senior Vice President, Chief Financial January 2, 2001
* Oficer, Secretary and Treasurer
------------------------------
Nicholas Narlis (Principal Accounting Officer)
* Director January 2, 2001
------------------------------
David Levi
* Director January 2, 2001
------------------------------
Eli Porat
/s/ Bruce E. Welty Director January 2, 2001
------------------------------
Bruce E. Welty
</TABLE>
* By /s/ Bathsheba J. Malsheen [Bathsheba J. Malsheen] as attorney-in-fact
pursuant to power of attorney filed on December 6, 2000.
26
<PAGE>
INDEX TO EXHIBITS
4.1 Stock Purchase Warrant issued to InRoad, Inc. on April 4, 2000.*
4.2 Stock Purchase Warrant Issued to Stratos Product Development, LLC on
April 4, 2000 (1)*
4.3 Stock Restriction and Registration Right Agreement dated as of April
4, 2000, by and among Voxware, Inc., Verbex Acquisition Corporation,
Inroad, Inc. and Stratos Product Development, LLC. (1)*
5.1 Opinion of Fulbright & Jaworski L.L.P.*
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1)*
24.1 Power of Attorney (included on signature page)*
(1) Incorporated by reference to the registrant's Quarterly Report on Form 10-Q
filed on May 15, 2000.
_________________
* Previously filed.
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