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Voxware Inc – ‘10-Q’ for 3/31/97

As of: Thursday, 5/15/97 · For: 3/31/97 · Accession #: 1036050-97-265 · File #: 0-21403

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 5/15/97  Voxware Inc                       10-Q        3/31/97    4:51K                                    Donnelley R R & S… 14/FA

Quarterly Report — Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                      13     73K 
 2: EX-10.1     Loan Modification Agreement                            5     28K 
 3: EX-11.1     Computation of Loss Per Share                          1      7K 
 4: EX-27       Financial Data Schedule                                2      8K

10-Q — Quarterly Report
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Exhibits and Reports on Form 8-K Financial Statements Financial Statements Page No Liquidity and Capital Resources Management's Discussion and Analysis of Results of Operations and Financial Condition Other Information Signatures
1	1st Page - Filing Submission
2	Item 1. Financial Statements Page No
3	Item 1. Financial Statements
7	Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition
11	Liquidity and Capital Resources
12	Item 5. Other Information
"	Item 6. Exhibits and Reports on Form 8-K
13	Signatures

10-Q 1st Page of 13 TOC ↑Top Previous Next ↓Bottom Just 1st
 
================================================================================
SECURITIES AND EXCHANGE COMMISSION  
Washington, DC 20549  

Form 10-Q 

[X]  Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934                                                           

For the quarterly period ended      March 31, 1997                              
    ----------------------

[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities        
Exchange Act of 1934                                                  

For the transition period from                                                  
      ------------------------

Commission File Number   0-021403                                               
--------------                      

 VOXWARE, INC.
 -------------

(Exact Name of Registrant as Specified in Its Charter)  

Delaware                                  36-3934824        
------------------------------                  ------------------              
(State or Other Jurisdiction of                 (I.R.S. Employer                
Incorporation or Organization)                  Identification No.)             

----------------- 

305 College Road East 
Princeton, New Jersey 08540 
609-514-4100  

----------------  

(Address, including zip code, and telephone 
number (including area code) of registrant's
principal executive office) 

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was     
required to file such reports), and (2) has been subject to such filing         
requirements for the last 90 days.    YES X   NO                                
            ---    ---

Indicate the number of shares outstanding of each of the issuer's classes of    
common stock, as of the latest practicable date.                                

                Class                         Shares Outstanding at May 14, 1997
         ---------------------                ----------------------------------
Common Stock, $.001 par value                        12,466,983       

================================================================================

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VOXWARE, INC. 
INDEX 

                                                        [Enlarge/Download Table]

PART I - FINANCIAL INFORMATION                                                                   
------------------------------                                                                   

   Item 1.   Financial Statements                                                        Page No.
                                                                                         ------- 
                                                                                                 
             Statements of Operations (unaudited)                                                
               Three and Nine Months Ended March 31, 1997 and 1996......................     3   

             Balance Sheets                                                                      
               March 31, 1997 (unaudited) and June 30, 1996.............................     4   

             Statements of Cash Flows (unaudited)                                                
               Nine Months Ended March 31, 1997 and 1996................................     5   

             Notes to Financial Statements..............................................     6   

   Item 2.   Management's Discussion and Analysis of Results of Operations                       
             and Financial Condition....................................................     7   

PART II - OTHER INFORMATION                                                                      
---------------------------                                                                      

             Other Information..........................................................    12   

             Signatures.................................................................    13   

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PART I - FINANCIAL INFORMATION                                                  
------------------------------                                                  

ITEM 1.  FINANCIAL STATEMENTS                                             

 Voxware, Inc.
Statements of Operations
 (In thousands, except per share data)

                                                        [Enlarge/Download Table]

                                                Three Months Ended               Nine Months Ended         
                                                      March 31,                       March 31,            
                                          ------------------------------  ---------------------------------
                                              1997               1996         1997                1996     
                                          ------------       -----------  -------------       -------------
                                                    (unaudited)                      (unaudited)           
                                                                                                           
Revenues:                                                                                                  
  Product revenues:                                                                                        
    Initial license fees                   $    1,647        $      504    $     3,619        $        704 
    Royalties and recurring license fees          688               -            1,303                 -   
                                          ------------       -----------  -------------      --------------
     Total product revenues                     2,335               504          4,922                 704 
  Service revenues                                 77                 2            205                   3 
                                          ------------       -----------  -------------      --------------
    Total revenues                              2,412               506          5,127                 707 
                                          ------------       -----------  -------------      --------------

Cost of revenues:                                                                                          
  Cost of product revenues                        103                 3            148                   9 
  Cost of service revenues                         43                 5            120                  10 
                                          ------------       -----------  -------------      --------------
    Total cost of revenues                        146                 8            268                  19 
                                          ------------       -----------  -------------      --------------

    Gross profit                                2,266               498          4,859                 688 
                                          ------------       -----------  -------------      --------------

Operating expenses:                                                                                        
  Research and development                      2,104               630          6,042               1,203 
  Sales and marketing                           1,165               331          3,052                 637 
  General and administrative                      778               298          2,513                 538 
                                          ------------       -----------  -------------      --------------
    Total operating expenses                    4,047             1,259         11,607               2,378 
                                          ------------       -----------  -------------      --------------

    Operating loss                             (1,781)             (761)        (6,748)             (1,690)

Interest income                                   259                51            485                  85 
                                          ------------       -----------  -------------      --------------

Net loss                                   $   (1,522)        $    (710)    $   (6,263)         $   (1,605)
                                          ============       ===========  =============      ==============

Net loss per share                         $    (0.12)        $   (0.08)    $    (0.57)         $    (0.19)
                                          ============       ===========  =============      ==============

Shares used in computing                                                                                   
  net loss per share                           12,467             8,776         11,008               8,421 
                                          ============       ===========  =============      ==============

The accompanying notes are an integral part of these statements.

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10-Q 4th Page of 13 TOC 1st Previous Next ↓Bottom Just 4th
 Voxware, Inc.
Balance Sheets
 (In thousands, except share data)

                                                        [Enlarge/Download Table]


                                                                                    March 31,     June 30,   
                                                                                      1997          1996     
                                                                                  -------------  ------------
                                                                                   (unaudited)               
                                                      ASSETS                                                 
                                                                                                             
Current assets:                                                                                              
  Cash and cash equivalents                                                        $  1,075       $  3,837   
  Short-term investments                                                             16,324            -     
  Accounts receivable, net of allowance for doubtful accounts of                                             
      $263,200 and $25,000                                                            2,519            470   
  Prepaid expenses                                                                      259             54   
                                                                                  ----------     ----------  
      Total current assets                                                           20,177          4,361   
Property and equipment, net                                                             603            611   
Other assets, net                                                                       360            364   
                                                                                  ----------     ----------  
                                                                                   $ 21,140       $  5,336   
                                                                                  ==========     ==========  

                                  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                             
Current liabilities:                                                                                         
   Accounts payable and accrued expenses                                           $  2,704       $    365   
   Deferred revenues                                                                    440            109   
                                                                                  ----------     ----------  
        Total current liabilities                                                     3,144            474   
                                                                                  ----------     ----------  

Deferred rent                                                                           199            -     
                                                                                  ----------     ----------  
Redeemable Series A Convertible Preferred Stock                                         -            5,938   
                                                                                  ----------     ----------  
Commitments and contingencies                                                                                

Stockholders' equity (deficit):                                                                              
   Preferred stock, $.001 par value, 10,000,000 shares authorized;                                           
    none and 6,000,000 Redeemable Series A Convertible shares issued                                         
    and outstanding                                                                     -              -     
   Common stock, $.001 par value, 30,000,000 shares authorized;                                              
       12,466,983 and 5,947,496 shares issued and outstanding                            12              6   
   Additional paid-in capital                                                        28,317          3,177   
   Unrealized loss on available-for-sale securities                                      (6)           -     
   Accumulated deficit                                                              (10,526)        (4,259)  
                                                                                  ----------     ----------  
          Total stockholders' equity (deficit)                                       17,797         (1,076)  
                                                                                  ----------     ----------  
                                                                                   $ 21,140       $  5,336   
                                                                                  ==========     ==========  


The accompanying notes are an integral part of these statements.  

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10-Q 5th Page of 13 TOC 1st Previous Next ↓Bottom Just 5th
 Voxware, Inc.
Statements of Cash Flows
 (In thousands, except share and warrant data)

                                                        [Enlarge/Download Table]

                                                                                         Nine Months Ended         
                                                                                              March 31,            
                                                                                  ---------------------------------
                                                                                      1997                 1996    
                                                                                  -----------          ------------
                                                                                             (unaudited)           
                                                                                                                   
Operating activities:                                                                                              
   Net loss                                                                       $   (6,263)          $    (1,605)
   Adjustments to reconcile net loss to net cash used in                                                           
     operating activities:                                                                                         
     Depreciation and amortization                                                       170                   133 
     Provision for doubtful accounts                                                     238                   -   
     Changes in assets and liabilities:                                                                            
           Accounts receivable                                                        (2,287)                 (422)
           Prepaid expenses                                                             (206)                    7 
           Other assets                                                                    4                  (101)
           Accounts payable and accrued expenses                                       2,339                   327 
           Deferred revenues                                                             331                   (42)
           Deferred rent                                                                 199                   -   
                                                                                  -----------          ------------
                Net cash used in operating activities                                 (5,475)               (1,703)
                                                                                  -----------          ------------

Investing activities:                                                                                              
   Purchases of short-term investments                                               (88,542)                  -   
   Maturities of short-term investments                                               72,212                   -   
   Purchases of property and equipment                                                  (161)                 (240)
                                                                                  -----------          ------------
                Net cash used in investing activities                                (16,491)                 (240)
                                                                                  -----------          ------------

Financing activities:                                                                                              
   Proceeds from issuance of common stock, net                                        18,442                   -   
   Proceeds from exercise of common stock warrants                                       762                   -   
   Proceeds from sale of Redeemable Series A                                                                       
           Convertible Preferred Stock                                                   -                   5,931 
                                                                                  -----------          ------------
                Net cash provided by financing activities                             19,204                 5,931 
                                                                                  -----------          ------------

Increase (decrease) in cash and cash equivalents                                      (2,762)                3,988 
Cash and cash equivalents, beginning of period                                         3,837                 1,523 
                                                                                  -----------          ------------
Cash and cash equivalents, end of period                                               1,075                 5,511 
Short-term investments, end of period                                                 16,324                   -   
                                                                                  -----------          ------------
Cash and short-term investments, end of period                                    $   17,399           $     5,511 
                                                                                  ===========          ============

SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS:                                                                 
           Conversion of Redeemable Series A Convertible Preferred Stock                                           
                to Common Stock                                                   $    5,938           $       -   
           Accretion of redemption premium on Redeemable Series A                                                  
                Convertible Preferred Stock                                       $        4           $         3 
           Cashless exercise of 377,500 warrants, converted at a rate of                                           
                one-half share of Common Stock per warrant (converted to 188,750                                   
                shares of Common Stock) in December 1996                          $      -             $       -   

                                                                                  =================================

The accompanying notes are an integral part of these statements.  

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Voxware, Inc. 
Notes To Financial Statements 

1.             BASIS OF PRESENTATION                                            

             The financial statements as of March 31, 1997 and for the three
        and nine month periods ended March 31, 1997 and 1996 are unaudited and
reflect all adjustments (consisting only of normal recurring  
       adjustments) which are, in the opinion of management, necessary for a
       fair presentation of the financial position and operating results for
 the interim periods. The financial statements should be read in
       conjunction with the financial statements and notes thereto, together
      with management's discussion and analysis of financial condition and
results of operations, contained in the Company's Registration
         Statement on Form S-1 which was declared effective on October 30, 1996,
       the Company's Forms 10-Q for the quarters ended December 31, 1996 and
September 30, 1996, and in this report on Form 10-Q.          

               The results of operations for the interim periods ended March 31,
       1997 are not necessarily indicative of the results to be expected for
   the fiscal year ending June 30, 1997 or any other future periods.

2.             SALE OF COMMON STOCK                                             

          The Company consummated an Initial Public Offering of Common
  Stock which closed on November 4, 1996 and December 4, 1996. The
     Company offered and sold an aggregate of 2,823,237 shares of Common
         Stock at an initial public offering price of $7.50. The net proceeds to
         the Company from the initial public offering, after payment of offering
expenses, were approximately $18,442,000.                     

3.             NET LOSS PER SHARE                                               

           Net loss per share was calculated by dividing net loss by the
         weighted average number of common shares outstanding for the respective
       periods adjusted for the dilutive effect of common stock equivalents,
       which consist of stock options and warrants, using the treasury stock
        method. The calculation of shares used in computing net loss per share
   also includes 6,000,000 shares of Redeemable Series A Convertible
       Preferred Stock which converted into 3,000,000 shares of Common Stock
       upon the consummation of the Initial Public Offering, as if they were
converted to Common Stock on their original date of issuance. 

            In March 1997, the Financial Accounting Standards Board issued
    Statement of Financial Accounting Standards No. 128, "Earnings Per
     Share" ("SFAS No. 128"). SFAS No. 128 is effective for fiscal years
 ending after December 15, 1997, and, when adopted, will require
    restatement of prior years' earnings per share. If the Company had
        adopted SFAS No. 128 for the period ending March 31, 1997, there would
   have been no effect on earnings per share, on either the basic or
diluted basis.                                                

4.             REVENUE RECOGNITION                                              

        The Company generates revenues from two sources: fees from
   product licenses and fees for services provided. Product revenues
      include a combination of initial license fees and recurring payments
      such as royalties based on a percentage of licensees' sales or units
         shipped, or pre-determined periodic license fees. Product revenues from
       initial license fees are generally recognized upon shipment, provided
         that there are no significant post-delivery obligations, the payment is
   due within one year and collection of the resulting receivable is
     deemed probable. Royalty revenues are recognized at the time of the
         customer's shipment of products incorporating the Company's technology.
Recurring product license fees are generally recognized at the
         inception of the renewal period, provided that there are no significant
        post-delivery obligations (if any delivery has been made), the payment
      is due within one year and collection of the resulting receivable is
        deemed probable. Service revenues from customer support, including the
        amounts bundled with initial or recurring license fees, are recognized
   over the term of the support period, which is typically one year.
     Service revenues from engineering fees are recognized upon customer
 acceptance or over the period in which services are provided if
customer acceptance is not required.                          

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS AND FINANCIAL CONDITION 

                 This report contains forward-looking statements which involve
       risks and uncertainties. Such statements are subject to certain
          factors which may cause the Company's plans and results to differ.
            Factors that may cause such differences include, but are not limited
  to, the rate of progress, if any, of the Company's product
     development programs and the uncertainty of acceptance of the
           Company's products in the marketplace, the uncertain development of
         the Internet and its use as a means for voice communications, the
   highly competitive nature of the Company's industry and the
           Company's ability to compete successfully, the Company's ability to
        attract and retain qualified personnel, the Company's ability to
     successfully enter into and maintain relationships with third
     parties and the Company's dependence on such third parties to
         develop and market products using the Company's technology and to
        develop a recurring revenue stream to the Company, the Company's
         ability to manage its growth, the costs involved in obtaining and
           enforcing patents and any necessary licenses, the Company's ability
          to obtain additional funds, and those other risks discussed in the
         Company's Registration Statement on Form S-1, File No. 333-08393.

Overview                                                

                The Company develops, markets, licenses and supports digital
         speech processing and audio technologies and solutions. Voxware's
           MetaVoice(TM) and MetaSound(TM) coding technologies are designed to
        reproduce high-quality speech and audio while requiring very low
communications bandwidth and processing power. Voxware's
technologies enable users to create a new generation of 
      audio-enhanced communications and interactive products for the
         Internet and other bandwith-constrained environments. The Company
licenses its technologies, including its codecs and     
   application-programming interfaces, to software, computing,
communications, and entertainment companies.            

          From inception (August 20, 1993) to June 30, 1995, the
      Company's operating activities related primarily to performing
           research and development, recruiting personnel, raising capital and
           purchasing operating assets. The Company commenced product releases
   in July 1995 and, for accounting purposes, emerged from the
       development stage commencing in July 1995. Since inception, the
       Company has raised net proceeds of approximately $28,329,000 as
     follows: approximately $8,838,000 through private placements;
           approximately $18,442,000 through the Initial Public Offering which
     was declared effective on October 30, 1996; and approximately
      $1,049,000 through other sales of equity securities, including
exercises of all outstanding common stock warrants.     

              The Company generates revenues from two sources: fees from
         product licenses and fees for services provided. Product revenues
       account for a majority of the Company's revenues. The Company's
  products are licensed primarily to software, computing and
         communications companies which incorporate the Company's products
   and technologies into their products. The Company generally
         negotiates contract terms with customers on a case by case basis,
          with arrangements that have historically included a combination of
            initial license fees and royalties and other recurring payments. One
           of the Company's objectives is to develop recurring revenue through
           entering into licensing agreements with third parties which provide
         for recurring payments such as royalties based on a percentage of
      licensees' sales or an agreed-upon amount per unit shipped, or
          pre-determined annual or other periodic payments. As a result, the
     timing and amount of the Company's revenues are substantially
         dependent on the timing and efforts of the Company's licensees in
     developing and marketing products incorporating the Company's
      products and technologies. There can be no assurance as to the
         timing or success of any licensee implementation or the timing or
     amount of recurring revenues from any licensee product. Since
           inception, the Company has entered into over 60 license agreements,
      the majority of which provide for recurring license or royalty
  payments. Service revenues consist of customer support and
     engineering fees. Customer support services include providing
updates                                                 

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10-Q 8th Page of 13 TOC 1st Previous Next ↓Bottom Just 8th
     and technical support to licensees of the Company's products.
     Engineering services include providing technical resources to
    support customer specific development efforts or porting the
Company's technologies to specific customer platforms.  

           Software product revenues are generally recognized upon
      shipment, provided that there are no significant post-delivery
         obligations, the payment is due within one year and collection of
            the resulting receivable is deemed probable. If an acceptance period
      is required, revenues are recognized upon customer acceptance.
           Royalty revenues are recognized in the period of customer shipment.
         For the three and nine months ended March 31, 1997, respectively,
        approximately $688,000 and $1,303,000 of royalties and recurring
     license fees have been recognized. Customer support revenues,
            including amounts bundled with license fees, are recognized over the
       term of the support period, which typically lasts for one year.
            Engineering fees are recognized upon customer acceptance or over the
           period in which services are provided if customer acceptance is not
          required. All research and development costs have been expensed as
incurred.                                               

                  The Company has only a limited operating history upon which an
       evaluation of the Company and its prospects can be based. As of
 March 31, 1997, the Company had an accumulated deficit of
           $10,526,000. Although the Company has experienced revenue growth in
          recent periods, the limited operating history of the Company makes
      the prediction of future results of operations impossible and,
          therefore, the Company's recent revenue growth should not be taken
        as indicative of the rate of revenue growth, if any, that can be
            expected in the future. In addition, the Company's operating results
          may fluctuate significantly in the future as a result of a variety
     of factors, including the level of usage of the Internet, the
            budgeting cycles of potential customers, the volume of, and revenues
      derived from sales of products by the Company's licensees that
            incorporate the Company's products, the amount and timing of capital
     expenditures and other costs relating to the expansion of the
          Company's operations, the introduction of new products or services
           by the Company or its competitors, pricing changes in the industry,
            technical difficulties with respect to the use of products developed
by the Company and general economic conditions.         

Results of Operations                                   

Revenues                                          

                  Total revenues increased $1,906,000 from $506,000 in the three
           months ended March 31, 1996 to $2,412,000 in the three months ended
  March 31, 1997 as a result of the Company entering into an
            increasing number of license agreements providing customers with the
        right to use the Company's products and related services, and an
        increase in the amount of royalties and other recurring revenues
        recognized from customers who licensed the Company's products in
           previous periods. On a year-to-date basis, total revenues increased
            $4,420,000 from $707,000 for the nine months ended March 31, 1996 to
       $5,127,000 for the nine months ended March 31, 1997. One of the
      Company's largest customers accounted for 16% and 17% of total
          revenues in the three and nine month periods ended March 31, 1997,
    respectively, and another of the Company's largest customers
         accounted for 29% and 14% of total revenues in the three and nine
month periods ended March 31, 1997, respectively.       

              Product revenues increased $1,831,000 from $504,000 in the
           three months ended March 31, 1996 to $2,335,000 in the three months
       ended March 31, 1997. For the nine months ended March 31, 1997,
        product revenues totaled $4,922,000 compared to $704,000 for the
   nine months ended March 31, 1996, reflecting an increase of
   $4,218,000. These dollar increases in product revenues were
          primarily due to the increased volume of licenses of the Company's
   products to new customers, and an increase in the amount of
            royalties and other recurring revenues recognized from customers who
          licensed the Company's products in previous periods. For the three
          and nine month periods ended March 31, 1997, approximately 71% and
          74% of the Company's product revenues were attributable to initial
        license fees, respectively, and 29% and 26% were attributable to
royalties and annual or other periodic payments,        

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10-Q 9th Page of 13 TOC 1st Previous Next ↓Bottom Just 9th
          respectively. For the three and nine month periods ended March 31,
        1996, all of the Company's product revenues were attributable to
initial license fees.                                   

             During the three months ended March 31, 1997, the Company
        recognized $1,647,000 in initial license fees related to sixteen
           agreements, compared to $504,000 in initial license fees related to
           seven agreements for the three months ended March 31, 1996. For the
           nine months ended March 31, 1997, the Company recognized $3,619,000
            in initial license fees related to thirty-eight agreements, compared
          to $704,000 in initial license fees related to fourteen agreements
       for the nine months ended March 31, 1996. Additionally, for the
          three months ended March 31, 1997, the Company recognized $688,000
           in royalties and recurring product license fees, which were derived
            from a total of seven customers. For the nine months ended March 31,
          1997, the Company recognized $1,303,000 in royalties and recurring
      product license fees, which were derived from a total of seven
   customers. Of those seven customers, one customer generated
        royalties or recurring product license fees in each of the three
          fiscal quarters during the nine months ended March 31, 1997, three
          customers generated royalties or recurring product license fees in
         the second and third fiscal quarters during the nine months ended
   March 31, 1997, and the remaining three customers generated
       royalties or recurring product license fees in the third fiscal
            quarter during the nine months ended March 31, 1997. No royalties or
          recurring product license fees were recognized during the three or
nine months ended March 31, 1996.                       

                  Service revenues were $77,000 for the three months ended March
        31, 1997 compared to $2,000 for the three months ended March 31,
           1996 and $205,000 for the nine months ended March 31, 1997 compared
            to $3,000 for the comparable nine month period ended March 31, 1996.
            Service revenues were primarily attributable to customer support and
fees for engineering.                                   

Cost of Revenues                                  

                  Cost of product revenues increased $100,000 from $3,000 in the
         three months ended March 31, 1996 to $103,000 in the three months
            ended March 31, 1997. For the nine months ended March 31, 1997, cost
       of product revenues totaled $148,000 compared to $9,000 for the
        comparable nine month period ended March 31, 1996, reflecting an
         increase of $139,000. These increases in cost of product revenues
       were primarily due to the costs of licensed technology, product
         media and duplication, manuals and packaging materials related to
         the increased volume of licenses of the Company's products to new
customers.                                              

               Cost of service revenues consists primarily of the expenses
    associated with the staffing of a customer support group and
 engineering services, which consist primarily of employee
         compensation and equipment depreciation. Cost of service revenues
         increased $38,000 from $5,000 in the three months ended March 31,
     1996 to $43,000 in the three months ended March 31, 1997, and
           increased $110,000 from $10,000 for the nine months ended March 31,
        1996 to $120,000 for the nine months ended March 31, 1997. These
            dollar increases in cost of service revenues from the three and nine
            months ended March 31, 1996 to the three and nine months ended March
         31, 1997 were primarily attributable to increased staffing of the
Company's customer support and engineering groups.      

Operating Expenses                                

                  The Company's operating expenses have continued to increase in
   each quarter since inception. This trend reflects the costs
           associated with the development of infrastructure, rapid growth and
     increased efforts to commercialize the Company's products and
          services. The Company believes that, over the long term, continued
            expansion of its operations would enhance the Company's products and
       services and ability to distribute them in targeted markets and
expand the Company's installed user base.               

          Research and development expenses primarily consist of
  employee compensation and equipment depreciation and lease
          expenditures related to product research and development. Research
          and development expenses increased $1,474,000 from $630,000 in the
three months ended March 31, 1996                       

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            to $2,104,000 in the three months ended March 31, 1997. For the nine
           months ended March 31, 1997, research and development expenses were
         $6,042,000 compared to $1,203,000 for the nine months ended March
    31, 1996, reflecting an increase of $4,839,000. These dollar
            increases in research and development expenses were primarily due to
          increasing the research and development staff from eleven at March
         31, 1996 to fifty at March 31, 1997 and the costs associated with
          developing and enhancing the functionality of the Company's family
         of products. The Company believes that significant investments in
       research and development are required to establish and maintain
      competitive advantage and, as a result, the Company intends to
      increase the absolute dollar level of research and development
expenditures in future periods.                         

              Sales and marketing expenses consist primarily of employee
           compensation (including direct sales commissions), travel expenses,
           trade shows and costs of promotional materials. Sales and marketing
           expenses increased $834,000 from $331,000 in the three months ended
        March 31, 1996 to $1,165,000 in the three months ended March 31,
   1997. On a year-to-date basis, sales and marketing expenses
          increased $2,415,000 from $637,000 for the nine months ended March
        31, 1996 to $3,052,000 for the nine months ended March 31, 1997.
   These dollar increases in sales and marketing expenses were
       primarily due to the expansion of the Company's sales force and
         marketing staff from four at March 31, 1996 to seventeen at March
          31, 1997, and increased expenses associated with the promotion and
     marketing of the Company's products and services. The Company
  intends to continue to intensify and expand its direct and
    tele-sales efforts and, as a result, intends to increase the
       absolute dollar level of sales and marketing expenses in future
periods.                                                

            General and administrative expenses consist primarily of
           employee compensation and fees for insurance, rent, office expenses
      and professional services. General and administrative expenses
            increased $480,000 from $298,000 in the three months ended March 31,
          1996 to $778,000 in the three months ended March 31, 1997. For the
    nine months ended March 31, 1997, general and administrative
            expenses totaled $2,513,000 compared to $538,000 for the nine months
   ended March 31, 1996, reflecting a year-to-date increase of
        $1,975,000. These dollar increases in general and administrative
          expenses were primarily due to increasing the administrative staff
        from seven at March 31, 1996 to twenty-one at March 31, 1997 and
          increased expenses related to insurance, rent, office expenses and
           professional services. The Company expects that the absolute dollar
         level of general and administrative expenses for the three months
           ended June 30, 1997 will remain fairly consistent with the absolute
         dollar level of general and administrative expenses for the three
months ended March 31, 1997.                            

Interest Income                                   

                  Interest income increased $208,000 to $259,000 for the quarter
         ended March 31, 1997 from $51,000 for the quarter ended March 31,
            1996. On a year-to-date basis, interest income increased $400,000 to
     $485,000 for the nine months ended March 31, 1997 compared to
            $85,000 for the nine months ended March 31, 1996. These increases in
    interest income primarily reflect interest earned on the net
            proceeds from the Initial Public Offering closed during November and
December 1996 (see "Liquidity and Capital Resources").  

Income Taxes                                      

                  As of March 31, 1997, the Company had approximately $9,600,000
       of federal net operating loss carryforwards which will begin to
         expire in 2009 if not utilized. As of March 31, 1997, the Company
         has provided a full valuation allowance on the deferred tax asset
            because of the uncertainty regarding realizability of these deferred
        assets, primarily as a result of considering such factors as the
            Company's limited operating history, the volatility of the market in
        which it competes, the operating losses incurred to date and the
operating losses anticipated in future periods.         

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Liquidity and Capital Resources                         

                As of March 31, 1997, the Company had $1,075,000 in cash and
       cash equivalents and $16,324,000 in short-term investments. The
         Company's cash and short-term investments portfolio is liquid and
      investment grade, consisting of high-grade money-market funds,
           United States Government-backed securities and commercial paper and
         corporate obligations. Since inception, the Company has primarily
      financed its operations through the sale of equity securities.

                 Cash of $1,703,000 and $5,475,000 was used to fund operations
            for the nine months ended March 31, 1996 and 1997, respectively. For
    the nine months ended March 31, 1996, cash used in investing
          activities was $240,000 and was related to purchases of equipment.
        For the nine months ended March 31, 1997, cash used in investing
        activities totaled $16,491,000 which reflects $16,330,000 in net
   purchases of short-term investments and $161,000 related to
         purchases of equipment. For the nine months ended March 31, 1997,
  cash provided by financing activities totaled $19,204,000,
      reflecting $18,442,000 in net proceeds from the Initial Public
           Offering and $762,000 in proceeds from the exercise of common stock
            warrants. For the nine months ended March 31, 1996, cash provided by
           financing activities totaled $5,931,000 and was attributable to the
          issuance of Series A Preferred Stock. All Series A Preferred Stock
          converted into Common Stock upon the closing of the Initial Public
Offering.                                               

               The Company maintains a $5,000,000 revolving line of credit
        with Silicon Valley Bank. Borrowings under the revolving line of
         credit will bear interest at the bank's prime lending rate. As of
March 31, 1997, no borrowings were outstanding.         

                In November 1996 and December 1996, the Company closed on an
        initial public offering of Common Stock. The Company offered and
           sold 2,823,237 shares of Common Stock at an initial public offering
        price of $7.50. The net proceeds to the Company from the Initial
Public Offering after payment of offering expenses were 
approximately $18,442,000.                              

                  The Company has no material commitments other than those under
   normal building and equipment operating leases. The Company
       anticipates increases in its capital expenditures and operating
    lease arrangements beyond March 31, 1997 consistent with its
         anticipated growth. The Company believes that the net proceeds of
         $18,442,000 obtained from the initial public offering and current
        cash balances will be sufficient to fund its working capital and
         capital expenditures requirements, exclusive of cash required for
            possible acquisitions of, or investments in businesses, products and
technologies for at least the next twelve months.       

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PART II - OTHER INFORMATION                             
---------------------------                             

Item 5.   Other Information.  None.                 

Item 6.   Exhibits and Reports on Form 8-K.         

(a) Exhibits                

                          10.1  Loan Modification Agreement dated May 5,
                                1997 between Silicon Valley Bank and the
Company.

                              11.1  Statement re: Computation of Loss Per Share.

          27    Financial Data Schedule.

   (b) Reports on Form 8-K.  None.

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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 thereunto duly authorized.    

Date:  May 14, 1997                                     

VOXWARE, INC.     
(Registrant)      

         By:   /s/ Michael Goldstein
                           ---------------------------------
                          Michael Goldstein, President and
                 Chief Executive Officer

        By:   /s/ Kenneth H. Traub
                           ---------------------------------
                                     Kenneth H. Traub, Executive Vice President,
                               Chief Financial Officer and Secretary
                       (Principal Financial Officer)

       By:   /s/ Nicholas Narlis
                           ---------------------------------
                      Nicholas Narlis, Controller,
                                Chief Accounting Officer and Treasurer
                        (Principal Accounting Officer)

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10-Q’ Filing	Date	First	Last	Other Filings

	12/15/97	6
	6/30/97	6	10	10-K, 10-K/A
Filed on:	5/15/97
	5/14/97	1	13	S-8
	5/5/97	12
For Period End:	3/31/97	1	11	10-Q/A
	12/31/96	6		10-Q
	12/4/96	6
	11/4/96	6
	10/30/96	6	7	S-1/A
	9/30/96	6		10-Q
	6/30/96	2
	3/31/96	2	11
	6/30/95	7
	8/20/93	7
				List all Filings

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Filing Submission 0001036050-97-000265 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Voxware Inc – ‘10-Q’ for 3/31/97

As of: Thursday, 5/15/97 · For: 3/31/97 · Accession #: 1036050-97-265 · File #: 0-21403

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Quarterly Report — Form 10-QFiling Table of Contents

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Dates Referenced Herein and Documents Incorporated by Reference

Quarterly Report — Form 10-Q
Filing Table of Contents

10-Q — Quarterly Report
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