Xybernaut Does Not Intend to Alter Terms of its Warrants
Warrants to Expire on July 19, 1999; Elimination of 26% Potential Dilution and Lack of Effective "Call Provision" Cited As Key To Decision
FAIRFAX, Va., July 16 /PRNewswire/ -- Xybernaut Corporation (Nasdaq: XYBR - news), the leader in wearable computing, today announced that it does not intend to alter the terms of its outstanding publicly-traded warrants (Nasdaq: XYBRW - news), which expire on their own terms on Monday, July 19, 1999. The stated expiration date of the warrants is July 17, 1999, which is a Saturday, so the effective expiration date will be the close of business on Monday, July 19, 1999.
Edward G. Newman, President of Xybernaut stated, ''After much consideration and debate, at this time, we feel that our stockholders are best served by letting the warrants expire on the date that has been disclosed in almost every filing we have made with the SEC since July 1996. Effectively lacking a realistic ''call provision,'' the current warrants could not be considered a reliable source of capital for the company, and the elimination of market overhang would seem to be most beneficial to our shareholders. We look forward to our stockholders benefiting from this decision.''
John F. Moynahan, Senior Vice President and Chief Financial Officer, added that, ''Allowing the warrants to expire eliminates 5.8 million shares, or 26%, of potential dilution for our common stockholders and the related market overhang that has complicated the outlook for our stock since the IPO in July, 1996. We feel that the warrants have provided resistance in the past to the stock moving above the strike price of the warrants. Allowing the warrants to expire will enable the market to move freely without the inherent structural resistance they have represented. In addition to eliminating a vehicle commonly utilized by day traders and professional short sellers, the expiration of the warrants will provide us with more control over the timing and amount of any future funding for the Company. It is our belief that our long term shareholders will understand the benefit they derive from this decision.''
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