Xybernaut CEO Says Company Is in Strongest Position Ever
March 20, 2000 08:04 AM
FAIRFAX, Va., March 20 /PRNewswire/ -- Xybernaut Corporation XYBR , the leader in wearable computing and communications solutions, today issued an open message from Xybernaut Corporation to its shareholders and interested parties.
Edward G. Newman, President and CEO noted:
"The Company feels that the drop in stock price on Friday, March 17, was based on reaction to an article released late Friday afternoon and was not based on any fundamental change in our operations, prospects or financial position. This article highlighted a disclaimer or qualification section that is in our past and current annual reports, and fails to mention the positive aspects of our performance last year. Such qualifications are very common for fast growing technology companies and do not indicate that the Company is in financial trouble. It only means that we will require additional cash to carry out our ambitious plans to be the leader in what we, and many industry analysts, expect will be a multi-billion dollar market in the near future.
The article did not accurately nor fairly describe our current position, financial or market, or our future opportunities. We are in a great position coming off of our record fourth quarter and fiscal 1999 operating performance.
It's unfortunate that in an annual report that reported a nearly fourfold growth in annual sales, that the writer of this article chose to highlight a qualification that has been present since our IPO in 1996. It is also unfortunate that the writer of this article did not contact the CEO or the CFO for comment to make sure that he understood our prospects for the future and the accounting rules behind going concern qualifications.
To clarify the situation and provide an appropriate perspective, let me share the following information with you that we sent to shareholders and interested parties in a XyberFlash Friday evening:
* The Company has never been in a stronger position from a product, sales or cash position. We currently have approximately $8 million cash on hand.
* The going concern clause in the audit opinion, which has been in our reports since the inception of the Company, has never in the past been considered "newsworthy" until Friday, March 17, one hour before the market closed when this article was released. As mentioned above, this clause is common for growing companies and only indicates that "the Company has incurred recurring losses from operations and will require additional capital to fund its operations."
* The inclusion of this clause is required by accounting practices for companies that are in the process of establishing a cash flow history and is not an opinion that the Company is in financial difficulty. In the past few years, Xybernaut has raised over $65 million in cash, and we have amply demonstrated our capability to adequately capitalize the Company to the benefit of our shareholders and customers alike.
* Xybernaut, and our partners, believe that the marketplace is huge and developing rapidly. We are confident that we have the financial means to rapidly take that market and maximize the return for our shareholders.
* We are not a company at risk, and we have a number of financing alternatives available to us to ensure that the Company remains adequately capitalized. In fact, during the first couple of months of 2000 we have raised an additional $13 million.
* We are of the belief that the marketplace has been established largely by Xybernaut, that our products are world class, and that the likelihood of success for this company has never been greater. Last year's meaningful quarter to quarter revenue growth is part of the basis for this belief, as is the increasing number of inquiries by customers interested in the benefits offered by Xybernaut's wearable computing solutions.
* We have continued to strengthen our patent position, as demonstrated by the recent announcement of the granting of the "transferable core" patents and the existence of over 470 patent applications granted, allowed and/or pending worldwide.
* We continue to be in serious discussions with numerous major vendors in both the computer and communication markets.
* The obvious should not be overlooked! The Company is enjoying success, and management is committed to dominating the huge worldwide marketplace it has created and maximizing the long-term return for our shareholders. The release of one article does not change this situation."
About Xybernaut Corporation
Xybernaut Corporation is the leading provider of mobile convergence solutions, and wearable computing hardware, software and services. The company's patented wearable computer, called the Mobile Assistant IV(R) (MA IV(R)), is a full-function Pentium PC that runs Microsoft MS-DOS, Windows, and Windows NT, along with UNIX, Linux and other operating systems that run on the Intel x86 architecture. The MA IV allows users hands-free access to information in the computer's internal storage, in local area networks and on the Internet on an as-needed, where-needed basis. Xybernaut's software is designed to provide users with the right information when and where it's needed, using consistent navigation techniques and screen presentations. With the MA IV, customers realize immediate savings in maintenance and repair, diagnosis, inspection, inventory control and data collection procedures. Key industries using Xybernaut's products include manufacturing, distribution, transportation, government, and utilities. Headquartered in Fairfax, Virginia, Xybernaut has offices and subsidiaries in Europe (Germany) and Asia (Japan). Visit Xybernaut's web site at www.xybernaut.com .
MS-DOS, Windows and Windows NT are registered trademarks of Microsoft Corporation.
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 (the "Act"). In particular, when used in the preceding discussion, the words "plan," "confident that," "believe," "expect," or "intend to," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to the safe harbor created by the Act. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. Such risks and uncertainties include, but are not limited to, market conditions, the availability of components and production of the Mobile Assistant, general acceptance of the Company's products and technologies, competitive factors, the ability to successfully complete additional financing and other risks described in the Company's SEC reports and filings.
SOURCE Xybernaut Corporation
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