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Technology Stocks : XYBR - Xybernaut -- Ignore unavailable to you. Want to Upgrade?

To: Mary McGee who wrote (2490)	4/15/1999 6:30:00 PM
From: Jason Flora	Read Replies (2) \| Respond to of 6847

Some items pulled from the filing for consideration: At December 31, 1998 a total of 3,846,427 warrants to purchase common stock were issued and outstanding related to the Company's IPO and the conversion of debentures during 1996 and 1997. These warrants originally entitled the holder to purchase one share of the Company's Common Stock at an exercise price of $9.00 and expire on July 17, 1999. These warrants contain anti-dilution provisions that, upon the issuance of the Series A Preferred Stock and the Series B Preferred Stock, have adjusted the number of shares that can be purchased with one warrant to 1.50, resulting in an effective exercise price of $6.01, and 5,762,060 shares of common stock that would be issued upon full conversion of the warrants. On March 10, 1999, the Company completed the first tranche of $5.0 million of a $10.0 million private placement of an aggregate of 5,000 shares of the Company's Series D Preferred Stock, par value $.01 per share (the "Series D Preferred Stock"), and realized gross proceeds of $5.0 million and net proceeds of approximately $4,990,000 after related expenses. In addition, the Company issued warrants to purchase an aggregate of 100,000 shares of the Company's Common Stock. The warrants have an exercise price equal to 125% of the closing bid price of the Common Stock on the first trading day immediately preceding the closing date of the first tranche. The warrants have an exercise period which ends on the three year anniversary of the issuance date of the warrants. Management is currently exploring financing alternatives to supplement the Company's cash position. Potential sources of additional financing include private equity financings, mergers, strategic investments, strategic partnerships or various forms of debt financings. Give the start of full-scale production and distribution of the MA IV in early 1999, the Company's management believes that it is likely that the Company's gross revenues and allowable losses will not meet the Performance Targets of the 12-month period ending September 30, 1999. In January 1999, the Company exercised a Put Right under its Equity Line of Credit (See Note 6) and issued 841,356 shares of common stock for proceeds of $3,360,000. On March 10, 1999, the Company issued 5,000 shares of Series D Convertible Preferred Stock for proceeds of $4,990,000 net of offering costs of $10,000. In addition, the Company has available an additional $5,000,000 under this agreement pursuant to which an additional 5,000 shares of Series D Preferred Stock would be issued within 3 business days of the effective registration statement being filed with the SEC, which registers the underlying common shares for these securities.