SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 13, 1999
XYBERNAUT CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE0 2101354 1799851
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NUMBER)
12701 FAIRLAKES CIRCLE - SUITE 550
FAIRFAX, VA 22033
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (703) 631-6925
NOT APPLICABLE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 4. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
(A) PREVIOUS INDEPENDENT ACCOUNTANT
(i) On September 13, 1999, Xybernaut Corporation (the "Registrant") dismissed
PricewaterhouseCoopers LLP as its independent accountant. The decision to
dismiss PricewaterhouseCoopers LLP was approved by the Audit Committee and the
Board of Directors of the Registrant.
(ii) PricewaterhouseCoopers LLP reports on the Registrant's financial statements
for the years ended December 31 1998 and 1997 did not contain an adverse opinion
or a disclaimer of opinion, and were not qualified or modified as to audit scope
or accounting principle. However, such reports contained an explanatory
paragraph relating to the Company's ability to continue as a going concern.
(iii) In connection with the audits of the financial statements of the
Registrant for the years ended December 31, 1998 and 1997, and for the period
from January 1, 1999 through September 13,1999, the Registrant had no
disagreements with PricewaterhouseCoopers LLP on matters of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of
PricewaterhouseCoopers, would have caused them to make reference to such
disagreements in their report on the Registrant's financial statements for such
years.
(iv) During the years ended December 31, 1998 and 1997 and the period from
January 1, 1999 through September 13, 1999, there have been no reportable events
(as defined in Regulation S-K item 304(a)(i)(v)), except that the
PricewaterhouseCoopers LLP Report to the Audit Committee Regarding
Recommendations to Management for the year ended December 31, 1998 included a
material weakness related to the Company's policies and procedures for the
recognition of revenue during the year ended December 31, 1998. In summary, the
recommendation noted that during the fourth quarter of 1998, the Registrant
recorded approximately $1,000,000 in revenue related to shipments to
distributors. However, based upon further review of the terms and conditions in
the underlying documents and further review of the accounting principles
relating to revenue recognition for such shipments, the Registrant reversed
approximately $700,000 of revenue in the fourth quarter on certain of these
transactions. Revenue related to these units will be recognized when the units
are paid for by the re-seller or sold by the re-seller to an end user. The
Registrant has since revised its policies and procedures for the recognition of
revenue in accordance with the recommendation of PricewaterhouseCoopers LLP and
the Registrant's management is of the opinion that the material weakness noted
by PricewaterhouseCoopers LLP has been corrected and that a material weakness no
longer exists in this regard.
(v) The Registrant has requested that PricewaterhouseCoopers LLP furnish it with
a letter addressed to the SEC stating whether or not it agrees with the
statements contained in this Item 4(A). A copy of that letter, dated September
17, 1999, is filed as Exhibit 16 to this Form 8-K and incorporated herein by
reference.
(B) NEW INDEPENDENT ACCOUNTANT
The Registrant engaged Grant Thornton LLP as its new independent
accountant as of September 13, 1999. The decision to engage Grant Thornton LLP
was approved by the Audit Committee and Board of Directors of the Registrant.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits.
16. Letter, dated September 17, 1999, concerning the change in
the Registrant's Certifying Accountant.
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SIGNATURE
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 hereunto duly authorized.
XYBERNAUT CORPORATION
Date: September 17, 1999 By: /s/ John F. Moynahan
----------------------------
John F. Moynahan
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Description
- ------- -----------
16. Letter, dated September 17, 1999, concerning the change in the
Registrant's Certifying Accountant.
EXHIBIT 16
September 17, 1999
Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549
We have read the statements made by Xybernaut Corporation (copy attached), which
we understand will be filed with the Commission, pursuant to Item 4 of Form 8-K,
as part of the Company's Form 8-K report dated September 13, 1999. We agree with
the statements concerning our Firm in such Form 8-K, except that with respect to
the fourth and fifth sentences of Item 4(A)(iv) for which we have no basis to
agree or disagree with the Company's comments.
Very truly yours,
/s/ PRICEWATERHOUSECOOPERS LLP
