As filed with the Securities and Exchange Commission on March 31, 2000
Registration No. 333-94463
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 1
TO FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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XYBERNAUT CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 54-1799851
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12701 FAIR LAKES CIRCLE, FAIRFAX, VIRGINIA 22033
(Address of Principal Executive Offices) (Zip Code)
1996 OMNIBUS STOCK INCENTIVE PLAN
1997 STOCK INCENTIVE PLAN
and
1999 STOCK INCENTIVE PLAN
(Full title of the plans)
EDWARD G. NEWMAN
12701 FAIR LAKES CIRCLE
FAIRFAX, VIRGINIA 22033
(703) 631-6925
(Name, address and telephone number, including area code, of agent for service)
with a copy to:
Martin Eric Weisberg, Esq.
Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
(212) 704-6000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to time
after this Registration Statement becomes effective, as determined by market
conditions.
|_| If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
<PAGE>
|X| If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.
|_| If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering.
---------------------
|_| If this Form is a post-effective amendment filed pursuant to rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
---------------------
|_| If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
EXPLANATORY NOTE
-----------------------------------
The Prospectus filed as part of this Registration Statement has been prepared in
accordance with the requirements of Form S-3 pursuant to General Instruction C
of Form S-8 and may be used for reoffers or resales of Xybernaut Corporation's
common stock to be acquired by the persons named therein pursuant to Xybernaut's
1996 Omnibus Stock Incentive Plan, 1997 Stock Incentive Plan and 1999 Stock
Incentive Plan.
<PAGE>
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WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE.
THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
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PROSPECTUS
XYBERNAUT CORPORATION
5,300,000 SHARES OF COMMON STOCK
The stockholders of Xybernaut Corporation listed on pages 10 and 11 of this
prospectus are offering for sale up to 5,300,000 shares of common stock of
Xybernaut under this prospectus.
The selling stockholders may offer their shares through public or private
transactions, at prevailing market prices, or at privately negotiated prices.
See "Plan of Distribution."
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NASDAQ SmallCap Market Symbol: "XYBR"
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On March 29, 2000, the closing price of one share of our common stock on
the NASDAQ SmallCap Market was $17.25.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY
CONSIDER THE FACTORS DESCRIBED UNDER THE CAPTION "RISK FACTORS" BEGINNING
ON PAGE 2 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this prospectus is March 31, 2000
<PAGE>
RISK FACTORS
BEFORE YOU BUY SHARES OF OUR COMMON STOCK, YOU SHOULD BE AWARE THAT
THERE ARE VARIOUS RISKS ASSOCIATED WITH THAT PURCHASE, INCLUDING THOSE DESCRIBED
BELOW. YOU SHOULD CONSIDER CAREFULLY THESE RISK FACTORS, TOGETHER WITH ALL OF
THE OTHER INFORMATION IN THIS PROSPECTUS AND THE DOCUMENTS WE HAVE INCORPORATED
BY REFERENCE IN THE SECTION "WHERE YOU CAN FIND MORE INFORMATION ABOUT US,"
BEFORE YOU DECIDE TO PURCHASE SHARES OF OUR COMMON STOCK.
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RISKS ASSOCIATED WITH OUR HISTORY OF LOSSES AND FUTURE NEED FOR CAPITAL
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WE HAVE A HISTORY OF LOSSES AND, IF WE DO NOT ACHIEVE PROFITABILITY, WE MAY NOT
BE ABLE TO CONTINUE OUR BUSINESS IN THE FUTURE.
Our research, development, sales, marketing and general and
administrative expenses have resulted in significant losses and are expected to
continue to result in significant losses for the foreseeable future. We have
incurred the following losses since 1994:
Fiscal years ended:
o March 31, 1994 $47,352
o March 31, 1995 $1,303,892
o December 31, 1996 $5,238,536
o December 31, 1997 $9,479,966
o December 31, 1998 $13,111,488
o December 31, 1999 $16,775,797
THE "GOING CONCERN" QUALIFICATION ON THE REPORT OF OUR INDEPENDENT ACCOUNTANTS
MAY REDUCE OUR ABILITY TO RAISE ADDITIONAL FINANCING.
The report of our independent accountants on our December 31, 1999
consolidated financial statements contains an explanatory paragraph regarding
our ability to continue as a going concern. Our independent accountants cited
our history of operating losses and our need for additional capital as factors
which raised substantial doubt as to our ability to continue as a going concern.
This "going concern" qualification may reduce our ability to raise additional
financing.
WE COULD BE REQUIRED TO CUT BACK OR STOP OPERATIONS IF WE ARE UNABLE TO RAISE OR
OBTAIN NEEDED FINANCING.
The research, development, commercialization, manufacturing and
marketing of our products will likely require financial resources which are
significantly in excess of those presently available to us. If we are not able
to arrange financing or other third party arrangements on acceptable terms, we
may be unable to fully develop and commercialize any of our products and could
be required to cut back or stop operations.
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RISKS ASSOCIATED WITH THE INDUSTRY IN WHICH WE OPERATE
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OUR FUTURE REVENUES AND ABILITY TO PRODUCE NEW PRODUCTS DEPEND SUBSTANTIALLY ON
THE SUCCESS OF THE MOBILE ASSISTANT SERIES(R).
Our Mobile Assistant(R) Series currently consists of one product, the
MA IVTM. The Mobile Assistant Series is our principal product, and our success
will depend upon its commercial acceptance, which cannot be assured. Additional
product development will result in a significant increase in our research and
development expenses that may be unrecoverable should commercialization of new
products prove unsuccessful. We also could require additional funding if
research and development expenses are greater than we anticipate. As with most
high technology products, new models of the Mobile Assistant series must be
introduced periodically for the Company to remain competitive. There can be no
assurance that these new products can be successfully developed or commercially
accepted.
WE MAY HAVE TO LOWER PRICES OR SPEND MORE MONEY TO EFFECTIVELY COMPETE AGAINST
COMPANIES WITH GREATER RESOURCES THAN US WHICH COULD RESULT IN LOWER REVENUES
AND/OR PROFITS.
The success of our products in the marketplace depends on many factors,
including product performance, price, ease of use, support of industry
standards, and customer support and service. Given these factors we cannot
assure you that we will be able to compete successfully. For example, if our
competitors offer lower prices, we could be forced to lower prices which would
result in reduced margins and a decrease in revenues. If we do not lower prices
we could lose sales and market share. In either case, if we are unable to
compete against our main competitors which include established companies like
Computing Devices International, a division of Ceridian Corporation, ViA Inc.,
Texas Microsystems, Telxon, Symbol Norand, Teltronics, Inc., a subsidiary of
Interactive Solutions, Inc., Raytheon, and others, we would not be able to
generate sufficient revenues to grow the company or reverse our history of
losses.
In addition, we may have to spend more money to effectively compete for
market share, including funds to expand our infrastructure, which is a capital
and time extensive process. Further, if other companies want to aggressively
compete against us, we may have to spend more money on advertising, promotion,
trade shows, product development, marketing and overhead expenses, hiring and
retaining personnel, and developing new technologies. These higher expenses
would hurt our net income and profits.
CURRENCY FLUCTUATIONS, ESPECIALLY IN THE JAPANESE YEN, MAY SIGNIFICANTLY
INCREASE OUR EXPENSES AND AFFECT OUR RESULTS OF OPERATIONS.
The exchange rates for some local currencies in countries where we
operate may fluctuate in relation to the U.S. dollar. Such fluctuations may have
an adverse effect on our expenses, revenues, earnings, assets or liabilities
when local currencies are translated into U.S. dollars. We are party to supplier
arrangements with several companies in Japan, including Shimadzu and Sony
Digital Products for the production of the MA IV system. The fees we pay to
these companies are paid in
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<PAGE>
Japanese Yen. Any strengthening of the value of the U.S. dollar against the
Japanese Yen could result in an increase in our production expenses which,
if substantial, could have a material adverse effect on our financial
condition and results of operations.
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RISKS ASSOCIATED WITH
OUR INTERNAL OPERATIONS AND POLICIES
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SINCE WE DO NOT INTEND TO DECLARE DIVIDENDS IN THE FORESEEABLE FUTURE, THE
RETURN ON YOUR INVESTMENT WILL DEPEND UPON APPRECIATION OF THE MARKET PRICE OF
YOUR SHARES.
We have never paid any dividends on our common stock. Our board of
directors does not intend to declare any dividends in the foreseeable future,
but intends to retain all earnings, if any, for use in our business operations.
As a result, the return on your investment in Xybernaut will depend upon any
appreciation in the market price of the common stock. The holders of common
stock are entitled to receive dividends when, as and if declared by the board of
directors out of funds legally available for dividend payments. The payment of
dividends, if any, in the future is within the discretion of our board of
directors and will depend upon our earnings, capital requirements and financial
condition, and other relevant factors.
OUR COMPUTER SYSTEMS AND THOSE OF OUR CUSTOMERS AND SUPPLIERS MAY NOT RECOGNIZE
THE YEAR 2000 WHICH MAY AFFECT OUR COMPUTER SYSTEMS AND DISRUPT OUR BUSINESS.
The year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any of our
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, a
temporary inability to process transactions, send invoices, or engage in similar
normal business activities.
We have utilized both internal and external resources to test,
reprogram or replace, as needed, our computing and communications hardware and
software for year 2000 modifications. Based on this evaluation, we have made
modifications to our computer system and determined that these systems will
properly utilize dates beyond December 31, 1999. As such, we are compliant with
the year 2000 issue.
As a result of the testing, we determined that our old phone system was
not year 2000 compliant. Our phone system was already scheduled for replacement
to add capacity, upgrade the telecommunications capabilities, and allow for
better customer service. In December 1999, we replaced the existing phone system
with one that provides enhanced capabilities and is year 2000 compliant. The
cost to purchase and install the new phone system was approximately $75,000. Our
estimate of the costs to remediate our year 2000 issue related to our telephone
system is based on presently available information. Outside of the phone system,
the cost of testing and modifying our computer systems to obtain year 2000
compliance was less than $10,000 in the aggregate.
We have contacted all of our significant suppliers and large customers
to determine the possible effect on our operations of their inability or failure
to remediate their own year 2000 Issue. However, we cannot guarantee that the
systems of other companies on which our systems rely will be
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timely converted, or that a failure to convert by another company, or a
conversion that is incompatible with our systems, would not have material
adverse effect on our operations. We believe that no exposure to contingencies
related to the year 2000 issue for the products we have sold.
We noted no significant product or system failures or miscalculations
related to the year 2000 issue on or around January 1, 2000.
Our estimates of the date of completion and cost of our year 2000 project are
based on our best estimates, which we derived utilizing numerous assumptions of
future events including the continued availability of certain resources, third
party modification plans and other factors. The costs and completion date of our
year 2000 project could differ materially from our estimates due to the lack of
availability and cost of personnel trained in this area, our ability to locate
and correct all relevant computer codes, and similar uncertainties.
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RISKS WHICH MAY DILUTE THE VALUE OF YOUR XYBERNAUT
SHARES OR LIMIT THE EFFECT OF THEIR VOTING POWER
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THE PRICE OF OUR COMMON STOCK IS HIGHLY VOLATILE.
The price of our common stock is highly volatile. During the period
from January 1, 1998 to March 29, 2000 the closing price of our common stock has
ranged from a high of $23.75 to a low of $1.00. Following periods of volatility
in the market price of a company's securities, securities class action
litigation has often been instituted against such a company. If similar
litigation were instituted against us, it could result in substantial costs and
a diversion of our management's attention and resources, which could have an
adverse effect on our business. The volatile fluctuations of the market price
are based on (1) the number of shares in the market at the time as well as the
number of shares we may be required to issue in the future, compared to the
market demand for our shares; (2) our performance and meeting expectations of
our performance, including the development and commercialization of our products
and proposed products; and (3) general economic and market conditions.
OUR EXECUTIVE OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS, TOGETHER, MAY
EXERCISE CONTROL OVER ALL MATTERS SUBMITTED TO A VOTE OF STOCKHOLDERS.
As of March 29, 2000, our executive officers, directors and principal
stockholders beneficially owned, in the aggregate, approximately 18% of our
outstanding shares of common stock. These stockholders, if acting together, may
be able to effectively control most matters requiring approval by our
stockholders. The voting power of these stockholders under certain circumstances
could have the effect of delaying or preventing a change in control of
Xybernaut.
WE HAVE 5,239,755 SHARES OF OUR COMMON STOCK RESERVED FOR FUTURE ISSUANCES
WHICH CAN SUBSTANTIALLY DILUTE THE VALUE OF YOUR XYBERNAUT COMMON STOCK.
The issuance of reserved shares would dilute the equity interest of
existing stockholders and could have a significant adverse effect on the market
price of our common stock. As of March 29,
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2000, we had 5,239,755 shares of common stock reserved for possible future
issuances upon conversion of outstanding convertible securities, options and
warrants. Certain convertible securities, options and warrants are convertible
into or exercisable for shares of common stock at discounts from future market
prices of the common stock. Those discounts could result in substantial dilution
to existing holders of common stock. The sale of the common stock acquired at a
discount could have a negative impact on the trading price of the common stock
and could increase the volatility in the trading price of the common stock. See
the section entitled "Dilution" for a summary of the number of shares which
could be issued upon conversion of the outstanding preferred stock at various
market prices.
In addition, we intend to seek additional financing which may result in
the issuance of additional shares of our capital stock and/or rights to acquire
additional shares of our capital stock. Those additional issuances of capital
would result in a reduction of your percentage interest in Xybernaut.
ANTI-TAKEOVER MEASURES IN OUR CERTIFICATE OF INCORPORATION COULD ADVERSELY
AFFECT THE VOTING POWER OF THE HOLDERS OF THE COMMON STOCK.
Our certificate of incorporation authorizes anti-takeover measures like
the authority to issue "blank check" preferred stock and the staggered terms of
the members of our board of directors. Those measures could have the effect of
delaying, deterring or preventing a change in control without any action by the
shareholders. In addition, issuance of preferred stock, without shareholder
approval, on those terms as the board of directors may determine, could
adversely affect the voting power of the holders of the common stock, including
the loss of voting control to others. See "Description of Securities."
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains certain forward-looking statements which
involve substantial risks and uncertainties. These forward-looking statements
can generally be identified because the context of the statement includes words
such as "may," "will," "except," "anticipate," "intend," "estimate," "continue,"
"believe," or other similar words. Similarly, statements that describe our
future plans, objectives and goals are also forward-looking statements. Our
factual results, performance or achievements could differ materially from those
expressed or implied in these forward-looking statements as a result of certain
factors, including those listed in "Risk Factors" and elsewhere in this
Prospectus.
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WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C. New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
over the Internet at the SEC's Website at "http://www.sec.gov."
We have filed with the SEC a registration statement on Form S-8 to
register the shares being offered. This prospectus is part of that registration
statement and, as permitted by the SEC's rules, does not contain all the
information included in the registration statement. For further information with
respect to us and our common stock, you should refer to the registration
statement and to the exhibits and schedules filed as part of the registration
statement, as well as the documents discussed below.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update or supersede this information.
This prospectus may contain summaries of contracts or other documents.
Because they are summaries, they will not contain all of the information that
may be important to you. If you would like complete information about a contract
or other document, you should read the copy filed as an exhibit to the
registration statement or incorporated in the registration statement by
reference.
We incorporate by reference the documents listed below and any future
filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 (File No. 0-19041) until all of the shares
are sold:
o Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1999; and
o The description of our common stock contained in the
registration statement on Form 8-A filed on July 15, 1996
under the Exchange Act (File No. 0-15086), including all
amendments or reports filed for the purpose of updating that
description.
You may request a copy of these filings, at no cost, by writing to us
at 12701 Fair Lakes Circle, Fairfax, Virginia 22033, (703) 631-6925, Attention:
John F. Moynahan, or by e-mail at [email protected].
You can review and copy the registration statement, its exhibits and
schedules, as well as the documents listed below, at the public reference
facilities maintained by the SEC as described above. The registration statement,
including its exhibits and schedules, are also available on the SEC's web site.
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USE OF PROCEEDS
The selling stockholders are selling all of the shares covered by this
prospectus for their own accounts. Accordingly, we will not receive any proceeds
from the resale of the shares.
We will receive proceeds from the exercise, if any, of the warrants. We
will use those proceeds, if any, for working capital and general corporate
purposes.
We will bear the expenses relating to this registration, other than
discounts and commissions, which will be paid by the selling stockholders.
DILUTION
As of March 29, 2000, we had issued and outstanding 37,105,681 shares
of common stock. At that date, there were an additional 5,239,755 shares of
common stock reserved for possible future issuances as follows:
o options to purchase 4,432,571 shares at an exercise price
between $1.37 and $13.81 per share. We have registered the
shares issuable upon exercise of the options under the
Securities Act;
o warrants to purchase 192,500 shares at a price between $2.00
and $18.00 per share. We have registered a total of 10,000
shares issuable upon exercise of these warrants. The balance
of 182,500 shares will be deemed to be "restricted securities"
when issued;
o 98,495 shares issuable upon conversion of 250 shares of series
D preferred stock and 100 shares of series E preferred stock,
all of which will be deemed to be "restricted securities" when
issued; and
o 516,189 shares issuable upon the exercise of options under the
1996 Omnibus Stock Incentive Plan, the 1997 Stock Incentive
Plan and the 1999 Stock Incentive Plan which have not been
granted as of March 29, 2000.
During the terms of the outstanding options and warrants, we must give
the holders the opportunity to profit from a rise in the market price of the
common stock. The existence of the options and warrants may adversely affect the
terms on which we may obtain additional equity financing. Moreover, the holders
are likely to exercise their rights to acquire common stock at a time when we
would otherwise be able to obtain capital with more favorable terms than we
could obtain through the exercise of such securities.
The shares which will be deemed "restricted securities" may be sold
under Rule 144. Rule 144 permits sales of "restricted securities" by any person,
whether or not an affiliate of the issuer, after one year. At that time, sales
can be made subject to the Rule's volume and other limitations and after two
years by non-affiliates without adhering to Rule 144's volume or other
limitations. In general, an "affiliate" is a person with the power to manage and
direct our policies. The SEC has
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stated that, generally, executive officers and directors of an entity are deemed
affiliates of the issuing entity.
Dilution Effects of the Conversion of Outstanding Preferred Stock
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The outstanding series D and series E preferred stocks are convertible
into common stock over time at the discretion of the holders. While the
conversion timing, terms, conditions and formulas vary for each issue, if the
holders of this preferred stock were able to fully convert their shares into
common stock on March 29, 2000 and elected to do so, approximately 98,495
additional shares of common stock would be issued. In addition, you should note
the following:
o The outstanding convertible series D and series E preferred
securities are convertible at a floating rate based on the
historical market price of the common stock. As a result, the
lower the stock price preceding the time the holder converts,
the more common shares the holder will receive upon
conversion.
o To the extent the selling stockholders convert and then sell
their common stock, the common stock price may decrease due to
the additional shares in the market. This could allow the
selling stockholders to convert their convertible preferred
stock into greater amounts of common stock, the sales of which
would further depress the stock price.
o The significant downward pressure on the price of the common
stock as the selling shareholders convert and sell common
stock could encourage short sales by the selling stockholders
or others. This could place further downward pressure on the
price of the common stock.
o The conversion of the convertible preferred stock may result
in substantial dilution to the interests of other holders of
common stock since each holder of convertible preferred may
ultimately convert and sell the full amount issuable upon
conversion. In this regard, even though each selling
stockholder may not convert its preferred stock into more than
4.99% of the then outstanding common stock, this restriction
does not prevent a selling stockholder from converting and
selling some of its holding and then converting the rest of
its holdings. In this way, an individual selling stockholder
could sell more than 4.99% of the outstanding common stock
while never holding more than 4.99% of the outstanding common
stock at a time.
SELLING STOCKHOLDERS
This prospectus covers the potential resale by the selling
stockholders of up to 5,300,000 shares of our common stock.
The following table lists certain information regarding the
selling stockholders' ownership of shares of our common stock as of
March 29, 2000, and as adjusted to reflect the sale of the shares.
Information concerning the selling stockholders, their pledgees, donees
and other non-sale transferees who may become selling stockholders, may
change from time to time. To the extent the selling
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stockholders or any of their representatives advise us of such changes,
we will report those changes in a prospectus supplement to the extent
required. See "Plan of Distribution."
The following list sets forth the stock and options held by officers
and directors of the Company. The inclusion of this list in this registration
statement allows these individuals to sell shares of stock obtained through the
exercise of options at some point in the future. The inclusion of this list does
not mean that these individuals intend to sell shares acquired under the
exercise of options. All of the persons in this list are restricted in their
ability to sell stock by Rule 144 and by the Company's policy and procedures on
insider selling, which generally restricts buying or selling of Company stock to
defined "open window" periods and only with the permission of the Company's
insider trading committee. Further, many of the options listed below are not
currently vested. All such individuals must wait until the options are vested,
the Rule 144 requirements are met, a defined open window period is in effect and
permission of the insider trading committee is granted before shares obtained
under an option exercise may be sold.
<TABLE>
<CAPTION>
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Percentage of
Shares of Common Common Stock Shares of Shares of Common Stock
Stock Owned Prior to Owned Prior to Common Stock Owned
Offering the Offering to be Sold after Offering
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Number Percent
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<S> <C> <C> <C> <C>
Edward G. Newman, 3,168,688 8.5% 441,665 2,727,023 7.3%
President, C.E.O., Chairman of the
Board of Directors
Steven A. Newman, 1,845,431 4.9% 561,750 1,283,681 3.4%
Director, Executive Vice President and
Vice Chairman of the Board of Directors
John F. Moynahan, 332,841 * 331,741 1,100 *
Senior Vice President, Treasurer and
C.F.O.
Kaz Toyosato, 170,000 * 170,000 0 *
Executive Vice President and Director
George Allen, 60,300 * 60,000 300 *
Director
Eugene J. Amobi, 530,000 1.4% 230,000 300,000 *
Director
Keith P. Hicks, 399,597 1.1% 80,000 319,597 *
Director
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Phillip E. Pearce, 130,000 * 130,000 0 *
Director
James J. Ralabate, 168,726 * 140,000 28,726 *
Director
Harry E. Soyster, 149,364 * 130,000 19,364 *
Director
Martin Eric Weisberg, 105,000 * 105,000 0 *
Secretary and Director
Dr. Edwin Vogt, 205,000 * 185,000 20,000 *
Director
William Tauskey, 494,000 1.3% 494,000 0 *
Executive Vice President
*Less than 1%
</TABLE>
DESCRIPTION OF SECURITIES
GENERAL
Our authorized capital stock consists of 80,000,000 shares of common
stock, par value $0.01 per share, and 6,000,000 shares of preferred stock, par
value $0.01 per share. As of March 29, 2000, we have 37,105,681 shares of common
stock, 250 shares of series D preferred stock and 100 shares of series E
preferred stock issued and outstanding. We have reserved 5,239,755 shares of
common stock for issuance upon conversion of the preferred stock and outstanding
options and warrants.
COMMON STOCK
Voting
The holders of our common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders. Our
certificate of incorporation and by-laws do not provide for cumulative voting
rights in the election of directors. Accordingly, holders of a majority of the
shares of common stock entitled to vote in any election of directors may elect
all of the directors standing for election.
Dividends
Holders of common stock are entitled to receive ratably those dividends
as may be declared by our board of directors out of funds legally available for
that purpose.
Rights on Liquidation
In the event of our liquidation, dissolution or winding up, holders of
common stock are entitled to share ratably in the assets remaining after payment
of liabilities.
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Pre-emptive or Redemption Rights
Holders of common stock have no preemptive, conversion or redemption
rights. All of the outstanding shares of common stock are fully-paid and
nonassessable.
PREFERRED STOCK
Our board of directors has the authority to issue up to 6,000,000
shares of preferred stock from time to time in one or more series. Our board has
the authority to establish the number of shares to be included in each series,
and to fix the designations, powers, preferences and rights of the shares of
each series and the applicable qualifications, limitations or restrictions. The
issuance of preferred stock may have the effect of delaying or preventing a
change in control. The issuance of preferred stock could decrease the amount of
earnings and assets available for distribution to the holders of common stock,
if any, or could adversely affect the rights and powers, including voting
rights, of the holders of the common stock. In certain circumstances, the
issuances could have the effect of decreasing the market price of the common
stock.
As of the date of this prospectus, we have not designated any shares of
preferred stock other than the series A, B, C, D and E preferred stock. The
series A, B and C preferred stock have been fully converted. As of March 29,
2000, there are 250 shares of series D preferred stock and 100 shares of series
E preferred stock issued and outstanding.
ANTI-TAKEOVER CONSIDERATIONS.
Our certificate of incorporation authorizes the issuance of up to
6,000,000 shares of $0.01 par value preferred stock. The issuance of preferred
stock with such rights could have the effect of limiting stockholder
participation in certain transactions such as mergers or tender offers and could
discourage or prevent a change in our management. We have no present intention
to issue any additional preferred stock.
We have a classified or staggered board of directors which limits an
outsider's ability to effect a rapid change of control of our board. In
addition, at the 1998 Annual Meeting of Stockholders held on September 24, 1998,
our shareholders approved measures to amend our certificate of incorporation and
by-laws, where applicable, to:
o implement an advance notice procedure for the submission of
director nominations and other business to be considered at
annual meetings of stockholders;
o permit only the President, the Vice Chairman of our board, the
Secretary or our board of directors to call special meetings
of stockholders and to limit the business permitted to be
conducted at such meetings to be brought before the meetings
by or at the direction of our board;
o provide that a member of our board of directors may only be
removed for cause by an affirmative vote of holders of at
least 66 2/3% of the voting power of the then outstanding
shares entitled to vote generally in the election of directors
voting together as a single class;
-12-
<PAGE>
o fix the size of our board of directors at a maximum of twelve
directors, with the authorized number of directors set at ten,
and our board of directors having the sole power and authority
to increase or decrease the number of directors acting by an
affirmative vote of at least a majority of the total number of
authorized directors most recently fixed by our board of
directors;
o provide that any vacancy on the board may be filled for the
unexpired term (or for a new term in the case of an increase
in the size of the board) only by an affirmative vote of at
least a majority of the remaining directors then in office
even if less than a quorum, or by the sole remaining director;
o eliminate stockholder action by written consent;
o require the approval of holders of 80% of the then outstanding
voting stock and/or the approval of 66 2/3% of the directors
for certain corporate transactions; and
o require an affirmative vote of 66 2/3% of the voting stock in
order to amend or repeal any adopted amendments to the
certificate of incorporation and bylaws adopted at the
meeting.
Those measures combined with the ability of our board of directors to
issue "blank check" preferred stock and the staggered terms of the members of
our board of directors, could have the effect of delaying, deterring or
preventing a change in control without any further action by the stockholders.
In addition, the issuance of preferred stock, without stockholder approval, on
such terms as our board may determine, could adversely affect the voting power
of the holders of the common stock, including the loss of voting control to
others.
TRANSFER AGENT AND REGISTRAR
Continental Stock Transfer & Trust Company is our Transfer Agent and
Registrar for our common stock and the redeemable warrants.
PLAN OF DISTRIBUTION
The selling stockholders and their pledgees, donees, transferees and
other subsequent owners, may offer their shares at various times in one or more
of the following transactions:
o on any U.S. securities exchange on which our common stock may
be listed at the time of sale
o in the over-the-counter market
o in privately negotiated transactions
o in connection with short sales; or
o in a combination of any of the above transactions.
-13-
<PAGE>
The selling stockholders may offer their shares of common stock at
prevailing market prices at the time of sale, at prices related to those
prevailing market prices, at negotiated prices or at fixed prices.
The selling stockholders may also sell the shares under Rule 144
instead of under this prospectus, if Rule 144 is available for those sales.
The transactions in the shares covered by this prospectus may be
effected by one or more of the following methods:
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
o purchases by a broker or dealer as principal, and the resale
by that broker or dealer for its account under this
prospectus, including resale to another broker or dealer;
o block trades in which the broker or dealer will attempt to
sell the shares as agent but may position and resell a portion
of the block as principal in order to facilitate the
transaction; or
o negotiated transactions between selling stockholders and
purchasers without a broker or dealer.
The selling stockholders and any broker-dealers or other persons acting
on the behalf of parties that participate in the distribution of the shares may
be deemed to be underwriters. Any commissions or profits they receive on the
resale of the shares may be deemed to be underwriting discounts and commissions
under the Securities Act.
As of the date of this prospectus, we are not aware of any agreement,
arrangement or understanding between any broker or dealer and any of the selling
stockholders with respect to the offer or sale of the shares under this
prospectus.
We have advised the selling stockholders that during the time each is
engaged in distributing shares covered by this prospectus, each must comply with
the requirements of the Securities Act and Rule 10b-5 and Regulation M under the
Exchange Act.
Under those rules and regulations, they:
o may not engage in any stabilization activity in connection
with our securities;
o must furnish each broker which offers common stock covered by
this prospectus with the number of copies of this prospectus
which are required by each broker; and
o may not bid for or purchase any of our securities or attempt
to induce any person to purchase any of our securities other
than as permitted under the Exchange Act.
In the purchase agreements and warrants we executed in connection with
the transactions with the selling stockholders we agreed to indemnify and hold
harmless each selling stockholder against liabilities under the Securities Act,
which may be based upon, among other things, any untrue statement or alleged
untrue statement of a material fact or any omission or alleged omission of a
material fact, unless made or omitted in reliance upon written information
provided to us by that selling stockholder. We have agreed to bear the expenses
incident to the registration of the shares, other than selling discounts and
commissions.
-14-
<PAGE>
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Section 145 of the Delaware General Corporation Law allows companies to
indemnify their directors and officers against expenses, judgments, fines and
amounts paid in settlement under the conditions and limitations described in the
law. Our certificate of incorporation authorizes us to indemnify our officers,
directors and other agent to the fullest extent permitted under Delaware law.
Our certificate of incorporation provides that a director is not
personally liable for monetary damages to us or our stockholders for breach of
his or her fiduciary duties as a director. A director will be held liable for a
breach of his or her duty of loyalty to us or our stockholders, his or her
intentional misconduct or willful violation of law, actions or in actions not in
good faith, an unlawful stock purchase or payment of a dividend under Delaware
law, or transactions from which the director derives an improper personal
benefit. This limitation of liability does not affect the availability of
equitable remedies against the director including injunctive relief or
rescission.
We have purchased a directors and officers liability and reimbursement
policy that covers liabilities of our directors and officers arising out of
claims based upon acts or omissions in their capacities as directors and
officers.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
LEGAL MATTERS
Parker Chapin LLP, New York, New York will pass upon the validity of the
securities offered hereby. Martin Eric Weisberg, Esq., a member of the firm, is
our Secretary and one of our Directors.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-KSB for the year ended December 31,
1999, have been so incorporated in reliance on the report (which contains an
explanatory paragraph relating to our ability to continue as a going concern as
described in Note 1 to the consolidated financial statements) of Grant Thornton
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
RECENT DEVELOPMENTS
On March 30, 2000 the Company announced that it had executed a
definitive merger agreement with Selfware Inc., a leading provider of enterprise
management services and software for projects, maintenance and work flow.
Selfware is a privately-held company that was founded in 1983 and has over 30
full-time employees at its headquarters in Vienna, Virginia and an office in
Seattle, Washington. For the twelve months ended December 31, 1999, revenues for
Selfware were approximately $5.0 million, gross profit was approximately $2.0
million and net income was approximately $0.1 million. Under the terms of the
definitive agreement, the value of Selfware is determined by a formula with a
maximum valuation of approximately $8.1 million. The acquisition of Selfware by
Xybernaut will be effected by exchanging shares of Selfware for shares of
Xybernaut based on a ratio determined by the 30-day average closing price for
Xybernaut's common stock prior to closing. The approval of Selfware shareholders
for the acquisition is expected by April 7, 2000. The transaction is intended to
be accounted for as a pooling of interests. A fairness opinion for the
acquisition was provided to Xybernaut by a leading investment bank. Restated
financial statements to give effect to this proposed transaction have not been
presented herein because the transaction does not meet the significance tests
promulgated by Regulation S-X of the SEC.
-15-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
======================================================== ===============================================
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON
OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR TO 5,300,000
REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. SHARES OF COMMON STOCK
YOU MUST NOT RELY ON ANY UNAUTHORIZED INFORMATION. THIS
PROSPECTUS DOES NOT OFFER TO SELL OR BUY ANY SHARES IN ANY
JURISDICTION WHERE IT IS UNLAWFUL. THE INFORMATION IN THIS
PROSPECTUS IS CURRENT AS OF MARCH 31, 2000.
XYBERNAUT CORPORATION
TABLE OF CONTENTS
Page
Risk Factors.........................................2
Where You Can Find More
Information About Us.........................7
Use of Proceeds......................................8
Dilution.............................................8
Selling Stockholders ................................9
Description of Securities...........................11
Plan of Distribution ...............................13
Indemnification for Securities
Act Liabilities.............................15 -------------
Legal Matters.......................................15 PROSPECTUS
Experts ............................................15 -------------
Recent Developments.................................15
March 31, 2000
</TABLE>
<PAGE>
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Disclosed in Prospectus under "Where You Can Find More
Information About Us."
ITEM 4. DESCRIPTION OF SECURITIES.
Disclosed in Prospectus under same title.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Disclosed in Prospectus under same title.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
<PAGE>
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
5.1 Opinion of Parker Chapin LLP, as to the legality of the common stock being
offered. (1)
23.1 Consent of Parker Chapin LLP.
23.2 Consent of Grant Thornton LLP.
24.1 Power of attorney of certain officers and directors of the registrant. (1)
99.1 1996 Omnibus Stock Incentive Plan. (1)
99.2 1997 Stock Incentive Plan. (1)
99.3 1999 Stock Incentive Plan. (1)
</TABLE>
- ----------
(1) Included as exhibits with the original filing of this Form S-8 as filed
with the Securities and Exchange Commission on January 12, 2000, SEC
File No. 333-94463, and incorporated herein by reference.
<PAGE>
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in this registration statement,
notwithstanding the foregoing, any increase or
decrease in volume of securities offered if the total
dollar value of securities offered would not exceed
that which was registered) and any deviation from the
low or high end of the estimated maximum offering
range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price
represent no more than 20 percent change in the
maximum aggregate offering price set forth in
"Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
this registration statement or any material change to
such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
<PAGE>
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions described in Item 6
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing a post-effective amendment to Form S-8 and
has duly caused this post-effective amendment to Form S-8 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Fairfax,
the Commonwealth of Virginia on March 31, 2000.
XYBERNAUT CORPORATION
By: /s/ Edward G. Newman
-----------------------------
Edward G. Newman
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities indicated on the 31st day of March, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
By: /s/ Edward G. Newman Chairman of the Board, President and Chief
------------------------------ Executive Officer
Edward G. Newman
By: /s/ Martin Eric Weisbert Secretary and Director
----------------------------
Martin Eric Weisberg
By: /s/ Harry E. Soyster Director
----------------------------
Lt. Gen. Harry E. Soyster
By: /s/ James J. Ralabate Director
----------------------------
James J. Ralabate
By: /s/ Keith P. Director
----------------------------
Keith P. Hicks
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
By: /s/ Steven A. Newman Director
----------------------------
Steven A. Newman
By: /s/ Phillip E. Pearce Director
----------------------------
Phillip E. Pearce
By: /s/ Eugene J. Amobi Director
----------------------------
Eugene J. Amobi
By: /s/ Kaz Toyosato Executive Vice President and Director
----------------------------
Kaz Toyosato
By: /s/ Edwin Vogt Director
----------------------------
Edwin Vogt
By: /s/ George Allen Director
----------------------------
George Allen
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
<S> <C>
5.1 Opinion of Parker Chapin LLP, as to the legality of the common stock being
offered. (2)
23.1 Consent of Parker Chapin LLP.
23.2 Consent of Grant Thornton LLP.
24.1 Power of attorney of certain officers and directors of the registrant. (1)
99.1 1996 Omnibus Stock Incentive Plan. (1)
99.2 1997 Stock Incentive Plan. (1)
99.3 1999 Stock Incentive Plan. (1)
</TABLE>
- ----------
(1) Included as exhibits with the original filing of this Form S-8 as filed
with the Securities and Exchange Commission on January 12, 2000, SEC
File No. 333-94463, and incorporated herein by reference.
EXHIBIT 23.1
------------
CONSENT OF ATTORNEYS
[Letterhead of Parker Chapin LLP]
March 31, 2000
Xybernaut Corporation
12701 Fair Lakes Circle
Fairfax, Virginia 22033
Dear Sirs:
We have acted as counsel to Xybernaut Corporation, a Delaware
corporation (the "Company"), in connection with its filing of a post-effective
amendment to its registration statement on Form S-8, Registration No. 333-94463
(the "Registration Statement") being filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, relating to an offering
of an aggregate of 5,300,000 shares of common stock, par value $.01 per share
(the "Common Stock").
We hereby consent to the filing of this consent as an exhibit to the
Registration Statement and to the reference made to us under the caption "Legal
Matters" in the prospectus constituting part of the Registration Statement.
Very truly yours,
/s/ Parker Chapin LLP
---------------------
PARKER CHAPIN LLP
Exhibit 23.2
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We have issued our report dated February 25, 2000 accompanying the consolidated
financial statements of Xybernaut Corporation appearing in the Annual Report on
Form 10-KSB for the year ended December 31, 1999 which are incorporated by
reference in this Post-Effective Amendment No. 1 to Form S-8 Registration
Statement. We consent to the incorporation by reference in the Registration
Statement of the aforementioned reports and to the use of our name as it appears
under the caption "Experts".
/s/ Grant Thornton LLP
GRANT THORNTON LLP
Vienna, Virginia
March 31, 2000
