Document/Exhibit Description Pages Size
1: 8-K Form 8-K for Xybernaut Corporation 9 33K
2: EX-2 Form of Agreement and Plan of Merger 88 383K
3: EX-4 Form of Registration Rights Agreement 16 64K
4: EX-99.1 Press Release Dated March 30, 2000 3 13K
5: EX-99.2 Press Release Dated April 14, 2000 2 13K
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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): APRIL 7, 2000
XYBERNAUT CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE 0-15086 54-1799851
(State or other (Commission (IRS Employer
jurisdiction of file number) Identification No.)
incorporation)
12701 FAIR LAKES CIRCLE, FAIRFAX, VIRGINIA 22033
(Address of principal executive offices)
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 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 7, 2000, the transactions contemplated by the Agreement and
Plan of Merger (the "Merger Agreement") among Xybernaut Corporation, a Delaware
corporation ("Xybernaut"), Selfware Acquisition Corporation, a Virginia
corporation and a wholly owned subsidiary of Xybernaut ("Subsidiary"), Selfware,
Inc., a Virginia corporation ("Selfware"), and certain shareholders of Selfware
were consummated.
Pursuant to the Merger Agreement, among other things, Subsidiary merged
with and into Selfware (the "Merger"), with Selfware continuing as the surviving
corporation and a wholly-owned subsidiary of Xybernaut. As a result of the
Merger, the holders of each share of Selfware common stock, par value $0.005 per
share (the "Selfware Shares"), outstanding at the effective time of the Merger
(the "Selfware Stockholders") received 0.1323 shares of Xybernaut's common
stock, par value $0.01 per share (the "Common Stock"), and cash in lieu of
fractional shares. At the effective time of the Merger, 3,245,307 Selfware
Shares were issued and outstanding.
The shares of Common Stock to be issued to the Selfware Stockholders
and payment for fractional share interest in Common Stock was, or will be, made
as follows: (i) 60% of the Common Stock which each Selfware Stockholder is
entitled to receive, rounded to the nearest whole share, was issued on April 7,
2000 (the "Effective Date") and (ii) the remaining 40% of the Common Stock which
each Selfware Stockholder is entitled to receive will be issued on a deferred
basis, with the date of issuance of such shares of Common Stock being the 90th
day after the Effective Date.
The terms of the Merger were determined in arms-length negotiations
between Xybernaut and Selfware and a fairness opinion was provided to
Xybernaut's board of directors by Merrill Lynch. This opinion covered only the
fairness of the exchange ratio for the acquisition from a financial point of
view and did not address the merits of the decision to merge with Selfware or
the financial impact of such merger. Mr. Jacques Rebibo, chairman and CEO of
Selfware, served on Xybernaut's board of directors from January 1996 to August
1997.
Concurrently with the execution and delivery of the Merger Agreement,
Xybernaut and the Selfware Stockholders entered into a registration rights
agreement (the "Registration Rights Agreement"). Under the terms of the
Registration Rights Agreement, Xybernaut has agreed to use its best efforts to
file within 90 days after the Effective Date a registration statement with the
Securities and Exchange Commission for the registration of 25% of the Common
Stock issued pursuant to the Merger (the "Registrable Securities") and any
shares of Common Stock issuable upon any stock split, stock dividend,
recapitalization or similar event with respect to such Registrable Securities.
The description of the Merger Agreement and the Registration Rights
Agreement in Item 2 of this Current Report on Form 8-K is qualified in its
entirety by reference to the actual Merger Agreement and Registration Rights
Agreement, respectively, which are attached hereto as exhibits and incorporated
herein by reference.
Page 2
Prior to consummation of the Merger, neither Xybernaut nor Subsidiary
beneficially owned, directly or indirectly, any voting securities of Selfware,
apart from any beneficial ownership interest they may have had from entering
into the Merger Agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma combined financial statements give
effect to the Merger of Xybernaut and Selfware, on a pooling-of-interests basis.
The unaudited pro forma combined financial statements are based on the
respective historical financial statements and the notes thereto of Xybernaut
and Selfware, which are incorporated by reference in this Current Report on Form
8-K. The unaudited pro forma combined balance sheet assumes that the Merger took
place on December 31, 1999 and combines Xybernaut's December 31, 1999 audited
consolidated balance sheet with Selfware's December 31, 1999 audited balance
sheet. The unaudited pro forma combined statement of operations assumes that the
Merger took place as of January 1, 1999 and combines Xybernaut's audited
consolidated statement of operations for the year ended December 31, 1999 with
Selfware's audited statement of operations for the year ended December 31, 1999.
The unaudited pro forma combined financial statements are based on the
estimates and assumptions set forth in the notes to such statements. The pro
forma adjustments made in connection with the development of the pro forma
information are preliminary and have been made solely for purposes of developing
such pro forma information for illustrative purposes necessary to comply with
the disclosure requirements of the Securities and Exchange Commission. The
unaudited pro forma combined financial statements do not purport to be
indicative of the results of operations for future periods or the combined
financial position or the results that actually would have been realized had the
entities been a single entity during these periods.
Xybernaut and Selfware estimate that they will incur direct transaction
costs of approximately $350,000 associated with the Merger which will be charged
to operations in the second quarter of 2000, which is the quarter in which the
Merger was consummated. There can be no assurance that Xybernaut and Selfware
will not incur additional charges in subsequent quarters to reflect costs
associated with the Merger.
Page 3
Xybernaut Corporation and Selfware, Inc.
Unaudited Pro Forma Combined Balance Sheet
As of December 31, 1999
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Pro Forma
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Xybernaut Selfware Adjustments * Total
--------- -------- ------------- -----
Current assets:
Cash and cash equivalents $ 2,031,143 $ 94,855 $ - $ 2,125,998
Accounts receivable, net 706,850 997,460 - 1,704,310
Inventory 6,060,455 20,995 - 6,081,450
Prepaid and other 556,042 79,246 - 635,288
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Total current assets 9,354,490 1,192,556 - 10,547,046
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Investments - 47,000 - 47,000
Property and equipment, net 695,440 105,870 - 801,310
Other assets:
Software development costs, net - 146,765 - 146,765
Patent costs, net 703,174 - - 703,174
Tooling costs, net 286,456 - - 286,456
Other 283,864 109,379 - 393,243
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Total other assets 1,273,494 256,144 - 1,529,638
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Total assets $ 11,323,424 $1,601,570 $ - $ 12,924,994
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Current liabilities:
Notes and loans payable $ 1,034,254 $ 385,704 $ - $ 1,419,958
Accounts payable, accrued expenses and other 6,886,021 526,932 350,000 7,762,953
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Total current liabilities 7,920,275 912,636 350,000 9,182,911
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Stockholders' equity:
Preferred stock
3,996,588 - - 3,996,588
Common stock 299,444 14,780 - 314,224
Additional paid-in capital 47,188,704 547,233 - 47,735,937
Accumulated other comprehensive income 58,541 37,130 - 95,671
Accumulated (deficit) earnings (48,140,128) 89,791 (350,000) (48,400,337)
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Total stockholders' equity 3,403,149 688,934 (350,000) 3,742,083
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Total liabilities and stockholders' equity $ 11,323,424 $1,601,570 $ - $ 12,924,994
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* See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.
Page 4
Xybernaut Corporation and Selfware, Inc.
Unaudited Pro Forma Combined Statement of Operations
For the Year Ended December 31, 1999
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Pro Forma
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Xybernaut Selfware Adjustments * Total
--------- -------- ------------- -----
Revenues:
Product sales $ 3,301,899 $ - $ - $ 3,301,899
Consulting, software and other 5,012,502
38,373 - 5,050,875
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Total revenues 3,340,272 5,012,502 8,352,774
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Cost of sales 2,854,456 3,028,816 - 5,883,272
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Gross margin 485,816 1,983,686 - 2,469,502
Operating expenses 17,310,485 1,877,998 - 19,188,483
Acquisition related charges - - 350,000 350,000
Other income(expenses) 78,095 (54,829) - 23,266
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Income(loss) before income taxes (16,746,574) 50,859 (350,000) (17,045,715)
Income tax benefit (provision) (29,223) 35,964 - 6,741
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Net income (loss) (16,775,797) 86,823 (350,000) (17,038,974)
Provisions for preferred stock (1,819,090) - - (1,819,090)
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Net income (loss) to common shareholders $(18,594,887) $ 86,823 $ (350,000) $(18,858,064)
==================================================================
Weighted average common shares outstanding 23,842,403 2,947,288 (2,517,961) 24,271,730
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Income (loss) per common share $ (0.78) $ 0.03 $ (0.78)
================================ =================
* See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.
Page 5
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
NOTE 1. PERIODS COMBINED
The Xybernaut consolidated balance sheet as of December 31, 1999 has
been combined with the Selfware balance sheet as of December 31, 1999.
The Xybernaut consolidated statement of operations for the year ended
December 31, 1999 has been combined with the Selfware statement of operations
for the year ended December 31, 1999.
NOTE 2. MERGER COSTS
Xybernaut and Selfware estimate they will incur direct transaction
costs of approximately $350,000 associated with the Merger, consisting of fees
for investment banking, legal, accounting, and other related charges.
NOTE 3. PRO FORMA NET LOSS PER SHARE
The unaudited pro forma combined net loss per common share is based
upon the pro forma weighted average number of shares of common stock of the
combined Xybernaut and Selfware entity outstanding during 1999, including the
429,327 shares of Xybernaut Common Stock issued in exchange for the outstanding
common stock of Selfware. Pursuant to the terms of the Merger agreement, the
shares of Xybernaut Common Stock were issued for an effective price of $18.97
per share based on the average market price of Xybernaut's stock during the
thirty calendar days immediately preceding the date of the Merger.
Page 6
(c) Exhibits
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Exhibit Number Description
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2 Form of Agreement and Plan of Merger by and among
Xybernaut, Selfware, Subsidiary and certain shareholders of
Selfware.
4 Form of Registration Rights Agreement by and among
Xybernaut and Selfware Stockholders.
99.1 Press release dated March 30, 2000 issued by Xybernaut.
99.2 Press release dated April 14, 2000 issued by Xybernaut.
Page 7
SIGNATURE
Pursuant to the requirements of Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: April 18, 2000
XYBERNAUT CORPORATION
BY: /s/ Edward G. Newman
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EDWARD G. NEWMAN
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Page 8
EXHIBIT INDEX
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EXHIBIT NUMBER DESCRIPTION
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2 Form of Agreement and Plan of Merger by and among Xybernaut, Selfware, Subsidiary and
certain shareholders of Selfware
4 Form of Registration Rights Agreement by and among Xybernaut and Selfware Stockholders.
99.1 Press release dated March 30, 2000 issued by Xybernaut.
99.2 Press release dated April 14, 2000 issued by Xybernaut.
Page 9
Dates Referenced Herein and Documents Incorporated by Reference
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