In addition, its auditor Grant Thornton resigned after concluding that it could not rely on management representations.
With the company fighting delisting from Nasdaq, directors plan to retain financial experts to assist in maximizing shareholder value. This phrase usually means a company is looking for a buyer.
With the share price at only $0.25, valuing Xbernaut at $44.8m, the company’s patent portfolio will be the main attraction. In the most recent figures available, for the first nine months to September 30, 2004, the company made a net loss of $12.5m on revenue of $11m.
Xybernaut directors allege that its former CEO Newman improperly used company funds for personal expenses, and hired members of his own family in violation of its anti-nepotism policy. They claim major transactions were entered into by certain members of senior management in violation of internal controls. The Newman brothers, who refused an invitation to resign from the board, are also accused of impeding an investigation by the audit committee.
