Early History
The company was originally founded in 1990 as Computer Products & Services Incorporated (CPSI) by Edward G. Newman. In 1994, Newman's brother, Steven A. Newman became the president of the company. The company had is Initial public offering in 1996 under the new name, Xybernaut, .
It subsequently posted 33 consecutive quarterly losses, despite repeated promises by the Newmans that profitability was right around the corner.
In mid-1998, former Virginia governor George Allen joined the company's board of directors. He remained on the board until December 2000, resigning after he was elected a U.S. Senator the month before. In 1998 and 1999, McGuire Woods LLP, the law firm that Allen was a partner of, billed $315,925 to Xybernaut for legal work. Allen remained on the Xybernaut board until December 2000. He was granted 110,000 options of company stock that, at their peak, were worth $1.5 million, but he never exercised those options, which expired 90 days after he left the board.
In September 1999, the company's board dismissed its accounting firm, PricewaterhouseCoopers, which had issued a report with a "going concern" paragraph that questioned the company’s financial health. This was just one of many signs that the Newman brothers discouraged transparency in company accounting practices.
Read more about this topic: Xybernaut
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