Xybernaut

Xybernaut Corporation was a United States technology company focused on wearable mobile computing hardware, software, and related services. It began in 1990 as Computer Products & Services Incorporated, or CPSI, under the leadership of Edward G. Newman. Edward Newman's brother, Steven A. Newman, became president in 1994. The company adopted the Xybernaut name before its initial public offering in 1996 and presented itself as an early specialist in hands-free, mobile computing. The company's best-known product was the Poma wearable computer, introduced in 2002. Designed to be worn by a user rather than carried as a conventional laptop or tablet, the system attracted early attention as an example of practical wearable computing. Xybernaut also developed the MA-V wearable computer and the Atigo tablet PC. Its products were intended for situations in which workers needed access to information while keeping their hands available, including retail, hospitality, government, military, and other field-oriented environments. The company reported sales or deployments involving customers such as Tesco and the U.S. Army. Xybernaut's commercial development was undermined by technical and financial problems. Its wearable products were criticized as relatively bulky, slow, and difficult to use, while battery limitations reduced their practical value. The Poma in particular became associated with the gap between the promise of wearable computing and the limitations of early-2000s hardware. The company also recorded a long run of quarterly losses and repeatedly failed to reach sustainable profitability. Corporate-governance problems intensified in the early 2000s. In 2005, Edward and Steven Newman were subpoenaed by the Securities and Exchange Commission in connection with stock-sale issues. An internal audit described allegations involving personal expenses, family hiring, undisclosed transactions, and interference with internal audits. Both brothers resigned in April 2005, and Perry L. Nolen, previously associated with the company's services subsidiary, became president and chief executive officer. Xybernaut filed for bankruptcy reorganization in July 2005 and emerged from bankruptcy protection in January 2007. The reorganization did not resolve the company's wider legal and financial difficulties. In October 2007, federal prosecutors indicted the Newman brothers, former general counsel Martin Weisberg, and others in connection with alleged securities fraud and money laundering. The allegations included the issuance of large quantities of company stock at below-market prices and secret payments involving businesspeople in Israel. Subsequent proceedings continued for years. In 2010, Zev Saltsman reportedly resolved parallel criminal and civil allegations through a guilty plea and settlement arrangement that included forfeiture, with part of the money designated for former Xybernaut shareholders. In January 2017, a final judgment against Edward G. Newman imposed a permanent injunction concerning specified antifraud provisions of federal securities law and barred him from serving as an officer or director of a public company. By 2017, Xybernaut was described as having collapsed under the combined weight of financial scandal, regulatory action, and criminal proceedings. Its history is notable both for its early attempt to commercialize wearable computers and for the governance failures that accompanied its unsuccessful transition from a speculative public technology company to a sustainable operating business.

Xybernaut originated in 1990 as Computer Products & Services Incorporated, commonly known as CPSI. Edward G. Newman founded the company, and his brother Steven A. Newman became president in 1994. The business was established around the development of mobile computing products that could be used while a worker's hands remained free. Before smartphones and modern wearable ecosystems became widespread, this represented a specialized and technically ambitious direction for enterprise computing. The company adopted the Xybernaut name and completed an initial public offering in 1996. Its public-market period was marked by persistent difficulty in converting technological publicity into profitable operations. According to the company's documented history, it recorded 33 consecutive quarterly losses while management continued to indicate that profitability was approaching. In 1998, former Virginia governor George Allen joined the board of directors. He left the board in December 2000 after being elected to the U.S. Senate. During this period, the law firm with which Allen was associated also provided legal services to Xybernaut, creating an additional governance issue discussed in accounts of the company. Xybernaut's principal commercial proposition was wearable mobile computing. Its products included the Poma, the MA-V wearable computer, and the Atigo tablet PC. The Poma, launched in 2002, generated early attention because it embodied a future-oriented vision of computers worn on the body. In practice, reviewers and commentators criticized the product's relatively slow operation, bulky form factor, and battery limitations. The contrast between the concept's promise and the product's usability contributed to its later reputation as an example of an early wearable-technology failure. Xybernaut nevertheless obtained business in retail and hospitality and supplied technology to government and military users, including the U.S. Army. Tesco was also identified as a customer or commercial user. The company's financial and governance problems became more serious in the early 2000s. In 1999, the board dismissed PricewaterhouseCoopers after the accounting firm issued a report containing a going-concern paragraph that questioned Xybernaut's financial condition. In February 2005, Edward and Steven Newman were subpoenaed by the Securities and Exchange Commission concerning stock sales. An internal audit alleged that the brothers had charged personal expenses to the company, hired family members without appropriate SEC disclosure, failed to inform the board about significant transactions, and interfered with internal audit work. They were forced to resign in April 2005. The board then appointed Perry L. Nolen, who had previously led the company's services subsidiary, as president and CEO. Xybernaut filed for bankruptcy reorganization in July 2005. Its business still had identifiable technical assets and customer relationships, but analysts cited the limitations of its hardware, including size and battery performance, as obstacles to expansion. The company emerged from bankruptcy protection in January 2007, but the reorganization did not end its legal exposure. In October 2007, Edward and Steven Newman and former general counsel Martin Weisberg were indicted in federal court in Brooklyn, New York, alongside other individuals. The indictment alleged that the defendants caused Xybernaut to issue hundreds of millions of shares below market value to two Israeli businessmen, who allegedly provided secret cash kickbacks. Zev Saltsman and Menachem Eiten were also indicted and were awaiting extradition according to the account. In 2010, Saltsman reportedly resolved parallel civil and criminal allegations through a guilty plea and settlement arrangement. The agreement included forfeiture, with a portion designated for former Xybernaut shareholders and additional funds intended for continued litigation. A final judgment against Edward G. Newman was imposed on January 25, 2017. It included a permanent injunction against future violations of specified antifraud provisions of federal securities laws and a bar on serving as an officer or director of a public company. By 2017, Xybernaut had collapsed under the combined pressure of weak commercial performance, bankruptcy, financial scandal, and regulatory and criminal proceedings. The company remains historically significant as an early attempt to establish wearable computing as a commercial enterprise, but it did not survive as an operating brand.

• 2017

  Final judgment against Edward G. Newman

  [1]Xybernauten.wikipedia.org

  A federal securities-law judgment imposed an injunction and a public-company officer and director bar against the founder.

• 2007

  Emergence from bankruptcy and federal indictments

  [1]Xybernauten.wikipedia.org

  Xybernaut emerged from bankruptcy protection in January; in October, federal prosecutors indicted former executives and associates in a securities-fraud and money-laundering case.

• 2005

  Management resignations and bankruptcy filing

  [1]Xybernauten.wikipedia.org

  The Newman brothers resigned following regulatory and audit scrutiny, and Xybernaut filed for bankruptcy reorganization later that year.

• 2002

  Poma wearable computer introduced

  [1]Xybernauten.wikipedia.org

  Xybernaut launched its best-known wearable computer, attracting early attention to the company's approach to hands-free computing.

• 1999

  Accounting-firm change amid going-concern concerns

  [1]Xybernauten.wikipedia.org

  The board dismissed PricewaterhouseCoopers after a report raised questions about the company's financial health.

• 1996

  Initial public offering under the Xybernaut name

  [1]Xybernauten.wikipedia.org

  The company adopted the Xybernaut identity and completed its IPO.

• 1994

  Steven A. Newman becomes president

  [1]Xybernauten.wikipedia.org

  Edward Newman's brother joined the company as president.

• 1990

  Company founded as Computer Products & Services Incorporated

  [1]Xybernauten.wikipedia.org

  Edward G. Newman founded the business that later became Xybernaut.

An early specialist in wearable and hands-free mobile computing for enterprise, government, military, retail, hospitality, and field-service users.

• Wearable computer · 2002

  Poma

  Introduced in 2002, the Poma was Xybernaut's most visible attempt to bring wearable mobile computing to market. It was designed for hands-free use and attracted attention as an early body-worn computer. Its commercial reception was limited by criticisms of slow performance, an awkward and bulky appearance, and battery constraints. The product later became associated with the technological limitations of first-generation wearable computers.

• Wearable computer

  MA-V

  The MA-V was part of Xybernaut's line of wearable mobile-computing systems. It was aimed at users who needed access to computing functions while working in the field or performing tasks that made conventional laptop use inconvenient. Available documentation identifies it as a core Xybernaut product, but does not provide enough detail to establish a complete specification or broad commercial history.

• Tablet PC

  Atigo

  The Atigo was Xybernaut's tablet-PC offering and extended the company's mobile-computing portfolio beyond body-worn systems. It was intended for portable professional use and complemented the company's enterprise software and services activities. The available reference material confirms the product line but does not establish a precise launch date or detailed product specifications.

• 2017

  Securities-law judgment against Edward G. Newman

  A final judgment permanently enjoined Newman from specified antifraud violations and barred him from serving as an officer or director of a public company.

  Source

• 2010

  Settlement involving Zev Saltsman

  Zev Saltsman reportedly resolved parallel allegations through a guilty plea and settlement that included forfeiture and an arrangement to distribute part of the funds to former shareholders.

  Source

• 2007

  Federal securities-fraud and money-laundering indictment

  Former executives and associates were indicted over allegations that Xybernaut shares were issued below market value in exchange for secret cash kickbacks.

  Source

• 2005

  SEC investigation and internal-audit allegations

  The Newman brothers were subpoenaed by the SEC over stock-sale issues. An internal audit alleged personal expense charges, undisclosed family hiring, unreported transactions, and interference with internal audits. Both brothers resigned in April 2005.

  Source

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• 2005

  Bankruptcy reorganizationStrategy

  Background

  Persistent losses, product limitations, and escalating governance scrutiny weakened the company's ability to operate as a public technology business.

  Action taken

  Xybernaut filed for bankruptcy protection and reorganization in July 2005.

  Aftermath

  The company emerged from bankruptcy in January 2007, but continuing criminal and regulatory proceedings contributed to its later collapse.

  Source

• 2002

  Launch of the Poma wearable computerProduct launch

  Background

  Xybernaut sought to turn its wearable-computing concept into a recognizable commercial product.

  Action taken

  The company introduced the Poma as a body-worn mobile computer.

  Aftermath

  The product generated initial interest but was later criticized for slowness, bulk, appearance, and battery limitations.

  Source

• 1996

  Rebrand and public offeringStrategy

  Background

  The company moved from its original CPSI identity toward a specialized wearable-computing brand and public-company structure.

  Action taken

  It adopted the Xybernaut name and completed an initial public offering.

  Aftermath

  The public-company period was followed by sustained losses and repeated difficulty achieving profitability.

  Source

1. 1Xybernauten.wikipedia.org