Free Declaration - District Court of Delaware - Delaware

Case1:05-cv—00242-SLR Document 9-2 Filed 06/14/2005 Page10f3
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Case 1 :05-cv—00242-SLR Document 9-2 Filed 06/14/2005 Page 2 of 3
Shepherd, Finkelman, Miller & Shah, LLC Files Class Action Lawsuit Against Xybemaut". Page 1 of 2
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Press Release Source: Shepherd. Finkelman. Miller & Shah, LLC
Shepherd, Finkelman, Miller 8. Shah, LLC Files Class Action
Lawsuit Against Xybernaut Corporation -- XY BRE
Frlday April 15, 12:23 pm ET
HARTFORD. Conn., April 15 /PRNewswire-FirstCall! - Shepherd. Finkelman. Miller & Shah, LLC
( l1ttp;L!ttma.it,c1assac1ionrz>.unseLcom: e-mail; [email protected] ), a law firm with offices in Connecticut.
` Pennsylvania, New Jersey and Florida, announces that it has filed a lawsuit seeking class action status in the United
States District Court for the District of Delaware on behalf of all persons (the ”CIass") who purchased the securities of
Xybernaut Corporation (Nasdaq: KBE - News; "Xybemaut" or the 'Company") during the period March 27, 2003
and April 8. 2005 (the "Class Period"). A copy of the Complaint may be obtained from the Court, or you can call our
offices toll free at either 866/540-5505 or 877/891-9880 to speak with an attorney regarding this matter and we will
send you a copy of the Complaint.
The Complaint charges Xybemaut. Edward G. Newman, Steven A. Newman, M.D.. and Thomas D. Davis with
violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. More specifically, the Complaint alleges that the Company omitted or misrepresented material facts
· about its financial condition, business prospects. revenue expectations and intemal controls during the Class Period.
On March 14. 2005, Xybemaut announced that it was seeking an extension of time within which to file its annual
report with the Securities and Exchange Commission ("SEC”). On March 31, 2005. after the close of trading,
Xybernaut belatedly revealed that it was in dire financial and regulatory straits. The Company Issued a press release
that day, which stated. in part: ”Xybemaut Corporation (Nasdaq: 2(IBB - News) announced today that the tiling of its
Form 10-K and other related reports for the year ended December 31, 2004. anticipated to occur today, will be further
delayed, pending completion of an intemal investigation undertaken by its Audit Committee." The press release
stated that independent counsel had been engaged to assist in an internal investigation of. "among other things,
concerns brought to the Audit Committee's attention relating to the internal control environment of the Company, the
propriety of certain expenditures and the documentation of certain expenses of the Chairman and CEO of the
Company, the Company's transparency and public disclosure process, the accuracy of certain public disclosures,
managemenfs conduct in response to the investigation, and the propriety of certain major transactions." The press
release further stated that the Company had received a subpoena from the Northeast Regional Office of the SEC
seeking "documents and other information relating to the sale of Company securities by any person identified as a
selling shareholder in any Company registration statement or other public filing."
On this news, the Company's share price, which at one time had traded as high as $2.23 per share due to the
Company's positive press releases and false and misleading representations during the Class Period, closed at
$0.42 per share on March 31. 2005, and then dropped further by almost fifty percent (50%), to close at $0.24 per
share on April 1, 2005.
On April 8, 2005. after the close of trading. Xybernaut announced in a press release that ”investors and others should
refrain from relying upon the Company's historical financial statements". for the years ended December 31, 2002 and
2003. and interim quarterly reports for the quarters ended March 31, 2003. June 30, 2003, September 30. 2003,
March 31, 2004. June 30, 2004 and September 30, 2004.” On the heels of this shocking news, trading was again
heavy and the Company's price per share fell to $0.13 per share.
lf you purchased Qtybemaut securities between March 27, 2003 and April 8. 2005 (inclusive), you may qualify to
serve as lead plaintiff on behalf ofthe Class. All motions for appointment as lead plaintiff must be filed with the Court
http://biz.yahoo.com/pmews/050415/t1f009.ht1111?.v=5&p1·inte1=1 6/1 3/2005

Case 1 :05-cv—00242-SLR Document 9-2 Filed 06/14/2005 Page 3 of 3 _
Shepherd, Finkelman, Miller & Shah, LLC Files Class Action Lawsuit Against Xybemaut". Page 2 of 2
no later than June 14, 2005. Any member of the proposed Class may move the Court to serve as lead plaintiff in this
action through counsel of his or her choice, or may remain an absent class member. There are certain legal
requirements to serve as lead plaintiff, which we would be pleased to discuss with you. Please contact James E.
Miller. Esquire (866/540-5505; lmllLei:@d ). or James C. Shah, Esquire (877/891-9880;
jsttat1@;,;LassactioncounseI,com ), if you would like to discuss this action or have any question regarding this notice or
your rights.
Shepherd, Flnkelman, Miller & Shah, LLC ( http_;[[www.cla_s_sactioncou_nsel,;;ot1; ) is a national law firm that represents
investors, including institutions and individuals, as well as consumers, in class action and other complex litigation,
and maintains oftices In Connecticut, Florida, New Jersey and Pennsylvania. The tirm's attomeys have appeared ln
matters on behalf of our clients throughout the United States and have been appointed lead counsel in a number of
class actions and corporate governance matters.
Source: Shepherd, Flnkelman, Miller & Shah, LLC

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