- The Washington Times - Wednesday, June 13, 2001

Xybernaut Corp. is donating six of its wearable computers for a research mission to an Arctic crater that has similar conditions to the planet Mars.

The company will not profit from the donation, but there is a "good chance" that NASA, one of the project sponsors, will buy the equipment later, said John Moynahan, Xybernaut's senior vice president.

The Fairfax company has been designing, making and perfecting computers that can be worn on the body since the early 1990s. But although industry analysts predict the market for the devices will grow in the future, becoming a profitable business has been a daunting quest for Xybernaut.

The company has had quarterly sales of about $2 million for the past year, but at the same time its losses have been growing.

Although the donation will produce no immediate cash, it should increase the flailing company's visibility.

"The main impact for the company is really the increased visibility on how wearables can be used," he said. "Just as wearables are proven in being valuable in a variety of maintenance tasks, they will prove to be even more invaluable in a space exploration environment by allowing a remote team to be fully intra- and interconnected with experts not only on the planet but on the Earth."

International Data Corp., a technology research firm in Framingham, Mass., predicts the market for wearables will reach $600 million by 2003, driven by demand in the industrial, manufacturing, military, government and medical sectors.

But three weeks after Xybernaut announced its new $4,000 model at the sixth annual International Conference on Wearable Computing, the company has received no new orders.

The devices weigh less than a pound and have the capabilities of a personal computer. They are made up of a computer unit, a head-mounted display and a separate battery, and work mostly through speech recognition. Wearables can be worn inside or underneath a space suit, Mr. Moynahan said.

The devices will be used starting June 23 on the Haughton-Mars Project, which is studying a 23-million-year-old crater on Devon Island on Canada's high Arctic, which is viewed as a Mars analog. The setting is expected to reveal possibilities of life in extreme environments, support studies of exploration research, and test technologies that would potentially be used in trips to space.

Xybernaut is known "for some very high-end, industrially robust wearable computing systems," said Pascal Lee, a scientist with the nonprofit Search for Extraterrestrial Intelligence Institute of Mountain View, Calif., which is cosponsoring the mission.

"One of the key things [the wearables] allow is that they free up your hands, and allow you to access information and process data as you go about your work. That is the critical enabling capability for human planetary exploration."

News of Xybernaut's donation did not affect trading of its shares yesterday, which closed at $3.75 on the Nasdaq Composite Index.

The stock had traded in the $1 to $4 range since the start of the year, climbing over $6 late in May on speculation, published on Yahoo stock message boards, that IBM Corp., would buy some of the company's wearables.

Xybernaut, which pays IBM to manufacture its products, denied the rumor.

For its first quarter, the company said net sales rose 9 percent to $2.28 million from $2.1 million a year ago. Meanwhile, losses grew to $5.94 million (13 cents per diluted share) from $4.78 million (14 cents). Diluted shares reflect the value of options, warrants and other securities convertible into common stock.

Although still unprofitable, Xybernaut has increased its sales dramatically over the past five years. Sales were $9.51 million last year, a 773 percent jump from 1996 when sales were $1.09 million.

Among the company's contracts are a $2.5 million subcontract to develop software for the Federal Aviation Administration, a $1 million deal with FedEx Corp., a $500,000 agreement with the U.S. Navy and National Guard, and a $900,000 agreement with the State of Louisiana Department of Transportation Development.

The company has at least two competitors, including Via Technologies of Northfield, Minn.

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