Wave Systems Reports Q1 Results; Highlights its Progress in Trusted Computing Marketplace.LEE, Mass. -- Wave Systems Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : WAVX; www.wave.com) today reviewed recent corporate progress and reported results for its first quarter (Q1) ended March 31, 2005. Wave's Q1 2005 net revenue rose to $78,000, compared to Q1 2004 net revenue of $50,000, principally due to an increase in software license revenue. Wave reported a net loss of $4.5 million, or $0.06 per basic share, for the first quarter of 2005, compared to a net loss to common stockholders of $3.4 million, or $0.05 per basic share, in Q1 2004. The year-ago first quarter included the benefit of a gain on sale of marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has amounting to $1.2 million. Excluding the gain, Wave would have continued its trend of reduced year-over-year net losses. The weighted average number of basic shares outstanding in the first quarters of 2005 and 2004, was 77,212,000 and 67,338,000, respectively. As of March 31, 2005, Wave had total current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. of $6.0 million, working capital of $2.8 million and no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . Steven Sprague, Wave's president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said, "The commitment to trusted computing Trusted Computing (also abbreviated TC) is a technology developed and promoted by the Trusted Computing Group. The term is taken from the field of trusted systems and has a specialized meaning. is continuing by a broad range of IT industry players. Most recent are announcements around the expected availability of next-generation Trusted Platform Module In computing, Trusted Platform Module (TPM) is both the name of a published specification detailing a microcontroller that can store secured information, as well as the general name of implementations of that specification, often called "TPM chip" or "TPM Security Device" (Dell). ("TPM (1) See TP monitor. (2) (Transactions Per Minute) The number of transactions processed within one minute. See TPS. (3) (Trusted Platform M ") v1.2 security chips for trusted personal computers. The launch of this enhanced version TPM by a range of silicon providers and personal computer manufacturers should prove to be an important catalyst in accelerating industry adoption of trusted computing. "As trusted PCs See trusted computer system. become more mainstream, Wave believes there will be a significant business opportunity in delivering trusted computing software solutions that address the security challenges facing businesses and governments today - issues like data and identity protection, network management and the strong authentication (1) Verifying the integrity of a transmitted message. See message integrity, e-mail authentication and MAC. (2) Verifying the identity of a user logging into a network. of users into enterprise networks. We believe that to be broadly adopted, secure solutions must fit into existing infrastructure and reduce costs and customer service. "Into 2005, Wave continues to make progress. Wave's EMBASSY(R) Trust Suite ("ETS ETS Educational Testing Service (nonprofit private educational testing and measurement organization) ETS Emergency Telecommunications Service ETS Electronic Trading System ETS Engineering (&) Technical Services ") secure software ships with certain products of one of the global leaders in PC motherboard  This article or section may be confusing or unclear for some readers.Please [improve the article] or discuss this issue on the talk page. sales; our software is available for sale on the web site of one of the global leaders in PC sales; we have contracts to have our products bundled with certain products of two other leading silicon chip suppliers, and our solutions are now available from additional reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. partners." Summary of recent progress: (for more details, please visit www.wave.com): --EMBASSY(R) Trust Suite 4.3: In April, in conjunction with Microsoft's WinHEC conference, Wave announced summer availability of ETS 4.3, designed to support the next generation security chip hardware, TPM 1.2, which is expected to be available from personal computer original equipment manufacturers also beginning this summer. --Giesecke & Devrient ("G&D"): In April 2005, Wave formed a strategic alliance with G&D to offer an enhanced security solution to address the trusted computing market. The collaboration will address G&D and Wave's respective joint development activities in the fields of smart card technology and trusted computing software. --Seagate Technology: In March 2005, at the Intel Developers Forum, Wave and Seagate conducted a technology demonstration showing the data protection benefits of linking the security of a TPM to a Seagate-trusted disc drive. --Dell: On February 1, 2005, Wave's ETS Enterprise Security Dell Edition 1.0 was made available for purchase on www.Dell.com. --Sonex ISG ISG Iraq Study Group ISG Iraq Survey Group ISG International Steel Group ISG Integrated Security Gateway ISG Information Systems Group ISG Information Systems Group (IBM) ISG Integrated Starter/Generator : In February 2005, Sonex Infrastructure Solutions Group agreed to distribute Wave's ETS software and infrastructure to enterprises. Sonex's distribution will encompass the Eastern European countries of Lithuania, Latvia and Estonia. --Microsoft: In January 2005, Wavexpress commenced offering its TVTonic video service to Media Center personal computer users via Microsoft's Online Spotlight. Online Spotlight is a selection of featured services within Microsoft Windows See Windows. (operating system) Microsoft Windows - Microsoft's proprietary window system and user interface software released in 1985 to run on top of MS-DOS. Widely criticised for being too slow (hence "Windoze", "Microsloth Windows") on the machines available then. XP Media Center Edition 2005 that offers users a fast, simple way to access compatible services directly from the main navigation screen. --Operational Research Consultants ("ORC Orc monstrous sea creature; devours human beings. [Ital. Lit.: Orlando Furioso] See : Monsters "): In January, 2005, Wave and ORC forged a strategic partnership to jointly market trusted computing and certified See certification. credentialing Credentialing is the administrative process for validating the qualifications of licensed professionals, organizational members or organizations, and assessing their background and legitimacy. to provide identity management solutions to federal, state and local governments. --Groupement des Cartes CARTES Computer Arts Centre at Espoo Bancaires ("CB"): In January 2005, Wave announced that CB, the French banking authority for payment systems involving bank cards and terminals, will use Wave's secure software development tools to evaluate the potential of Trusted Computing Group See TCG. compliant computing computing - computer solutions. --Quadra Media LA: In March 2005, Quadra Media licensed TVTonic Direct from Wave's Wavexpress subsidiary for use in the delivery of Spanish language Spanish language, member of the Romance group of the Italic subfamily of the Indo-European family of languages (see Romance languages). The official language of Spain and 19 Latin American nations, Spanish is spoken as a first language by about 330 million persons content to Spanish speaking households in the U.S. About Wave Systems Consumers and businesses are demanding a computing environment that is more trusted, private, safe and secure. Wave is a leader in delivering trusted computing applications and services with advanced products, infrastructure and solutions across multiple trusted platforms from a variety of vendors. Wave holds a portfolio of significant fundamental patents in security and e-commerce applications and employs some of the world's leading security systems architects and engineers. For more information about Wave, visit http://www.wave.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Except for the statements of historical fact, the information presented herein constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to fund operations, the ability to forge partnerships required for deployment, changes in consumer and corporate buying habits, chip development and production, the rapid pace of change in the technology industry and other factors over which Wave Systems Corp. has little or no control. Wave Systems assumes no obligation to publicly update or revise any forward-looking statements. All brands are the property of their respective owners. This press release shall not constitute an offer to sell or a solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of an offer to buy any securities. No securities are being offered at this time.
Conference call: Today, Tuesday, May 10, 2005 at
4:30 P.M. E.S.T.
Webcast / Replay URL: http://www.wave.com
Dial-in numbers: 212-271-4563 or 415-537-1870
Wave Systems Corp. and Subsidiaries
(a development stage company)
Consolidated Balance Sheets
(in thousands)
(Unaudited)
March 31, December 31,
2005 2004
------------ ------------
Assets
Current Assets:
Cash and cash equivalents $ 5,067 $ 5,806
Marketable securities 569 722
Prepaid expenses and other receivables 339 272
------------ ------------
Total current assets 5,975 6,800
Property & equipment, net 1,241 1,435
Other assets 216 219
------------ ------------
Total assets 7,432 8,454
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued expenses 2,698 2,900
Deferred revenue 453 351
------------ ------------
Total current liabilities 3,151 3,251
Liability for warrants containing cash
settlement provisions 378 493
------------ ------------
Total liabilities 3,529 3,744
Total stockholders' equity 3,903 4,710
------------ ------------
Total Liabilities and Stockholders' Equity $ 7,432 $ 8,454
Wave Systems Corp. and Subsidiaries
(a development stage corporation)
Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
---------------------------
2005 2004
------------ ------------
Revenues
Product -- 6
Services 7 --
Licensing and other 71 44
------------ ------------
Total Net Revenues 78 50
Cost of Sales:
Product -- 5
Services 9 --
Licensing and other 5 14
Amortization expense 155 8
------------ ------------
Total Cost of Sales 169 27
Gross Margin (91) 23
Operating Expenses:
Selling, general and administrative 2,997 3,305
Research and development 1,594 1,756
------------ ------------
4,591 5,061
Net interest income 21 7
Gain on sales of marketable securities -- 1,175
Unrealized gain on decrease in value of
warrant liability 115 447
------------ ------------
136 1,629
Net loss ($4,546) ($3,409)
============ ============
Net loss per share - basic ($0.06) ($0.05)
============ ============
Weighted average of basic shares
outstanding 77,212 67,338
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