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I'm OK with "wiggle room" as I think it's reasonable for the listing board to avoid delistings and to be able to exercise discretion when appropriate. It must be the company's sources indicate it's available this time around, as well it should be imo.
I believe they have to file a special meeting report the day after like an annual meeting.
http://secfilings.com/searchresultswide.aspx?TabIndex=2&FilingID=9365624&type=convpdf&companyid=3659&ppu=%2fdefault.aspx%3fticker%3dWAVX%26amp%3bformgroupid%3d9%26amp%3bauth%3d1
I get your point but I wonder then how the last compliance was stated as July 9-22 when the deadline was the 8th? The RS was implemented July 1 which would make just six days through the deadline. Four days is more than "a day or two", a bit too "soft" for Nasdaq to just bend their rules, and if they had to make 10 days by the 8th why wait 6 days after the RS is voted in to implement it? As I stated earlier, I don't think we're quite clear on when the deadline actually is, although I would agree the language in the compliance notices seems clear enough.
Last time the compliance period was stated as July 9-22 when the deadline was July 8 so it could be the language in the compliance notices is ambiguous or something.
When an RS was last voted in it was 8-k'ed the day after. It's not like it has to be happen before the market opens, apparently.
I think we're not quite clear on when the 10 day minimum compliance period begins in order to make the Jan. 12 deadline...I had thought it was today. Something now tells me if today was day #1 then the RS (assuming it was voted in) would have been implemented today.
I think they may have to 8-k yesterday's special meeting by today, the day after it.
tkc, with your assumed billings of $1.0m:
Q2-ending cash: $2.79m
minus Q3 op ex $5.15m
plus Q3 billings (cash in the door) $1.0m
plus net bridge loan (cash in the door) $.46m>>>>>>>>>>>>>>>
$2.79m - $5.15m + $1.0m + $.46m= Q3-ending cash of -$900k
Actual Q3-ending cash= $334k
Using the above numbers (Q2-ending cash/Q3 op ex/Q3 billings/bridge loan) requires $2.23m billings (not $1.0m) to arrive at actual Q3-ending cash of $334k.
My $2.23m billings equates to a Q3 burn of $2.92m...not exactly pretty so I acknowledge your point that the company did not have a great picture to show as far as billings, but still your billings estimate does not reconcile with the Q3-ending cash whereas mine more closely does.
tkc, with your assumed billings of $1.0m:
Q2-ending cash: $2.79m
minus Q3 op ex $5.15m
plus Q3 billings (cash in the door) $1.0m
plus net bridge loan (cash in the door) $.46m>>>>>>>>>>>>>>>
$2.79m - $5.15m + $1.0m + $.46m= Q3-ending cash of -$900k
Actual Q3-ending cash= $334k
Using the above numbers (Q2-ending cash/Q3 op ex/Q3 billings/bridge loan) requires $2.23m billings (not $1.0m) to arrive at actual Q3-ending cash of $334k.
tkc...
Q2-ENDING CASH= $2.79m
minus Q3 operating expenses $5.15m
plus Q3 bridge loan net $.46m
plus Q3 assumed billings (cash in the door) $2.23m
--------------------------------------------------------------
$2.79m- $5.15m+ $.46m + $2.23m= $.33m (Q3 ENDING CASH= $334k)
Note: Q2/Q3 accounts payable/accrued expenses are within $6k of being identical, therefore additional Q3 burn is not buried in the payables.
Q2 deferred is $5.21m (long-term deferred $2.11m) and Q3 is $5.07m (long-term deferred $2.28m), a $140k decrease in deferred and a $130k increase in long-term deferred from Q2 to Q3. Does that mean only $140k deferred was taken in Q3?
Is that what you meant by "we know what the Q3 deferred numbers are"?
tkc, all I can say is you have not yet reconciled Q3's ending cash, at least not to me. If billings (money in the door) was only $1m as you suggest, cash would have ended -$666k not $334k.
And check the accounts payables/accrued expenses...the same Q3 as Q2.
I see your point and checking the 10-Q it does describe the larger than 5000 license orders as taking the revenue for all components (licensing and maintenance) ratably over the performance period, however I couldn't locate the performance period for the $2.3m sale. I could have sworn GM and the other large orders were ratably taken over a four q period but I either wasn't clear on that or something changed.
So if deferred decreased $675k in Q2 (you don't think that was from the $2.3m transaction?) and allowing for that, Q2 billings matched up with Q2 revenues, what would be your estimate for the change in deferred in Q3?
As I've outlined, I don't see that money in the door Q3 was much under $2m, therefore if revenues were $2.6m it would seem around $600k of that was deferred.
I think they've been taking a larger chunk of deferred as revenue from the $2.3m sale over the first four quarters following the transaction than the $191k you are allowing.
It's my understanding the perpetual license part of a greater than 5000 license sale is taken over four q's whereas sales less than 5000 licenses are taken fully in the q of the transaction. The maintenance portion of any size sale is taken over the contract period, therefore maintenance sales of all sizes are treated differently than the sale of the license itself. My estimation is that the larger piece of the $2.3m sale is perpetual licenses and the revenue from it is booked over the first four q's.
Deferred increased $1.92m Q1 of which a big piece has to be the $2.3m sale. Q2 deferred decreased $675k which is far more than other preceding periods which again has to be related to the $2.3m sale. I can only assume Q3 had a similar decrease in deferred since we are still in the four q period following the transaction.
If one takes Q3 revenue $2.56m and deducts $675k deferred similar to Q2, an approximation of the money in the door part or Q3 revenues= $1.885m.
My Q2/Q3 cash-ending/Q3 op ex analysis (allowing for the bridge loan funding) indicates Q3 billings= $2.23m
I don't where the discrepancy is.
VSC 2.0 came out 17 months ago, not two years. Given that 12-18 mo. is common for large customer sales cycles I don't see anything unusual in the timeframe. Sure if the company was better established and capitalized there would be more sales by now.
Your analysis' never seem to address the mature user authentication/IAM market and that Windows just doesn't compete there. I would agree that a segment of the market uses Windows AD-based authentication which everyone knows is less secure, but your Server 2016 supplanting ERAS claim doesn't hold up without proving the specifics.
Win10/Server 2016 does have improved TPM functionality making it all the more feasible for ERAS to support it. I believe that has been the basis for collaborating with MS.
According to my analysis of Q2/Q3, Q3 billings had to be around $2m otherwise Q3-ending cash would have been less ie. anything less than $2m in the door and the q-ending cash would less by that amount ie. billings $1m and Q3-ending cash would have been -$666k not $334k. Q2/Q3 accounts payables/accrued expenses were identical too, so it's not as though additional Q3 burn can be found in the payables side.
I would not expect all future VSC/TPM/SED/Bitlocker/Safend sales to large customers to be gradual procurements such as today's announced customer which has their own needs. Some will purchase licenses in the largest blocks possible like GM, BASF, BP and the large insurance co.
$60k not $600k.
Hard to know what the pricing for those 2000 licenses actually is. It's in the MLA.
VSC 2.0 is an ERAS-managed solution which looks to be north of $30 give or take depending on volume. If they already have ERAS for SEDs, VSC/TPM management can be added for less etc.
http://www.kernelsoftware.com/products/catalog/wave_systems.html
Looks a lot like 150k+ licenses procured over time.
Samsung is not a parallel...that is OEM bundling, this is an enterprise customer...completely different.
Speaking of bundling, Samsung hasn't had traction because they are a small player in the enterprise PC market and ship few TPMs. SAC on the other hand is a TPM chip distributor for Infineon.
Won't be the last large VSC customer. (eom)
A large VSC 2.0 validation. (eom)
I can't say for sure they are the only bidder to the tender but it can be deduced from opening remarks at the SHM sans the customer's name that it was subsequently created around POC's that were successfully completed before it was released. That is why I indicated earlier that the scope of customer's earlier procurement plans may not have required a tender.
Multiple partners/vendors, multiple tools/servers for one centralized management solution? Not likely.
Tender Detail
Buyer/Seller : Government Of Germany
Ref. Number : 15745070 Tender Number : 371308-2015 Tender Prod. No : 371308-2015
Requirement : Software package and information systems, Networking software package, Security software package.
Centralized management solution for managing VSC, TPM, SSD and BitLocker management.[
Tender Detail : Specifications and additional documents (including documents for a dynamic purchasing system) can be obtained from: Deutsche Bahn AG
The tender was scheduled to close Nov. 23 and it's my understanding the award would be posted in January. I would think Wave could know by now from DB if other qualified bids were received although that may be strictly out of procedure. We are not aware of another vendor that offers centralized management of VSC/TPMs/SEDs/Bitlocker, and that's any Windows including 10/Server 2016.
(Edited): Yes...thanks for your help.
I believe financials have interfered with PO's being issued necessitating the restructuring which may continue today (e.g consolidating office locations/other?). I also believe DB may have been set for a lower scope procurement around the time of the May $5.1m funding, one for which their internal procedures did not require a tender or if they did came and passed with Wave getting the nod. They then expanded the scope presumably from VSC only, adding SEDs and Bitlocker requiring the tender, or another one assuming the first required one. No, I don't know if they are a prime or sub, but are they a sub it seems their financials could also be subject to the scrutiny by the prime (not just the customer), but just guessing on that.
It's our belief DB is one the prospects from earlier this year and that they successfully POC'ed the portfolio of Wave TPM/SED/Bitlocker solutions forming the basis for the tender specs. Therefore DB has been in the pipeline a long time, with a tender process that is expected to post an award in about 30 days. Also, the (large) prospects talked about earlier in the year were at the end of the VSC 2.0 sales cycle as few as 6-8 mo. after the product launch? Highly unlikely given some of them like DB only entered the pipeline earlier this year. As you and I have discussed, large enterprise sales cycles can go 18 mo. or longer, therefore large VSC prospects that came in shortly after or even before the July 2014 product launch could still be going. I would say DB has been in close to 12 mo.
NW, I think folks may come to understand that Wave is no longer selling TPMs per se but instead a superior authentication solution (and more) to take market share from both incumbent authentication vendors as well as create market share selling to the many enterprises that still use Active Directory-based passwords with no outside vendor support. In fact early in his tenure Solms himself quoted that the customer doesn't even have to know they are using TPMs.
No need for one to be stuck in the "TPMs aren't selling" mode.
awk, that's laughable:
1. Did Wave ever announce revenue-bearing news at RSA? I really don't see the point to Solms having an "RSA PR" if it's not billings-related and without a major PO, which we assume they have been waiting the last two months or more for, what is there to announce at RSA? I can't believe it if in fact you yearn for the SKS-era RSA PR's that resulted in zero billings/revenues.
2. Solms has delivered nothing in two years?...and it's 18 mo. not two years. Q1 billings are an estimated $5.0m with zero Dell bundling projected and that is nothing? How many times did SKS do those numbers with zero Dell? About three times...GM, BASF and BP.
It's a mistake if you miss the SKS, Feeney, Len Veil era. SKS and Veil, the duo who never formally launched a product.
My point wasn't that the $2.3m was expected to contribute to Q4 2014 BE or any other q for that matter, it was a reminder that large customer sales generally close well after they are anticipated to do so.
Per comments in the CC, the insurance co. sale was expected to close in Q4 and the PO came late Feb., I would estimate about three months later than anticipated.
In fact the recent 8-K that we released on a large $2.32 million sale, we strongly believed we might have closed in Q4 of last year. But these large enterprise sales are harder to predict as to when we’ll actually have the purchase order in hand. And although, so I hesitate to say exactly when future deals are going to close.
CTO of North American sales?
Slackers are no longer tolerated in the company as they were under SKS. In some cases that may come across to staff as management bullying.
They have products for which there is customer demand currently totaling upwards of $3m/q without the large orders. If sales people don't meet their quarterly quotas they are out the door. Should have been that way starting a long time ago.
tkc, thanks for that. I value your opinion is why I asked for it. Hope you are having a nice weekend.
tkc, do you think it's speculative that Solms was not being speculative in his comments the last CC re: the pipeline, deals in the latter stages of development and so on?
I'm inclined to think based on what I know of Solms' character, career history and his performance thus far in reorganizing the company and delivering a large order that he would not publicly "speculate" on matters relating to the pipeline, choosing instead to make statements that would bear the test of time. I'll second guess here and call for detractors to counter that not meeting the goal of BE by the end of 2014 was a "statement" that didn't "bear the test of time".
I understand there were many times in the past when "believers" put their faith in Sprague and then the goods were not delivered because they weren't there. While there's always a chance the current VSC deals fall through, I believe based on Solms' performance thus far that his statements carry weight. Detractors can say that is mere hope or optimism. Whatever.
tkc, we do need follow-on large PO's in Q2, however having noted that the $2.3m billing obviously constitutes a significant step up from Q4 in cash flow and just in time for Dell being zero or close to it in Q1. Not exactly a bleak picture as some claim including your estimated cash balance entering Q2. Again, Q2 follow-on orders are required and from the sounds of the CC it's possible. Not Sprague-speak imo. The $2.3m order lends credibility to previous statements on the pipeline.
How is it that software security companies can attain the valuations they do when time after time, software has proven vulneable.
Understanding what TPM-based solutions offer network security is a understandable struggle for those inluding myself who work outside the industry. Having noted that perhaps I can help.
TPM-based security is not a silver bullet to solve all network security vulnerabilities but it can, once deployed, eliminate significant attack vectors. Basically, TPMs can establish pre-boot code integrity eliminating rootkits and also assure "known device ID" in the same way that SIM cards do for mobile phones ie. allow only known authorized devices to access the network. The authorized device paradigm is significant because then if an attacker hacks credentials from a user (such as from Target's refrigeration vendor) the attacker needs not only the stolen passwords but also an authorized known device. In the Target hack once they had the credentials they used their own unauthorized devices to gain access. If all of Target's own devices and those of their vendors were TPM-secured then the hack couldn't have occurred in the way it did. It would be a challenge for a company like Target to require all their vendors to deploy "known devices" using TPMs otherwise they can't access Target's network but it could eventually happen.
Unfortunately there are ways to hack network access that bypass rootkits and known devices. This involves planting malware in devices at the OS level and using it to gain a remote presence on a user device which could include a TPM-secured known device. An employee opening e-mail is probably the most common method to get malware on a device.
So where vendors such as FireEye, Bromium, the three start-ups in the article going public and many others come in is to the detect malware attacks in real time and and remediate the threat in real time. Real-time detection and response is the big thing now and one will note all the big security vendors such as Symantec, McAfee and RSA all offer it to keep up with the flashy newcomers such as FireEye.
Imo it will take both TPM-based solutions and OS level malware detection solutions to better secure the network. Perhaps a siginificant number of incidents that malware detection solutions remediate would not have occurred in a TPM-secured environament, but given the capability to install malware on devices above the hardware level, TPMs can't eliminate all malware other than rootkits.
Wave is selling VSC to customers who have either deployed an alternative authentication solution such as tokens or merely use MS Active Directory-based passwords. The new version of WEM to detect and remediate rootkits is yet to be released. Again, it will imo take both TPMs and real-time malware threat detection to more effectively secure enterprise networks.
i think we can finally call the original wave dream a fantasy. it relied on unicorns and a world unconnected to reality.
It's not clear what "dream" that refers to; Peter's meter, interconnected trust using the E2 chip or a significant piece of the enterprise security market.
another interesting idea which didn't take because it required that proprietorial interests would be swept aside.
If that refers to TPMs and SEDs, the jury is still out at least as far as enterprise adoption. TPMs ship standard, the PC OEMs went that route years ago, so whatever proprietorial interests they have, TPMs apparently don't conflict with them.
apple said no
After putting TPMs on a few models years ago, it's true Apple has returned to no TPMs, however from what I understand the embedded hardware unique ID (UID) that every Apple device is manufactured with (BlackBerries too) is not suitable for enterprise network use leaving IT to apply the same authentication solutions to iOS devices that they do to other devices leaving open the possibility that if TPMs become widely deployed in gov't and commercial enterprise that Apple may see customer demand to provide them. TPMs in iOS devices don't have to conflict with the consumer iTunes model, they would be for enterprise network use.
mobile said only if we control it
If that means MNO's they don't necessarily call the shots over the device makers. If gov't and commercial customers demand TPMs the device makers are likely imo to provide them.
microsoft absorbed it into the os
OS'es don't absorb TPMs per se. MS uses the TPM for secure boot but the device owner still controls it and the TPM. It's the enterprise's decision to deploy centrally managed secure boot or not, it's not MS' call. Actually, ChromeBook TPMs are owned by the OS but this is not the case in Windows devices.
dell found another provider
It's MS. Beginning with Win8 the PC OEMs no longer provide their own TPM interface. It's part of Windows, however ISV tools are required for enterprise-grade deployments.
samsung purchased rights but didn't follow through
It seems Samsung doesn't make a lot of devices with TPMs probably because the have a small presence in the PC market. It could be smartphones are a potential larger TPM opportunity for them.
enterprises stuck with what they have
It premature imo to call TPMs in the enterprise a dead opportunity. Windows promotes their use in a major way so scale adoption could lay ahead. Again, MS or the OEMs don't own TPMs, the user is the owner and is free to deploy.
governments preferred surveillance
Gov't can continue surveillance independent of TPM deployment by those under surveillance. Gov't can also deploy for their own network/device security same as their adversaries and commercial enterprise.
sad history for wave
SKS was unable to build and bring to market a deployable enterprise TPM solution.
So were these in January:
http://www.nasdaq.com/markets/spos/activity.aspx?tab=pricings&month=2015-01
Q4 did about $2.4m in SMB licensing/maintenance.
Here's another reseller list:
http://www.synnex.com/vendors/WAVE_SYSTEMS.html
I'm glad Dell is nearly gone. For many years the previous management sat on Dell revenues, neglecting to face the challenges associated with building the enterprise business. It begins with having the appropriate upper management and a competent sales force held accountable to goals. Products also have to be made deployment-friendly to both SMB and large enterprise.
Large enterprise sales are required plus growth in SMB.
Look at all the companies cited to give Wave oodles of revenue: IBM, HP, INTEL, DIEBOLD, HAUPPAUGE DIGITAL, ATMEL, SEAGATE, DOCOMO, PHOENIX TECH, SAMSUNG, MICRON, BELL ID--so sorry for this partial listing--my fingers got tired of typing all the names--but you get the picture. Potential up the Wazoo, but results non-existent.
BF, with one large order recently bagged and the potential for more on the way, your attempts to paint Wave as hopeless are becoming increasingly filled with inaccuracies. To cite but one of them, with projected Q1 billings of just uner $5m enterprise product sales, results are non-existent? What will become of you when the next large PO arrives?
No offense BF, but it does sounds like trivialing the $2.3m sale, reiterating it's old technology and the first large transaction for the Solms-led Wave. Anyways we don't agree everything hinges on VSC, large orders are also possible for DP, SED management and WEM.