Wave Systems Corp. (fka WAVXQ)

[john_galt]

keV,

Financial Accounting Standard No. 123 requires expensing of share-based compensation, specifically stock options. Wave's prior year accounting did not include this expense since it was not yet required under FAS 123.

This accounting standard was a very hot topic for tech firms because it forced them to recognize expense for options that were essentially "free" in prior years.

The expense does not indicate amounts exercised nor "in the money." It is likely based on a Black-Scholes valuation of options awarded to Wave employees.