OT SEC Review Delays Wave Systems Shareholder Vote
Wednesday August 6, 12:03 pm ET
By Ellen Sheng
Dow Jones Newswires
NEW YORK -- The Securities and Exchange Commission has held up Wave Systems Corp.'s plan to have shareholders approve an increase to the company's total float to 120 million shares from 75 million shares.
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David Collins, a spokesman for the security software maker, said the SEC is currently reviewing the company's proxy statement after having finished a review of its 10-K filing. The vote, which was originally set for Monday, cannot be rescheduled until the SEC finishes its review, he said.
Mr. Collins said he didn't know what the SEC is reviewing.
The shareholder vote is part Wave Systems' effort to keep itself afloat. In a June 30 SEC filing, the Lee, Mass., maker of products that monitor and manage the use of electronic information disclosed it has only enough cash to fund operations through approximately Oct. 15. Moreover, its auditor, KPMG, expressed "substantial doubt" of the company's ability to continue as a going concern beyond the second quarter of this year.
"In order to fund our business beyond the fourth quarter of 2003, it will be necessary for us to raise additional capital. Wave is uncertain as to the availability of financing from other sources to fund any cash deficiencies," the filing states. In order to continue as a going concern for the next 12 months, the company said it needs to raise $9.3 million.
The company said it wants to use the additional authorized Class A shares for a number of purposes, including selling for cash and issuing additional options, all without further shareholder approval.
Wave Systems said it plans to issue Class A shares for its stock option plans, upon conversion of its outstanding convertible securities and upon issuing dividends accrued on its Series H stock, according to the filing.
In the first quarter, the company recorded a net loss of $6.5 million, or 12 cents a share, compared with a year-earlier loss of $11.3 million, or 22 cents a share. The company generated revenue of $16,000, compared with $246,000 a year earlier.
Near midday Wednesday, Nasdaq-listed shares of Wave Systems traded at $3.45, down $1.08, or 24%.
The stock had seen a huge spike in the last several days amid very heavy volume after the company released statements announcing relationships with Intel Corp. (NasdaqNM:INTC - News) and International Business Machines Corp. (NYSE:IBM - News) .
-By Ellen Sheng, Dow Jones Newswires; 201-938-5863;
