Wave Systems Corp. (fka WAVXQ)

[SPIN]

much lessShoddy IMO

Dow Jones Business News
Wave Systems Sets Holder Vote Following SEC Proxy Review

[very fair headline IMO]

Friday August 8, 5:14 pm ET
By Ellen Sheng, Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--After being delayed by a Securities and Exchange Commission (News - Websites) review of its proxy, Wave Systems Corp. (NasdaqNM:WAVX - News) said Friday that its shareholder vote will take place Aug. 27.

ADVERTISEMENTThe vote previously was scheduled for Aug. 4. David Collins, an outside spokesman for the company, said that the review was not an investigation, as some retail investors believed.

Among the issues to be decided by the shareholder vote is the small security software company's plan to increase its float by 60%, to 120 million shares. It currently has a total float of 75 million shares.

The move is part of the Lee, Mass., company's plan to replenish its coffers. In a June 30 SEC filing, Wave Systems disclosed it has only enough cash to fund operations through Oct. 15. Also, the company's auditor, KPMG, expressed " substantial doubt" about the company's ability to continue as a going concern past the second quarter of this year. [ummmmm, five weeks old?!?!] Wave Systems said it needs to raise $9.3 million in order to continue as a going concern for the next 12 months.

On Tuesday, Wave Systems said it received $3.6 million in cash proceeds. Of that amount, $1 million came from Chairman Peter Sprague, who was repaying a loan. The other $2.6 million came from shareholders who, in all, exercised options to purchase 1.189 million shares at strike prices ranging between $1.09 to $4.08 a share.

Wave Systems shares traded at under $1 until last week, when the company announced it signed a pact to bundle its software onto a new Intel Corp. (NasdaqNM:INTC - News) motherboard. Then on Monday, Wave Systems said its software got an official seal of approval by International Business Machines Corp. (NYSE:IBM - News) as an independent software vendor. Share prices soared amid several erroneous reports [at least 3 of which were written by the bylined reporter] that the company had inked a bundling deal with the PC maker. Within days, share prices skyrocketed to $5.24 - their highest level since June 2001.

Chief Executive Steven Sprague was among those to exercise options. He exercised options for 150,000 shares at a strike price of $2.01 and then sold all the underlying shares. According to the company's latest proxy statement, Sprague received, in 2002, options with 252,500 shares underlying them. He has 1.35 million exercisable options. The company also said that Chief Financial Officer Gerard Feeney sold 100,000 shares. Feeney received options with 150,000 shares underlying them last year, and now has 466,667 shares in exercisable options.

The amended proxy removes three provisions that were in earlier versions of the statement. An earlier proxy included a provision to increase the number of Class A common stock authorized for issuance under the stock option plan to 15.5 million shares, from 13 million. Another provision sought to extend the stock option plan to January 2009, from January 2004. Lastly, the new proxy removes a provision seeking shareholder approval for an issuance of Class A common stock that exceeds 19.99% of the total float before April 30, 2003.

Collins, the spokesman, said he did not have additional information regarding the proxy statement. Calls to the company, including Feeney, were not immediately returned.

Wave Systems shares closed Friday at $3.46, up 7 cents, or 2.1%, from Thursday's closing price. Trading volume was 8.2 million shares, compared with average daily volume of 3.6 million.

-By Ellen Sheng, Dow Jones Newswires; 201-938-5863; [e-mail]

WOW!

Wave is starting to reform!!!!

not sure whether they were strong-armed by SEC or made these moves of their own accord, but i sure like the developments!

howiever, what is the implication of the removal of the 19.99% provision? Has the recent activity put Wave in a position that it is no longer needed?

i think next week is gonna be good!

really good,

SPIN

PS yeah, it was such a bad idea to e-mail the reporter!

PPS in fact, i think i owe her another one, albeit of a very different tenor...