Wave Systems Corp. (fka WAVXQ)

[Jaybeaux]

Wave Systems Corrects its Q4 and Full-Year 2003 Results

LEE, Mass.--March 11, 2004--Following the release of fourth
quarter and year-end results after the market's close today, Wave
Systems Corp. (NASDAQ: WAVX; www.wave.com) was informed by its
auditors that the accounting treatment of a non-cash item to which the
auditors and the Company had previously agreed, was incorrect.
Unfortunately the company was not informed until after the results had
been released. The Company agrees with this change which is outlined
below and is issuing a corrected release. Importantly, the change has
had no impact on Wave's balance sheet, its cash flow or working
capital position.
The Company and the auditors agreed that the "Unrealized Holding
Gain on Trading Securities" of $3.6 million in the Consolidated
Statements of Operations should instead be reflected as a component of
other comprehensive income within "Total Stockholders' Equity" on the
Consolidated Balance Sheets. The securities underlying this unrealized
gain were previously classified as trading securities but should have
been classified as held for sale, with the unrealized gain reflected
in other comprehensive income. Wave is therefore correcting its
earlier press release to reflect these changes and to show fourth
quarter and full year 2003 net losses of $4.3 million, or $0.07 per
share, and $25.3 million, or $0.45 per share, respectively. No change
will be required to the Consolidated Balance Sheets in our earlier
press release. These changes are reflected in a complete press release
titled "Wave Systems Provides Update on Corporate Progress and Reviews
Q4 2003 Results (Corrected)," to be issued shortly.

Safe Harbor for Forward-Looking Statements

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 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.


CONTACT: Wave Systems Corp.
Gerard T. Feeney, 413/243-1600
[e-mail]
or
Jaffoni & Collins
David Collins, Richard Land
212/835-8500
[e-mail]