Wave Systems Corp. (fka WAVXQ)

[Fullmoon]

Wave Q1 2008 Revenues Rose 32% to $1.7 Million on Continued Growth in Bundled PC OEM Software Royalties
Shipments of Bundled Wave Software Reached over 27 Million Units
and Continued to Grow Each Month
Wave Starting to See Meaningful Software "Upgrade" Billings in Q2
2008
LEE, Mass.--(BUSINESS WIRE)--May 12, 2008--
Wave Systems Corp. (NASDAQ: WAVX):

Conference call: Today, Monday, May 12, 2008 at 4:30 P.M. ET
Webcast / Replay URL: www.wave.com or www.earnings.com
Dial-in numbers: 212-896-6169 or 415-537-1810

Wave Systems Corp. (NASDAQ: WAVX; www.wave.com) today reported results for
the first quarter (Q1) of 2008 and provided an update on corporate progress
and developments.

Reflecting an increase in license revenues, Wave's Q1 2008 net revenues rose
32% to $1.7 million, compared to Q1 2007 net revenues of $1.3 million. Wave's
improvement in license revenues was principally due to royalties earned from
increased shipments of Wave software by Wave's leading OEM partner. Gross
profit for Q1 2008 rose to $1.5 million compared to $1.1 million in Q1 2007,
reflecting the higher level of sales.

For Q1 2008 Wave reported a net loss of approximately $6,010,000, or $0.12
per basic share, compared to a Q1 2007 net loss of approximately $5,046,000,
also $0.12 per basic share. Per share figures are based on a weighted average
number of basic shares outstanding in the first quarters of 2008 and 2007 of
50,898,515 and 42,243,005 respectively. As of March 31, 2008, Wave had cash
and equivalents of approximately $1.5 million and no long-term debt.

Steven Sprague, Wave's president and CEO, commented, "Our first quarter
performance reflected continued strength in bundled sales of our Wave Embassy
Trust Suite software in what appears to be the slowest quarter for customer
activity each year. While we made continued strides in engaging enterprises in
dialogues regarding upgrade activity and worked to expand our pipeline of
opportunities, actual sales that closed in the quarter were modest, though we
experienced expanding customer interest.

"I'm pleased to say that our efforts in Q1 and prior periods are yielding
positive results. We have already received more upgrade orders in Q2 than we
received in all of Q1 2008. We are also seeing encouraging activity in the
area of full disk encryption. While the number of drives sold was modest, well
over 1,000 different enterprises have purchased FDE drives equipped with our
software for their evaluation and testing. We believe this illustrates the
level of interest we are seeing for FDE solutions, and could present
opportunities to 'up-sell' enterprise early adopters or beta testers with our
EMBASSY Remote Administration Server software, built specifically to support
enterprise FDE deployments.

"The growth of the installed base of customers with Wave software is also
significant. With over 27 million units shipped to date, the installed base
represents an important development for Wave, and we continue to see growing
interest in managing the hardware security that is shipping as standard on
most enterprise client platforms. Our marketing efforts are promoting
significantly greater industry understanding of hardware security, and we have
seen increased advertising and marketing efforts by our partners in this area
as well.

"Importantly, these efforts are also yielding our first satisfied upgrade
customers such as Ken Waring of CBI Health and David Virkler of AdaptaSoft,
both of whom have volunteered to serve as reference customers and discuss
their network's adoption of our solutions."

CBI Health

"As one of the largest healthcare services and management providers in all
of Canada, with more than 2,300 clinical and support providers on staff, it's
our obligation to safeguard our patients' information and take proactive
measures to mitigate the risk of data breach. Wave offers a technically
progressive solution that was compelling when compared to the other market
offerings." said Ken Waring, Director of IT at CBI (Canadian Back Institute)
Health, a network of more than 135 community- and hospital- based
rehabilitation, medical and healthcare facilities. "Wave's software, which
manages both the Seagate Momentus full disk encryption drives and the Trusted
Platform Modules on these PCs, is integral to our corporate security strategy
going forward. We chose Wave because of its ease of use, low total cost of
ownership and their strategic relationship with Dell."

AdaptaSoft

"As providers of software and services for payroll providers, we understand
the importance of keeping client and employee information secure. We evaluated
data protection solutions from other vendors, but early on we were sold on the
inherent advantages of hardware-based encryption for our mobile data. That's
why the clear choice was Wave--their product was in a class above all others,"
noted David Virkler, Chief Information Officer at AdaptaSoft Inc. based in
Francesville, IN. "All of our future laptops will include Wave's software,
TPM's and FDE hard drives from Seagate. With Wave's EMBASSY Remote
Administration Server, we've been able to manage Seagate's drives and the
Trusted Platform Module security chips in our organization. We chose Wave
because they had the enterprise infrastructure in mind when they designed
their solution, thus enabling a low-touch, fully functional, data protection
solution."

Summary of recent progress/developments:

(for more details, please visit www.wave.com):

-- Dell Software License Amendment: In early January, Wave
amended its software license agreement with Dell extending the
term of the agreement to January 2011. Pursuant to the
agreement, Dell is permitted to distribute Wave's ETS software
on certain of its PCs that include TPM security chips.
Reflecting value-added features incorporated into a new
version 3.0 of Wave's ETS software, starting in mid-2008 Wave
will receive a higher per-unit royalty based on the volume of
products shipped by Dell with this software. The contract does
not provide for guaranteed minimum royalties or shipped
quantities of units containing Wave software.

-- Dell Promotion: In late 2007 and into Q1 2008, Dell conducted
the "The World's Most Secure Notebook" advertising campaign.
The campaign highlighted the Dell/Seagate/Wave notebook
solution and was featured in a variety of major print and
online media. Wave is now participating in Dell's global
"Future of Computing" road show, demonstrating the company's
hardware-based data protection solutions with Seagate
Technology, LLC. The tour encompasses 149 cities worldwide,
with the first leg of the U.S. tour starting May 13, 2008 in
Pittsburgh.

-- Wave Releases Embassy Remote Administration Server Version
1.5: In late January, Wave released EMBASSY Remote
Administration Server (ERAS) version 1.5. ERAS 1.5 features
new, compliance-focused enhancements that are designed to
enable organizations with full disk encrypting (FDE) hard
drives from Seagate to generate a detailed audit log of drive
security events, thereby helping to establish that encryption
was not disabled by the user and that data on the drive
remained protected.

-- TVTONIC Expands High-Definition Offerings through On Networks:
In mid February, Wavexpress, a provider of broadband media
technology and services, majority-owned by Wave, entered a
content license with ON Networks, a leading new media company.
The content license allows Wavexpress to feature five of ON
Networks' TV shows in high-definition in its free Internet
television application, TVTONIC.

-- Wave Adds Lenovo as a supported OEM: In mid March, Wave
announced that it has completed the qualification and testing
of its EMBASSY Trust Suite, including the EMBASSY Trusted
Drive Manager software, on Lenovo PCs with Seagate Momentus(R)
FDE hard drives, adding Lenovo as a list of its supported OEMs
offering robust hardware data protection. Wave's Trusted Drive
Manager software, Lenovo Edition, is now available as an
option on the ThinkPad R61 series with Seagate Momentus Full
Disc Encryption (FDE) hard drives.

-- SigniaDocs, Inc. utilizes eSign Transaction Management Suite:
In mid March, Wave licensed its eSign Transaction Management
Suite (eTMS) for integration into SigniaDocs' SigNet eDoc
Management Solutions. Wave's trusted electronic signature and
vault solutions can now be used to automate SigNet eDoc
Management Solutions by eliminating the need for ink
signatures, as well as the expense of paper document
processing and transportation of mail, overnight delivery,
faxes and other types of delivery services.

-- Wave Introduces Trust-and-Verify Web Service: In early April,
Wave announced a proof-of-concept solution for ensuring the
integrity of data protection hardware with its
Trust-and-Verify Web service, in which a server interrogates
computers seeking access to sensitive data in order to verify
the status of their Seagate full disk encryption hard drive.
Only after this verification step occurs and the level of data
protection is deemed adequate, can a PC download requested
data.

-- Wave Partners with SafeNet to Expand Enterprise Security for
Data-at-Rest: In early April, Wave completed a reseller
agreement with SafeNet, Inc., a global leader in information
security. The agreement gives Wave authority to globally
market and distribute SafeNet's ProtectDrive line of software
disk encryption products, enabling Wave to now target mobile
PCs that are currently too small to support an FDE drive.

About Wave Systems

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( BW ) 05/12 04:01PM Wave Q1 2008 Revenues Rose 32% to $1.7 Million on -2-
Wave provides software to help solve critical enterprise PC security
challenges such as strong authentication, data protection, network access
control and the management of these enterprise functions. Wave is a pioneer in
hardware-based PC security and a founding member of the Trusted Computing
Group (TCG), a consortium of nearly 140 PC industry leaders that forged open
standards for hardware security. Wave's EMBASSY(R) line of client- and
server-side software leverages and manages the security functions of the TCG's
industry standard hardware security chip, the Trusted Platform Module (TPM).
TPMs are included on tens of millions of PCs and are standard equipment on
many enterprise-class PCs shipping today. Using TPMs and Wave software,
enterprises can substantially and cost-effectively strengthen their current
security solutions. For more information about Wave and its solutions, visit
http://www.wave.com.

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.