Wave Systems Corp. (fka WAVXQ)

[Fullmoon]

Wave Systems Reports Improved Q4 Results and Highlights Progress in Addressing Growing Trusted Computing Marketplace
LEE, Mass.--(BUSINESS WIRE)--March 15, 2005--Wave Systems Corp. (NASDAQ:
WAVX; www.wave.com) today reviewed recent corporate progress and reported
results for its fourth quarter (Q4) and year ended December 31, 2004.
Wave's Q4 2004 net revenue related to technology licensing and related
support services was $108,000, compared to Q4 2003 net revenue of $59,000.
Reflecting ongoing management of sales, marketing, administrative and R&D
expenses, Wave reported a net loss to common stockholders of $3.0 million, or
$0.04 per basic share, for the fourth quarter of 2004, compared to a net loss
to common stockholders of $4.3 million, or $0.07 per basic share, in Q4 2003.
The weighted average number of basic shares outstanding in the fourth quarters
of 2004 and 2003, was 71,793,000 and 65,203,000, respectively.
For the year ended December 31, 2004, Wave Systems reported net revenue of
$209,000, compared to revenue of $189,000 in the prior year. Wave reported a
net loss to common stockholders of $14.5 million, or $0.21 per basic share,
for the full 2004 year, compared to a net loss to common stockholders of $25.3
million, or $0.45 per basic share, in 2003. The weighted average number of
basic shares outstanding in 2004 and 2003, was 69,041,000 and 55,887,000,
respectively.
As of December 31, 2004, Wave had total current assets of $6.8 million,
working capital of $3.5 million and no long-term debt.
Steven Sprague, Wave's president and CEO, said, "During 2004 and into this
year, Wave made significant progress as a leader in the development and
delivery of software and services to enable trusted computing. This occurred
in an environment where many PC brands made the commitment to offer trusted
computers and the Trusted Computing Group grew to more than 90 members
globally.
"As trusted PCs become more mainstream, Wave believes there will be a
significant business opportunity in delivering trusted computing products that
address the typical challenges facing businesses and governments today -
implementing secure solutions that fit into existing infrastructure, that
reduce costs and that improve communications and customer service.
"As we evaluate our progress, Wave continues to establish itself as an
important member of the trusted computing ecosystem: Our software ships with
the global leader of PC motherboards; our software is available for sale on
the web site of one of the global leaders in PC sales; we have contracts to
have our products bundled with two other leading silicon suppliers, and our
reseller partners continue to grow.
"Given the challenges and opportunities inherent in our market, we remain
optimistic that trusted computing will continue to grow and generate demand
for our EMBASSY(R) Trust Suite secure software client and server solutions."

Summary of 2004 and year-to-date developments:

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

-- Dell: On February 1, 2005, Wave's ETS Enterprise Security Dell
Edition 1.0 was made available for purchase on www.Dell.com.

-- Intel: Wave's EMBASSY(R) Trust Suite 3.1 began shipping with
Intel desktop board models D915GEV and D915GUX in June 2004,
targeting business users of next generation PCs.

-- Microsoft: In January 2005, Wavexpress commenced offering its
TVTonic video service to Media Center PC users via Microsoft's
Online Spotlight. Online Spotlight is a selection of featured
services within Microsoft Windows XP Media Center Edition 2005
that offers users a fast, simple way to access compatible
services directly from the main navigation screen.

-- Seagate Technology: In March 2005, at the Intel Developers
Forum, Wave and Seagate conducted a technology demonstration
showing the data protection benefits of linking the security
of a Trusted Platform Module (TPM) to a Seagate-trusted disc
drive.

-- a la mode, inc. In October, Wave and a la mode agreed to
incorporating Wave's eSign Transaction Management Suite in a
la mode's comprehensive solution for securely managing real
estate and mortgage transactions online.

-- U.S. Military Academy: In December, Wave received an order
from the United States Military Academy's Information
Technology Operations Center for Wave to provide trusted
computing products associated with the academy's Secure
Content Dissemination and Data Retrieval Computer System
project.

-- Operational Research Consultants (ORC): In January, 2005, Wave
and ORC forged a strategic partnership to jointly market
trusted computing and certified credentialing to provide
identity management solutions to federal, state and local
governments.

-- Groupement des Cartes Bancaires (CB): In January 2005, Wave
announced that CB, the French banking authority for payment
systems involving bank cards and terminals, will use Wave's
secure software development tools to evaluate the potential of
TCG-compliant computing solutions.

-- Sonex ISG: In February 2005, Sonex Infrastructure Solutions
Group (Sonex ISG) agreed to distribute Wave's ETS software and
infrastructure to enterprises. Sonex's distribution will
encompass the Eastern European countries of Lithuania, Latvia
and Estonia.

-- Giesecke & Devrient (G&D): In March 2005, Wave demonstrated
its ETS software with G&D at the CeBIT 2005 trade show. G&D is
a leading global supplier of smart cards.

-- Quadra Media LA: In March 2005, Quadra Media licensed TVTonic
Direct from Wave's Wavexpress subsidiary for use in the
delivery of Spanish language content to Spanish speaking
households in the U.S.

Auditor's Opinion Letter - Disclosure:

Pursuant to Rule 4350 of the NASD Marketplace Rules, Wave is also announcing
that its auditors' opinion letter (dated March 15, 2005 and which will be
contained in Wave's Form-10-K for the year ended December 31, 2004) raises
"substantial doubt" about Wave's ability to continue as a going concern given
its recurring losses from operations, working capital position and its
accumulated deficit.

About Wave Systems

Consumers and businesses are demanding a computing environment that is more
trusted, private, safe and secure. Wave is a leader in delivering trusted
computing applications and services with advanced products, infrastructure and
solutions across multiple trusted platforms from a variety of vendors. Wave
holds a portfolio of significant fundamental patents in security and
e-commerce applications and employs some of the world's leading security
systems architects and engineers. For more information about Wave, 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.

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This press release shall not constitute an offer to sell or a solicitation
of an offer to buy any securities. No securities are being offered at this