Replies to post #240426 on Wave Systems Corp. (fka WAVXQ)

[aleajactaest]

Another thing. If Wave fails to reach CFBE in 2014, I expect the going concern qualification to haunt Wave's opinion. Again.

Which means another year of potential service purchasers looking at Wave's financial status and thinking, maybe not.

Long term maintenance contracts and going concern qualifications don't mix well.

I am sure many folks will discount that notion looking towards the future even as they now acknowledge it as a historical influence!

What a difference a few large deals would make. Wave needs the cash in hand to make it look viable over the maintenance term.

[dig space]

alea, my understanding is the policy was officially changed, that there is no such thing as 'non-performance bonuses' at Wave any longer. That said I have no idea how the comp committe would view exec performance in 2014. My guess is Solms nil (that Solms tells the committe he seeks nil) and that Shepard will get ~100k.

Wave is in a remarkable spot right now ... some just around the corner comments from the top, the curious hiring of a 2* as a CEO assistant, continued thinning of some of the presumably highly paid old guard (e.g Thib) i.e. evidence elsewhere of roster churn, not just cutting roster.

In some ways hiring e.g. 2* is reminiscent of the buildup in front of the pastry cavity in that it would spell to an outsider that mgmt sees future requirements and the revenues to support it. It differs in that it occurs against the broader tapestry of staff reductions or in some cases staff churn.

The S3 is effective. This is the time I had pencilled in on the back of my napkin to see if more unusual material events are under way (5 weeks from filing to effective seems to be normal for Wave).

So,

If:

1. the sales impediement is fincancial stability
and
2. the shelfie is in some form designed to cure that deficiency
and
3. the cure is sufficient to effect NBDs

Then
the Q for the day is what for the cure takes ... the standard PP with warrants etc (wash-rinse-repeat) or something comparatively unusual e.g. some sort of strategic-investment thingy, a share-swappy thingy (don't worry, I don't know what a share-swappy thingy is either), etc.

And finally of course, does the NBD benefit afforded by cure outpace the costs of the cure (i.e. ROI).

The shelfie is a $15m facility. Burn is roughly $3m. Say one torches the whole shelfie in a one-off (assuming they can, 1/3rd rule stuff and all, or was that an ATM thingy or what?) Then if one assumes a 15% discount, and one assumes warrants (worst case 1:1 at PP price) then one migrates to something like 70m shares, close to 100m fully diluted.

If then one has NBDs, recurring, at cfbe levels and calls cfbe $30m/yr, and figures cfbe is worth 4x sales to the market, then when the dust settles Wave is worth $1.7 a share ($1.2 fully diluted) on a big bad one-off all-in effort.