Replies to post #127440 on Wave Systems Corp. (fka WAVXQ)

[Fly Fisher]

KeV, answer your own Q - tell us one company that doesn't

give this form of compansation when the company has a loss for the quarter and/or year.

FlyFisher

[john_galt]

keV,

Financial Accounting Standard No. 123 requires expensing of share-based compensation, specifically stock options. Wave's prior year accounting did not include this expense since it was not yet required under FAS 123.

This accounting standard was a very hot topic for tech firms because it forced them to recognize expense for options that were essentially "free" in prior years.

The expense does not indicate amounts exercised nor "in the money." It is likely based on a Black-Scholes valuation of options awarded to Wave employees.

[Architect]

I am not an cpa, tax attorney, the 408K thay gave their emplyoees I don't believe is tax...until they leave or retire. The company, IMHO, is in the growth/revenue stage and is only as good as the folks down in the trenches (besides the investors)who are ironing out the bugs and hopefully following through sales.