Replies to post #5507 on Wave Systems Corp. (fka WAVXQ)

[rachelelise]

Yaya

we are not voting on a float increase despite the wording in all of these articles. we are voting on an increase in the amount of authorized shares which could be sold to the public or institutions later on if the Board felt it prudent and also be available for stock based compensation programs.

These shares are not included in any financial ratios per se. That said it is one step closer to having the shares issued which at that time would be used in the denominator of some of the financial fractions.

If my memory serves me well, I think it is an increase up to 125 million shares (from 75 million) which is a healthy increase.It appears with the latest financing that most if not all of the existing authorized shares are allocated.

[Wildman262]

Yaya, the vote to authorize additional shares will not affect any PE calculation. Only when those shares are used to grant additonal employee options or when some of them may be sold to raise money do they get counted in the float.

If authorized and approved, they are not tradeble until Wave does something with them. Much in the same way Wave previously had 75 million shares outstanding. Just prior to the last funding in April, there was around 52million shareoutstanding. Add up all the shares that were used for the funding and that is the new number of shares outstanding, with 75 million shares still the number of total authorized shares.

But, to answer your question, I think the $40 package could carry a margin of 50-70%, not unlike other software from other well known vendors. Wave can go from zero, to decent numbers n a short period of time, as TPM's begin to ramp up with hockey stick adoption curves. I know you know all this, but it bears repeating for any new investors that are reading.