Replies to post #203916 on Wave Systems Corp. (fka WAVXQ)

[aleajactaest]

*I wondered about the definition of ordinary business as well. But you can only chase your tail so far.

Then I realised that a large order also has a material impact financially:

"material changes in the financial condition or operations"

... and ended up thinking a large order is going to meet the requirement one way or another.

The accountants do seem to offer a little advice on the nature of extraordinary items, and your post seems to confirm the a.

Accounting Principles Board (APB) 30 provides that:

"Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. Thus, both of the following criteria should be met to classify an event or transaction as an extraordinary item:

a. Unusual nature—the underlying event or transaction should possess a high degree of abnormality and be of a type clearly unrelated to, or only incidentally related to, the ordinary and typical activities of the entity, taking into account the environment in which the entity operates.
b. Infrequency of occurrence—the underlying event or transaction should be of a type that would not reasonably be expected to recur in the foreseeable future, taking into account the environment in which the entity operates."

[dig space]

alea/bull,

somewhere in my looking into the normal order of business thingy (and I can't find it now, sorry, so just bear with me) I read

1) that the new timely requirements are such that if you need to name it in a q report, you need to name it in a timely manner (4 days from event) using an 8-k

2) while normal is deliberately vague it seems, somewhere it was said in one of those trying to interpret the rule thingy's 10% or 15% of business meets the criteria.

assuming Wave does lets say $7m in Q4 based on previously disclosed normal order of business, a new material agreement of around $700k should be mentioned in a timely manner (withing 4 days) by my general understanding, but again, there is quite a bit of squish when it come to positive news (adding a customer) as opposed to negative news (losing a customer or a sig change to a deal with a 10%+ relationship). Regarding assests it seems a little clearer in the rule itself, but on sales of the product for which it is your normal business to sell it, vagueness sets in.