Replies to post #236285 on Wave Systems Corp. (fka WAVXQ)

[tkc]

Hi Alea. re: the critical importance of time. The end of the runway is in sight. Wave sales must lift off or lighten the cargo soon. W/ a current burn of ~$2.5M and funding limited via the ATM to only $6.7M they are time limited. Quick "back of the napkin" #s EoQ4 cash of 2.1 less current account neg. bal of 1.2 (assume C/L includes 1M bal due SKS) plus 5.4 in Q1 ATM funding yields ~$6.3 of worling capital. Add the 6.7 remaining available thru the ATM = ~13M. Wave, as it currently operates, is time limited. The good news is: Wave is time limited. Thus the new CEO will continue taking actions to lighten the load &/or improve sales. As Dell continued to shrink SMB must have seen a little incremental growth. I doubt Q1 will show much improvement in sales so op ex will likely decrease some. So the saga continues but something will occur soon to provide more clarity of Wave's future.

[RootOfTrust]

"there's a timeline when someone purchases wave's software. until then, there's uncertainty."

I'm sure you realize Wave does sell software and not just to OEMs. According to the 10-K, 2013 Embassy licensing and maintenance was $17.95m of which $11.18m was Dell leaving $6.77m for everything else including non-Dell OEMs and enterprise licensing.

I would readily agree that "when someone purchases wave software" can be taken to mean "when the numbers scale up significantly" but just the same software sales are occurring, in fact the $6.77m of non-Dell Embassy licensing and maintenance might include something like 50,000-100,000 new seats of ERAS.

What Solms needs to do is continue to improve core products such as ERAS, VSC and WEM to make them more scalable and attractive to deploy in large enterprise IT networks. He also needs sales people who have a track record selling to large customers.