Friday, September 12, 2008

Wave Systems sells stock to regain Nasdaq compliance

By Mass High Tech Staff

Wave Systems Corp. reports that it is selling 172 shares of newly designated 8 percent Series I convertible preferred stock to investors for $4,400 per share to generate $756,800. Lee-based Wave Systems (Nasdaq: WAVX) reports that proceeds from the financing will be used to fund the company’s ongoing operations.

The news comes less than a month after Wave Systems received notification from the Nasdaq Stock Market indicating that Wave had failed to regain compliance with the market value rule for continued inclusion on the Nasdaq Global Market. Wave officials subsequently said they planned an appeal hearing to be held within six weeks.

Wave Systems, which was founded as Indata Corp. in 1988, develops client and server-based data security products. In March, the company reported a private offering of its stock worth $3.3 million. In May 2007, it completed a similar private placement, raising $14.2 million.

In the new financing, each share of Series I convertible preferred stock will be convertible into 10,000 shares of Class A common stock at a conversion rate of 44 cents per share after Wave’s Class A common stock reaches $1.10 for 15 consecutive trading days, company officials said.

Wave Systems completed an initial public offering in 1999. In 2007 it reported a net loss of $19.9 million on revenue of $6.3 million.