Wave Systems (WAVX) 10-Q 10 Nov 14 2014 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 07, 2014	Nov. 07, 2014
		Common Class A	Common Class B
Entity Registrant Name	'WAVE SYSTEMS CORP	'	'
Entity Central Index Key	'0000919013	'	'
Document Type	'10-Q	'	'
Document Period End Date	30-Sep-14	'	'
Amendment Flag	'false	'	'
Current Fiscal Year End Date	'--12-31	'	'
Entity Current Reporting Status	'Yes	'	'
Entity Filer Category	'Smaller Reporting Company	'	'
Entity Common Stock, Shares Outstanding	'	45,895,118	8,885
Document Fiscal Year Focus	'2014	'	'
Document Fiscal Period Focus	'Q3	'	'

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	Sep. 30, 2014	Dec. 31, 2013
Current Assets:	'	'
Cash and cash equivalents	$4,332,781	$2,120,102
Accounts receivable, net of allowance for doubtful accounts of $-0- at September 30, 2014 and December 31, 2013	1,960,558	2,730,077
Pledged receivables	'	1,683,188
Prepaid expenses and other current assets	433,366	488,656
Total current assets	6,726,705	7,022,023
Property and equipment, net	451,762	596,820
Amortizable intangible assets, net	2,153,900	2,590,920
Goodwill	1,448,000	1,448,000
Other assets	172,909	167,146
Total Assets	10,953,276	11,824,909
Current Liabilities:	'	'
Secured borrowings	'	1,430,710
Accounts payable and accrued expenses	3,624,978	6,789,274
Deferred revenue	5,022,767	6,996,239
Total current liabilities	8,647,745	15,216,223
Other long-term liabilities	57,136	78,618
Royalty liability	4,388,981	4,509,629
Long-term deferred revenue	1,054,443	1,003,614
Total liabilities	14,148,305	20,808,084
Stockholders' Deficit:	'	'
Capital in excess of par value	422,781,305	407,907,019
Accumulated deficit	-426,435,374	-417,240,480
Total Stockholders' Deficit	-3,195,029	-8,983,175
Total Liabilities and Stockholders' Deficit	10,953,276	11,824,909
Common Class A	'	'
Stockholders' Deficit:	'	'
Common Stock	458,951	350,197
Common Class B	'	'
Stockholders' Deficit:	'	'
Common Stock	$89	$89

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Accounts receivable, allowance for doubtful accounts (in dollars)	$0	$0
Common Class A	'	'
Common stock, par value (in dollars per share)	$0.01	$0.01
Common stock, Authorized shares	150,000,000	150,000,000
Common stock, shares issued	45,895,118	35,019,740
Common stock, shares outstanding	45,895,118	35,019,740
Common Class B	'	'
Common stock, par value (in dollars per share)	$0.01	$0.01
Common stock, Authorized shares	13,000,000	13,000,000
Common stock, shares issued	8,885	8,885
Common stock, shares outstanding	8,885	8,885

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net revenues:	'	'	'	'
Licensing and maintenance	$4,032,104	$5,851,325	$13,804,463	$16,978,355
Services	300,000	400,000	300,000	1,808,938
Total net revenues	4,332,104	6,251,325	14,104,463	18,787,293
Operating expenses:	'	'	'	'
Licensing and maintenance - cost of net revenues	260,828	406,051	912,175	3,105,961
Services - cost of net revenues	73,000	65,149	73,000	277,665
Selling, general, and administrative	4,006,625	6,181,802	14,589,760	20,043,524
Research and development	2,069,272	2,493,354	7,608,358	9,254,464
Impairment of goodwill	'	'	'	2,590,000
Total operating expenses	6,409,725	9,146,356	23,183,293	35,271,614
Operating loss	-2,077,621	-2,895,031	-9,078,830	-16,484,321
Other income (expense):	'	'	'	'
Net currency transaction (loss) gain	-3,913	-5,626	-7,862	-12,358
Net interest expense	-24,325	-43,166	-108,202	-151,196
Total other income (expense), net	-28,238	-48,792	-116,064	-163,554
Net loss	($2,105,859)	($2,943,823)	($9,194,894)	($16,647,875)
Loss per common share - basic and diluted (in dollars per share)	($0.05)	($0.09)	($0.22)	($0.58)
Weighted average number of common shares outstanding (in shares)	45,895,118	31,132,377	42,049,167	28,609,207

Consolidated_Statement_of_Stoc

Consolidated Statement of Stockholders' Deficit (USD $)	Common Class A	Common Class B	Capital in Excess of Par Value	Accumulated Deficit	Total
	Common Stock	Common Stock
Balance at Dec. 31, 2013	$350,197	$89	$407,907,019	($417,240,480)	($8,983,175)
Balance (in shares) at Dec. 31, 2013	35,019,740	8,885	'	'	'
Increase (Decrease) in Stockholders' Equity	'	'	'	'	'
Net loss	'	'	'	-9,194,894	-9,194,894
Issuance of Class A common stock at prices ranging from $0.90 - $1.39 per share, less issuance costs of $171,168	54,105	'	5,328,904	'	5,383,009
Issuance of Class A common stock at prices ranging from $0.90 - $1.39 per share, less issuance costs of $171,168 (in shares)	5,410,450	'	'	'	'
Issuance of Class A Common Stock at $0.9725 per share, less issuance costs of $103,133	52,256	'	9,022,524	'	9,074,780
Issuance of Class A Common Stock at $0.9725 per share, less issuance costs of $103,133 (in shares)	5,225,560	'	'	'	'
Warrants exercised at $2.20 -$2.32 and $1.12 - $4.62 per share for the year 2012 and 2011 respectively	1,339	'	120,523	'	121,862
Warrants exercised at $2.20 -$2.32 and $1.12 - $4.62 per share for the year 2012 and 2011 respectively (in shares)	133,914	'	'	'	'
Shares of Class A Common Stock Issued pursuant to the Wave Employee Stock Purchase Plan at $1.29, $3.40 and $9.316 per share for the year 2013, 2012 and 2011, respectively	1,054	'	98,441	'	99,495
Issuance of Class A Common Stock pursuant to the Wave Employee Stock Purchase Plan at $ 0.9435 (in shares)	105,454	'	'	'	'
Stock based compensation	'	'	303,894	'	303,894
Balance at Sep. 30, 2014	$458,951	$89	$422,781,305	($426,435,374)	($3,195,029)
Balance (in shares) at Sep. 30, 2014	45,895,118	8,885	'	'	'

Consolidated_Statement_of_Stoc1

Consolidated Statement of Stockholders' Deficit (Parenthetical) (USD $)	9 Months Ended
	Sep. 30, 2014
Consolidated Statement of Stockholders' Deficit	'
Issuance of Class A Common Stock, per share, Lower range	$0.90
Issuance of Class A Common Stock, per share, Upper range	$1.39
Issuance of Class A Common Stock, issuance costs (in dollars)	$171,168
Issuance of Class A Common Stock, per share	$1.90
Issuance of Class A Common Stock, issuance costs (in dollars)	$853,784
Warrants exercised (in dollars per share)	$0.91
Shares of Class A Common Stock Issued pursuant to the Wave Employee Stock Purchase Plan, per share	$0.94

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities:	'	'
Net loss	($9,194,894)	($16,647,875)
Adjustments to reconcile net loss to net cash used in operating activities:	'	'
Depreciation and amortization	677,317	763,840
Compensation associated with issuance of stock options	303,894	1,619,115
Impairment of goodwill and intangible assets	'	4,205,000
Accretion of royalty liability	72,975	61,050
Changes in assets and liabilities:	'	'
Decrease in accounts receivable	1,021,997	1,329,587
Decrease (increase) in prepaid expenses and other current assets	55,290	-172,528
(Increase) decrease in other assets	-5,763	88,507
Decrease in accounts payable and accrued expenses	-3,164,296	-1,218,345
(Decrease) increase in deferred revenue	-1,922,643	658,347
Decrease in royalty liability	-193,623	-103,900
Decrease in other long-term liabilities	-21,482	-16,960
Net cash used in operating activities	-12,371,228	-9,434,162
Cash flows from investing activities:	'	'
Acquisition of property and equipment	-95,239	-165,860
Internal-use software development costs	'	-226,000
Net cash used in investing activities	-95,239	-391,860
Cash flows from financing activities:	'	'
Net proceeds from issuance of common stock	14,457,789	9,389,626
Proceeds from exercise of warrants	121,862	'
Proceeds from employee stock purchase plans	99,495	171,796
Proceeds from employee stock option exercises	'	42,039
Payments on capital lease obligation	'	-44,658
Net cash provided by financing activities	14,679,146	9,558,803
Net increase (decrease) in cash and cash equivalents	2,212,679	-267,219
Cash and cash equivalents at beginning of period	2,120,102	2,112,769
Cash and cash equivalents at end of period	4,332,781	1,845,550
Cash paid during the period for:	'	'
Interest	60,209	97,308
Non-cash financing activities:	'	'
Issuance of common stock for developed technology	'	$500,000

Critical_Accounting_Policies

Critical Accounting Policies	9 Months Ended
	Sep. 30, 2014
Critical Accounting Policies	'
Critical Accounting Policies	'
	1.Critical Accounting Policies
	Wave’s discussion and analysis of its financial condition and results of operations are based on the Company’s consolidated financial statements which have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis management evaluates its estimates and judgments, including those related to revenue recognition, accounts receivable reserves, depreciation and amortization, valuation of long-lived, and intangible assets, goodwill, and software development costs, contingencies and share based compensation.  Management bases its estimates on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
	A detailed description of the accounting policies deemed critical to the understanding of the consolidated financial statements is included in the notes to Wave’s audited financial statements for the year ended December 31, 2013, included in its Form 10-K filed with the Securities and Exchange Commission on March 14, 2014.
	Revenue Recognition — Wave’s business model targets revenues from various sources including: licensing of the EMBASSY Trust Suite, Safend’s endpoint data loss protection suite, eTMS software products and development contracts.  Many of these sales arrangements include multiple-elements and/or require significant modification or customization of Wave’s software.
	Wave recognizes revenue when it is realized or realizable and earned. Wave considers revenue realized or realizable and earned when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured.  In addition to the aforementioned general policy, the following are the specific revenue recognition policies for each major category of revenue.
	Licensing and Maintenance
	Wave receives revenue from licensing its EMBASSY Trust Suite software through distribution arrangements with its OEM partners, software development and other services.  Wave’s distribution arrangements also give rise to separate software license upgrade agreements with the end users of the products distributed by the OEMs.  Safend receives revenue from licensing its endpoint data loss protection products and services through its distribution channels. Wave and Safend apply software revenue recognition guidance to all transactions except those where no software is involved.  Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is reasonably assured.  Persuasive evidence is generally a binding purchase order or license agreement.  Delivery occurs when product is shipped for its OEM distribution arrangements, or delivered via a license key for our license upgrade agreements.
	Wave enters into perpetual software license agreements through direct sales to customers and indirect sales through its OEM partners, distributors and resellers with the end users of the products distributed by the OEMs.  Wave has defined its two classes of end user customers as large and small based on those with orders in excess of 5,000 licenses and those with less than 5,000 licenses, respectively.  These license upgrade agreements generally include a maintenance component.  For arrangements with multiple-elements, including software licenses, maintenance and/or services, revenue is allocated and deferred in amounts equivalent to the vendor specific objective evidence (“VSOE”) of fair value for the undelivered elements and the difference between the total arrangement fee and the amount deferred for the undelivered elements is recognized as license revenue.  VSOE of fair value is based upon the price for which the undelivered element is sold separately.
	During the three-months ended September 30, 2014, Wave further stratified the VSOE of fair value of maintenance analysis to align it with current sales trends with respect to product mix and maintenance terms.  The following represents the resulting updates to VSOE of fair value of maintenance as a result of such further stratification.
		·	Wave products:
		·	VSOE of fair value of maintenance is only applied to bundled license and maintenance arrangements with maintenance terms of one year and less than 5,000 licenses.
		·	Safend products:
		·	Safend has defined two classes of end user customers as large and small based on those with orders in excess of 5,000 licenses and those with less than 5,000 licenses, respectively.
		·	VSOE of fair value of maintenance is only applied to bundled license and maintenance arrangements with maintenance terms of one year and less than 5,000 licenses.
	Wave has VSOE of fair value of maintenance for its small class of customers based on independent one-year maintenance renewals for its EMBASSY Remote Administration Server (“ERAS”) for Self Encrypting Drives (“SED”) products only.  As a result, for the ERAS SED small customer class licenses with maintenance bundled, Wave allocates the arrangement consideration to the elements in multi-element arrangements using the residual method.  Under the residual method, the VSOE of the undelivered elements is deferred and the remaining portion of the arrangement fee for perpetual licenses is recognized as revenue upon delivery of the software, assuming all other revenue recognition criteria are met.
	When VSOE of fair value for the undelivered elements does not exist, as is the case for Wave’s maintenance for all products other than ERAS SED, large customer class ERAS SED orders, and small customer class ERAS SED orders when maintenance terms are in excess of one year, the entire arrangement fee is recognized ratably over the performance period as licensing and maintenance revenue.
	Wave’s deferred revenue consists of the unamortized maintenance for sales to its small class of customers and bundled license and maintenance arrangements where VSOE does not exist.
	Safend enters into perpetual software license agreements through direct sales to customers and indirect sales through its OEM partners, distributors and resellers.  Safend has defined two classes of end user customers, large and small, based on those with orders in excess of 5,000 licenses and those with orders less than 5,000 licenses, respectively.  These license arrangements, generally also include a maintenance component.  For arrangements with multiple-elements, including software licenses, maintenance and/or services, revenue is allocated and deferred in amounts equivalent to the VSOE of fair value for the undelivered elements and the difference between the total arrangement fee and the amount deferred for the undelivered elements is recognized as licensing revenue.  VSOE of fair value is based upon the price for which the undelivered element is sold separately.
	Safend has VSOE of fair value of maintenance for its small class of customers based on independent one-year maintenance renewals for its Protector product only.  As a result, for the Protector small customer class with maintenance terms of one-year, Safend allocates the arrangement consideration to the elements in multi-element arrangements using the residual method.  Under the residual method, the VSOE of the undelivered elements is deferred and the remaining portion of the arrangement fee for perpetual licenses is recognized as revenue upon delivery of the software, assuming all other revenue recognition criteria are met.
	When VSOE of fair value for the undelivered elements does not exist, as is the case for Safend’s maintenance for its Encryptor, Inspector, Discoverer, Reporter, Auditor, large customer class Protector orders and small customer class Protector orders when maintenance terms are in excess of one-year, the entire arrangement fee is recognized ratably over the performance period as licensing and maintenance revenue.
	Licensing and maintenance - cost of net revenues includes customer support personnel costs, foreign tax withholdings, amortization and impairment expense for the developed technology intangible asset, costs associated with providing consulting services and related share-based compensation expense.
	Services
	Revenue from time and material service contracts is recognized as the services are provided. Revenue from fixed price, long-term service or development contracts is recognized using the percentage of completion method or the completed contract method.  The determination between completed contract method and the percentage of completion method is based on the ability to estimate. The Company measures the percentage of completion by reference to the proportion of contract hours incurred for work performed to date to the estimated total contract hours expected to be incurred.  Losses on fixed price contracts are recognized during the period in which such losses are identified.
	Services - cost of net revenues includes non-recurring time and materials costs incurred in connection with fixed price contracts and related share-based compensation expense.
	Valuation of Goodwill - We review goodwill for impairment annually and whenever events or changes in circumstances indicate the fair value of a reporting unit is more likely than not below its carrying value. If the implied fair value of the reporting unit’s goodwill is less than the carrying value, the difference is recorded as an impairment loss. The provisions of the accounting standard for goodwill and other intangibles allow us to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. We perform a quantitative test for our Safend reporting unit. We determine the fair value of Safend using the income approach. Under the income approach, we calculate the fair value of the Safend unit based on the present value of estimated future cash flows. Cash flow projections are based on management’s estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used is based on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the business’s ability to execute on the projected cash flows. The reporting unit’s fair value is allocated to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit’s goodwill is less than the carrying value, the difference is recorded as an impairment loss.
	Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates and future economic and market conditions. We base our fair value estimates on assumptions we believe to be reasonable but they are unpredictable and inherently uncertain. Actual future results may differ from those estimates.
	We will continue to evaluate goodwill on an annual basis as of September 30 and whenever events or changes in circumstances, such as significant adverse changes in business climate or operating results or changes in management’s business strategy, indicate that there may be a potential indicator of impairment.
	Valuation of Long Lived Assets - We review purchased intangible assets with finite lives for impairment whenever events or changes in circumstances indicate the carrying value of an asset group may not be recoverable. Recoverability of asset groups is assessed based on the estimated undiscounted future cash flows expected to be generated by the asset group, including its ultimate disposition. If the sum of the undiscounted cash flows is less than the carrying value, the impairment to be recognized is measured by the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell.
	Capitalized internal-use software development costs - The Company follows the provisions of ASC Topic 350-40, Intangibles Goodwill and Other—Internal Use Software. ASC Topic 350-40 provides guidance for determining whether computer software is internal-use software and also provides guidance on capitalization of the costs incurred for computer software developed or obtained for internal use.  These capitalized costs are related to Wave’s cloud platform that is hosted by the Company and accessed by its clients on a subscription basis.  The Company expenses all costs incurred during the preliminary project stage of development and capitalizes the costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the software are capitalized if it is determined that these upgrades or enhancements add additional functionality to the software. Costs incurred to improve and support products after they become available are charged to expense as incurred.  The Company records amortization of the software on a straight-line basis over five years, which is the estimated useful life of the software.  At each balance sheet date, management evaluates the unamortized capitalized software costs for potential impairment by comparing the balance to the net realizable value of the products.
	Accounting for Transfers of Financial Assets - We derecognize financial assets, specifically accounts receivable, when control has been surrendered in compliance with ASC Topic 860, Transfers and Servicing. Transfers of accounts receivable that meet the requirements of ASC 860 for sale accounting treatment are removed from the balance sheet and gains or losses on the sale are recognized. If the conditions for sale accounting treatment are not met, or are no longer met, accounts receivable transferred are classified as collateralized receivables in the consolidated balance sheets and cash received from these transactions is classified as secured borrowings. All transfers of assets are accounted for as secured borrowings. Transaction costs associated with secured borrowings, if any, are treated as borrowing costs and recognized in interest expense.
	Share-based Compensation — We recognize compensation expense for all share-based compensation awards made to employees and directors, including employee stock options and employee stock purchases related to the Employee Stock Purchase Plan. Share-based compensation expense recognized is based on the fair value of share-based payment awards adjusted for estimated forfeitures.  We estimate the fair value of share-based payment awards at grant date using a Black-Scholes option-pricing model.  Our estimate of the fair value of the share-based payment awards on the date of grant using the Black-Scholes option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables including, but not limited to, the estimated term of the award and our estimated stock price volatility.
	Reclassifications - Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation.
	Immaterial Correction of an Error — During the third quarter of 2014, we identified an error in our accounting for share-based compensation recorded in fiscal years 2011 to 2013 and through the six-months ended June 30, 2014. We assessed the materiality of the error on prior periods’ financial statements and concluded that the error was not material to any of our prior period annual or current and prior year interim financial statements.  We elected to correct the error in the three-month period ended September 30, 2014 by decreasing operating expenses by $820,000 and decreasing capital in excess of par value on the consolidated balance sheet by the same amount. For the three and nine month periods ended September 30, 2014, loss per basic and diluted share decreased by $0.02 as a result of the correction.
	Recently Adopted Accounting Pronouncements - In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue From Contracts With Customers (Topic 606), which amended the existing accounting standards for revenue recognition. The amendments are based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company is required to adopt the amendments in the first quarter of 2017. Early adoption is not permitted. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The Company is currently evaluating the impact of these amendments and the transition alternatives on its Consolidated Financial Statements.
	In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Components of an Entity, which updates the definition of discontinued operations under GAAP. Going forward, only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. Previously, a component of an entity that is a reportable segment, an operating segment, a reporting unit, a subsidiary, or an asset group was eligible for discontinued operations presentation. Additionally, the condition that the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction has been removed. The effective date for the revised standard is for applicable transactions that occur within annual periods beginning on or after December 15, 2014. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. The Company adopted this standard in the third quarter of 2014.

Reverse_Stock_Split

Reverse Stock Split	9 Months Ended
	Sep. 30, 2014
Reverse Stock Split	'
Reverse Stock Split	'
	2.Reverse Stock Split
	On June 28, 2013, our Board of Directors approved a reverse stock split of our common stock at a ratio of 1-for-4, causing each four outstanding shares of Class A common stock and Class B common stock to convert automatically into one share of Class A common stock or Class B common stock, respectively. The par value of Class A common stock and Class B common stock remains $0.01 per share. The reverse split became effective on July 1, 2013.  Stockholders’ equity has been restated to give retroactive recognition to the reverse split for all periods presented by reclassifying the excess par value resulting from the reduced number of shares from common stock to paid-in capital. Except as otherwise noted, all references to common share and per common share amounts (including warrant shares, shares reserved for issuance and applicable exercise prices) for all periods presented have been retroactively restated to reflect this reverse split.

Liquidity

Liquidity	9 Months Ended
	Sep. 30, 2014
Liquidity	'
Liquidity	'
	3.Liquidity
	The accompanying consolidated financial statements have been prepared assuming that Wave will continue as a going concern.  Wave has incurred substantial operating losses since its inception, and as of September 30, 2014, has an accumulated deficit of approximately $426,435,000.  We also expect Wave will incur an operating loss for fiscal year 2014.  As of September 30, 2014, Wave had negative working capital of approximately $1,921,000.
	If Wave is not successful in executing its business plan, Wave will not generate enough revenue to fund its cash flow requirements for the twelve-months ended September 30, 2015.  As of September 30, 2014, we had approximately $4,333,000 of cash on hand.  Given Wave’s forecasted working capital requirements for the twelve-months ending September 30, 2015, and our cash balance as of September 30, 2014, Wave will be required to raise additional capital prior to September 30, 2015 to continue to fund its operations if its sales and operating performance do not meet expectations.   During the nine-months ended September 30, 2014, Wave’s ability to raise additional capital has been primarily based on three sources:
		·	Sales of registered Class A Common Stock under a $20,000,000 shelf registration statement filed with the SEC on August 9, 2013 and declared effective by the Commission on September 12, 2013 (“2013 shelf registration statement”).  The remaining available gross proceeds on the 2013 shelf registration statement as of June 11, 2014 were increased by twenty percent pursuant to Rule 462(b) under the Securities Act of 1933 in connection with the offering on such date described below;
		·	Sales of registered Class A Common Stock via the At the Market Sales Agreement with MLV & Co. LLC (“MLV”) entered into during January, 2012.  The At the Market Sales Agreement was amended on September 19, 2013 to authorize the issuance and sale of shares of the Company’s Class A Common Stock under the At the Market Sales Agreement for aggregate gross sales proceeds of up to $15,000,000 in connection with the 2013 shelf registration
		·	Sales of Class A Common Stock through private placements.
	On June 11, 2014, Wave entered into agreements with certain institutional investors for a private placement of 5,225,560 shares of its Class A Common Stock at a price of $1.90 per share yielding gross proceeds of approximately $9,929,000.  This financing was completed under the 2013 shelf registration statement together with the related registration statement on Form S-3 filed pursuant to Rule 462(b).  Craig-Hallum Capital Group LLC (“Craig-Hallum”) entered into a placement agency agreement with Wave in which they agreed to act as placement agent in connection with the offering.  Wave agreed to pay Craig-Hallum a fee equal to 7% of the gross proceeds of this offering.  We realized approximately $9,075,000 in net proceeds after deducting the placement agent fees of $695,000 and additional legal and other fees associated with the issuance of these securities totaling approximately $159,000. In connection with the financing, we also issued warrants to the subscribers to purchase up to 2,090,224 shares of Wave Class A Common Stock for $1.90 per share. These warrants expire on June 11, 2019.  A prospectus supplement related to the offering was filed with the SEC on June 13, 2014.
	During the nine-months ended September 30, 2014, Wave sold 5,410,450 shares of its Class A common stock through its At the Market Sales Agreement with MLV at an average price of $1.03 per share, for net proceeds of approximately $5,383,000 after deducting offering costs of approximately $171,000.  As a result of the June 11, 2014 offering which used substantially all of the remaining availability of the 2013 shelf registration statement, the Company terminated all future sales under the At the Market Sales Agreement with MLV.
	As of November 7, 2014, approximately $37,000 in gross proceeds remains under the 2013 shelf registration statement.  The Company will be filing a new shelf registration statement within the next twelve-months ending September 30, 2015.
	Wave may be required to sell shares of common stock, preferred stock, obtain debt financing or engage in a combination of these financing alternatives, to raise additional capital to continue to fund its operations for the twelve-months ending September 30, 2015.  If Wave is not successful in executing its business plan, it will be required to sell additional shares of common stock, preferred stock, obtain debt financing or engage in a combination of these financing alternatives or it could be forced to reduce expenses which may significantly impede its ability to meet its sales, marketing and development objectives, or cause it to cease operations or merge with another company.  No assurance can be provided that any of these initiatives will be successful.  Due to our current cash position, our forecasted working capital needs over the next twelve months and beyond, uncertainty as to whether we will achieve our business plan and the fact that we may require additional financing, substantial doubt exists with respect to our ability to continue as a going concern.

Secured_Borrowings_and_Pledged

Secured Borrowings and Pledged Receivables	9 Months Ended
	Sep. 30, 2014
Secured Borrowings and Pledged Receivables	'
Secured Borrowings and Pledged Receivables	'
	4.Secured Borrowings and Pledged Receivables
	Pursuant to agreements entered into on April 23, 2012 with The Receivables Exchange (“TRE”) and on November 26, 2013 with CapFlow Funding Group Managers LLC (“CapFlow”), both of which are unrelated third parties, Wave has transferred certain accounts receivable to buyers which are accounted for as secured borrowings. The transferred receivables are classified as pledged receivables and Wave’s obligation to repurchase the transferred receivables is presented as secured borrowings on the consolidated balance sheet. The carrying value of each secured borrowing approximates 85% of each associated pledged receivable and takes into consideration a 15% holdback provision per the TRE and CapFlow agreements.  The customers’ payment of the pledged receivables constitutes the repayment of the related amounts borrowed. The respective financial institution will then remit the remaining 15% holdback to Wave less interest.  Beginning on November 26, 2013 Wave no longer transfers accounts receivable to TRE and currently utilizes CapFlow exclusively.  The interest rate on the secured borrowings was 1.50% for every thirty days outstanding, or an annual effective rate of approximately 18%.
	With Wave’s approval, CapFlow establishes arrangements with buyers providing for borrowings that are secured by our accounts receivable, and for which recourse exists against Wave. Wave can be required to repurchase the receivables under certain circumstances in case of specific defaults by our customers as set forth in the program terms.  CapFlow acts as the servicing agent for receivables transferred to buyers.  CapFlow collects the pledged receivables from Wave’s customers and makes the repayment to the buyers on its behalf once the receivables are collected.
	At September 30, 2014 and December 31, 2013, receivables totaling $0 and $1,683,188, respectively, were transferred to buyers, remain uncollected and are subject to repurchase. The secured borrowings totaled $0 and $1,430,710 as of September 30, 2014 and December 31, 2013, respectively. We recognized $35,227 and $88,996 of interest expense associated with the secured borrowings for the nine-months ended September 30, 2014 and 2013, respectively and $0 and $22,775 of interest expense for the three-months ended September 30, 2014 and 2013, respectively.  Proceeds from the transfer of receivables are included in cash provided by operating activities in the consolidated statements of cash flows.  Proceeds from the transfer of pledged receivables were $1,693,450 and $6,886,188 for the nine-months ended September 30, 2014 and 2013, respectively.  CapFlow and TRE collected $1,693,450 and $6,356,691 of pledged receivables in the nine-months ended September 30, 2014 and 2013, respectively, which thereby reduced our repurchase obligation and were accounted for as reductions of pledged receivables and secured borrowings on the consolidated balance sheet.  No pledged receivables were repurchased by the Company in the three and nine-months ended September 30, 2014 and 2013.  The changes in pledged receivables and secured borrowings on the consolidated balance sheets are included within the change in accounts receivable on the consolidated statements of cash Flows.

Loss_per_Share

Loss per Share	9 Months Ended
	Sep. 30, 2014
Loss per Share	'
Loss per Share	'
	5.Loss per Share
	Basic net loss per common share has been calculated based upon the weighted average number of shares of common stock outstanding during the period.  Diluted net loss per share is also computed using the weighted average number of common shares and excludes dilutive instruments as their effect would be anti-dilutive.  Dilutive instruments consist primarily of employee stock options and stock warrants.  Diluted net loss per share is equal to basic net loss per share and is therefore not presented separately in the financial statements.  The weighted average number of potential common shares that would have been included in diluted loss per share, had their effect not been anti-dilutive for each of the three and nine-month periods ended September 30, 2014 were 261,000 and 174,000, respectively, versus 4,000 and 141,000 for the three and nine-month periods ended September 30, 2013, respectively.  Employee stock options and other stock warrants to purchase a weighted average of approximately 6,452,000 and 7,797,000 shares were outstanding for the three-month and nine-month periods ended September 30, 2014, respectively, versus 5,983,000 and 5,486,000 shares for the three-month and nine-month periods ended September 30, 2013, respectively, but have not been included in the computation of diluted loss per share because their effect would have been anti-dilutive.

Sharebased_Compensation

Share-based Compensation	9 Months Ended
	Sep. 30, 2014
Share-based Compensation	'
Share-based Compensation	'
	6.Share-based Compensation
	Wave recognized $(547,950) and $512,569 of share-based compensation during the three-months ended September 30, 2014 and 2013, respectively, and $303,894 and $1,619,115 for the nine-month periods ended September 30, 2014 and 2013, respectively.  During the nine-month period ended September 30, 2014, Wave granted 1,856,100 stock options at a weighted-average estimated fair value ranging from $0.54 to $1.09.  During the nine-month period ended September 30, 2013, Wave granted 641,897 stock options at a weighted-average estimated fair value ranging from $0.68 to $2.72.  During the three-month period ended September 30, 2014, Wave granted 178,100 stock options at a weighted-average estimated fair value ranging from $0.71 and $0.86, respectively.  During the three-month period ended September 30, 2013, Wave granted 14,910 stock options at a weighted-average estimated fair value ranging from $0.68 to $0.96.
	The following table summarizes the effect of share based compensation in Wave’s statement of operations, for the three-month and nine-month periods ended September 30, 2014 and 2013:
		Three months ended					Nine months ended
		September 30,					September 30,
		2014			2013		2014			2013
	Cost of Sales	$	3,129		$	6,494	$	10,310		$	21,583
	Selling, General & Administrative	(365,262		)	368,358		296,837			1,202,756
	Research & Development	(185,817		)	137,717		(3,253		)	394,776
	Total	$	(547,950	)	$	512,569	$	303,894		$	1,619,115

Goodwill_and_Amortizable_Intan

Goodwill and Amortizable Intangible Assets	9 Months Ended
	Sep. 30, 2014
Goodwill and Amortizable Intangible Assets	'
Goodwill and Amortizable Intangible Assets	'
	7.Goodwill and Amortizable Intangible Assets
	There have been no changes to the carrying amount of goodwill during the three and nine month periods ended September 30, 2014.
	Wave tests goodwill for impairment annually on September 30 and during interim periods whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable.  Wave uses a fair value approach in testing goodwill for impairment in accordance with the provisions of ASC Topic 350, Intangibles—Goodwill and Other. The provisions of the accounting standard for goodwill and other intangibles allow us to first assess the qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test.  For our annual goodwill impairment test at September 30, 2014, we performed a quantitative test for our Safend reporting unit.  We determine the fair value of Safend using the income approach.  The reporting unit’s fair value is allocated to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit’s goodwill is less than the carrying value, the difference is recorded as an impairment loss.
	During the first quarter of 2013, the Company determined that sufficient indicators of potential impairment existed to require an interim goodwill impairment analysis for the Safend reporting unit.  These indicators included, among others, significantly lower than expected revenue, identification of increased competition for transactions involving Safend products, inability of the combined sales force to close large transactions and downward revisions to management’s short-term and long-term forecast for Safend.  The revised forecast reflected changes related to revenue growth rates, current market trends, expected deal synergies and other expectations impacting the anticipated short-term and long-term operating results of Safend.  Due to the aforementioned indicators, the Company concluded that there were qualitative factors for the Safend unit that indicated it is more likely than not that the fair value of the Safend reporting unit was less than its carrying amount.
	The Company estimates the fair value of its reporting units using the income approach. Under the income approach, the Company calculates the fair value of a reporting unit based on the present value of estimated future cash flows.  Cash flow projections are based on management’s estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used is based on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the business’ ability to execute on the projected cash flows.  The inputs used for the income approach are significant unobservable inputs, or Level 3 inputs, as described in ASC Topic 820, Fair Value Measurement.
	When indicators of impairment are present, such as those noted above, the Company tests long-lived assets (other than goodwill) for recoverability by comparing the carrying value of an asset group to the estimated undiscounted future cash flows expected to be generated by the asset group, including its ultimate disposition. Based on the results of the recoverability test during the first quarter of 2013 the Company determined that the carrying value of the Safend asset group exceeded its undiscounted cash flows and was therefore not recoverable. The Company estimated the fair value of the intangible assets under an income approach as described above. Based on the analysis, the Company recorded impairment charges of approximately $1,600,000 on developed technology intangible assets during the first quarter of 2013.  The decline in the fair value of the Safend intangible assets is attributable to the same factors as discussed above for the fair value of the Safend reporting unit.
	After adjusting the carrying value of the reporting unit for the impairment of the intangibles noted above in the first quarter of 2013, the Company completed the two step goodwill impairment test for the Safend reporting unit.  This test resulted in an implied fair value of goodwill substantially below the carrying value of the goodwill. As a result, the Company recorded a goodwill impairment charge of approximately $2,600,000 during the first quarter of 2013. The goodwill impairment charge totaling approximately $2,600,000 for the six-months ended June 30, 2013 is included in the impairment of goodwill line item in the consolidated statements of operations.  The developed technology impairment charge of approximately $1,600,000 for the six-months ended June 30, 2013 is included in the licensing and maintenance — cost of net revenues line item in the consolidated statements of operations.
	The following schedule presents intangible assets subject to amortization as of September 30, 2014 and December 31, 2013:
	September 30, 2014
	Intangible Asset	Gross		Accumulated			Accumulated			Net		Weighted
		Carrying		Amortization			Impairment					Average Remaining
		Amount					Loss					Useful Life
												(in years)
	Developed Technology	$	6,426,000	$	(1,285,924	)	$	(5,038,100	)	$	101,976	3.9
	Customer Relationships	3,972,000		(841,327		)	(1,786,673		)	1,344,000		6.9
	Internal-use software	726,000		(146,410		)	—			579,590		3.9
	Acquired Patents	1,100,000		(971,666		)	—			128,334		0.5
		$	12,224,000	$	(3,245,327	)	$	(6,824,773	)	$	2,153,900
	December 31, 2013
	Intangible Asset	Gross		Accumulated			Accumulated			Net		Weighted
		Carrying		Amortization			Impairment					Average
		Amount					Loss					Remaining
												Useful Life
												(in years)
	Developed Technology	$	6,426,000	$	(1,266,803	)	$	(5,038,100	)	$	121,097	4.8
	Customer Relationships	3,972,000		(697,327		)	(1,786,673		)	1,488,000		7.8
	Internal-use software	726,000		(37,510		)	—			688,490		4.8
	Acquired Patents	1,100,000		(806,667		)	—			293,333		1.4
		$	12,224,000	$	(2,808,307	)	$	(6,824,773	)	$	2,590,920
	Amortization expense associated with intangible assets was $145,674 and $437,021 for the three and nine months ended September 30, 2014, respectively, and $111,794 and $402,740 for the three and nine months ended September 30, 2013, respectively. The estimated amortization expense for intangible assets for the next five years and thereafter is as follows (in thousands):
	Period	Estimated
		Amortization
		Expense
	Remainder of 2014	$	146
	2015	436
	2016	363
	2017	363
	2018	318
	Thereafter	528
	Total	$	2,154

Income_Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2014
Income Taxes	'
Income Taxes	'
	8.Income Taxes
	Wave has federal and state net operating loss carryforwards of approximately $310,794,000, which expire beginning in 2014 through 2034 and include approximately $8,200,000 of net operating loss carryforwards of Safend, Inc., a wholly owned US-based subsidiary of Safend, Ltd.  Pursuant to Section 382 of the Internal Revenue Code, the annual utilization of Wave’s net operating and capital loss carryforwards may be substantially limited if a cumulative change in ownership of more than 50% occurs within any three-year period.  Wave has not determined whether there have been such cumulative changes in ownership or the impact on the utilization of the loss carryforwards if such changes have occurred.  However, in considering Section 382 of the Internal Revenue Code, Wave believes that it is likely that such a change in ownership has occurred thus raising the likelihood that such net operating and capital loss carryforwards are subject to annual limitations.  In addition, the Company maintains approximately $14,500,000 of operating loss carryforwards associated with Safend, Ltd., which may be carried forward indefinitely.

Segment_Reporting

Segment Reporting	9 Months Ended
	Sep. 30, 2014
Segment Reporting	'
Segment Reporting	'
	9.Segment Reporting
	The Company’s products include the Wave EMBASSY® digital security products and services (“the Wave segment”) and Safend’s endpoint data loss protection products and services (“the Safend segment).  These products and services constitute the Company’s reportable segments as of September 30, 2014.
	During the three-months ended September 30, 2014, the Company began allocating costs to the Safend segment to attribute costs incurred by the Wave segment on behalf of Safend.  These costs primarily include sales salaries, salary related expenses and marketing expenses.  The Company has also adjusted the nine-months ended September 30, 2014 segment operating income (loss) to capture the year to date allocation of the Safend segment costs that were incurred by the Wave segment.
	Net losses for reportable segments exclude net interest income (expense) and other income (expense), net.  These items are not reported by segment since they are excluded from the measurement of segment performance reviewed by Wave’s Chief Executive Officer.
	The following sets forth reportable segment data:
		Three months ended						Nine months ended
		September 30,						September 30,
		2014			2013			2014			2013
	Net revenues:
	EMBASSY® digital security products and services	$	3,105,690		$	4,976,696		$	10,123,328		$	15,224,606
	Safend endpoint data loss protection products and services	1,226,414			1,274,629			3,981,135			3,562,687
	Total Net Revenues	$	4,332,104		$	6,251,325		$	14,104,463		$	18,787,293
	Net income (loss):
	EMBASSY® digital security products and services	$	(2,113,827	)	$	(3,117,522	)	$	(9,322,110	)	$	(11,522,799	)
	Safend endpoint data loss protection products and services	36,206			222,491			243,280			(4,961,522		)
	Total Segments Operating Loss	(2,077,621		)	(2,895,031		)	(9,078,830		)	(16,484,321		)
	Other income (expense), net	(3,913		)	(5,626		)	(7,862		)	(12,358		)
	Net interest expense	(24,325		)	(43,166		)	(108,202		)	(151,196		)
	Net Loss	$	(2,105,859	)	$	(2,943,823	)	$	(9,194,894	)	$	(16,647,875	)
	Impairment of Goodwill:
	EMBASSY® digital security products and services	$	—		$	—		$	—		$	—
	Safend endpoint data loss protection products and services	—			—			—			2,590,000
	Total Impairment of Goodwill	$	—		$	—		$	—		$	2,590,000
	Depreciation and Amortization Expense:
	EMBASSY® digital security products and services	$	154,777		$	152,884		$	494,107		$	496,967
	Safend endpoint data loss protection products and services	60,640			63,686			$	183,210		266,873
	Total Depreciation and Amortization Expense	$	215,417		$	216,570		$	677,317		$	763,840
	Capital Expenditures:
	EMBASSY® digital security products and services	$	30,476		$	21,150		$	93,008		$	146,654
	Safend endpoint data loss protection products and services	—			8,562			2,231			19,206
	Total Capital Expenditures	$	30,476		$	29,712		$	95,239		$	165,860
		September 30,			December 31,
		2014			2013
	Assets:
	EMBASSY digital security products and services	$	7,375,112		$	7,733,322
	Safend endpoint data loss protection products and services	3,578,164			4,091,587
	Total assets	$	10,953,276		$	11,824,909
	The following table details Wave’s sales by geographic area for the three and nine-month periods ended September 30, 2014 and 2013.  Geographic area is based on the location of where the products were shipped or services rendered.
		United States			Europe			Asia			Total
		of America
	Three months ended September 30, 2014:
	EMBASSY® digital security products and services	$	2,389,644		$	559,695		$	156,350		$	3,105,690
	Safend endpoint data loss protection products and services	613,850			527,446			85,118			1,226,414
	Total	$	3,003,494		$	1,087,141		$	241,468		$	4,332,104
	% of Total Revenue	69		%	25		%	6		%	100		%
	Three months ended September 30, 2013:
	EMBASSY® digital security products and services	$	3,561,621		$	1,061,969		$	353,106		$	4,976,696
	Safend endpoint data loss protection products and services	561,648			616,707			96,274			1,274,629
	Total	$	4,123,269		$	1,678,676		449,380			$	6,251,325
	% of Total Revenue	66		%	27		%	7		%	100		%
	Nine months ended September 30, 2014:
	EMBASSY® digital security products and services	$	7,503,559		$	1,803,558		$	816,211		$	10,123,328
	Safend endpoint data loss protection products and services	2,023,226			1,666,844			291,065			3,981,135
	Total	$	9,526,785		$	3,470,402		$	1,107,276		$	14,104,463
	% of Total Revenue	67		%	25		%	8		%	100		%
	Nine months ended September 30, 2013:
	EMBASSY® digital security products and services	$	11,363,297		$	2,989,228		$	872,081		$	15,224,606
	Safend endpoint data loss protection products and services	1,533,564			1,766,108			263,015			3,562,687
	Total	$	12,896,861		$	4,755,336		$	1,135,096		$	18,787,293
	% of Total Revenue	69		%	25		%	6		%	100		%
	Approximately 90% of all tangible assets of Wave are located within the United States of America and approximately 10% are located in the State of Israel.
	Customers, by segment, from which Wave derived revenue in excess of 10% for the three and nine-month periods ended September 30, 2014 and 2013 are as follows:
				Three months ended						Nine months ended
September 30,					September 30,
			2014			2013			2014			2013
Customer	Segment		Revenue						Revenue
Dell, Inc.	EMBASSY®		$	1,262,879		$	2,963,995		$	4,811,984		$	8,647,857
% of Total Revenue			29		%	47		%	34		%	46		%

Issuance_of_Common_Stock

Issuance of Common Stock	9 Months Ended
	Sep. 30, 2014
Issuance of Common Stock	'
Issuance of Common Stock	'
	10.Issuance of Common Stock
	On June 11, 2014, Wave entered into agreements with certain institutional investors for a private placement of 5,225,560 shares of its Class A Common Stock at a price of $1.90 per share yielding gross proceeds of $9,928,564.  This financing was completed under the 2013 shelf registration statement together with the related registration statement on Form S-3 filed pursuant to Rule 462(b).  Craig-Hallum entered into a placement agency agreement with Wave in which they agreed to act as placement agent in connection with the offering.  Wave agreed to pay Craig-Hallum a fee equal to 7% of the gross proceeds of this offering.  We realized approximately $9,075,000 in net proceeds after deducting the placement agent fees of $695,000 and additional legal and other fees associated with the issuance of these securities totaling approximately $159,000.  In connection with the financing, we also issued warrants to the subscribers to purchase up to 2,090,224 shares of Wave Class A Common Stock for $1.90 per share. These warrants expire on June 11, 2019.  The warrants have been accounted for as equity. A prospectus supplement related to the offering was filed with the SEC on June 13, 2014.
	During the three-month period ended June 30, 2014, Wave received net proceeds of $59,292 after deducting offering costs of approximately $3,000 in connection with the issuance of 44,666 shares of Class A Common Stock in its At The Market offerings through MLV.  The shares were sold at prices ranging from $1.37 - $1.39 per share.
	On June 1, 2014, Wave issued 105,454 shares of Class A Common Stock to Wave employees for $0.94 per share, pursuant to the Wave 2004 Employee Stock Purchase Plan.  Wave received proceeds of $99,495 from the sale of these shares.
	During the three-month period ended June 30, 2014, Wave received gross proceeds of $121,862 in connection with the issuance of 133,914 shares of Class A Common Stock upon the exercise of warrants that were granted to investors as part of Wave’s December 2013 financings.  The warrants were exercised at $0.91 per share.
	During the three-month period ended March 31, 2014, Wave received net proceeds of $5,323,717 after deducting offering costs of approximately $169,000, in connection with the issuance of 5,365,784 shares of Class A Common Stock in its At The Market offerings through MLV.  The shares were sold at prices ranging from $0.90 - $1.13 per share.
	On March 13, 2013, Wave entered into agreements with certain institutional investors for a private placement of 301,205 shares of its Class A Common Stock at a price of $3.32 per share, yielding gross proceeds of $1,000,000.  Wave agreed to pay Dawson James Securities, Inc., the placement agent, a fee equal to 6% of the gross proceeds of this offering. Wave realized approximately $910,000 in net proceeds after deducting the placement agent fees of $60,000 and additional legal and other fees associated with the issuance of these securities totaling approximately $30,000.  Wave also issued warrants to the subscribers to purchase 150,603 shares of Class A Common Stock at an exercise price of $3.32 per share.  These warrants expire in October 2018.
	During the three-month period ended March 31, 2013, Wave received net proceeds of $262,945 after deducting offering costs of approximately $8,700, in connection with the issuance of 94,988 shares of Class A Common Stock in its at the market offerings through MLV.  The shares were sold at prices ranging from $2.80 - $2.92 per share.
	During the three-month period ended March 31, 2013, Wave received gross proceeds of $42,039 in connection with the issuance of 12,983 shares of Class A Common Stock upon the exercise of employee stock options.  The employee stock options were exercised at $3.24 per share.

Fair_Value_Measurement

Fair Value Measurement	9 Months Ended
	Sep. 30, 2014
Fair Value Measurement	'
Fair Value Measurement	'
	11.Fair Value Measurement
	As of September 30, 2014, Wave’s financial assets that are measured at fair value on a recurring basis are comprised of overnight money market fund investments.  Wave invests excess cash from its operating cash accounts in overnight money market funds and reflects these amounts ($3,352,534 at September 30, 2014) within cash and cash equivalents on the consolidated balance sheet using quoted prices in active markets for identical assets (Level 1) at a net value of 1:1 for each dollar invested.
	Financial instruments not measured or recorded at fair value in the accompanying unaudited consolidated financial statements consist of accounts receivable, collateralized receivables, accounts payable and secured borrowings. The estimated fair value of accounts receivable, collateralized receivables, accounts payable and secured borrowings approximates their carrying value.
	Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument.  These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision.  Changes in assumptions could significantly affect the estimates.

Subsequent_Events

Subsequent Events	9 Months Ended
	Sep. 30, 2014
Subsequent Events	'
Subsequent Events	'
	12.Subsequent Events
	On October 15, 2014, Wave entered into an Asset Purchase Agreement with DocMagic, Inc. (“DocMagic”) to sell eSignSystems, a product line of Wave, to DocMagic for $1,214,000 (the “Transaction”). The Transaction closed on October 16, 2014.  Wave is estimating a net gain on the sale of approximately $1,300,000.

Critical_Accounting_Policies_P

Critical Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2014
Critical Accounting Policies	'
Revenue Recognition	'
	Revenue Recognition — Wave’s business model targets revenues from various sources including: licensing of the EMBASSY Trust Suite, Safend’s endpoint data loss protection suite, eTMS software products and development contracts.  Many of these sales arrangements include multiple-elements and/or require significant modification or customization of Wave’s software.
	Wave recognizes revenue when it is realized or realizable and earned. Wave considers revenue realized or realizable and earned when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured.  In addition to the aforementioned general policy, the following are the specific revenue recognition policies for each major category of revenue.
	Licensing and Maintenance
	Wave receives revenue from licensing its EMBASSY Trust Suite software through distribution arrangements with its OEM partners, software development and other services.  Wave’s distribution arrangements also give rise to separate software license upgrade agreements with the end users of the products distributed by the OEMs.  Safend receives revenue from licensing its endpoint data loss protection products and services through its distribution channels. Wave and Safend apply software revenue recognition guidance to all transactions except those where no software is involved.  Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is reasonably assured.  Persuasive evidence is generally a binding purchase order or license agreement.  Delivery occurs when product is shipped for its OEM distribution arrangements, or delivered via a license key for our license upgrade agreements.
	Wave enters into perpetual software license agreements through direct sales to customers and indirect sales through its OEM partners, distributors and resellers with the end users of the products distributed by the OEMs.  Wave has defined its two classes of end user customers as large and small based on those with orders in excess of 5,000 licenses and those with less than 5,000 licenses, respectively.  These license upgrade agreements generally include a maintenance component.  For arrangements with multiple-elements, including software licenses, maintenance and/or services, revenue is allocated and deferred in amounts equivalent to the vendor specific objective evidence (“VSOE”) of fair value for the undelivered elements and the difference between the total arrangement fee and the amount deferred for the undelivered elements is recognized as license revenue.  VSOE of fair value is based upon the price for which the undelivered element is sold separately.
	During the three-months ended September 30, 2014, Wave further stratified the VSOE of fair value of maintenance analysis to align it with current sales trends with respect to product mix and maintenance terms.  The following represents the resulting updates to VSOE of fair value of maintenance as a result of such further stratification.
		·	Wave products:
		·	VSOE of fair value of maintenance is only applied to bundled license and maintenance arrangements with maintenance terms of one year and less than 5,000 licenses.
		·	Safend products:
		·	Safend has defined two classes of end user customers as large and small based on those with orders in excess of 5,000 licenses and those with less than 5,000 licenses, respectively.
		·	VSOE of fair value of maintenance is only applied to bundled license and maintenance arrangements with maintenance terms of one year and less than 5,000 licenses.
	Wave has VSOE of fair value of maintenance for its small class of customers based on independent one-year maintenance renewals for its EMBASSY Remote Administration Server (“ERAS”) for Self Encrypting Drives (“SED”) products only.  As a result, for the ERAS SED small customer class licenses with maintenance bundled, Wave allocates the arrangement consideration to the elements in multi-element arrangements using the residual method.  Under the residual method, the VSOE of the undelivered elements is deferred and the remaining portion of the arrangement fee for perpetual licenses is recognized as revenue upon delivery of the software, assuming all other revenue recognition criteria are met.
	When VSOE of fair value for the undelivered elements does not exist, as is the case for Wave’s maintenance for all products other than ERAS SED, large customer class ERAS SED orders, and small customer class ERAS SED orders when maintenance terms are in excess of one year, the entire arrangement fee is recognized ratably over the performance period as licensing and maintenance revenue.
	Wave’s deferred revenue consists of the unamortized maintenance for sales to its small class of customers and bundled license and maintenance arrangements where VSOE does not exist.
	Safend enters into perpetual software license agreements through direct sales to customers and indirect sales through its OEM partners, distributors and resellers.  Safend has defined two classes of end user customers, large and small, based on those with orders in excess of 5,000 licenses and those with orders less than 5,000 licenses, respectively.  These license arrangements, generally also include a maintenance component.  For arrangements with multiple-elements, including software licenses, maintenance and/or services, revenue is allocated and deferred in amounts equivalent to the VSOE of fair value for the undelivered elements and the difference between the total arrangement fee and the amount deferred for the undelivered elements is recognized as licensing revenue.  VSOE of fair value is based upon the price for which the undelivered element is sold separately.
	Safend has VSOE of fair value of maintenance for its small class of customers based on independent one-year maintenance renewals for its Protector product only.  As a result, for the Protector small customer class with maintenance terms of one-year, Safend allocates the arrangement consideration to the elements in multi-element arrangements using the residual method.  Under the residual method, the VSOE of the undelivered elements is deferred and the remaining portion of the arrangement fee for perpetual licenses is recognized as revenue upon delivery of the software, assuming all other revenue recognition criteria are met.
	When VSOE of fair value for the undelivered elements does not exist, as is the case for Safend’s maintenance for its Encryptor, Inspector, Discoverer, Reporter, Auditor, large customer class Protector orders and small customer class Protector orders when maintenance terms are in excess of one-year, the entire arrangement fee is recognized ratably over the performance period as licensing and maintenance revenue.
	Licensing and maintenance - cost of net revenues includes customer support personnel costs, foreign tax withholdings, amortization and impairment expense for the developed technology intangible asset, costs associated with providing consulting services and related share-based compensation expense.
	Services
	Revenue from time and material service contracts is recognized as the services are provided. Revenue from fixed price, long-term service or development contracts is recognized using the percentage of completion method or the completed contract method.  The determination between completed contract method and the percentage of completion method is based on the ability to estimate. The Company measures the percentage of completion by reference to the proportion of contract hours incurred for work performed to date to the estimated total contract hours expected to be incurred.  Losses on fixed price contracts are recognized during the period in which such losses are identified.
	Services - cost of net revenues includes non-recurring time and materials costs incurred in connection with fixed price contracts and related share-based compensation expense.
Valuation of Goodwill and Purchased Intangible Assets	'
	Valuation of Goodwill - We review goodwill for impairment annually and whenever events or changes in circumstances indicate the fair value of a reporting unit is more likely than not below its carrying value. If the implied fair value of the reporting unit’s goodwill is less than the carrying value, the difference is recorded as an impairment loss. The provisions of the accounting standard for goodwill and other intangibles allow us to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. We perform a quantitative test for our Safend reporting unit. We determine the fair value of Safend using the income approach. Under the income approach, we calculate the fair value of the Safend unit based on the present value of estimated future cash flows. Cash flow projections are based on management’s estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used is based on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the business’s ability to execute on the projected cash flows. The reporting unit’s fair value is allocated to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit’s goodwill is less than the carrying value, the difference is recorded as an impairment loss.
	Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates and future economic and market conditions. We base our fair value estimates on assumptions we believe to be reasonable but they are unpredictable and inherently uncertain. Actual future results may differ from those estimates.
	We will continue to evaluate goodwill on an annual basis as of September 30 and whenever events or changes in circumstances, such as significant adverse changes in business climate or operating results or changes in management’s business strategy, indicate that there may be a potential indicator of impairment.
	Valuation of Long Lived Assets - We review purchased intangible assets with finite lives for impairment whenever events or changes in circumstances indicate the carrying value of an asset group may not be recoverable. Recoverability of asset groups is assessed based on the estimated undiscounted future cash flows expected to be generated by the asset group, including its ultimate disposition. If the sum of the undiscounted cash flows is less than the carrying value, the impairment to be recognized is measured by the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell.
Capitalized internal-use software development costs	'
	Capitalized internal-use software development costs - The Company follows the provisions of ASC Topic 350-40, Intangibles Goodwill and Other—Internal Use Software. ASC Topic 350-40 provides guidance for determining whether computer software is internal-use software and also provides guidance on capitalization of the costs incurred for computer software developed or obtained for internal use.  These capitalized costs are related to Wave’s cloud platform that is hosted by the Company and accessed by its clients on a subscription basis.  The Company expenses all costs incurred during the preliminary project stage of development and capitalizes the costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the software are capitalized if it is determined that these upgrades or enhancements add additional functionality to the software. Costs incurred to improve and support products after they become available are charged to expense as incurred.  The Company records amortization of the software on a straight-line basis over five years, which is the estimated useful life of the software.  At each balance sheet date, management evaluates the unamortized capitalized software costs for potential impairment by comparing the balance to the net realizable value of the products.
Accounting for Transfers of Financial Assets	'
	Accounting for Transfers of Financial Assets - We derecognize financial assets, specifically accounts receivable, when control has been surrendered in compliance with ASC Topic 860, Transfers and Servicing. Transfers of accounts receivable that meet the requirements of ASC 860 for sale accounting treatment are removed from the balance sheet and gains or losses on the sale are recognized. If the conditions for sale accounting treatment are not met, or are no longer met, accounts receivable transferred are classified as collateralized receivables in the consolidated balance sheets and cash received from these transactions is classified as secured borrowings. All transfers of assets are accounted for as secured borrowings. Transaction costs associated with secured borrowings, if any, are treated as borrowing costs and recognized in interest expense.
Share-based Compensation	'
	Share-based Compensation — We recognize compensation expense for all share-based compensation awards made to employees and directors, including employee stock options and employee stock purchases related to the Employee Stock Purchase Plan. Share-based compensation expense recognized is based on the fair value of share-based payment awards adjusted for estimated forfeitures.  We estimate the fair value of share-based payment awards at grant date using a Black-Scholes option-pricing model.  Our estimate of the fair value of the share-based payment awards on the date of grant using the Black-Scholes option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables including, but not limited to, the estimated term of the award and our estimated stock price volatility.
Reclassifications	'
	Reclassifications - Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation.
Immaterial correction of an error	'
	Immaterial Correction of an Error — During the third quarter of 2014, we identified an error in our accounting for share-based compensation recorded in fiscal years 2011 to 2013 and through the six-months ended June 30, 2014. We assessed the materiality of the error on prior periods’ financial statements and concluded that the error was not material to any of our prior period annual or current and prior year interim financial statements.  We elected to correct the error in the three-month period ended September 30, 2014 by decreasing operating expenses by $820,000 and decreasing capital in excess of par value on the consolidated balance sheet by the same amount. For the three and nine month periods ended September 30, 2014, loss per basic and diluted share decreased by $0.02 as a result of the correction.

Sharebased_Compensation_Tables

Share-based Compensation (Tables)	9 Months Ended
	Sep. 30, 2014
Share-based Compensation	'
Summary of effect of share based compensation in the entity's statement of operations	'
		Three months ended					Nine months ended
		September 30,					September 30,
		2014			2013		2014			2013
	Cost of Sales	$	3,129		$	6,494	$	10,310		$	21,583
	Selling, General & Administrative	(365,262		)	368,358		296,837			1,202,756
	Research & Development	(185,817		)	137,717		(3,253		)	394,776
	Total	$	(547,950	)	$	512,569	$	303,894		$	1,619,115

Goodwill_and_Amortizable_Intan1

Goodwill and Amortizable Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2014
Goodwill and Amortizable Intangible Assets	'
Schedule of the details of intangible assets	'
	September 30, 2014
	Intangible Asset	Gross		Accumulated			Accumulated			Net		Weighted
		Carrying		Amortization			Impairment					Average Remaining
		Amount					Loss					Useful Life
												(in years)
	Developed Technology	$	6,426,000	$	(1,285,924	)	$	(5,038,100	)	$	101,976	3.9
	Customer Relationships	3,972,000		(841,327		)	(1,786,673		)	1,344,000		6.9
	Internal-use software	726,000		(146,410		)	—			579,590		3.9
	Acquired Patents	1,100,000		(971,666		)	—			128,334		0.5
		$	12,224,000	$	(3,245,327	)	$	(6,824,773	)	$	2,153,900
	December 31, 2013
	Intangible Asset	Gross		Accumulated			Accumulated			Net		Weighted
		Carrying		Amortization			Impairment					Average
		Amount					Loss					Remaining
												Useful Life
												(in years)
	Developed Technology	$	6,426,000	$	(1,266,803	)	$	(5,038,100	)	$	121,097	4.8
	Customer Relationships	3,972,000		(697,327		)	(1,786,673		)	1,488,000		7.8
	Internal-use software	726,000		(37,510		)	—			688,490		4.8
	Acquired Patents	1,100,000		(806,667		)	—			293,333		1.4
		$	12,224,000	$	(2,808,307	)	$	(6,824,773	)	$	2,590,920
Summary of estimated amortization expense for intangible assets	'
	The estimated amortization expense for intangible assets for the next five years and thereafter is as follows (in thousands):
	Period	Estimated
		Amortization
		Expense
	Remainder of 2014	$	146
	2015	436
	2016	363
	2017	363
	2018	318
	Thereafter	528
	Total	$	2,154

Segment_Reporting_Tables

Segment Reporting (Tables)	9 Months Ended
	Sep. 30, 2014
Segment Reporting	'
Schedule of reportable segment data	'
		Three months ended						Nine months ended
		September 30,						September 30,
		2014			2013			2014			2013
	Net revenues:
	EMBASSY® digital security products and services	$	3,105,690		$	4,976,696		$	10,123,328		$	15,224,606
	Safend endpoint data loss protection products and services	1,226,414			1,274,629			3,981,135			3,562,687
	Total Net Revenues	$	4,332,104		$	6,251,325		$	14,104,463		$	18,787,293
	Net income (loss):
	EMBASSY® digital security products and services	$	(2,113,827	)	$	(3,117,522	)	$	(9,322,110	)	$	(11,522,799	)
	Safend endpoint data loss protection products and services	36,206			222,491			243,280			(4,961,522		)
	Total Segments Operating Loss	(2,077,621		)	(2,895,031		)	(9,078,830		)	(16,484,321		)
	Other income (expense), net	(3,913		)	(5,626		)	(7,862		)	(12,358		)
	Net interest expense	(24,325		)	(43,166		)	(108,202		)	(151,196		)
	Net Loss	$	(2,105,859	)	$	(2,943,823	)	$	(9,194,894	)	$	(16,647,875	)
	Impairment of Goodwill:
	EMBASSY® digital security products and services	$	—		$	—		$	—		$	—
	Safend endpoint data loss protection products and services	—			—			—			2,590,000
	Total Impairment of Goodwill	$	—		$	—		$	—		$	2,590,000
	Depreciation and Amortization Expense:
	EMBASSY® digital security products and services	$	154,777		$	152,884		$	494,107		$	496,967
	Safend endpoint data loss protection products and services	60,640			63,686			$	183,210		266,873
	Total Depreciation and Amortization Expense	$	215,417		$	216,570		$	677,317		$	763,840
	Capital Expenditures:
	EMBASSY® digital security products and services	$	30,476		$	21,150		$	93,008		$	146,654
	Safend endpoint data loss protection products and services	—			8,562			2,231			19,206
	Total Capital Expenditures	$	30,476		$	29,712		$	95,239		$	165,860
		September 30,			December 31,
		2014			2013
	Assets:
	EMBASSY digital security products and services	$	7,375,112		$	7,733,322
	Safend endpoint data loss protection products and services	3,578,164			4,091,587
	Total assets	$	10,953,276		$	11,824,909
Schedule of sales by geographic area	'
		United States			Europe			Asia			Total
		of America
	Three months ended September 30, 2014:
	EMBASSY® digital security products and services	$	2,389,644		$	559,695		$	156,350		$	3,105,690
	Safend endpoint data loss protection products and services	613,850			527,446			85,118			1,226,414
	Total	$	3,003,494		$	1,087,141		$	241,468		$	4,332,104
	% of Total Revenue	69		%	25		%	6		%	100		%
	Three months ended September 30, 2013:
	EMBASSY® digital security products and services	$	3,561,621		$	1,061,969		$	353,106		$	4,976,696
	Safend endpoint data loss protection products and services	561,648			616,707			96,274			1,274,629
	Total	$	4,123,269		$	1,678,676		449,380			$	6,251,325
	% of Total Revenue	66		%	27		%	7		%	100		%
	Nine months ended September 30, 2014:
	EMBASSY® digital security products and services	$	7,503,559		$	1,803,558		$	816,211		$	10,123,328
	Safend endpoint data loss protection products and services	2,023,226			1,666,844			291,065			3,981,135
	Total	$	9,526,785		$	3,470,402		$	1,107,276		$	14,104,463
	% of Total Revenue	67		%	25		%	8		%	100		%
	Nine months ended September 30, 2013:
	EMBASSY® digital security products and services	$	11,363,297		$	2,989,228		$	872,081		$	15,224,606
	Safend endpoint data loss protection products and services	1,533,564			1,766,108			263,015			3,562,687
	Total	$	12,896,861		$	4,755,336		$	1,135,096		$	18,787,293
	% of Total Revenue	69		%	25		%	6		%	100		%
Schedule of customers by segment, from which Wave derived revenue in excess of 10%	'
				Three months ended						Nine months ended
				September 30,						September 30,
				2014			2013			2014			2013
	Customer	Segment		Revenue						Revenue
	Dell, Inc.	EMBASSY®		$	1,262,879		$	2,963,995		$	4,811,984		$	8,647,857
	% of Total Revenue			29		%	47		%	34		%	46		%

Critical_Accounting_Policies_D

Critical Accounting Policies (Details) (USD $)	0 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
		item		item
Revenue Recognition	'	'	'	'	'
Number of classes of end user customers	2	2	'	2	'
Minimum order of licenses of end user customers defined as large	5,000	5,000	'	5,000	'
Maximum order of licenses of end user customers defined as small	5,000	5,000	'	5,000	'
Term of Maintenance	'1 year	'	'	'	'
Critical Accounting Policies	'	'	'	'	'
Loss per basic and diluted share	'	($0.05)	($0.09)	($0.22)	($0.58)
Adjustment	'	'	'	'	'
Critical Accounting Policies	'	'	'	'	'
Operating expenses	'	$820,000	'	'	'
Loss per basic and diluted share	'	$0.02	'	$0.02	'
Capitalized internal-use software development costs	'	'	'	'	'
Critical Accounting Policies	'	'	'	'	'
Estimated useful life	'	'	'	'5 years	'

Reverse_Stock_Split_Details

Reverse Stock Split (Details) (USD $)	0 Months Ended
	Jun. 28, 2013	Sep. 30, 2014	Dec. 31, 2013
Reverse stock split	'	'	'
Reverse stock split ratio	0.25	'	'
Common Class A	'	'	'
Reverse stock split	'	'	'
Reverse stock split ratio	0.25	'	'
Common stock, par value (in dollars per share)	$0.01	$0.01	$0.01
Common Class B	'	'	'
Reverse stock split	'	'	'
Reverse stock split ratio	0.025	'	'
Common stock, par value (in dollars per share)	$0.01	$0.01	$0.01

Liquidity_Details

Liquidity (Details) (USD $)

9 Months Ended

3 Months Ended

9 Months Ended

0 Months Ended

0 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Dec. 31, 2013

Dec. 31, 2012

Mar. 13, 2013

Jun. 30, 2014

Mar. 31, 2014

Mar. 31, 2013

Sep. 30, 2014

Sep. 30, 2014

Jun. 30, 2014

Mar. 31, 2014

Mar. 31, 2013

Sep. 19, 2013

Nov. 07, 2014

Aug. 09, 2013

Jun. 11, 2014

Jun. 11, 2014

Common Class A

At the Market Sales Agreement

At the Market Sales Agreement

At the Market Sales Agreement

At the Market Sales Agreement

At the Market Sales Agreement

At the Market Sales Agreement

At the Market Sales Agreement

At the Market Sales Agreement

At the Market Sales Agreement

2013 shelf registration statement

2013 shelf registration statement

2011 shelf registration statement

2011 shelf registration statement

Warrants Issued, March 2013

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Stock

Common Stock

Common Class A

Common Class A

Average

Maximum

Maximum

Maximum

Funding plan

Subsequent event

Funding plan

Warrants - July 2013 financing - Subscribers

Maximum

Liquidity

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Accumulated deficit

$426,435,374

'

$417,240,480

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Positive working capital

1,921,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Cash on hand

4,332,781

1,845,550

2,120,102

2,112,769

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Liquidity

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Shelf registration statement, amount

'

'

'

'

'

'

'

'

'

'

'

'

'

'

37,000

20,000,000

'

'

Number of shares sold

'

'

'

'

'

44,666

5,365,784

94,988

5,410,450

'

'

'

'

'

'

'

5,225,560

'

Share price (in dollars per share)

'

'

'

'

'

'

'

'

'

$1.03

$1.39

$1.13

$2.92

'

'

'

$1.90

'

Gross proceeds from issuance of common stock

'

'

'

'

'

'

'

'

'

'

'

'

'

15,000,000

'

'

9,928,564

'

Placement agent fees equal to gross proceeds from offering (as a percent)

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

7.00%

'

Net proceeds from issuance of common stock

14,457,789

9,389,626

'

'

'

59,292

5,323,717

262,945

5,383,000

'

'

'

'

'

'

'

9,075,000

'

Placement agent fees

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

695,000

'

Legal and other fees

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

159,000

'

Offering costs

'

'

'

'

'

$3,000

$169,000

$8,700

$171,000

'

'

'

'

'

'

'

'

'

Common stock agreed to be issued against warrants (in shares)

'

'

'

'

150,603

'

'

'

'

'

'

'

'

'

'

'

'

2,090,224

Warrants exercised (in dollars per share)

$0.91

'

'

'

$3.32

'

'

'

'

'

'

'

'

'

'

'

'

$1.90

Secured_Borrowings_and_Pledged1

Secured Borrowings and Pledged Receivables (Details) (Secured borrowings collateralized by receivables, USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Secured borrowings collateralized by receivables	'	'	'	'	'
Secured Borrowings and Collateralized Receivables	'	'	'	'	'
Carrying value of secured borrowing as a percentage of associated pledged receivable	'	'	85.00%	'	'
Percentage of holdback provision as per the TRE agreement	'	'	15.00%	'	'
Interest rate on secured borrowings for every thirty days outstanding (as a percent)	1.50%	'	1.50%	'	'
Annual effective rate of interest (as a percent)	18.00%	'	18.00%	'	'
Receivables transferred to buyer, remain uncollected	$0	'	$0	'	$1,683,188
Secured borrowings	0	'	0	'	1,430,710
Interest expense associated with the secured borrowings	0	22,775	35,227	88,996	'
Proceeds from the transfer of pledged receivables	'	'	1,693,450	6,886,188	'
Amount of pledged receivables collected by CapFlow and TRE	'	'	1,693,450	6,356,691	'
Pledged receivables repurchased	$0	'	'	$0	'

Loss_per_Share_Details

Loss per Share (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Weighted average potential common shares	'	'	'	'
Loss per share	'	'	'	'
Antidilutive securities excluded from earnings per share	261,000	4,000	174,000	141,000
Weighted average employee stock options and other stock warrants	'	'	'	'
Loss per share	'	'	'	'
Antidilutive securities excluded from earnings per share	6,452,000	5,983,000	7,797,000	5,486,000

Sharebased_Compensation_Detail

Share-based Compensation (Details) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Jun. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Share-based Compensation	'	'	'	'	'
Stock options granted (in shares)	178,100	14,910	'	1,856,100	641,897
Weighted-average estimated fair value (in dollars per share)	'	'	$2.72	'	$1.09
Share-based Compensation expense	($547,950)	$512,569	'	$303,894	$1,619,115
Minimum	'	'	'	'	'
Share-based Compensation	'	'	'	'	'
Weighted-average estimated fair value (in dollars per share)	$0.71	$0.68	'	$0.54	$0.68
Maximum	'	'	'	'	'
Share-based Compensation	'	'	'	'	'
Weighted-average estimated fair value (in dollars per share)	$0.86	$0.96	'	$1.09	$2.72
Cost of net revenues	'	'	'	'	'
Share-based Compensation	'	'	'	'	'
Share-based Compensation expense	3,129	6,494	'	10,310	21,583
Selling, general & administrative	'	'	'	'	'
Share-based Compensation	'	'	'	'	'
Share-based Compensation expense	-365,262	368,358	'	296,837	1,202,756
Research & development	'	'	'	'	'
Share-based Compensation	'	'	'	'	'
Share-based Compensation expense	($185,817)	$137,717	'	($3,253)	$394,776

Goodwill_and_Amortizable_Intan2

Goodwill and Amortizable Intangible Assets (Details) (USD $)

3 Months Ended

9 Months Ended

9 Months Ended

12 Months Ended

9 Months Ended

12 Months Ended

9 Months Ended

12 Months Ended

9 Months Ended

12 Months Ended

3 Months Ended

6 Months Ended

3 Months Ended

6 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Dec. 31, 2013

Sep. 30, 2014

Dec. 31, 2013

Sep. 30, 2014

Dec. 31, 2013

Sep. 30, 2014

Dec. 31, 2013

Sep. 30, 2014

Dec. 31, 2013

Mar. 31, 2013

Jun. 30, 2013

Mar. 31, 2013

Jun. 30, 2013

Developed Technology

Developed Technology

Customer Relationships

Customer Relationships

Capitalized internal-use software development costs

Capitalized internal-use software development costs

Acquired Patents

Acquired Patents

Safend

Safend

Safend

Safend

Developed Technology

Developed Technology

Goodwill and amortizable intangible assets

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Goodwill, Impairment Loss

'

'

'

$2,590,000

'

'

'

'

'

'

'

'

'

$2,600,000

$2,600,000

'

'

Impairment charge on developed technology intangible assets

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

1,600,000

1,600,000

Intangible Asset

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Gross Carrying Amount

12,224,000

'

12,224,000

'

12,224,000

6,426,000

6,426,000

3,972,000

3,972,000

726,000

726,000

1,100,000

1,100,000

'

'

'

'

Accumulated Amortization

-3,245,327

'

-3,245,327

'

-2,808,307

-1,285,924

-1,266,803

-841,327

-697,327

-146,410

-37,510

-971,666

-806,667

'

'

'

'

Accumulated Impairment loss

-6,824,773

'

-6,824,773

'

-6,824,773

-5,038,100

-5,038,100

-1,786,673

-1,786,673

'

'

'

'

'

'

'

'

Net

2,153,900

'

2,153,900

'

2,590,920

101,976

121,097

1,344,000

1,488,000

579,590

688,490

128,334

293,333

'

'

'

'

Weighted Average Remaining Useful Life

'

'

'

'

'

'3 years 10 months 24 days

'4 years 9 months 18 days

'6 years 10 months 24 days

'7 years 9 months 18 days

'3 years 10 months 24 days

'4 years 9 months 18 days

'6 months

'1 year 4 months 24 days

'

'

'

'

Estimated useful life

'

'

'

'

'

'

'

'

'

'5 years

'

'

'

'

'

'

'

Intangible assets amortization expense

$145,674

$111,794

$437,021

$402,740

'

'

'

'

'

'

'

'

'

'

'

'

'

Goodwill_and_Amortizable_Intan3

Goodwill and Amortizable Intangible Assets (Details 2) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Estimated Amortization Expense	'	'
Remainder of 2014	$146	'
2015	436	'
2016	363	'
2017	363	'
2018	318	'
Thereafter	528	'
Net	$2,153,900	$2,590,920

Income_Taxes_Details

Income Taxes (Details) (USD $)	Jun. 30, 2014
Income Taxes	'
Net operating loss	$310,794,000
Safend, Inc.	'
Income Taxes	'
Net operating loss	8,200,000
Safend	'
Income Taxes	'
Net operating loss	$14,500,000

Segment_Reporting_Details

Segment Reporting (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Segment Reporting	'	'	'	'	'
Net Revenues	$4,332,104	$6,251,325	$14,104,463	$18,787,293	'
Segments net loss	-2,077,621	-2,895,031	-9,078,830	-16,484,321	'
Net other income (expense), net	-3,913	-5,626	-7,862	-12,358	'
Net interest expense	-24,325	-43,166	-108,202	-151,196	'
Net loss	-2,105,859	-2,943,823	-9,194,894	-16,647,875	'
Impairment of goodwill	'	'	'	2,590,000	'
Depreciation and amortization expense	215,417	216,570	677,317	763,840	'
Capital expenditures	30,476	29,712	95,239	165,860	'
Assets	10,953,276	'	10,953,276	'	11,824,909
EMBASSY digital security products and services	'	'	'	'	'
Segment Reporting	'	'	'	'	'
Net Revenues	3,105,690	4,976,696	10,123,328	15,224,606	'
Segments net loss	-2,113,827	-3,117,522	-9,322,110	-11,522,799	'
Depreciation and amortization expense	154,777	152,884	494,107	496,967	'
Capital expenditures	30,476	21,150	93,008	146,654	'
Assets	7,375,112	'	7,375,112	'	7,733,322
Safend endpoint data loss protection products and services	'	'	'	'	'
Segment Reporting	'	'	'	'	'
Net Revenues	1,226,414	1,274,629	3,981,135	3,562,687	'
Segments net loss	36,206	222,491	243,280	-4,961,522	'
Impairment of goodwill	'	'	'	2,590,000	'
Depreciation and amortization expense	60,640	63,686	183,210	266,873	'
Capital expenditures	'	8,562	2,231	19,206	'
Assets	$3,578,164	'	$3,578,164	'	$4,091,587

Segment_Reporting_Details_2

Segment Reporting (Details 2) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Segment Reporting	'	'	'	'
Total net revenues	$4,332,104	$6,251,325	$14,104,463	$18,787,293
United States of America	'	'	'	'
Segment Reporting	'	'	'	'
Total net revenues	3,003,494	4,123,269	9,526,785	12,896,861
Europe	'	'	'	'
Segment Reporting	'	'	'	'
Total net revenues	1,087,141	1,678,676	3,470,402	4,755,336
Asia	'	'	'	'
Segment Reporting	'	'	'	'
Total net revenues	241,468	449,380	1,107,276	1,135,096
Geographic area | United States of America	'	'	'	'
Segment Reporting	'	'	'	'
% of total revenue	69.00%	66.00%	67.00%	69.00%
Geographic area | Europe	'	'	'	'
Segment Reporting	'	'	'	'
% of total revenue	25.00%	27.00%	25.00%	25.00%
Geographic area | Asia	'	'	'	'
Segment Reporting	'	'	'	'
% of total revenue	6.00%	7.00%	8.00%	6.00%
Revenue | Geographic area	'	'	'	'
Segment Reporting	'	'	'	'
% of total revenue	100.00%	100.00%	100.00%	100.00%
Long-lived assets | Geographic area | United States of America	'	'	'	'
Segment Reporting	'	'	'	'
% of total revenue	'	'	90.00%	'
Long-lived assets | Geographic area | ISRAEL	'	'	'	'
Segment Reporting	'	'	'	'
% of total revenue	'	'	10.00%	'
EMBASSY digital security products and services	'	'	'	'
Segment Reporting	'	'	'	'
Total net revenues	3,105,690	4,976,696	10,123,328	15,224,606
EMBASSY digital security products and services | United States of America	'	'	'	'
Segment Reporting	'	'	'	'
Total net revenues	2,389,644	3,561,621	7,503,559	11,363,297
EMBASSY digital security products and services | Europe	'	'	'	'
Segment Reporting	'	'	'	'
Total net revenues	559,695	1,061,969	1,803,558	2,989,228
EMBASSY digital security products and services | Asia	'	'	'	'
Segment Reporting	'	'	'	'
Total net revenues	156,350	353,106	816,211	872,081
Safend endpoint data loss protection products and services	'	'	'	'
Segment Reporting	'	'	'	'
Total net revenues	1,226,414	1,274,629	3,981,135	3,562,687
Safend endpoint data loss protection products and services | United States of America	'	'	'	'
Segment Reporting	'	'	'	'
Total net revenues	613,850	561,648	2,023,226	1,533,564
Safend endpoint data loss protection products and services | Europe	'	'	'	'
Segment Reporting	'	'	'	'
Total net revenues	527,446	616,707	1,666,844	1,766,108
Safend endpoint data loss protection products and services | Asia	'	'	'	'
Segment Reporting	'	'	'	'
Total net revenues	$85,118	$96,274	$291,065	$263,015

Segment_Reporting_Details_3

Segment Reporting (Details 3) (EMBASSY digital security products and services, Dell, USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
EMBASSY digital security products and services | Dell	'	'	'	'
Major customers, by segment	'	'	'	'
Revenue	$1,262,879	$2,963,995	$4,811,984	$8,647,857
% of total revenue	29.00%	47.00%	34.00%	46.00%

Issuance_of_Common_Stock_Detai

Issuance of Common Stock (Details) (USD $)

9 Months Ended

3 Months Ended

3 Months Ended

9 Months Ended

0 Months Ended

0 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Jun. 30, 2014

Mar. 31, 2013

Mar. 13, 2013

Jun. 30, 2014

Mar. 31, 2014

Mar. 31, 2013

Sep. 30, 2014

Jun. 30, 2014

Mar. 31, 2014

Mar. 31, 2013

Jun. 30, 2014

Mar. 31, 2014

Mar. 31, 2013

Mar. 13, 2013

Jun. 11, 2014

Jun. 11, 2014

Jun. 01, 2013

Jun. 01, 2014

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

Common Class A

2004 Employee Stock Purchase Plan

2004 Employee Stock Purchase Plan

Stock Options

Stock Options

Warrants Issued, March 2013

At the Market Sales Agreement

At the Market Sales Agreement

At the Market Sales Agreement

At the Market Sales Agreement

At the Market Sales Agreement

At the Market Sales Agreement

At the Market Sales Agreement

At the Market Sales Agreement

At the Market Sales Agreement

At the Market Sales Agreement

Equity issuance

2011 shelf registration statement

2011 shelf registration statement

Common Class A

Common Class A

Minimum

Minimum

Minimum

Maximum

Maximum

Maximum

Warrants - July 2013 financing - Subscribers

Common Stock

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Net proceeds from issuance of common stock

$14,457,789

$9,389,626

'

'

'

$59,292

$5,323,717

$262,945

$5,383,000

'

'

'

'

'

'

$910,000

$9,075,000

'

'

'

Offering costs

'

'

'

'

'

3,000

169,000

8,700

171,000

'

'

'

'

'

'

'

'

'

'

'

Number of shares sold

'

'

'

'

'

44,666

5,365,784

94,988

5,410,450

'

'

'

'

'

'

301,205

5,225,560

'

'

'

Share price (in dollars per share)

'

'

'

'

'

'

'

'

'

$1.37

$0.90

$2.80

$1.39

$1.13

$2.92

$3.32

$1.90

'

'

$0.94

Gross proceeds from issuance of common stock

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

1,000,000

9,928,564

'

'

'

Placement agent fees equal to gross proceeds from offering (as a percent)

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

6.00%

7.00%

'

'

'

Placement agent fees

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

60,000

695,000

'

'

'

Legal and other fees

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

30,000

159,000

'

'

'

Number of shares under warrants

'

'

'

'

150,603

'

'

'

'

'

'

'

'

'

'

'

'

2,090,224

'

'

Exercise price of warrants (in dollars per share)

$0.91

'

'

'

$3.32

'

'

'

'

'

'

'

'

'

'

'

'

$1.90

'

'

Proceeds from employee stock option exercises

'

42,039

121,862

42,039

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Stock Issued During Period, Shares, Employee Stock Purchase Plans

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

105,454

'

Issuance of shares upon exercise of employee stock options

'

'

133,914

12,983

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Proceeds from Issuance of Shares under Incentive and Share-based Compensation Plans, Excluding Stock Options

$99,495

$171,796

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

$99,495

'

Exercise price of employee stock options exercised (in dollars per share)

'

'

$0.91

$3.24

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Fair_Value_Measurement_Details

Fair Value Measurement (Details) (Recurring basis, Level 1, USD $)	Sep. 30, 2014
Recurring basis | Level 1	'
Disclosures about the Fair Value of Financial Instruments	'
Overnight money market funds	$3,352,534
Ratio for the net value of money market funds for each dollar invested based on quoted prices in active markets for identical assets (level 1)	1

Subsequent_Events_Details

Subsequent Events (Details) (Subsequent event, eSignSystems [Member], DocMagic [Member], USD $)	0 Months Ended
	Oct. 16, 2014
Subsequent event | eSignSystems [Member] | DocMagic [Member]	'
Subsequent events	'
Proceeds from Divestiture of Businesses	$1,214,000
Net gain on the sale	$1,300,000