Wave Systems (WAVX) 10-Q 23 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 11, 2015
Entity Registrant Name	WAVE SYSTEMS CORP
Entity Central Index Key	919,013
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Amendment Flag	false
Common Class A
Entity Common Stock, Shares Outstanding		60,821,141
Common Class B
Entity Common Stock, Shares Outstanding		8,885

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 333,670	$ 1,777,414
Accounts receivable, net of allowance for doubtful accounts of $-0- at September 30, 2015 and December 31, 2014	1,849,623	1,820,945
Prepaid expenses and other current assets	477,438	397,689
Total current assets	2,660,731	3,996,048
Property and equipment, net	320,084	411,755
Amortizable intangible assets, net	0	2,008,227
Goodwill	0	1,448,000
Other assets	168,219	169,330
Total Assets	3,149,034	8,033,360
Current Liabilities:
Accounts payable and accrued expenses	3,478,960	3,918,493
Warrant liability	570,459	0
Convertible debt	419,728	0
Deferred revenue	5,073,365	5,125,932
Total current liabilities	9,542,512	9,044,425
Long Term Liabilities:
Royalty liability	5,148,082	4,982,306
Long-term deferred revenue	2,281,955	871,677
Other long-term liabilities	39,937	50,779
Total Liabilities	17,012,486	14,949,187
Stockholders’ Deficit:
Capital in excess of par value	429,334,193	422,745,539
Accumulated deficit	(443,797,195)	(430,121,078)
Total Stockholders’ Deficit	(13,863,452)	(6,915,827)
Total Liabilities and Stockholders’ Deficit	3,149,034	8,033,360
Common Class A
Stockholders’ Deficit:
Common Stock	599,461	459,623
Common Class B
Stockholders’ Deficit:
Common Stock	$ 89	$ 89

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
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	59,946,141	45,962,324
Common stock, shares outstanding	59,946,141	45,962,324
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 Oper

Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net revenues:
Licensing and maintenance	$ 2,562,462	$ 4,032,104	$ 7,590,133	$ 13,804,463
Services	0	300,000	0	300,000
Total net revenues	2,562,462	4,332,104	7,590,133	14,104,463
Operating expenses:
Licensing and maintenance — cost of net revenues	254,758	260,828	1,083,490	912,175
Services - cost of net revenues	0	73,000	0	73,000
Selling, general and administrative	3,047,864	4,006,625	11,138,440	14,589,760
Research and development	1,848,193	2,069,272	6,836,264	7,608,358
Impairment of goodwill	0	0	1,448,000	0
Impairment of amortizable intangible assets	0	0	1,753,546	0
Total operating expenses	5,150,815	6,409,725	22,259,740	23,183,293
Operating loss	(2,588,353)	(2,077,621)	(14,669,607)	(9,078,830)
Other income (expense), net:
Net currency transaction loss	(14,008)	(3,913)	(87,746)	(7,862)
Change in fair value of warrant liability	982,616	0	1,276,441	0
Net interest expense	(74,073)	(24,325)	(195,205)	(108,202)
Total other income (expense), net	894,535	(28,238)	993,490	(116,064)
Net loss	$ (1,693,818)	$ (2,105,859)	$ (13,676,117)	$ (9,194,894)
Loss per common share - basic and diluted (in dollars per share)	$ (0.03)	$ (0.05)	$ (0.25)	$ (0.22)
Weighted average number of common shares outstanding (in shares)	59,946,141	45,895,118	55,095,077	42,049,167

Consolidated Statement of Stock

Consolidated Statement of Stockholders' Deficit - 9 months ended Sep. 30, 2015 - USD ($)	Total	Capital in Excess of Par Value	Accumulated Deficit	Common Class ACommon Stock	Common Class BCommon Stock
Balance at Dec. 31, 2014	$ (6,915,827)	$ 422,745,539	$ (430,121,078)	$ 459,623	$ 89
Balance (in shares) at Dec. 31, 2014				45,962,324	8,885
Increase (Decrease) in Stockholders' Equity
Net loss	(13,676,117)		(13,676,117)
Issuance of Class A common stock at $0.65 per share, less issuance costs of $245,009	3,338,470	3,283,340		$ 55,130
Issuance of Class A common stock at $0.65 per share, less issuance costs of $245,009 (in shares)				5,513,044
Issuance of Class A common stock at $0.65 per share, less issuance costs of $588,491	4,868,259	4,784,309		$ 83,950
Issuance of Class A common stock at $0.65 per share, less issuance costs of $588,491 (in shares)				8,395,000
Issuance of 4,197,500 warrants, measured at fair value on issuance date	(1,846,900)	(1,846,900)
Issuance of Class A Common Stock pursuant to the Wave Employee Stock Purchase Plan at $0.561 per share	42,508	41,750		$ 758
Issuance of Class A Common Stock pursuant to the Wave Employee Stock Purchase Plan at $0.561 per share (in shares)				75,773
Issuance of 1,225,000 warrants, measured at relative fair value on issuance date.	84,295	84,295
Share-based compensation	241,860	241,860
Balance at Sep. 30, 2015	$ (13,863,452)	$ 429,334,193	$ (443,797,195)	$ 599,461	$ 89
Balance (in shares) at Sep. 30, 2015				59,946,141	8,885

Consolidated Statement of Stoc6

Consolidated Statement of Stockholders' Deficit (Parenthetical)	9 Months Ended
	Sep. 30, 2015USD ($)$ / sharesshares
Statement of Stockholders' Equity [Abstract]
Issuance of Class A Common Stock (in dollars per share)	$ 0.65
Issuance of Class A Common Stock, issuance costs (in dollars) | $	$ 588,491
Issuance of Class A Common Stock (in dollars per share)	$ 0.65
Issuance of Class A Common Stock, issuance costs (in dollars) | $	$ 245,009
Issuance of warrants (in shares) | shares	4,197,500
Issuance of warrants (in shares) | shares	1,225,000
Issuance of Class A Common Stock pursuant to ESPP (in dollars per share)	$ 0.561

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net loss	$ (13,676,117)	$ (9,194,894)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	429,347	677,317
Accretion of convertible debt discount	14,023	0
Share-based compensation expense	241,860	303,894
Impairment of goodwill and amortizable intangible assets	3,201,546	0
Change in fair value of warrant liability	(1,276,441)	0
Accretion of royalty liability	87,151	72,975
Changes in assets and liabilities:
(Decrease) increase in accounts receivable	(28,678)	1,021,997
Increase (decrease) in prepaid expenses and other current assets	(79,749)	55,290
Increase (decrease) in other assets	1,111	(5,763)
Decrease in accounts payable and accrued expenses	(367,181)	(3,164,296)
Increase (decrease) in deferred revenue	1,357,711	(1,922,643)
Increase (decrease) in royalty liability	6,273	(193,623)
Decrease in other long-term liabilities	(10,842)	(21,482)
Net cash used in operating activities	(10,099,986)	(12,371,228)
Cash flows from investing activities:
Acquisition of property and equipment	(82,995)	(95,239)
Net cash used in investing activities	(82,995)	(95,239)
Cash flows from financing activities:
Net proceeds from issuance of common stock and warrants	8,206,729	14,457,789
Net proceeds from issuance of convertible debt and warrants	490,000	0
Proceeds from warrant exercises	0	121,862
Proceeds from employee stock purchase plan	42,508	99,495
Net cash provided by financing activities	8,739,237	14,679,146
Net (decrease) increase in cash and cash equivalents	(1,443,744)	2,212,679
Cash and cash equivalents at beginning of period	1,777,414	2,120,102
Cash and cash equivalents at end of period	333,670	4,332,781
Cash paid during the period for:
Interest	$ 28,168	$ 60,209

Critical Accounting Policies

Critical Accounting Policies	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Critical Accounting Policies	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 allowance, depreciation and amortization, valuation of long-lived assets, 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, 2014 , included in its Form 10-K filed with the Securities and Exchange Commission on March 9, 2015. Revenue Recognition — Wave's business model targets revenues from various sources including 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 1) persuasive evidence of an arrangement exists, 2) delivery has occurred or services have been rendered, 3) fees are fixed or determinable and 4) collectability is reasonably assured. If we determine that any one of the four criteria is not met, we will defer recognition of revenue until all of the criteria are met. 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 software to end users, OEM partners, software development and other services including maintenance. Wave applies 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 agreements. Wave enters into perpetual software license agreements through direct sales to customers and indirect sales through its OEM partners, distributors and resellers. Wave has defined its two classes of end user customers: large customers, whose orders are greater than or equal to 5,000 licenses and small customers, whose orders are less than 5,000 licenses. 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. 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”) product and its Protector product. As a result, for the ERAS SED and Protector small customer class licenses with one -year of 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 and Protector, large customer class ERAS SED and Protector orders, and small customer class ERAS SED and 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. 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. Licensing and maintenance - cost of net revenues includes customer support personnel costs, costs associated with providing consulting services and related share-based compensation expense. Valuation of Goodwill - Goodwill was fully impaired as of June 30, 2015, and as such, we have not evaluated goodwill as of September 30, 2015. Valuation of Long Lived Assets - We review long lived assets 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. Share-based Compensation — We recognize compensation expense for all share-based compensation awards made to employees, directors and consultants, including employee stock options, restricted stock units 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 determine the fair value of restricted stock units based on the closing market price of the Company's common stock on the date of grant. We estimate the fair value of employee stock option awards at grant date using a Black-Scholes option-pricing model. Our estimate of the fair value of the stock option 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. Recently Adopted Accounting Pronouncements - In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-15, Presentation of Financial Statements - Going Concern , which amends the disclosures of uncertainties about an entity's ability to continue as a going concern. The amendments provide guidance in GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. In doing so, the amendments should reduce the diversity in the timing and content of footnote disclosures. The Company is required to adopt the amendments in the first quarter of 2017. Early adoption is permitted. The Company is currently evaluating the impact of these amendments on its Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-9, 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 2018. Early adoption is permitted for annual reporting periods starting January 1, 2017. 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.

Liquidity

Liquidity	9 Months Ended
	Sep. 30, 2015
Liquidity
Liquidity	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, 2015 , has an accumulated deficit of approximately $443,797,000 . We also expect Wave will incur an operating loss for the fiscal year 2015. As of September 30, 2015 , Wave had negative working capital of approximately $6,882,000 and due to our limited financial resources, we have experienced difficulties in remaining current on rent, vendor payments and other obligations. As of September 30, 2015 , we had approximately $334,000 of cash on hand. On July 28, 2015, Wave initiated a global restructuring of the Company's business in conjunction with a review of Wave's options for raising capital and pursuing customer transactions and other strategic alternatives. Wave's restructuring involved immediate steps to reduce the Company's global workforce by approximately 60% to a core team of employees spread across all functional areas. Thereafter, the Company has continued to evaluate and manage headcount taking into account its very limited financial resources. Since we initiated the restructuring, we have also experienced a significant number of employee departures. Wave will be required to raise additional capital in the short term in order to continue its current operations. Wave's ability to raise additional capital is currently primarily based on: • Sales of equity; and • Debt financing. For registered offerings, Wave is required to calculate the amount of capital the Company is allowed to raise in accordance with the General Instruction I.B.6. on Form S-3 (“the one-third rule”). The one-third rule restricts the amount of capital that can be raised in a 12-month period provided that the registrant’s aggregate market value of the common equity held by non-affiliates is less than $75 million. As a result of the application of the one-third rule, the funds available on the 2015 shelf registration statement are reduced. Until Wave attains an aggregate market value of $75 million or more for shares held by non-affiliates, its available funds under the 2015 shelf registration statement will remain restricted to the one-third rule computation. To determine the amount available under the one-third rule for future financings, the aggregate market value of the common equity is calculated using the price at which the common equity was last sold, or the average of the bid and asked prices of the common equity as of a date within 60 days prior to the date of filing. As of November 11, 2015 , approximately $1,016,000 in gross proceeds remains under the 2015 shelf registration statement. However, based on the price of Wave's common equity over the applicable 60 day period and the one-third rule computation, none of the remaining gross proceeds are available for future financings as of November 11, 2015 . Wave will be required to sell shares of common stock, preferred stock, obtain debt or other financing or engage in a combination of these financing alternatives, to raise additional capital to continue to fund its operations. If Wave is not successful in executing its global restructuring and raising additional financing in the near term, it will be required to cease operations or pursue other alternatives. If Wave is able to raise additional financing, it will continue to explore strategic alternatives which could include additional capital raising transactions or a merger or other sale of Wave's business or assets. No assurance can be provided that any of these initiatives will be successful. Due to the foregoing, substantial doubt exists with respect to Wave's ability to continue as a going concern.

Goodwill and Amortizable Intang

Goodwill and Amortizable Intangible Assets	9 Months Ended
	Sep. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Amortizable Intangible Assets	Goodwill and Amortizable Intangible Assets 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 goodwill impairment test involves a two-step process. In the first step, we compare the fair value of each reporting unit to its carrying value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value or if the carrying value of the reporting unit is negative, which is the case for the Safend reporting unit, we must perform the second step of the impairment test to measure the amount of impairment loss. In the second step, 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 second quarter of 2015, 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, the impact of the major corporate restructuring announced on July 28, 2015, a significant decline in the Company's market cap and downward revisions to management's short-term and long-term forecast for Safend. The revised forecast reflected changes related to revenue growth, expense structure 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 goodwill and intangible assets were impaired. 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 its undiscounted future cash flows expected to be generated by the asset group, including its ultimate disposition. Based on the results of the recoverability test performed during the second quarter of 2015, the Company determined that the carrying value of the Safend asset group and the carrying value of Wave's internal-use software exceeded its undiscounted cash flows and were 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 $1,753,546 on amortizable intangible assets during the second quarter of 2015 consisting of an $82,856 impairment on the developed technology intangible asset, a $470,690 impairment on the internal-use software intangible asset and a $1,200,000 impairment on the customer relationships intangible asset. The decline in the fair value of the Safend intangible assets and Wave's internal-use software intangible asset are 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 second quarter of 2015, the Company completed the two step goodwill impairment test for the Safend reporting unit. As a result, the Company recorded a goodwill impairment charge of $1,448,000 during the second quarter of 2015. The following schedule presents intangible assets subject to amortization as of September 30, 2015 and December 31, 2014 : September 30, 2015 Intangible Asset Gross Carrying Amount Accumulated Amortization Accumulated Impairment Loss Net Weighted Average Remaining Useful Life (in years) Developed Technology $ 6,426,000 $ (1,305,044 ) $ (5,120,956 ) $ — 0 Customer Relationships 3,972,000 (985,327 ) (2,986,673 ) — 0 Internal-use software 726,000 (255,310 ) (470,690 ) — 0 Acquired Patents 1,100,000 (1,100,000 ) — — 0 $ 12,224,000 $ (3,645,681 ) $ (8,578,319 ) $ — December 31, 2014 Intangible Asset Gross Carrying Amount Accumulated Amortization Accumulated Impairment Loss Net Weighted Average Remaining Useful Life (in years) Developed Technology $ 6,426,000 $ (1,292,297 ) $ (5,038,100 ) $ 95,603 3.8 Customer Relationships 3,972,000 (889,327 ) (1,786,673 ) 1,296,000 6.8 Internal-use software 726,000 (182,710 ) — 543,290 3.8 Acquired Patents 1,100,000 (1,026,666 ) — 73,334 0.4 $ 12,224,000 $ (3,391,000 ) $ (6,824,773 ) $ 2,008,227 Amortization expense associated with intangible assets was $0 and $254,680 for the three and nine months ended September 30, 2015 , respectively and $145,674 and $437,021 for the three and nine months ended September 30, 2014, respectively.

Accounts Payable and Accrued Ex

Accounts Payable and Accrued Expenses	9 Months Ended
	Sep. 30, 2015
Payables and Accruals [Abstract]
Accounts Payable and Accrued Expenses	Accounts Payable and Accrued Expenses The following schedule presents the details of accounts payable and accrued expenses as of September 30, 2015 and December 31, 2014: 2015 2014 Accounts payable $ 1,601,746 $ 1,080,167 Accrued payroll and related costs 1,266,955 2,211,565 Accrued consulting and professional fees 171,141 157,500 Royalty liability 102,648 175,000 Other accrued expenses 336,470 294,261 Total accounts payable and accrued expenses $ 3,478,960 $ 3,918,493

Issuance of Common Stock, Conve

Issuance of Common Stock, Convertible Debt and Warrants	9 Months Ended
	Sep. 30, 2015
Stockholders' Equity Note [Abstract]
Issuance of Common Stock, Convertible Debt and Warrants	Issuance of Common Stock, Convertible Debt and Warrants Nine-Months Ended September 30, 2015 On September 23, 2015, the Company entered into a Convertible Bridge Instrument and Warrant Subscription Agreements with certain investors, consisting of a $490,000 unsecured bridge instrument that is required to be repaid on or before December 24, 2015 with an aggregate repayment amount of $588,000 and warrants to purchase up to 1,225,000 shares of Wave's Class A common stock at an exercise price of $0.18 per share. The warrants are exercisable six months after the issuance date and expire after five years. If the Company fails to pay the bridge instrument repayment amount by the repayment date of December 24, 2105, holders may (but are not required to) elect to convert the bridge instrument into shares of our Class A common stock at a conversion rate based on the applicable repayment amount divided by an amount equal to the lesser of $0.168 per share and 80% of Wave's variable weighted average stock price ("VWAP") for the five trading day period prior to the date on which the conversion election is made. The bridge instrument may not be converted into more than 19.9% of the outstanding common shares immediately preceding the transaction, unless a shareholder approval is obtained by the Company. The Company assessed the classification of warrants as of the date of the transaction and determined that such instruments meet the criteria for equity classification. The warrants are reported on the consolidated balance sheet as a component of additional paid in capital within stockholders equity. At the time of issuance, the relative fair value of the warrants was estimated at $84,000 using the Black-Scholes model and the relative fair value of the convertible debt was estimated at $406,000 using a Monte Carlo simulation. On May 21, 2015, Wave sold 7,300,000 units with each unit consisting of one share of Class A Common Stock and a warrant to purchase 0.5 shares of Class A Common Stock, at a public offering price of $0.65 per unit. The underwriter, Roth Capital, fully exercised its option to purchase an additional 1,095,000 shares of Class A Common Stock and warrants to purchase up to 547,500 shares of Class A Common Stock. The original exercise price of the warrants was $0.81 per share and they expire on May 21, 2020. On September 23, 2015, the issuance of convertible bridge instruments and warrants resulted in the reset of the exercise price of the warrants to $0.07 . Wave agreed to pay Roth Capital a fee equal to 7% of the gross proceeds of this public offering. Wave realized approximately $4,868,000 in net proceeds after deducting the underwriter fees of approximately $382,000 and additional legal and other fees associated with the issuance of these securities totaling approximately $207,000 . This financing was completed under the 2015 shelf registration statement together with the related registration statement on Form S-3 filed pursuant to Rule 462(b). A prospectus supplement related to the offering was filed with the SEC on May 26, 2015. The warrants issued in the May public offering contain a change in control feature that allow the warrant holders to require the successor entity to purchase the warrants by paying the warrant holder cash in an amount equal to the fair value of the remaining unexercised portion of the warrants on the change in control date. The warrants also contain a down round feature that adjusts the exercise price of the warrants to equal the price of common stock or convertible securities offered in a future financing if the price of a future financing is below $0.81 per share. The terms of the warrants require classification as a liability and the Company has therefore recorded the fair value as a liability as of the date of issuance for an aggregate fair value of $1,846,900 . See Note 10 for more information on the fair value model used to value the warrants. On January 26, 2015, Wave entered into agreements with certain investors for a private placement of 5,513,044 shares of its Class A Common Stock at a price of $0.65 per share yielding gross proceeds of $3,583,479 . This financing was completed under the 2015 shelf registration statement together with the related registration statement on Form S-3 filed pursuant to Rule 462(b). Wave also issued warrants to the subscribers to purchase 2,205,216 shares of Class A Common Stock at an exercise price of $0.70 per share. These warrants expire on July 26, 2020. SRA 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 SRA a fee equal to 6% of the gross proceeds of this offering. Wave realized approximately $3,338,000 in net proceeds after deducting the placement agent fees of approximately $215,000 and additional legal and other fees associated with the issuance of these securities totaling approximately $30,000 . In connection with the financing, Wave also issued warrants to SRA to purchase up to 330,783 shares of Wave Class A Common Stock for $0.70 per share. These warrants expire on July 26, 2018. The warrants associated with this financing have been accounted for as equity. A prospectus supplement related to the offering was filed with the SEC on January 27, 2015. On June 1, 2015, Wave issued 75,773 shares of Class A Common Stock to Wave employees for $0.56 per share, pursuant to the Wave 2004 Employee Stock Purchase Plan. Wave received proceeds of $42,508 from the sale of these shares. Nine-Months Ended September 30, 2014 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 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. 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 nine-months ended September 30, 2014, Wave received proceeds of $5,383,009 after deducting offering costs of approximately $172,000 , in connection with the issuance of 5,410,450 shares of Class A Common Stock in its at the market offerings through MLV & Co. LLC ("MLV"). The shares were sold at prices ranging from $0.90 - $1.39 per share. During the nine-months ended September 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 financing. The warrants were exercised at $0.91 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.

Share-based Compensation

Share-based Compensation	9 Months Ended
	Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-based Compensation	Share-based Compensation Wave recognized $143,331 and $(547,950) of share-based compensation during the three-months ended September 30, 2015 and 2014 , respectively and $241,860 and $303,894 for the nine-month periods ended September 30, 2015 and 2014, respectively. During the three-month periods ended September 30, 2015 and 2014, Wave granted 22,000 and 178,100 in share-based awards at a weighted-average estimated fair value of $0.44 and $0.71 , respectively. During the nine-month periods ended September 30, 2015 and 2014, Wave granted 1,127,750 and 1,856,100 share-based awards at a weighted-average estimated fair value of $0.78 and $0.54 , respectively. 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, 2015 and 2014 : Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 Cost of Sales $ (2,359 ) $ 3,129 $ 2,437 $ 10,310 Selling, General & Administrative 140,405 (365,262 ) 262,809 296,837 Research & Development 5,285 (185,817 ) (23,386 ) (3,253 ) Total $ 143,331 $ (547,950 ) $ 241,860 $ 303,894

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Wave has federal and state net operating loss carryforwards of approximately $316,802,000 , which expire beginning in 2015 through 2035 and include approximately $8,074,000 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 $16,000,000 of operating loss carryforwards associated with Safend, Ltd., which may be carried forward indefinitely. The Company maintains a full valuation allowance on the deferred tax asset associated with the operating loss carryforwards.

Loss per Share

Loss per Share	9 Months Ended
	Sep. 30, 2015
Earnings Per Share [Abstract]
Loss per Share	Loss per Share The calculation of basic and diluted loss per share was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Numerator Net loss attributable to common shareholders $ (1,693,818 ) $ (2,105,859 ) $ (13,676,117 ) $ (9,194,894 ) Denominator Weighted Average basic common shares 59,946,141 45,895,118 55,095,077 42,049,167 Effect of dilutive securities (1) — — — — Weighted average dilutive common share 59,946,141 45,895,118 55,095,077 42,049,167 Basic loss per share (0.03) (0.05) (0.25) (0.22) Diluted loss per share (0.03) (0.05) (0.25) (0.22) (1) Diluted loss per share was computed without consideration to potentially dilutive instruments as their inclusion would have been antidilutive. Potentially dilutive instruments include stock options, unvested restricted stock awards and warrants. As of September 30, 2015 and 2014, there were options to purchase 3.3 million and 4.2 million shares of common stock, respectively, and as of September 30, 2015 and 2014 there were warrants to purchase 24.0 million and 4.1 million shares of common stock, respectively, which were excluded from the computation as they would be antidilutive.

Segment Reporting

Segment Reporting	9 Months Ended
	Sep. 30, 2015
Segment Reporting [Abstract]
Segment Reporting	Segment Reporting Segments are defined by authoritative guidance as components of a company in which separate financial information is available and is evaluated by the chief operating decision maker (CODM), or a decision-making group, in deciding how to allocate resources and in assessing performance. Our CODM is our chief executive officer. The Company presents a single segment for purposes of financial reporting and prepared its consolidated financial statements upon that basis. The following table details Wave’s revenue by geographic area for the three and nine -month periods ended September 30, 2015 and 2014 . Geographic area is based on the location where the products were shipped or services rendered. For the three months ended September 30, United States of America Europe Asia Total 2015 Wave products and services $ 1,502,776 $ 791,787 $ 267,899 $ 2,562,462 % of Total 59 % 31 % 10 % 100 % 2014 Wave products and services $ 3,003,495 $ 1,087,141 $ 241,468 $ 4,332,104 % of Total 69 % 25 % 6 % 100 % For the nine months ended September 30, United States of America Europe Asia Total 2015 Wave products and services $ 4,058,608 $ 2,748,205 $ 783,320 $ 7,590,133 % of Total 54 % 36 % 10 % 100 % 2014 Wave products and services $ 9,526,785 $ 3,470,402 $ 1,107,276 $ 14,104,463 % of Total 67 % 25 % 8 % 100 % Approximately 73% of all tangible assets of Wave are located within the United States of America and approximately 27% are located in the State of Israel.

Fair Value Measurement

Fair Value Measurement	9 Months Ended
	Sep. 30, 2015
Fair Value Disclosures [Abstract]
Fair Value Measurement	Fair Value Measurement Assets and liabilities recorded at fair value on the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure the fair value. Level inputs are as follows: Level 1 - quoted prices in active markets for identical assets or liabilities. Level 2 - other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date. Level 3 - significant unobservable inputs that reflect management's best estimate of what market participants would use to price the assets or liabilities at the measurement date. The following table summarizes fair value measurements by level at September 30, 2015 for assets and liabilities measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 333,670 $ — $ — $ 333,670 Warrant liability — — (570,459 ) $ (570,459 ) The following table summarizes fair value measurements by level at December 31, 2014 for assets and liabilities measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 1,777,414 $ — $ — $ 1,777,414 Liabilities measured at fair value on a recurring basis include a warrant liability resulting from the Company's May 2015 public offering. The Company uses a Monte Carlo Simulation to estimate the fair value of the warrants. The estimation of the fair value is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, expected stock price volatility, risk-free interest rate, expected life and expectations of the timing and amount of future financing the Company may require. The fair value of the embedded down round feature is revalued each balance sheet date utilizing the Monte Carlo simulation-based model computations. A decrease or increase in fair value of the warrants is reported in the consolidated statements of operation as other income or expense, respectively. In addition, the use of a Monte Carlo simulation-based model requires the input of highly subjective assumptions, and other reasonable assumptions could provide differing results. The Company estimated the value of the warrants issued with the May public offering on the date of issuance to be $1,846,900 , or $0.44 per warrant, using the Monte Carlo model with the following assumptions: a term of 2.5 years, exercise price of $0.81 , volatility rate of 83.90% , and a risk-free interest rate of 0.82% . The Company remeasured the warrants as of September 30, 2015, using a Monte Carlo model with the following assumptions: a term of 2.2 years, exercise price of $0.07 , volatility rate of 103.60% , and a risk-free interest rate of 0.68% . As of September 30, 2015, the fair value of the warrants was $570,459 , or $0.14 per share, and was recorded as a liability on the accompanying consolidated balance sheet. An increase in any of the variables would cause an increase in the fair value of the warrants. Likewise, a decrease in any variable would cause a decrease in the value of the warrants. The following table shows the changes in Level 3 liabilities measured at fair value on a recurring basis for the three and nine-months ended September 30, 2015. Three-months ended September 30, 2015: Warrant Liability Beginning balance - June 30, 2015 $ 1,553,075 Issuances — Conversions — Unrealized gains (982,616 ) Ending balance - September 30, 2015 $ 570,459 Nine-months ended September 30, 2015: Warrant Liability Beginning balance - December 31, 2014 $ — Issuances 1,846,900 Conversions — Unrealized gains (1,276,441 ) Ending balance - September 30, 2015 $ 570,459 The following table presents the carrying value and estimated fair value of the Company's convertible debt as of September 30, 2015. Estimated Fair Value Carrying Value Convertible Debt, due December 23, 2015 $ 746,000 $ 419,728 Financial instruments not measured or recorded at fair value in the accompanying unaudited consolidated financial statements and not included in the above table consist of accounts receivable and accounts payable and accrued expenses. The estimated fair value of accounts receivable and accounts payable and accrued expenses 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, 2015
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events We have evaluated subsequent events after the balance sheet date through the date these financial statements were issued for appropriate accounting and disclosure and concluded that there are no subsequent events requiring adjustment or disclosure in these financial statements.

Critical Accounting Policies (P

Critical Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Basis of Presentation	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 allowance, depreciation and amortization, valuation of long-lived assets, 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.
Revenue Recognition	Revenue Recognition — Wave's business model targets revenues from various sources including 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 1) persuasive evidence of an arrangement exists, 2) delivery has occurred or services have been rendered, 3) fees are fixed or determinable and 4) collectability is reasonably assured. If we determine that any one of the four criteria is not met, we will defer recognition of revenue until all of the criteria are met. 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 software to end users, OEM partners, software development and other services including maintenance. Wave applies 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 agreements. Wave enters into perpetual software license agreements through direct sales to customers and indirect sales through its OEM partners, distributors and resellers. Wave has defined its two classes of end user customers: large customers, whose orders are greater than or equal to 5,000 licenses and small customers, whose orders are less than 5,000 licenses. 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. 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”) product and its Protector product. As a result, for the ERAS SED and Protector small customer class licenses with one -year of 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 and Protector, large customer class ERAS SED and Protector orders, and small customer class ERAS SED and 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. 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. Licensing and maintenance - cost of net revenues includes customer support personnel costs, costs associated with providing consulting services and related share-based compensation expense.
Valuation of Goodwill and Long Lived Assets	Valuation of Goodwill - Goodwill was fully impaired as of June 30, 2015, and as such, we have not evaluated goodwill as of September 30, 2015. Valuation of Long Lived Assets - We review long lived assets 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.
Share-based Compensation	Share-based Compensation — We recognize compensation expense for all share-based compensation awards made to employees, directors and consultants, including employee stock options, restricted stock units 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 determine the fair value of restricted stock units based on the closing market price of the Company's common stock on the date of grant. We estimate the fair value of employee stock option awards at grant date using a Black-Scholes option-pricing model. Our estimate of the fair value of the stock option 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.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements - In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-15, Presentation of Financial Statements - Going Concern , which amends the disclosures of uncertainties about an entity's ability to continue as a going concern. The amendments provide guidance in GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. In doing so, the amendments should reduce the diversity in the timing and content of footnote disclosures. The Company is required to adopt the amendments in the first quarter of 2017. Early adoption is permitted. The Company is currently evaluating the impact of these amendments on its Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-9, 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 2018. Early adoption is permitted for annual reporting periods starting January 1, 2017. 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.

Goodwill and Amortizable Inta20

Goodwill and Amortizable Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of the details of intangible assets	The following schedule presents intangible assets subject to amortization as of September 30, 2015 and December 31, 2014 : September 30, 2015 Intangible Asset Gross Carrying Amount Accumulated Amortization Accumulated Impairment Loss Net Weighted Average Remaining Useful Life (in years) Developed Technology $ 6,426,000 $ (1,305,044 ) $ (5,120,956 ) $ — 0 Customer Relationships 3,972,000 (985,327 ) (2,986,673 ) — 0 Internal-use software 726,000 (255,310 ) (470,690 ) — 0 Acquired Patents 1,100,000 (1,100,000 ) — — 0 $ 12,224,000 $ (3,645,681 ) $ (8,578,319 ) $ — December 31, 2014 Intangible Asset Gross Carrying Amount Accumulated Amortization Accumulated Impairment Loss Net Weighted Average Remaining Useful Life (in years) Developed Technology $ 6,426,000 $ (1,292,297 ) $ (5,038,100 ) $ 95,603 3.8 Customer Relationships 3,972,000 (889,327 ) (1,786,673 ) 1,296,000 6.8 Internal-use software 726,000 (182,710 ) — 543,290 3.8 Acquired Patents 1,100,000 (1,026,666 ) — 73,334 0.4 $ 12,224,000 $ (3,391,000 ) $ (6,824,773 ) $ 2,008,227

Accounts Payable and Accrued 21

Accounts Payable and Accrued Expenses (Tables)	9 Months Ended
	Sep. 30, 2015
Payables and Accruals [Abstract]
Schedule of accounts payable and accrued liabilities	The following schedule presents the details of accounts payable and accrued expenses as of September 30, 2015 and December 31, 2014: 2015 2014 Accounts payable $ 1,601,746 $ 1,080,167 Accrued payroll and related costs 1,266,955 2,211,565 Accrued consulting and professional fees 171,141 157,500 Royalty liability 102,648 175,000 Other accrued expenses 336,470 294,261 Total accounts payable and accrued expenses $ 3,478,960 $ 3,918,493

Share-based Compensation (Table

Share-based Compensation (Tables)	9 Months Ended
	Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of effect of share based compensation in the entity's statement of operations	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, 2015 and 2014 : Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 Cost of Sales $ (2,359 ) $ 3,129 $ 2,437 $ 10,310 Selling, General & Administrative 140,405 (365,262 ) 262,809 296,837 Research & Development 5,285 (185,817 ) (23,386 ) (3,253 ) Total $ 143,331 $ (547,950 ) $ 241,860 $ 303,894

Loss per Share Loss per Share (

Loss per Share Loss per Share (Tables)	9 Months Ended
	Sep. 30, 2015
Earnings Per Share [Abstract]
Calculation of basic and diluted loss per share	The calculation of basic and diluted loss per share was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Numerator Net loss attributable to common shareholders $ (1,693,818 ) $ (2,105,859 ) $ (13,676,117 ) $ (9,194,894 ) Denominator Weighted Average basic common shares 59,946,141 45,895,118 55,095,077 42,049,167 Effect of dilutive securities (1) — — — — Weighted average dilutive common share 59,946,141 45,895,118 55,095,077 42,049,167 Basic loss per share (0.03) (0.05) (0.25) (0.22) Diluted loss per share (0.03) (0.05) (0.25) (0.22) (1) Diluted loss per share was computed without consideration to potentially dilutive instruments as their inclusion would have been antidilutive. Potentially dilutive instruments include stock options, unvested restricted stock awards and warrants. As of September 30, 2015 and 2014, there were options to purchase 3.3 million and 4.2 million shares of common stock, respectively, and as of September 30, 2015 and 2014 there were warrants to purchase 24.0 million and 4.1 million shares of common stock, respectively, which were excluded from the computation as they would be antidilutive.

Segment Reporting (Tables)

Segment Reporting (Tables)	9 Months Ended
	Sep. 30, 2015
Segment Reporting [Abstract]
Schedule of sales by geographic area	The following table details Wave’s revenue by geographic area for the three and nine -month periods ended September 30, 2015 and 2014 . Geographic area is based on the location where the products were shipped or services rendered. For the three months ended September 30, United States of America Europe Asia Total 2015 Wave products and services $ 1,502,776 $ 791,787 $ 267,899 $ 2,562,462 % of Total 59 % 31 % 10 % 100 % 2014 Wave products and services $ 3,003,495 $ 1,087,141 $ 241,468 $ 4,332,104 % of Total 69 % 25 % 6 % 100 % For the nine months ended September 30, United States of America Europe Asia Total 2015 Wave products and services $ 4,058,608 $ 2,748,205 $ 783,320 $ 7,590,133 % of Total 54 % 36 % 10 % 100 % 2014 Wave products and services $ 9,526,785 $ 3,470,402 $ 1,107,276 $ 14,104,463 % of Total 67 % 25 % 8 % 100 %

Fair Value Measurement (Tables)

Fair Value Measurement (Tables)	9 Months Ended
	Sep. 30, 2015
Fair Value Disclosures [Abstract]
Fair value measurements by level	The following table summarizes fair value measurements by level at September 30, 2015 for assets and liabilities measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 333,670 $ — $ — $ 333,670 Warrant liability — — (570,459 ) $ (570,459 ) The following table summarizes fair value measurements by level at December 31, 2014 for assets and liabilities measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 1,777,414 $ — $ — $ 1,777,414
Level 3 liabilities measured at fair value recurring basis	The following table shows the changes in Level 3 liabilities measured at fair value on a recurring basis for the three and nine-months ended September 30, 2015. Three-months ended September 30, 2015: Warrant Liability Beginning balance - June 30, 2015 $ 1,553,075 Issuances — Conversions — Unrealized gains (982,616 ) Ending balance - September 30, 2015 $ 570,459 Nine-months ended September 30, 2015: Warrant Liability Beginning balance - December 31, 2014 $ — Issuances 1,846,900 Conversions — Unrealized gains (1,276,441 ) Ending balance - September 30, 2015 $ 570,459
Schedule of fair values of debt instruments	The following table presents the carrying value and estimated fair value of the Company's convertible debt as of September 30, 2015. Estimated Fair Value Carrying Value Convertible Debt, due December 23, 2015 $ 746,000 $ 419,728

Critical Accounting Policies (D

Critical Accounting Policies (Details)	9 Months Ended
	Sep. 30, 2015classlicense
Revenue Recognition
Number of classes of end user customers | class	2
Order of licenses of end user customers defined as large (in excess of)	5,000
Order of licenses of end user customers defined as small (less than)	5,000
Term of Maintenance (in excess of)	1 year

Liquidity (Details)

Liquidity (Details) - USD ($)	Nov. 11, 2015	Jul. 28, 2015	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013
Liquidity
Accumulated deficit			$ 443,797,195	$ 430,121,078
Negative working capital			6,882,000
Cash and cash equivalents			$ 333,670	$ 1,777,414	$ 4,332,781	$ 2,120,102
Subsequent Event | Shelf Registration 2015 | Common Stock
Financing [Line Items]
Proceeds from issuances of common stock, gross amount remaining	$ 1,016,000
Global Restructuring
Financing [Line Items]
Reduction in workforce (percentage)		60.00%

Goodwill and Amortizable Inta28

Goodwill and Amortizable Intangible Assets (Details) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2015	Jun. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Finite-Lived Intangible Assets [Line Items]
Impairment of amortizable intangible assets	$ 0	$ 1,753,546	$ 0	$ 1,753,546	$ 0
Impairment of goodwill	0	1,448,000	0	1,448,000	0
Intangible assets amortization expense	$ 0		$ 145,674	$ 254,680	$ 437,021
Developed Technology
Finite-Lived Intangible Assets [Line Items]
Impairment of amortizable intangible assets		82,856
Internal-use software
Finite-Lived Intangible Assets [Line Items]
Impairment of amortizable intangible assets		470,690
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Impairment of amortizable intangible assets		$ 1,200,000

Goodwill and Amortizable Inta29

Goodwill and Amortizable Intangible Assets (Details 2) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Intangible Asset
Gross Carrying Amount	$ 12,224,000	$ 12,224,000
Accumulated Amortization	(3,645,681)	(3,391,000)
Accumulated Impairment Loss	(8,578,319)	(6,824,773)
Net	0	2,008,227
Developed Technology
Intangible Asset
Gross Carrying Amount	6,426,000	6,426,000
Accumulated Amortization	(1,305,044)	(1,292,297)
Accumulated Impairment Loss	(5,120,956)	(5,038,100)
Net	$ 0	$ 95,603
Weighted Average Remaining Useful Life (in years)	0 years	3 years 9 months 18 days
Customer Relationships
Intangible Asset
Gross Carrying Amount	$ 3,972,000	$ 3,972,000
Accumulated Amortization	(985,327)	(889,327)
Accumulated Impairment Loss	(2,986,673)	(1,786,673)
Net	$ 0	$ 1,296,000
Weighted Average Remaining Useful Life (in years)	0 years	6 years 9 months 18 days
Internal-use software
Intangible Asset
Gross Carrying Amount	$ 726,000	$ 726,000
Accumulated Amortization	(255,310)	(182,710)
Accumulated Impairment Loss	(470,690)
Net	$ 0	$ 543,290
Weighted Average Remaining Useful Life (in years)	0 years	3 years 9 months 18 days
Acquired Patents
Intangible Asset
Gross Carrying Amount	$ 1,100,000	$ 1,100,000
Accumulated Amortization	(1,100,000)	(1,026,666)
Net	$ 0	$ 73,334
Weighted Average Remaining Useful Life (in years)	0 years	4 months 24 days

Accounts Payable and Accrued 30

Accounts Payable and Accrued Expenses (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Payables and Accruals [Abstract]
Accounts payable	$ 1,601,746	$ 1,080,167
Accrued payroll and related costs	1,266,955	2,211,565
Accrued consulting and professional fees	171,141	157,500
Royalty liability	102,648	175,000
Other accrued expenses	336,470	294,261
Total accounts payable and accrued expenses	$ 3,478,960	$ 3,918,493

Issuance of Common Stock, Con31

Issuance of Common Stock, Convertible Debt and Warrants (Details)	Sep. 23, 2015USD ($)day$ / sharesshares	Jun. 01, 2015USD ($)$ / sharesshares	May. 21, 2015USD ($)$ / sharesshares	Jan. 26, 2015USD ($)$ / sharesshares	Jun. 11, 2014USD ($)$ / sharesshares	Jun. 01, 2014USD ($)$ / sharesshares	Sep. 30, 2015USD ($)shares	Sep. 30, 2014USD ($)$ / sharesshares	Dec. 31, 2014USD ($)
Common Stock
Net proceeds from issuance of convertible debt and warrants							$ 490,000	$ 0
Number of shares under warrants | shares							4,197,500
Warrant liability	$ 84,000		$ 1,846,900				$ 570,459		$ 0
Convertible Debt, due December 23, 2015	$ 406,000
Net proceeds from issuance of common stock and warrants							8,206,729	14,457,789
Proceeds from warrant exercises							0	121,862
Proceeds from issuance of shares under share-based compensation plans							$ 42,508	$ 99,495
Employee Stock Purchase Plan 2004 | Common Class A
Common Stock
Share price (in dollars per share) | $ / shares		$ 0.56				$ 0.94
Stock issued related to employee stock purchase plans | shares		75,773				105,454
Proceeds from issuance of shares under share-based compensation plans		$ 42,508				$ 99,495
Shelf Registration 2015
Common Stock
Number of shares issued | shares			7,300,000
Price per unit (in dollars per unit) | $ / shares			$ 0.65
Placement agent fees equal to gross proceeds from offering (as a percent)			7.00%
Net proceeds from issuance of units			$ 4,868,000
Underwriter fees			382,000
Legal and other fees			$ 207,000
Shelf Registration 2015 | Common Class A
Common Stock
Number of shares issued | shares				5,513,044
Unit components - number of shares in each unit | shares			1
Share price (in dollars per share) | $ / shares				$ 0.65
Gross proceeds from issuance of common stock				$ 3,583,479
Over-Allotment Option | Common Class A
Common Stock
Number of shares issued | shares			1,095,000
Shelf Registration 2013 | Common Class A
Common Stock
Number of shares issued | shares					5,225,560
Placement agent fees equal to gross proceeds from offering (as a percent)					7.00%
Legal and other fees					$ 159,000
Share price (in dollars per share) | $ / shares					$ 1.90
Gross proceeds from issuance of common stock					$ 9,928,564
Net proceeds from issuance of common stock and warrants					9,075,000
Placement agent fees					$ 695,000
At the Market Sales Agreement | Common Class A
Common Stock
Number of shares issued | shares								5,410,450
Net proceeds from issuance of common stock and warrants								$ 5,383,009
Offering costs								$ 172,000
At the Market Sales Agreement | Common Class A | Minimum
Common Stock
Share price (in dollars per share) | $ / shares								$ 0.90
At the Market Sales Agreement | Common Class A | Maximum
Common Stock
Share price (in dollars per share) | $ / shares								1.39
Warrants Issued September 2015
Common Stock
Number of shares under warrants | shares	1,225,000
Exercise price of warrants (in dollars per share) | $ / shares	$ 0.18
May 2015 Warrants
Common Stock
Exercise price of warrants (in dollars per share) | $ / shares			$ 0.81
Warrant liability			$ 1,846,900
May 2015 Warrants | Shelf Registration 2015
Common Stock
Number of common stock called by each warrant | shares			0.5
May 2015 Warrants | Over-Allotment Option
Common Stock
Exercise price of warrants (in dollars per share) | $ / shares	$ 0.07		$ 0.81
Number of warrants purchased | shares			547,500
Warrants January 2015 Subscribers | Common Class A
Common Stock
Number of shares under warrants | shares				2,205,216
Exercise price of warrants (in dollars per share) | $ / shares				$ 0.70
Placement agent fees equal to gross proceeds from offering (as a percent)				6.00%
Legal and other fees				$ 30,000
Net proceeds from issuance of common stock and warrants				3,338,000
Placement agent fees				$ 215,000
SRA Warrants January 2015 Financing | Common Class A
Common Stock
Number of shares under warrants | shares				330,783
Exercise price of warrants (in dollars per share) | $ / shares				$ 0.70
Warrants Issued June 2014 | Shelf Registration 2013 | Common Class A
Common Stock
Number of shares under warrants | shares					2,090,224
Exercise price of warrants (in dollars per share) | $ / shares					$ 1.90
Warrants December 2013 Investors | Common Class A
Common Stock
Exercise price of warrants (in dollars per share) | $ / shares								$ 0.91
Proceeds from warrant exercises								$ 121,862
Stock issued upon exercise of warrants | shares								133,914
Convertible Debt
Common Stock
Net proceeds from issuance of convertible debt and warrants	$ 490,000
Debt Instrument, Convertible, Expected to be Repaid or Converted to Stock	$ 588,000
Debt Instrument, Convertible, Conversion Price | $ / shares	$ 0.168
Debt Instrument, Convertible, Conversion Ratio	0.8
Number of threshold trading days | day	5
Convertible Debt | Maximum
Common Stock
Debt Instrument, Convertible, Number of Equity Instruments, Percentage Outstanding	19.90%

Share-based Compensation (Detai

Share-based Compensation (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Share-based Compensation
Share-based Compensation expense	$ 143,331	$ (547,950)	$ 241,860	$ 303,894
Stock options granted (in shares)	22,000	178,100	1,127,750	1,856,100
Weighted-average estimated fair value (in dollars per share)	$ 0.44	$ 0.71	$ 0.78	$ 0.54
Cost of Sales
Share-based Compensation
Share-based Compensation expense	$ (2,359)	$ 3,129	$ 2,437	$ 10,310
Selling, General & Administrative
Share-based Compensation
Share-based Compensation expense	140,405	(365,262)	262,809	296,837
Research & Development
Share-based Compensation
Share-based Compensation expense	$ 5,285	$ (185,817)	$ (23,386)	$ (3,253)

Income Taxes (Details)

Income Taxes (Details) $ in Thousands	Sep. 30, 2015USD ($)
Income Taxes
Net operating loss	$ 316,802
Safend, Inc.
Income Taxes
Net operating loss	8,074
Safend, Ltd.
Income Taxes
Net operating loss	$ 16,000

Loss per Share (Details)

Loss per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net loss	$ (1,693,818)	$ (2,105,859)	$ (13,676,117)	$ (9,194,894)
Weighted Average basic common shares	59,946,141	45,895,118	55,095,077	42,049,167
Effect of dilutive securities	0	0	0	0
Weighted average dilutive common share	59,946,141	45,895,118	55,095,077	42,049,167
Basic loss per share (in dollars per share)	$ (0.03)	$ (0.05)	$ (0.25)	$ (0.22)
Diluted loss per share (in dollars per share)	$ (0.03)	$ (0.05)	$ (0.25)	$ (0.22)
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share			3,300,000	4,200,000
Warrant
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share			24,000,000	4,100,000

Segment Reporting (Details)

Segment Reporting (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Segment Reporting
Wave products and services	$ 2,562,462	$ 4,332,104	$ 7,590,133	$ 14,104,463
United States of America
Segment Reporting
Wave products and services	1,502,776	3,003,495	4,058,608	9,526,785
Europe
Segment Reporting
Wave products and services	791,787	1,087,141	2,748,205	3,470,402
Asia
Segment Reporting
Wave products and services	$ 267,899	$ 241,468	$ 783,320	$ 1,107,276
Revenue | Geographic area
Segment Reporting
% of total revenue	100.00%	100.00%	100.00%	100.00%
Revenue | Geographic area | United States of America
Segment Reporting
% of total revenue	59.00%	69.00%	54.00%	67.00%
Revenue | Geographic area | Europe
Segment Reporting
% of total revenue	31.00%	25.00%	36.00%	25.00%
Revenue | Geographic area | Asia
Segment Reporting
% of total revenue	10.00%	6.00%	10.00%	8.00%
Long-lived assets | Geographic area | United States of America
Segment Reporting
% of total revenue			73.00%
Long-lived assets | Geographic area | Israel
Segment Reporting
% of total revenue			27.00%

Fair Value Measurement (Details

Fair Value Measurement (Details) - USD ($)	Sep. 30, 2015	Sep. 23, 2015	May. 21, 2015	Dec. 31, 2014
Disclosures about the Fair Value of Financial Instruments
Warrant liability	$ (570,459)	$ (84,000)	$ (1,846,900)	$ 0
Recurring basis
Disclosures about the Fair Value of Financial Instruments
Cash and cash equivalents	333,670			1,777,414
Recurring basis | Warrant
Disclosures about the Fair Value of Financial Instruments
Warrant liability	(570,459)
Recurring basis | Level 1
Disclosures about the Fair Value of Financial Instruments
Cash and cash equivalents	333,670			1,777,414
Recurring basis | Level 1 | Warrant
Disclosures about the Fair Value of Financial Instruments
Warrant liability	0
Recurring basis | Level 2
Disclosures about the Fair Value of Financial Instruments
Cash and cash equivalents	0			0
Recurring basis | Level 2 | Warrant
Disclosures about the Fair Value of Financial Instruments
Warrant liability	0
Recurring basis | Level 3
Disclosures about the Fair Value of Financial Instruments
Cash and cash equivalents	0			$ 0
Recurring basis | Level 3 | Warrant
Disclosures about the Fair Value of Financial Instruments
Warrant liability	$ (570,459)

Fair Value Measurments (Details

Fair Value Measurments (Details 2) - USD ($)	Sep. 30, 2015	May. 21, 2015	Sep. 23, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	$ 570,459	$ 1,846,900	$ 84,000	$ 0
Estimated value of the warrants (in usd per share)	$ 0.14	$ 0.44
Warrant
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Expected term	2 years 2 months 12 days	2 years 6 months
Exercise price of warrants	$ 0.07	$ 0.81
Volatility rate	103.60%	83.90%
Risk free interest rate	0.68%	0.82%

Fair Value Measurement (Detai38

Fair Value Measurement (Details 3) - Level 3 - Recurring basis - Warrant - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value measurement, beginning balance	$ 1,553,075	$ 0
Issuances	0	1,846,900
Conversions	0	0
Unrealized gains	(982,616)	(1,276,441)
Fair value measurement, ending balance	$ 570,459	$ 570,459

Fair Value Measurement (Detai39

Fair Value Measurement (Details 4) - USD ($)	Sep. 30, 2015	Sep. 23, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Convertible Debt, due December 23, 2015		$ 406,000
Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Convertible Debt, due December 23, 2015	$ 746,000
Reported Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Convertible Debt, due December 23, 2015	$ 419,728