Segment Reporting

3 Months Ended

Mar. 31, 2013

Segment Reporting

Segment Reporting

8.             Segment Reporting

Wave’s products include the Wave EMBASSY® digital security products and services (“EMBASSY®”) and Safend’s endpoint data loss protection products and services.  These products and services constitute Wave’s reportable segments as of March 31, 2013.

Net losses for reportable segments exclude net interest income (expense) and other income.  These items are not reported by segment since they are excluded from the measurement of segment performance reviewed by Wave’s Chief Financial Officer.

The following sets forth reportable segment data:

	Three-months ended March 31,
	2013			2012
Net revenues:
EMBASSY digital security products and services	$	4,620,786		$	5,846,710
Safend endpoint data loss protection products and services	1,172,940			1,135,427
Total net revenues	5,793,726			6,982,137
Net loss:
EMBASSY digital security products and services	(5,403,917		)	(7,227,955		)
Safend endpoint data loss protection products and services	(4,753,302		)	(1,106,630		)
Total segments net loss	(10,157,219		)	(8,334,585		)
Net other income (expense)	1,631			23,600
Net interest expense	(58,167		)	(2,105		)
Net loss	(10,213,755		)	(8,313,090		)
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	177,128			165,417
Safend endpoint data loss protection products and services	138,781			361,372
Total depreciation and amortization expense	315,909			526,789
Capital expenditures:
EMBASSY digital security products and services	92,309			35,028
Safend endpoint data loss protection products and services	1,614			12,330
Total capital expenditures	$	93,923		$	47,358

	March 31,		December 31,
	2013		2012
Assets:
EMBASSY digital security products and services	$	6,241,683	$	9,695,864
Safend endpoint data loss protection products and services	4,529,392		8,937,294
Total assets	$	10,771,075	$	18,633,158

The following table details Wave’s sales by geographic area for the three-month periods ended March 31, 2013 and 2012.  Geographic area is based on the location of where the products were shipped or services rendered.

	United States of America			Europe			Asia			Total
2013
EMBASSY digital security products and services	$	3,722,988		$	746,693		$	151,105		$	4,620,786
Safend endpoint data loss protection products and services	544,398			558,331			70,211			1,172,940
Total	4,267,386			1,305,024			221,316			5,793,726
% of total revenue	74		%	22		%	4		%	100		%
2012
EMBASSY digital security products and services	$	5,130,404		$	676,306		$	40,000		$	5,846,710
Safend endpoint data loss protection products and services	439,985			600,284			95,158			1,135,427
Total	5,570,389			$	1,276,590		135,158			6,982,137
% of total revenue	80		%	18		%	2		%	100		%

Approximately 90% of all long-lived 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-month periods ended March 31st are as follows:

		2013			2012
Customer	Segment	Revenue
Dell	EMBASSY	$	2,458,411		$	4,125,990
% of total revenue		42		%	59		%