Wave Systems To Complete $4.4 Million Offering

Lee, MA — February 16 , 2006 — Wave Systems Corp. (NASDAQ: WAVX — www.wave.com), a developer of trusted computing solutions and services, announced today that it has agreed upon an issuance of $4,466,500 million of its Class A common stock to accredited investors. Pursuant to the financing, Wave Systems has agreed to sell 8,348,598 shares of Class A common stock at a price of $0.535 per share as well as warrants to purchase 1,550,868 shares of the company’s common stock within six months at an exercise price of $0.72 per share. If exercised in their entirety, the warrants would generate an additional $1,116,625 in gross proceeds to Wave. The transaction is anticipated to close today and is intended to fund Wave Systems’ ongoing operations and general corporate overhead. The transaction is being done under Wave Systems’ $25 million shelf registration statement which was declared effective by the Securities and Exchange Commission on January 13, 2006.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy securities of Wave Systems Corp.

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About Wave Systems Corp.

Wave is a pioneer in hardware-based PC security that provides software to help solve critical enterprise PC security challenges such as data protection, strong authentication, network access control and the management of these enterprise functions.  Wave is a founding member of the Trusted Computing Group (TCG), a consortium of more than 100 companies that forged open standards for hardware security.  Wave’s EMBASSY® line of client- and server-side software leverages and manages the security functions of the TCG’s industry standard hardware security chip, the Trusted Platform Module (TPM) as well as hard drives that comply with TCG’s “Opal” self-encrypting drive (SED) standard.  Self-encrypting drives are a growing segment of the data protection market, offering increased security and better performance than most existing software-based encryption solutions.  TPMs are standard equipment on many enterprise-class PCs shipping today and have shipped on an estimated 300 million PCs worldwide.  Using TPMs and/or SEDs and Wave software, enterprises can substantially and cost-effectively strengthen their current security solutions.  Visit http://www.wave.com for more information.

Safe Harbor for Forward Looking Statements

Under the Private Securities Litigation Reform Act of 1995. This press release may contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), including all statements that are not statements of historical fact regarding the intent, belief or current expectations of the company, its directors or its officers with respect to, among other things: (i) the company’s financing plans; (ii) trends affecting the company’s financial condition or results of operations; (iii) the company’s growth strategy and operating strategy; and (iv) the declaration and payment of dividends. The words "may," "would," "will," "expect," "estimate," "anticipate," "believe," "intend" and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the company’s ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors.

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For more information please contact:

Gerard T. Feeney, CFO
Wave Systems Corp.
Wave Investor Relations Contact
David Collins, Richard Land
Catalyst Global LLC

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