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.