As filed with the Securities and Exchange Commission on _April **, 1999_________
Registration No. 333-70821__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Amendment No. 1
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
WAVERIDER COMMUNICATIONS, INC.
(Exact name of registrant as specified in its Charter)
Nevada 33-0264030
(State or other jurisdiction of incorporation (I.R.S. Employer Identification
or organization) Number)
235 Yorkland Blvd., Suite 1101
Toronto, Ontario Canada M2J 4Y8
(416) 502-3200
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
T. SCOTT WORTHINGTON
235 Yorkland Blvd., Suite 1101
Toronto, Ontario Canada M2J 4Y8
(416) 502-3200 / Facsimile No.: (416) 502-2968
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications to:
DAVID A. BROADWIN, ESQ.
FOLEY, HOAG & ELIOT LLP
One Post Office Square
Boston, Massachusetts 02109-2170
(617) 832-1000 / Facsimile No.: (617) 832-7000
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==========================================================================================================
Proposed Proposed
maximum maximum Amount of
Title of each class of Amount to be offering price aggregate registration
securities to be registered Registered per share (1) offering fee
price
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<S> <C> <C> <C> <C>
Common Stock, $.001 par value 7,250,000(2) $2.315 $16,783,750 $4,952
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(1) Estimated solely for the purposes of determining the registration fee. In
accordance with Rule 457(c) under the Securities Act of 1933, the above
calculation is based on the closing bid price reported on the OTC Bulletin
Board on January 11, 1999.
(2) Assumes that all shares of preferred stock are converted into common stock,
that all the warrants are exercised and that WaveRider exercises in full
its right to sell common stock to certain selling stockholders.
</TABLE>
In accordance with Rule 416 under the Securities Act of 1933, this
Registration Statement also covers such indeterminate number of additional
shares of WaveRider's common stock, $0.001 par value, as may become issuable to
prevent dilution resulting from stock splits, stock dividends or similar
transactions as set forth in WaveRider's Articles of Incorporation and the terms
of the warrants referred to above.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
SUBJECT TO COMPLETION, DATED April **, 1999
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell securities, and we are not soliciting offers to buy these securities, in
any state where the offer or sale is not permitted.
<PAGE>
WaveRider Communications, Inc.
7,250,000 Shares of Common Stock
This prospectus provides for the sale of up to 7,250,000 shares of
commons stock of WaveRider by the selling stockholders. It is the SEC's view
that the selling stockholders are underwriters with respect to the transactions
described in this prospectus.
WaveRider's common stock is currently quoted on the OTC Bulletin Board,
under the symbol "WAVC". On March 19, 1999, the last reported sale price of
WaveRider's common stock was $2.1875 per share.
The mailing address, the telephone and facsimile numbers and the e-mail
address of WaveRider's executive offices is:
235 Yorkland Blvd., Suite 1101
Toronto, Ontario Canada M2J 4Y8
(416) 502-3200; Facsimile No.: (416) 502-2968
e-mail address: [email protected]
home page: http://www.waverider.com
Information contained in WaveRider's website shall not be deemed part of this
prospectus.
Investing in the common stock involves risks.
See "Risk Factors" beginning on page 5.
The Securities and Exchange Commission and state securities regulators
have not approved or disapproved these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is April **, 1999
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TABLE OF CONTENTS
Page
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Risk Factors 3
Where You Can Find More Information 6
Use of Proceeds 7
Dividends 8
Selling Stockholders 8
Plan of Distribution 13
Disclosure of SEC Position on Indemnification for
Securities Act Liabilities 14
Legal Matters 14
Experts 14
In purchasing the shares under this prospectus, you should rely only on
the information provided to you in this prospectus. WaveRider has not authorized
anyone else to provide you with different information. Neither WaveRider nor any
of the selling stockholders is making an offer of these securities in any state
where the offer is not permitted. You should not assume that the information in
this prospectus is accurate as of any date other than the date on the front page
of this prospectus. In this prospectus, reference to "we", "us" and "our" refer
to WaveRider Communications, Inc.
<PAGE>
RISK FACTORS
Investment in our shares of common stock is risky. In addition to the
information contained in this prospectus, including information incorporated by
reference, you should consider carefully the following risk factors, before
purchasing the shares offered under this prospectus.
Some of the information in this prospectus contains forward-looking
statements that involve substantial risks and uncertainties. Any statement, in
this prospectus and in the documents incorporated by reference into this
prospectus, that is not a statement of an historical fact constitutes a
"forward-looking statement". Further, when we use the words "may", "expect",
"anticipate", "plan", "believe", "seek", "estimate", "internal", and similar
words, we intend to identify statements and expressions that may be
forward-looking statements. We believe it is important to communicate certain of
our expectations to our investors. Forward-looking statements are not guarantees
of future performance. They involve risks, uncertainties and assumptions that
could cause WaveRider's future results to differ materially from those expressed
in any forward-looking statements. Many factors are beyond our ability to
control or predict. You are accordingly cautioned not to place undue reliance on
such forward-looking statements. We have no obligation or intent to update
publicly any forward-looking statements whether in response to new information,
future events or otherwise. Important factors that may cause our actual results
to differ from such forward-looking statements include, but are not limited to,
the risk factors discussed below. Before you invest in our common stock, you
should be aware that the occurrence of any of the events described under "Risk
Factors" below or elsewhere in this prospectus could have a material adverse
effect on our business, financial condition and results of operation. In such a
case, the trading price of our common stock could decline and you could lose all
or part of your investment.
We Have No Operating History
Up to the present time our company has been entirely a research and
development entity, with no sales or revenues. There can be no assurance that
the products that we offer will meet with market acceptance. In addition, there
is no guarantee that even if there proves to be a market for our products, such
market will be able to sustain our profitability requirements.
None of our current products have achieved widespread distribution or
customer acceptance. Although, some of our products have passed the development
stage, we have not yet established market for them. Although we believe that we
have the expertise to commercialize our products and establish a market for
them, there is no assurance that we will be successful or that such products
will prove to have widespread customer appeal.
We Have a History of Losses, and Our Future Profitability is Uncertain
Due to our limited operating history, we are subject to the
uncertainties and risks associated with any new business. Until recently we had
no product that could be commercialized, and therefore we experienced
significant operating losses every year since incorporation. Our net losses for
the fiscal year that ended December 31, 1998 was $4,477,518, and for the fiscal
year that ended December 31, 1997 was $1,324,960. We have an accumulated deficit
of $9,254,790 as of December 31, 1998.
There can be no assurance that we will ever generate profit from our
products or that we will ever reach profitability on a sustained basis.
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We Need Additional Financing and There Is Uncertainty We Can Get It
Management believes the Company will need to draw on the additional
funding arranged on December 29, 1998 in order to finalize development and
market its products. The ability to draw on this additional funding is dependent
on a number of factors including share pricing and volumes which are outside the
Company's control. If the Company is unable to draw on the additional funding
then the Company will need to raise the additional funds through the sale of its
equity or debt securities in private or public financing or through strategic
partnerships in order to fully exploit the potential of its products. There can
be no assurance that the funds required can be raised.
Competition in the Data Communication Industry is Intense
Although our products are based on a wireless technology, we compete
not only against companies that base their products on wireless technology, but
also against companies that base their products on hard-wired technology (wire
or fiber optic cable). There can be no assurance that we will be able to compete
successfully in the future against existing or new competitors or that our
operating results will not be adversely affected by increased price competition.
Competition is based on design and quality of the products, product performance,
price and service, with the relative importance of such factors varying among
products and markets. Competition, in the various markets we serve, comes from
companies of various sizes, many of which are larger and have greater financial
and other resources than we do and, thus, can better withstand adverse economic
or market conditions than we can.
Our Wireless Communication Technology is an Early Stage Technology
Our technology is at an early stage of development. As a result, we
have no historical financial information upon which you as an investor could
make an evaluation of your investment. Our future operating results are subject
to a number of risks, including our ability or inability to implement our
strategic plan, to attract qualified personnel and to raise sufficient financing
as required. Inability of our management to guide growth effectively, including
implementing appropriate systems, procedures and controls, could have a material
adverse effect on our business, financial condition and operating results.
The Data Communication Industry is in a State of Rapid Technological Change and
We May Not Be Able To Keep Up
We may be unable to keep up with technological advances in the data
communications industry. As a result, our products may become obsolete or
unattractive. The data communications industry is characterized by rapid
technological change. In addition to frequent improvements of existing
technology, there is frequent introduction of new technologies leading to more
complex and powerful products. Keeping up with these changes requires
significant management, technological and financial resources. As a small
company, we do not have the management, technological and financial resources
that larger companies in our industry may have. There can be no assurance that
we will be able or successful in enhancing our existing products, or in
developing, manufacturing and marketing new products. An inability to do so
would adversely effect our business, financial condition and results of
operation.
We Have Limited Intellectual Property Protection
Our ability to compete depends to a significant extent on our ability
to protect our intellectual property and to operate without infringing the
intellectual property rights of others. We regard our technology as proprietary.
We have no issued patents or pending patent applications, nor do we have any
registered copyrights with respect to our intellectual property rights, but we
intend to file patent applications. We rely on employee and third party
non-disclosure agreements and on the legal principles restricting the
unauthorized disclosure and use of trade secrets. Despite our precautions, it
might be possible for a third party to copy or otherwise obtain our technology,
and use it without authorization. Although we intend to defend our intellectual
property, we can not assure you that the steps we have taken or that we may take
in the future will be sufficient to prevent misappropriation or unauthorized use
of our technology. In addition, there can be no assurance that foreign
intellectual property laws will protect our intellectual property rights. There
is no assurance that patent application or copyright registration that may be
filed will be granted, or that any issued patent or copyrights will not be
challenged, invalidated or circumvented. There is no assurance that the rights
granted under patents that may be issued or copyrights that may be registered
will provide sufficient protection to our intellectual property rights.
Moreover, we can not assure you, that our competitors will not independently
develop technologies similar or even superior to our technology.
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Use of Our Products is Subordinated to Other Uses
License-free operation of our products, in certain radio frequency
bands, is subordinated to certain licensed and unlicensed uses of these bands.
This subordination means that our products must not cause harmful interference
to other equipment operating in the band, and must accept potential interference
from any of such other equipment. If our equipment is unable to operate without
any such harmful interference, or is unable to accept interference caused by
others, our customers could be required to cease operations in some or all of
these bands in the locations affected by the harmful interference. As well, in
the event these bands become unacceptably crowded, and no additional frequencies
are allocated to unlicensed use, our business could be adversely affected.
Adverse Consequences are Associated with Our Obligation to Issue Substantial
Shares of Common Stock upon Conversion of Convertible Securities
We are obligated to issue a substantial number of shares of common
stock upon the conversion or exercise of our outstanding warrants and
convertible preferred stock. The price which we may receive for the common stock
issuable upon conversion or exercise of such convertible securities will be less
than the market price of the common stock at the time of such exercise.
Consequently, for the life of such convertible securities the holders of such
convertible securities may have been given, at nominal cost, the opportunity to
profit from a rise in the market price of the common stock.
The exercise of all of the aforementioned securities may also adversely
affect the terms under which we could obtain additional equity capital. In
addition, should a significant number of these securities be exercised or
converted, the resulting increase in the amount of the common stock in the
public market could have a substantial dilutive effect on our outstanding common
stock.
We May Be Subject to Regulation of Wireless Communications
Currently, our products are designed to operate in frequency bands for
which licenses are not required in the United States, Canada and other countries
that we view as our potential market. Extensive regulation of the data
communications industry by U.S. or foreign governments, and in particular
imposing license requirements in the frequency bands of our products, could
materially and adversely affect us through the effect on our customers and
potential customers. Continued license-free operation will depend upon the
continuation of existing U.S., Canadian and such other countries' government
policy and, while no planned policy changes have been announced or are expected,
this cannot be assured.
We May Be Subject to Product Liability Claims, and We Lack Product Liability
Insurance
We face an inherent risk of exposure to product liability claims in the
event that the products designed and sold by us contain errors, "bugs" or
defects. There can be no assurance that we will avoid significant product
liability exposure. We do not currently have a product liability insurance, and
there can be no assurance that insurance coverage will be available in the
future on commercially reasonable terms, or at all. Further, there can be no
assurance that such insurance, if obtained, will be adequate to cover potential
product liability claims, or that a loss of insurance coverage or the assertion
of a product liability claim or claims would not materially adversely affect our
business, financial condition and results of operations.
5
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We Depend Upon a Single Third Party Manufacturer
We depend upon a single third party manufacturer to make our products.
We do not have a second source. If our single supplier is not able to
manufacture for us for any reason, we will have no products to sell.
Accordingly, no assurance can be given that manufacturing capacity will continue
to be available to us, on commercially reasonable terms or otherwise. Inability
to obtain manufacturing capacity will have a material adverse effect on our
business, financial condition and results of operation.
We Have Not Resolved All of Our Year 2000 Issues
Computer systems and software products that were designed to accept
entries of only two digits in the "year" date code field may be unable to
properly process date information beyond the year 1999. Inability of our
products to process these dates could have a material adverse effect on our
business. We have established a centrally coordinated project team to determine
the Year 2000 readiness of our products, business processes and internal
systems. We have began to review the year 2000 readiness of our products, and
expect to complete such review by the end of March 1999. We can not presently
estimate the total cost of this review but do not expect it to be material. We
are also in the process of assessing our internal systems, the computer systems
that we use in our business. We expect to have addressed all internal Year 2000
issues identified in this process by the end of June 1999.
However, there can be no assurance that we will be able to complete our
Year 2000 assessment and programs on a timely basis, that the costs of such
programs will not be greater than expected, or that as yet undiscovered
unanticipated Year 2000 problems will not affect our products or material
systems. Greater than expected assessment and remediation costs or unanticipated
Year 2000 problems could have a material adverse effect on our business,
financial condition and results of operation.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is a part of a registration statement on Form S-3 ,
WaveRider filed with the Securities and Exchange Commission, or the SEC, under
the Securities Act of 1933. This prospectus omits certain information contained
in the registration statement and the exhibits to the registration statements.
Reference is made to the registration statement and the exhibits to the
registration statement for further information with respect to WaveRider and the
shares offered under this prospectus. You may read and copy the registration
statement at the SEC's public reference rooms in Washington, D.C., New York, New
York and Chicago, Illinois. You can request copies of these documents by writing
to the SEC and paying a fee for the copying costs. Please call the SEC at
1-800-SEC-0330 for more information about the operation of the public reference
rooms. WaveRider files certain documents with the SEC electronically and these
documents may be inspected and copied at the SEC's Web site at
http://www.sec.gov. WaveRider is a reporting company under the Securities
Exchange Act of 1934, and consequently, files reports, proxy statements and
other information with the SEC. You may read and copy these reports, proxy
statements and other information at the SEC's public reference rooms appears
above.
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The SEC allows us to "incorporate by reference" the information we file
with them. Incorporation by reference means that we can disclose important
information to you by referring you to the information we filed with the SEC.
The information incorporated by reference is considered to be part of this
prospectus, and later information filed with the SEC will update and supercede
this information.
We incorporate by reference the information listed below and any future
information we file with the SEC pursuant to sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act of 1934.
(a) WaveRider's annual report, filed with the SEC on Form 10-KSB,
for the fiscal year ended December 31, 1998;
(b) The description of WaveRider's common stock contained in the
registration statement on Form 8-A filed with the SEC on March
18, 1995 under section 12 of the Exchange Act, including all
amendments and reports subsequently filed for the purpose of
updating such description.
You may request and receive, at no cost, copies of these filings by
writing or telephoning us at the following address:
T. Scott Worthington
WaveRider Communications, Inc.
235 Yorkland Blvd., Suite 1101
Toronto, Ontario Canada M2J 4Y8
(416) 502-3200; Facsimile No.: (416) 502-2968
E-mail Address: [email protected]
USE OF PROCEEDS
Any money received by WaveRider upon the sale of shares of common stock
to the selling stockholders, and any money received by WaveRider upon the
exercise of the warrants will be used for working capital and general corporate
purposes. The aggregate maximum amount of proceeds that WaveRider received and
could receive upon the sale of shares of common stock to the selling
stockholders and upon the exercise of the warrants is $15,812,250.
WaveRider will not receive any proceeds from the sale of the shares of
common stock by the selling stockholders. WaveRider will, however, receive the
exercise price upon the exercise of any warrants held by the selling
stockholders, if and to the extent that such warrants are exercised. However,
there can be no assurance that any or all of the warrants will be exercised and
that WaveRider will receive any proceeds from such exercise.
The costs associated with this offering are approximately $20,000.
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DIVIDEND POLICY
To date, WaveRider has not paid dividends on any shares of our common
stock and we do not plan to pay any dividends on our common stock in the
foreseeable future. The decision to pay dividends on the common stock in the
future is up to WaveRider's Board of Directors. Such decision to pay dividends
depends upon, among other things, our earnings, our capital requirements and our
financial condition. Although dividends are not limited currently by any
agreements, it is anticipated that future agreements, if any, with institutional
lenders or others may also limit our ability to pay dividends on the common
stock.
SELLING STOCKHOLDERS
JUNE SELLING STOCKHOLDERS
Of the 7,250,000 shares of common stock offered by this prospectus,
1,600,000 shares are being registered and may be offered for sale from time to
time during the period the effectiveness of the registration statement of which
this prospectus is part, for the accounts of selling stockholders who acquired
convertible preferred stock and warrants to purchase common stock in a private
placement in June 1998 set forth in the table below. The June Selling
Stockholders' shares of common stock registered under this prospectus consist
of:
(a) 800,000 shares of common stock issuable upon conversion of
Series C Voting 8% convertible preferred shares;
(b) 800,000 shares of common stock issuable upon the exercise of
800,000 Series F warrants, at $2.50 per share. The Series F
warrants expire on June 11, 2000.
The Series C preferred shares may be converted, prior to April 30,
2000, into shares of common stock, at a conversion ratio of one share of common
stock per one preferred share.
WaveRider will not receive any portion of the proceeds from the sale of
shares by the June Selling Stockholders pursuant to this prospectus. To the
extent that Series F warrants are exercised, WaveRider will receive the proceeds
from the exercise of such warrants. WaveRider cannot, however, predict the
extent to which Series F warrants will be exercised, if at all.
NOVEMBER SELLING STOCKHOLDERS
CONVERTIBLE DEBENTURE AGREEMENT
On December 15, 1998, WaveRider entered into an agreement to issue up
to $2,000,000 of 8% convertible debentures to International Advisory Services
Ltd. and Wyndel Consulting Ltd.. The convertible debenture granted WaveRider the
right to require the November Selling Stockholders to lend to WaveRider from
time to time up to an aggregate total amount of $2,000,000. WaveRider has not
required any loan advancement from the November Selling Stockholders under the
convertible debenture, and the convertible debenture was terminated on January
8, 1999.
Prior to termination of the convertible debenture, and as a commitment
fee, WaveRider issued to each of the November Selling Stockholders Series G
warrant to purchase 250,000 shares of common stock of WaveRider ("Series G
warrants"). The Series G warrants may be exercised at any time prior to December
15, 2003. The exercise price per share for the Series G warrants is $1.50.
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DECEMBER SELLING STOCKHOLDERS
COMMON STOCK PURCHASE AGREEMENT
Overview of Purchase Agreement
On December 29, 1998, WaveRider entered into a common stock Purchase
Agreement with Sovereign Partners LP and Canadian Advantage Limited Partnership.
The Purchase Agreement provides for the sale to, and the option to sell to, the
December Selling Stockholders up to an aggregate of $10,000,000 of common stock
of WaveRider, and for issuance to the December Selling Stockholders, and for the
issuance to the December Selling Stockholders of four series of warrants, each
to purchase 225,000 shares of WaveRider's common stock, at a different exercise
price for each series of warrants. The sale and the option to sell to the
December Selling Stockholders is pro rata amongst them in accordance with a
ratio set forth in the Purchase Agreement. At the Closing of the Purchase
Agreement, WaveRider sold to the December Selling Stockholders 1,167,860 shares
of common stock for $3,000,000. In connection with the Purchase Agreement, the
parties also entered into a Registration Rights Agreement and an Escrow
Agreement.
The Purchase Agreement refers to three financing "tranches". Pursuant
to the "First Tranche" WaveRider sold to the December Selling Stockholders, on
December 29, 1998 1,167,860 shares of WaveRider's common stock, for a total
amount of $3,000,000. Pursuant to the "Second Tranche" WaveRider was granted the
right to require the December Selling Stockholders to purchase additional shares
of common stock at a minimum of $1,000,000 and a maximum of $3,000,000. Pursuant
to the "Third Tranche" WaveRider was granted the right to require the December
Selling Stockholders to purchase additional shares of common stock at a minimum
of $1,000,000 and a maximum of $4,000,000. WaveRider is not obligated to sell
shares of common stock to the Selling Stockholders pursuant to the Second and
the Third Tranches, but rather has an option to do so. The December Selling
Stockholders, however, are required to purchase such shares of common stock
subject only to the conditions described below.
In connection with the Purchase Agreement, WaveRider will pay
Prudential Securities, Inc. a fee equal to 7% of the total aggregate amount of
common stock WaveRider will sell pursuant to the Purchase Agreement, for its
involvement as the investment banker in connection with the Purchase Agreement.
In addition, WaveRider has issued to Prudential Securities warrants to purchase
150,000 shares of common stock at an exercise price of $3 per share. These
warrants will expire on December 29, 2003.
First Tranche
On December 29, 1998 WaveRider sold to the December Selling
Stockholders, pro rata amongst them in accordance with the Purchase Ratio,
1,167,860 shares of common stock WaveRider, for a First Tranche Issuance Price
of $2.57 per share and for a total amount of $3,000,000. The First Tranche
Issuance Price is subject to reset, as described below, and upon such reset
WaveRider may be required to issue additional common stock to the December
Selling Stockholders.
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Second Tranche
At WaveRider's option, WaveRider may sell to the December Selling
Stockholders, pro rata amongst them in accordance with the Purchase Ratio,
additional shares of common stock for a total dollar amount of a minimum of
$1,000,000 and a maximum of $3,000,000, that number of secondary shares to be
derived from dividing the dollar amount set forth in WaveRider's option notice
by the secondary shares Issuance Price. WaveRider's option may be exercised upon
giving each of the December Selling Stockholders a prior written notice at least
five business days prior to the closing of the Second Tranche, after the earlier
to occur of (a) 165 calendar days after the Subscription Date, and (b) two
business days after the expiration of the second Reset Period for the Initial
shares, as more fully described below under Reset of Issuance Price, which
option must be exercised by WaveRider within 20 calendar days after the earlier
of (b) and (c) above.
WaveRider's right to exercise the option in the Second Tranche is
subject to satisfaction of each of the conditions described below.
Third Tranche
At WaveRider's option, WaveRider may sell to the December Selling
Stockholders, pro rata amongst them in accordance with the Purchase Ratio,
additional shares of common stock for a total dollar amount of a minimum of
$1,000,000 and a maximum of $4,000,000, that number of tertiary shares to be
derived from dividing the dollar amount set forth in WaveRider's option notice
by the tertiary shares Issuance Price. WaveRider's option may be exercised upon
giving each of the December Selling Stock holders a prior written notice at
least five business days prior to the closing of the Third Tranche, after the
earlier to occur of (a) 255 calendar days after the Subscription Date, and (b)
two business days after the expiration of the final Reset Period for the
secondary shares, as more fully described below under Reset of Issuance Price,
which option must be exercised by WaveRider within 20 calendar days after the
earlier of (a) and (b) above.
WaveRider's right to exercise the option in the Third Tranche is
subject to satisfaction of each of the conditions described below.
Conditions to the Sale
WaveRider right to exercise its option to require sale of common stock
under the Second and the Third Tranche, is subject to each one of the following
conditions: (1) effectiveness of this registration statement, (2) delivery of
shares to the escrow agent, (3) delivery of an opinion of counsel, (4) continued
accuracy of representations and warranties, (5) compliance with covenants, (6)
absence of proceedings adversely affecting the transaction, (7) continued
trading of the common stock, and (8) no change in control. In addition, the
Stock Purchase Agreement also expressly requires that:
(A) The average closing bid price of the common stock for the 20
consecutive trading days immediately preceding the notice by WaveRider to
require sale of additional common stock and the days immediately preceding the
closing of the sale and purchase of the shares shall be greater than $1.25;
(B) The average daily trading volume for the common stock for the 20
trading days immediately preceding the notice by WaveRider's to require sale of
additional common stock and the days immediately preceding the closing of the
sale and purchase of the shares shall be a minimum of 100,000; and
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(C) None of the December Selling Stockholders, in the event of the
closing of the sale and purchase of the shares would own or be deemed
beneficially deemed to own, more than 9.99% of the outstanding shares of common
stock of WaveRider.
The Price Per Share and Reset of the Price Per Share
The purchase price per share of the common stock sold pursuant to the
First Tranche or to be sold pursuant to the Second Tranche and the Third Tranche
is based on the average of the closing bid price for the common stock for the
five consecutive trading days prior to the closing of such Tranche. In each
case, the Issuance Price is subject to reset, as described below.
The price per share upon which WaveRider may sell the common stock in
the each one of the Tranches is subject to reset. As a result of such reset,
WaveRider may be required to issue additional shares to the December Selling
Stockholders. The Purchase Agreement provides for three "reset periods" per
Tranche, each such reset period consists of 30 calendar days.
For each reset period, the "reset price" shall be equal to the average
of the Closing Bid Prices for the trading days during such period. The number of
shares of common stock to be issued upon the expiration of each Reset Period
shall be calculated in accordance with the following formula:
A x B x 117.5% - C
------------------ = N
C
Where: A = number of shares subject to repricing; B =
Issuance Price of shares subject to repricing; C =
Reset Price; and N = Reset shares.
Upon the expiration of each reset period, WaveRider will issue that
number of Reset shares (if any) resulting from the above formula. If the
additional shares are not delivered by WaveRider on due date, WaveRider will
have to pay liquidated damages to the December Selling Stockholders.
Warrants
On the Subscription Date, WaveRider issued to the December Selling
Stockholders, four series of warrants to purchase a total aggregate of 900,000
shares of common stock. The four series and the exercise prices per one warrant
for each of them are as follows: warrants to purchase 225,000 shares have an
Exercise Price of $2.00, warrants to purchase 225,000 shares have an Exercise
Price of $2.61, warrants to purchase 225,000 shares have an Exercise Price of
$3.00, and warrants to purchase 225,000 shares have an Exercise Price of $4.00.
The warrants may be exercised during a five-year period after they were issued.
The number and kind of securities that may be purchased upon the
exercise of the warrants and the Exercise Prices of the warrants are subject to
adjustment from time to time upon the happening of certain events, such as
distribution of dividends in shares common stock , stock splits, and issuance of
other shares of capital stock in a reclassification of the common stock.
Indemnification of the December Selling Stockholders
WaveRider is obliged to indemnify and hold harmless the December
Selling Stockholders and each officer, director of the December Selling
Stockholders or person, if any, who controls the December Selling Stockholder,
against any losses, claims, damages or liabilities, joint or several (which
shall include all costs of defense and investigation and all attorneys' fees),
to which the Indemnified Party may become subject, under the Securities Act of
1933 or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon the breach of any
term of the Purchase Agreement by WaveRider. This indemnity obligation is in
addition to any liability which the WaveRider may otherwise have.
11
<PAGE>
SELLING STOCKHOLDERS
TABLE OF HOLDINGS
Based on the information supplied to WaveRider by each selling stockholder, the
following table sets forth, as of January 15, 1999, certain information
regarding the beneficial ownership of each selling Stockholder and number of
shares owned by each selling stockholder. The table assumes the conversion of
all of the shares of preferred stock, exercise of all Series F and G warrants
and the December warrants, and that WaveRider exercises in full its right to
sell common stock.
The beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or investment power with respect to securities.
Except as indicated, each person possesses sole voting and investment power with
respect to all of the shares of common stock owned by such person, subject to
community property laws where applicable. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options held by that person that are currently
exercisable or exercisable within 60 days are deemed outstanding. Such shares,
however, are not deemed outstanding for the purpose of computing the percentage
ownership of any other person.
<TABLE>
<CAPTION>
Shares Shares
Beneficially Owned Number Beneficially Owned
Prior to Offering of Shares After Offering
Name and Address Number Percent Offered Number Percent
- ---------------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
Sovereign Partners LP 3,750,000 8.31% 3,750,000 0 0.00%
Canadian Advantage Limited Partnership 1,250,000 2.77 1,250,000 0 0.00
Alliance Equities Ltd. 1,717,110 4.23 514,000 1,203,110 2.96
Interior Holdings Ltd. 1,761,365 4.33 514,000 1,247,365 3.07
International Advisory Services Ltd. 1,101,000 2.73 250,000 851,000 2.11
Wyndel Consulting Ltd. 687,500 1.70 250,000 437,500 1.08
Prudential Securities 150,000 0.37 150,000 0 0.00
Lori Birzins 156,000 0.39 100,000 56,000 0.14
Charles W. Williams, Jr. 82,900 0.21 80,000 2,900 0.01
Fredrick L. Aycock 70,000 0.18 60,000 10,000 0.03
Charles G. Maton 60,000 0.15 60,000 0 0.00
Lawson K. Broadrick and Kay W. Broadrick 40,000 0.10 40,000 0 0.00
Frank A. Zimmerman 28,000 0.07 28,000 0 0.00
Bruce Caldwell 24,000 0.06 24,000 0 0.00
Stanley Bland 39,000 0.10 20,000 19,000 0.05
Equity Hedge Fund Ltd. 20,000 0.05 20,000 0 0.00
Global Securities Corporation 20,000 0.05 20,000 0 0.00
Samuel D. Kerr 20,000 0.05 20,000 0 0.00
J. Houston Lennard and Celeste C. Lennard 22,800 0.06 20,000 2,800 0.01
Timothy J. Lindgren 21,000 0.05 20,000 1,000 0.00
Jason W. Peck 21,125 0.05 20,000 1,125 0.00
James Hutton 16,000 0.04 16,000 0 0.00
Edward C. Bonawitz 8,500 0.02 8,000 500 0.00
Kentex Corporation 8,000 0.02 8,000 0 0.00
Miramar Investments Ltd. 8,000 0.02 8,000 0 0.00
</TABLE>
12
<PAGE>
PLAN OF DISTRIBUTION
This prospectus covers the sale of shares of common stock by WaveRider
to certain selling stockholders and, from time to time, by the selling
stockholders. See "Selling Stockholders".
The shares of common stock offered by this prospectus may be sold from
time to time by the selling stockholders, or by pledgees, donees, transferees or
other successors in interest. The selling stockholders will act independently of
WaveRider in making decisions with respect to the timing, manner and size of
each sale. The sales may be made on the OTC Bulletin Board (or on one or more
exchanges on which WaveRider's common stock may then be listed) or in the
over-the-counter market, or otherwise. The sales will be made at prices and at
terms then prevailing, or at prices related to the then current market price, or
in negotiated transactions. The shares of common stock may be sold by one or
more of the following types of transactions:
(a) a block trade in which the broker or dealer so engaged will attempt
to sell the shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus;
(c) an exchange distribution in accordance with the rules of such
exchange;
(d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
(e) privately negotiated transactions;
(f) short sales;
(g) if such a sale qualify, in accordance with Rule 144 promulgated
under the Securities Act rather
than pursuant to this prospectus; and
(h) any other method permitted pursuant to applicable law.
In effecting sales, brokers or dealers engaged by the selling
stockholders may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from selling stockholders in
amounts to be negotiated immediately prior to the sale. Such brokers or dealers
and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of section 2(11) of the Securities Act in
connection with such sales. Accordingly any commission received by them and
profit on any resale of the shares as principal, might be deemed to be
underwriting discounts and commissions under the Securities Act. In addition,
because selling stockholders may be deemed to be "underwriters" they will be
subject to prospectus delivery requirements under the Securities Act of 1933.
Upon WaveRider being notified by a selling stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
the shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(c) under the
Securities Act of 1933. Such supplement will disclose:
(1) the name of each selling stockholder and of the participating
broker-dealer(s);
(2) the number of shares involved;
(3) the price at which such shares were sold;
(4) the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
(5) that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in this
prospectus; and
(6) other facts material to the transaction.
13
<PAGE>
WaveRider has agreed to pay the expenses incurred in connection with
preparing and filing this prospectus and the Registration Statement of which it
is a part (other than selling commissions). WaveRider has agreed to indemnify
the selling stockholders against certain liabilities, including liabilities
under the Securities Act.
In addition, in the event the selling stockholders sell short the
common stock of WaveRider, this prospectus may be delivered in connection with
such short sales and the shares offered by this prospectus may be used to cover
such short sales. It is the view of the SEC that the December Selling
Stockholders are "underwriters" within the meaning of the Securities Act. In
making sales, broker-dealers or agents engaged by the selling stockholders may
arrange for other broker-dealers or agents to participate. Such broker-dealers
or agents may receive commissions or discounts from the selling stockholders in
amounts to be negotiated immediately prior to the sale. These broker-dealers or
agents, and any other participating broker-dealers or agents, as well as the
selling stockholders, may be considered "underwriters" within the meaning of the
Securities Act of 1933.
WaveRider has informed the selling stockholders that the
anti-manipulative rules under the Exchange Act of 1934, including Regulation M,
may apply to their sales in the market. WaveRider has furnished the selling
stockholders with a copy of Regulation M. WaveRider has also informed the
selling stockholders that they must deliver a copy of this prospectus with any
sale of their shares.
DISCLOSURE OF SEC POSITION
ON INDEMNIFICATION FOR SECURITIES ACTS LIABILITIES
WaveRider's amended and restated Articles of Incorporation and By-Laws
provide that WaveRider shall indemnify its directors and officers, to the
fullest extent permitted under Nevada law, including in circumstances in which
indemnification is otherwise discretionary under Nevada law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or controlling persons of WaveRider,
pursuant to the foregoing provisions, or otherwise, WaveRider has been advised
that, in the opinion of the SEC, such indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable.
LEGAL MATTERS
Foley, Hoag & Eliot LLP, of One Post Office Square, Boston,
Massachusetts 02109-2170 will issue an opinion, for WaveRider and the selling
stockholders, about the legality and validity of the shares. WaveRider knows of
no members of Foley, Hoag & Eliot who are beneficial owners of common stock of
WaveRider.
EXPERTS
The financial statements as at December 31, 1998 and for the year then ended
incorporated in this registration by reference to the Annual Report on Form
10-KSB for the year ended December 31, 1998 have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of the said firm as experts in auditing and accounting.
The financial statements as at December 31, 1997 and for the year then ended
incorporated in this registration by reference to the Annual Report on Form
10-KSB for the year ended December 31, 1998 have been so incorporated in
reliance on the report of Johnson, Holscher & Company, P.C., independent public
accountants, given on the authority of said firm as experts in auditing and
accounting.
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses in connection
with the sale of the shares being registered hereby:
SEC registration fee $4,952
Printing and engraving $1,000
Accountants' fees and expenses $1,000
Legal fees $10,000
Miscellaneous $4,048
-------
Total $20,000
Item 15. Indemnification of Directors and Officers
Article VI of WaveRider's By-Laws provides that: "Every Director,
officer, employee and agent of the Company, and every person serving at the
Company's request as a director, officer (or in a position functionally
equivalent to that of officer or director), employee or agent of another
corporation, partnership, joint venture, trust or other entity, shall be
indemnified to the extent and in the manner provided by the Company's Charter,
as it may be amended, and in the absence of any such provision therein, in
accordance with Nevada law."
WaveRider's Charter contains no provisions regarding the
indemnification of directors and officers.
Section 78.7502 of Nevada General Corporation Law ("Nevada Corporation
Law") provides, that:
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner in which he reasonably believed to be in or not
opposed to the best interests of the corporation. Indemnification may not be
made for any claim, issue or matter as to which such a person has been adjudged
by a court of competent jurisdiction, after exhaustion of all appeals therefrom,
to be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstance of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
II - 1
<PAGE>
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, the corporation shall indemnify him against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection with the defense.
Section 78.751 of Nevada Corporation Law provides, that: Any
discretionary indemnification under Section 78.7502, unless ordered by a court
or advanced pursuant to subsection 2, may be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances. The
determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting
of directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding so orders, by independent legal
counsel in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the
action, suit or proceeding cannot be obtained, by independent legal counsel in a
written opinion.
The indemnification and advancement of expenses authorized or ordered
by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles of
incorporation or any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to Section 78.7502 or for
the advancement of expenses made pursuant to subsection 2, may not be made to or
on behalf of any director or officer if a final adjudication establishes that
his acts or omissions involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
In accordance with the provisions of Section 78.752 of Nevada
Corporation Law, WaveRider purchased and maintains insurance coverage on certain
liabilities of its directors and officers. Item 16. Exhibits
II-2
<PAGE>
Exhibit No. Description
3.1 Articles of Incorporation of WaveRider, incorporated by reference to
Exhibit 3.1 registration statement on Form S-18, File no. 33-25889-LA.
3.2 Bylaws of the Company, incorporated by reference to Exhibit 3.2 to the
annual report on Form 10-KSB for the year ended December 31, 1996.
3.3 Certificate of Amendment to the Articles of Incorporation of the Company
filed with the Nevada Secretary of State on October 8th, 1993, incorporated
by reference to Exhibit 3.3 to the quarterly report on Form 10-QSB for the
period ended September 30th, 1994.
3.4 Certificate of Amendment to the Articles of Incorporation of the Company
filed with the Nevada Secretary of State on October 25th, 1993,
incorporated by reference to Exhibit 2(d) to the registration statement on
Form 8-A, File No. 0-25680.
3.5 Certificate of Amendment to the Articles of Incorporation of WaveRider
filed with the Nevada Secretary of State on March 25th, 1995, incorporated
by reference to Exhibit 2(e) to registration statement on Form 8-A, File
no. 0-25680.
3.6 Certificate of Amendment to the Articles of Incorporation of the Company,
designating the Series A Voting Convertible Preferred Stock, filed with the
Nevada Secretary of State on March 24th, 1997, incorporated by reference to
Exhibit 3.6 on Form 10KSB for the year ended December 31, 1996.
3.7 Certificate of Amendment to the Articles of Incorporation of the Company
designating the Series B Voting Convertible Preferred Stock, filed with the
Nevada Secretary of State on May 16, 1997.
3.8 Certificate of Amendment to the Memorandum of WaveRider changing the name
to WaveRider Communications Inc., filed with the Nevada Secretary of State
on May 27, 1997.
4.1 Specimen common stock certificate, incorporated by reference to Exhibit 4.1
to registration statement on Form S-18, File no. 33-25889-LA.
4.2 Specimen Class A Common Stock Purchase Warrant Certificate, incorporated by
reference to Exhibit 4.2 on Form 10KSB for the year ended December 31,
1996.
4.3 Specimen Class B Common Stock Purchase Warrant Certificate, incorporated by
reference to Exhibit 4.3 on Form 10KSB for the year ended December 31,
1996.
4.4 Specimen Class C Common Stock Purchase Warrant Certificate, incorporated by
reference to Exhibit 4.4 on Form 10KSB for the year ended December 31,
1996.
4.5 Specimen Class D Common Stock Purchase Warrant Certificate, incorporated by
reference to Exhibit 4.5 on Form 10KSB for the year ended December 31,
1996.
4.6 Warrant Terms dated February 10th, 1997, relating to the Class A, Class B,
Class C and Class D, Common Stock Purchase Warrants, incorporated by
reference to Exhibit 4.6 on Form 10KSB for the year ended December 31,
1996.
II-3
<PAGE>
5.1 Opinion of Foley, Hoag & Eliot LLP.
10.1 Agreement dated February 2nd, 1997, between Ray Hoag and WaveRider,
incorporated by reference to Exhibit 10.2 on Form 10KSB for the year
ended December 31, 1996.
10.2 Agreement dated February 2nd, 1997, between C. Jeremy Renton and
WaveRider, incorporated by reference to Exhibit 10.21 on Form 10KSB for
the year ended December 31, 1996.
10.3 Stock Option Agreement dated January 22nd, 1997 between WaveRider and
Charlie Rodriguez, incorporated by reference to Exhibit 10.22 on Form
10KSB for the year ended December 31, 1996.
10.4 Stock Option Agreement dated January 22nd, 1997 between WaveRider and
C. Jeremy Renton, incorporated by reference to Exhibit 10.23 on Form
10KSB for the year ended December 31, 1996.
10.5 Stock Option Agreement dated January 22nd, 1997, between WaveRider and
Ray Hoag, incorporated by reference to Exhibit 10.24 on Form 10KSB for
the year ended December 31, 1996.
10.6 Share Exchange Agreement executed the 13th day of May, 1997 between
WaveRider and the shareholders of Major Wireless Communications Inc.,
("Major Wireless"), with respect to the purchase by the Company of all
the issued and outstanding shares in the capital stock of Major
Wireless, incorporated by reference to Exhibit 2.1 in Form 8-K filed
May 29, 1997.
10.7 Agreement supplemental to the Share Exchange Agreement executed the
13th day of May, 1997 (see 10.6 supra) incorporated by reference to
Exhibit 10.1 in Form 8-K filed May 29, 1997.
10.8 Employee Stock Compensation (1997) Plan incorporated by reference to
Exhibit 99 in Form S-8 filed August 29th, 1997.
10.9 Employee Stock Option (1997) Plan incorporated by reference to Exhibit
99 in Form S-8 filed August 29th, 1997.
10.10 Employment Agreement between WaveRider and D. Bruce Sinclair dated
November 18, 1997 incorporated as Exhibit 10.10 to WaveRider's annual
report on Form 10-KSB, for the year ended December 31, 1997.
10.1 Convertible Debenture Agreement between WaveRider and International
Advisory Services Ltd. And Wyndel Consulting Ltd. Dated December 15,
1998.
10.12 Letter of termination of the Convertible Debenture Agreement contained
in Exhibit 10.11, dated January 8, 1999.
10.13 Common Stock Purchase Agreement between WaveRider and Sovereign
Partners LP and Canadian Advantage Limited Partnership, dated December
31, 1998, including the exhibits to such agreement.
23.2 Consent of Johnson, Holscher & Company P.C., independent auditors.
23.3 Consent of PricewaterhouseCoopers LLP, independent auditors
II-4
<PAGE>
23.4 Consent of Foley, Hoag & Eliot LLP (included in last sentence of
Exhibit 5.1).
24.1 Power of Attorney (contained in the signature page).
Item 17. Undertakings
WaveRider hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(2) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(3) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
(4) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(5) For determining liability under the Securities Act, to treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(6) To remove from the registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(7) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or controlling persons of
the registrant, pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act, and is therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(8) For determining any liability under the Securities Act, to treat
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the issuer under Rule 424(b)(1), or (4) or 497(h) under the
Securities Act as part of this registration statement as of the time the
Commission declared it effective.
II-5
<PAGE>
(9) For determining any liability under the Securities Act, to treat
each post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration statement,
and that offering of the securities at that time as the initial bona fide
offering of those securities.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe it meets all the
requirements of filing on Form S-3 and authorized this Amendment No. 1 to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, on April 6, 1999.
WAVERIDER COMMUNICATIONS INC.
By:_____________________________________________
Bruce Sinclair, President and Chief Executive
Officer
In accordance with the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed by the following
persons in the capacities indicated on April 6, 1999.
Signature Title Date
--------- ----- ----
_______________ President, Chief Executive Officer April 6, 1999
D. Bruce Sinclair (Principal Executive Officer)
and Director
_____________ Secretary and Director April 6, 1999
William E. Krebs *
_____________ Director April 6, 1999
William H. Laird *
* By: D. Bruce Sinclair, Attorney-in-fact
II-6
Exhibit 5.1
-----------
January **, 1999
WaveRider Communications Inc.
235 Yorkland Blvd., Suite 1101
Toronto, Ontario Canada
M2J 4Y8
Ladies and Gentlemen:
We are familiar with the Registration Statement on Form S-3 filed today
by WaveRider Communications, Inc., a Nevada corporation, with the Securities and
Exchange Commission under the Securities Act of 1933. The S-3 Registration
Statement relates to the registration of a total of 7,250,000 shares of the
Company's common stock, $0.001 par value per share, which were issued or are
issuable to certain selling stockholders as set forth below, and as more
specifically described in the S-3 Registration Statement:
(1) 800,000 shares are issuable upon conversion of the Series C
preferred stock, sold in connection with WaveRider's June 1998 financing;
(2) 800,000 shares are issuable upon the exercise of 800,000 Series F
warrants, issued in connection with WaveRider's June 1998 financing;
(3) 500,000 shares are issuable upon the exercise of 500,000 Series G
warrants, issued in connection with WaveRider's December 1998 financing;
(4) 1,167,860 shares were sold in a private placement in connection
with WaveRider's December 1998 financing;
(5) 2,932,140 shares are issuable upon the sale by WaveRider of shares
of common stock in connection with WaveRider's December 1998 financing;
(6) 1,050,000 shares are issuable upon the exercise of 1,050,000
warrants, issued in connection with WaveRider's December 1998 financing;
In arriving at the opinions expressed below, we have examined and
relied on the following documents: (a) the Articles of incorporation of the
Company, as amended; (b) the Amended and Restated By-Laws of the Company; and
(c) the records of meetings and consents of the Board of Directors and
stockholders of the Company provided to us by the Company. In addition, we have
examined and relied on the originals or copies certified or otherwise identified
to our satisfaction of all such corporate records of the Company and such other
instruments and other certificates of public officials, officers and
representatives of the Company and such other persons, and we have made such
investigations of law, as we have deemed appropriate as a basis for the opinions
expressed below. We have further assumed that s sufficient number of duly
authorized and unissued shares of common stock will be available for issuance at
the time the Series C preferred stock is converted, the common stock is sold and
the warrants are exercised, in accordance with the terms thereof; and that the
consideration received by WaveRider in respect of each share will be no less
than its par value.
Based upon the foregoing, it is our opinion that:
1. the Company has taken all necessary corporate action required to
authorize the issuance and sale of the shares; and
2. the shares have been validly and legally issued and are fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the S-3
Registration Statement.
Very truly yours,
FOLEY, HOAG & ELIOT LLP
By: ________________
A Partner
***********
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-3 of WaveRider Communications, Inc. (the "Company") to
register 7,250,000 shares of common stock, of our report dated March 20, 1998
and March 22, 1999, Note 4. Prior Period Adjustment, on our audits of the
consolidated financial statements of the Company as of December 31, 1997 and
1996, incorporated in the Annual Report on Form 10-KSB of the Company, for the
years ended December 31, 1998 and 1997.
We also consent to the reference to our firm under the caption
"Experts".
Johnson, Holscher & Company, P.C.
April 5, 1999
PRICEWATERHOUSECOOPERS
Exhibit 23.2
April 5, 1999
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-70821) of
WaveRider Communications Inc. of our report dated February 5, 1999 appearing on
page 18 of WaveRider Communications Inc.'s Annual Report on Form 10-KSB for the
year ended December 31, 1998.
We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
Chartered Accountants
