As filed with the Securities and Exchange Commission on _________
Registration No. ______________________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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 (I.R.S. Employer
incorporation or organization) Identification Number)
255 Consumers Road, Suite 500
Toronto, Ontario Canada M2J 1R4
(416) 502-3200
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(Address, including zip code, and telephone number,
including area code, of principal executive offices)
T. SCOTT WORTHINGTON
255 Consumers Road, Suite 500
Toronto, Ontario Canada M2J 1R4
(416) 502-3200 / Facsimile No.: (416) 502-2968
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(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 from time to time 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. |_|
CALCULATION OF REGISTRATION FEE
===============================================================================
Proposed
Maximum Amount of
Title of each class of Aggregate registration
securities to be registered offering fee
price
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Common Stock, $.001 par value $7,500,000(1) $2,085
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(1) The maximum aggregate offering price of the common stock registered
hereunder will not exceed $7,500,000. Pursuant to Rule 457(o) under the
Securities Act of 1933, the registration fee is calculated on the aggregate
maximum offering price of the common stock, and the table does not specify
information about the amount of shares to be registered or the proposed maximum
offering price per share.
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.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT, OF WHICH THIS
PROSPECTUS IS PART, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE
IS NOT PERMITTED.
PROSPECTUS
SUBJECT TO COMPLETION, DATED SEPTEMBER **, 1999
WaveRider Communications Inc.
$7,500,000
COMMON STOCK
This prospectus is part of a registration statement we filed with the
Securities and Exchange Commission using a "shelf" registration process. This
means that:
- We may issue from time to time up to $7,500,000 of our common stock;
- We will circulate a prospectus supplement each time we plan to issue
the common stock;
- The prospectus supplement will inform you about specific terms of the
offering, and also may add to, or update or change the information
contained in this prospectus; and
- You should read this prospectus and any prospectus supplement
carefully before you invest in our common stock.
WaveRider's common stock is currently quoted on the OTC Bulletin Board,
under the symbol "WAVC". On August 30, 1999, the last reported sale price of
WaveRider's common stock was $1.03125 per share.
The mailing address, the telephone and facsimile numbers and the e-mail
address of WaveRider's executive offices is:
255 Consumers Road, Suite 500
Toronto, Ontario Canada M2J 1R4
Telephone No.: (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 3.
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.
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TABLE OF CONTENTS
Page
Risk Factors 3
Where You Can Find More Information 7
Use of Proceeds 9
Dividend Policy 9
Plan of Distribution 9
Disclosure of SEC Position on Indemnification
for Securities Act Liabilities 11
Legal Matters 11
Experts 11
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.
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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.
We Have A Limited Operating History, Therefore There Is A High Degree Of
Uncertainty Whether Our Business Plans Or Our Products Will Be Successful
Up to the present time, our company has been entirely a research and
development entity with insignificant 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 has achieved widespread distribution or
customer acceptance. Although, some of our products have passed the development
stage, we have not yet established a 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 quarter that ended June 30, 1999 and the year that ended December 31,
1998 were $2,335,526 and $4,477,518 respectively, and for the fiscal quarter
that ended June 30, 1998 and the year that ended December 31, 1997 were
$628,574 and $1,324,960 respectively. We have an accumulated deficit of
$13,002,471 as of June 30, 1999.
There can be no assurance that we will ever generate an overall profit
from our products or that we will ever reach profitability on a sustained basis.
Competition In The Data Communication Industry Is Intense And There Is
Uncertainty That Given Our New Technology And Limited Resources That We Will Be
Able To Succeed.
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.
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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 And There Is Risk That Our
Competitors Will Be Able To Appropriate Our Technology
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 cannot 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 And There Is Risk That Our
Customers May Have To Limit Or Discontinue The Use Of Our Products.
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.
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.
Adverse Consequences And Possible Dilution 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 may 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 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 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.
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We Depend Upon A Single Third Party Manufacturer And There Is Risk That If This
Supplier Becomes Unavailable For Any Reason We Will Have No Product To Sell
We depend significantly 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.
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.
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WHERE YOU CAN FIND MORE INFORMATION
This prospectus is a part of a registration statement on Form S-3 which
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 room at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington D.C. 20549, and at the regional offices of the
SEC located at Seven World Trade Center, 13th Floor, New York, New York 10048
and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. 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.
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 supersede
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 quarterly report, filed with the SEC on Form 10-Q, for the
fiscal quarter ended June 30, 1999;
(b) WaveRider's amendment to its quarterly report, filed with the SEC on
Form 10-Q/A, for the fiscal quarter ended June 30, 1999;
(c) WaveRider's Registration Statement on Form S-3, filed with the SEC on
July 14, 1999 and declared effective by the SEC on August 27, 1999;
(d) WaveRider's periodic report, filed with the SEC on Form 8-K, on June
30, 1999;
(e) WaveRider's quarterly report, filed with the SEC on Form 10-Q, for the
fiscal quarter ended March 31, 1999;
(f) WaveRider's Registration Statement on Form S-3, filed with the SEC on
April 27, 1999 and declared effective by the SEC on April 29, 1999;
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(g) WaveRider's annual report, filed with the SEC on Form 10-KSB, for the
fiscal year ended December 31, 1998;
(h) WaveRider's amendment to its annual report, filed with the SEC on Form
10-KSB/A, for the fiscal year ended December 31, 1998; and
(j) 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.
255 Consumers Road, Suite 500
Toronto, Ontario Canada M2J 1R4
Telephone No.: (416) 502-3200; Facsimile No.: (416) 502-2968
E-mail Address: [email protected]
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USE OF PROCEEDS
Unless otherwise indicated in the applicable prospectus supplement, the
net proceeds from the sale of the securities offered by this Prospectus will be
used for general corporate purposes, including capital expenditures and to meet
working capital needs. Each time we sell common stock, we will provide a
prospectus supplement that will contain information about how we intend to use
the net proceeds from the common stock sold at such time.
The costs associated with this offering are approximately $20,000.
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.
PLAN OF DISTRIBUTION
We may offer the common stock directly to purchasers, to or through
underwriters, through dealers or agents, or through a combination of such
methods.
If underwriters are used in an offering of the common stock, we will
execute an underwriting agreement with such underwriters and will set out the
name of each underwriter and the terms of the transaction (including any
underwriting discounts and other terms constituting compensation of the
underwriters and any dealers) in a prospectus supplement. If an underwriting
syndicate is used, the managing underwriter(s) will be set forth on the cover of
a Prospectus Supplement. Common stock may be acquired by the underwriters for
their own accounts and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. Any public offering
price and any discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
If dealers are used in an offering of the common stock, we will sell
the common stock to the dealers as principals. The dealers then may resell such
common stock to the public at varying prices which they determine at the time of
resale. The names of the dealers and the terms of the transaction will be set
forth in a prospectus supplement.
If agents are used in an offering of the common stock, the names of the
agents and the terms of the agency will be set forth in a prospectus supplement.
Unless otherwise indicated in a prospectus supplement, the agents will act on a
best-efforts basis for the period of their appointment.
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Dealers and agents named in a prospectus supplement may be deemed to be
underwriters (within the meaning of the Securities Act of 1933) of the common
stock described therein. Underwriters, dealers and agents, may be entitled to
indemnification by WaveRider against certain liabilities (including liabilities
under the Securities Act of 1933) under underwriting or other agreements. The
terms of any indemnification provisions will be set forth in a prospectus
supplement.
We may solicit offers to purchase the common stock from, and sell the
common stock directly to, institutional investors or others who may be deemed to
be underwriters within the meaning of the Securities Act of 1933, with respect
to any resales of the common stock. The terms of any offer will be set forth in
a prospectus supplement.
Certain underwriters, dealers or agents and their associates may engage
in transactions with, and perform services for, WaveRider in the ordinary course
of business, including refinancing of our indebtedness.
If so indicated in a prospectus supplement, we will authorize
underwriters or other persons acting as our agents to solicit offers by
institutional investors to purchase the common stock pursuant to contracts
providing for payment and delivery on a future date. We may enter into
agreements with commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions and other
institutional investors. The obligations of any institutional investor will be
subject to the condition that its purchase of the common stock will not be
illegal, at the time of delivery. The underwriters and other agents will not be
responsible for the validity or performance of agreements.
To facilitate an offering of a series of the common stock, certain
persons participating in the offering may engage in transactions that stabilize,
maintain or otherwise affect the price of the common stock. This may include
over-allotments of the common stock. Over-allotments involve the sale by persons
participating in the offering of more common stock than we have sold to them. In
such circumstances, these persons would cover over-allotments by purchasing the
Common Stock in the open market or by exercising their over-allotment options.
In addition, such persons may stabilize or maintain the price of the common
stock by bidding for or purchasing the Common Stock in the open market or by
imposing penalty bids, whereby selling concessions allowed to dealers
participating in any such offering may be reclaimed if the common stock they
sell is repurchased in connection with stabilization transactions. The effect of
these transactions may be to stabilize or maintain the market price of the
common stock at a level above that which might otherwise prevail in the open
market. These transactions, if commenced, may discontinue at any time.
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DISCLOSURE OF SEC POSITION
ON INDEMNIFICATION FOR SECURITIES ACT 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 Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act of
1933, 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 LLP 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.
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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 $ 1,350
Printing and engraving $ 500
Accountants' fees and expenses $ 15,000
Legal fees $ 2,500
Miscellaneous $ 650
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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 special provisions regarding the
indemnification of directors and officers beyond those in accordance with Nevada
law.
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.
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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.
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.
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<PAGE>
(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.
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<PAGE>
Item 16. Exhibits
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.
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<PAGE>
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.
4.7 Warrant Terms dated April 15, 1998, relating to the Class E Common Stock
Purchase Warrants, incorporated by reference to Exhibit 4.7 on Form 10KSB
for the year ended December 31, 1998.
4.8 Warrant Terms dated June 11, 1998, relating to the Class F Common Stock
Purchase Warrants, incorporated by reference to Exhibit 4.8 on Form 10KSB
for the year ended December 31, 1998.
4.9 Warrant Terms dated December 15, 1998, relating to the Class G Common
Stock Purchase Warrants, incorporated by reference to Exhibit 4.9 on Form
10KSB for the year ended December 31, 1998.
4.10 Warrant Terms dated December 29, 1998, relating to the Common Stock
Purchase Warrants, incorporated by reference to Exhibit 4.10 on
Form 10KSB for the year ended December 31, 1998.
4.11 Warrant Terms dated June, 1999, relating to the Class H Common Stock
Purchase Warrants.
5.1 Opinion of Foley, Hoag & Eliot LLP. (TO BE FILED BY AMENDMENT)
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.
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<PAGE>
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.
10.11 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.
10.14 Amendment to the Common Stock Purchase Agreement between WaveRider and
Sovereign Partners LP and Canadian Advantage Limited Partnership, dated
June 14, 1999.
10.15 Merger Agreement between WaveRider Communications Inc and TTI Merger Inc
and Transformation Techniques, Inc. and Peter Bonk, incorporated by
reference to Exhibit 10.1 in Form 8-K filed June 30, 1999
10.16 Employment agreement between Mr. Peter Bonk and WaveRider Communications
(USA) Inc., dated June 11, 1999, incorporated by reference to Exhibit 10.2
in Form 8-K filed June 30, 1999.
23.2 Consent of Johnson, Holscher & Company P.C., independent auditors.
23.3 Consent of PricewaterhouseCoopers LLP, independent accountants.
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).
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<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.
(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.
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<PAGE>
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 Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, on August
31, 1999.
WAVERIDER COMMUNICATIONS INC.
By: /s/ Bruce Sinclair
-----------------------------
Bruce Sinclair, President and
Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on August 30, 1999.
Signature Title Date
- --------- ----- ----
/s/ D. Bruce Sinclair
- --------------------- President, Chief Executive Officer August 30, 1999
D. Bruce Sinclair (Principal Executive Officer)
and Director
/s/ Cameron A. Mingay
- --------------------- Secretary/Director August 30, 1999
Cameron A. Mingay
/s/ Gerry Chastelet
- --------------------- Director August 30, 1999
Gerry Chastelet
/s/ William E. Krebs
- --------------------- Director August 30, 1999
William E. Krebs
/s/ William H. Laird
- --------------------- Director August 30, 1999
William H. Laird
II-8
EXHIBIT 5.1
(To be filed by amendment)
Exhibit 23.1
Johnson, Holscher & Company, P.C.
Certified Public Accountants
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of Waverider Communications Inc. (the "Company") to register $7,500,000
of its 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.
We also consent to the reference to our firm under the caption "Experts".
/s/ Johnson, Holscher & Company, P.C.
August 30, 1999
II-10
Exhibit 23.2
PricewaterhouseCoopers
August 31, 1999
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus dated
August 31, 1999 constituting part of the Registration Statement on Form S-3 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 references to us under the heading "Experts" in such
Registration Statement.
/s/ PricewaterhouseCoopers LLP
Chartered Accountants
PricewaterhouseCoopers LLP is a Canadian member firm of PricewaterhouseCoopers
International Limited, an English company limited by guarantee.
