As filed with the Securities and Exchange Commission on December 28, 2000
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 Identification
incorporation or organization) Number)
255 Consumers Road, Suite 500
Toronto, Ontario Canada M2J 1R4
(416) 502-3200
(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
(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. |_|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
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
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 12,525,000(2) $1.50 $18,787,500 $4,697
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(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 price reported on the Nasdaq National
Market system on December 19, 2000.
(2) All shares registered pursuant to this registration statement are to be
offered by the selling shareholder. Shares of common stock that may be
offered pursuant to this registration statement include (i) 4,075,633
shares issuable upon the exercise of warrants, (ii) an estimated number of
shares issuable upon conversion of notes and (iii) an indeterminate number
of additional shares of common stock as may from time to time become
issuable upon conversion of the notes and exercise of the warrants by
reason of stock splits, stock dividends and other similar transactions,
which shares are registered hereunder pursuant to Rule 416 under the
Securities Act of 1933.
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.
<PAGE>
Waverider Communications Inc.
12,525,000 Shares of Common Stock
The selling shareholders are offering to sell up to 12,525,000 shares
of our common stock with this prospectus. WaveRider Communications Inc. will not
receive any of the proceeds from sales of these shares by the selling
shareholder, but we will receive the exercise price payable on warrants for
shares of common stock if those warrants are exercised.
The selling shareholder acquired notes and warrants, which are
convertible into and exercisable for the offered shares, directly from us in a
private placement that was exempt from the registration requirements of the
federal securities laws. We are required to register these shares, and the
shares underlying the warrants, under the terms of the Registration Rights
Agreement dated as of December 8, 2000, between us and the selling shareholder
named in this prospectus.
WaveRider's common stock is currently quoted on the NASDAQ National
Market system, under the symbol "WAVC". On December 19, 2000, the last reported
sale price of WaveRider's common stock was $1.50 per share.
The selling shareholder may offer its shares of common stock from time
to time, in the open market, on The Nasdaq National Market, in privately
negotiated transactions, in an underwritten offering, or a combination of such
methods, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. The selling shareholder
may engage brokers or dealers who may receive commissions or discounts from the
selling shareholder. Any broker-dealer acquiring the common stock from the
selling shareholder may sell such securities in normal market making activities,
through other brokers on a principal or agency basis, in negotiated
transactions, to its customers or through a combination of such methods. See
"Plan of Distribution." We will bear all of the expenses and fees incurred in
registering the shares offered by this prospectus. The selling shareholder will
pay any brokerage commissions and discounts attributable to the sale of the
shares.
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
(416) 502-3200; Facsimile No.: (416) 502-2968
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.
The date of this prospectus is December 22, 2000.
<PAGE>
TABLE OF CONTENTS
Page
----
Risk Factors 3
Where You Can Find More Information 6
Use of Proceeds 7
Dividend Policy 7
Selling Stockholders 8
Plan of Distribution 11
Disclosure of SEC Position on Indemnification
for Securities Act Liabilities 12
Legal Matters 12
Experts 13
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.
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 beginning of the year 2000, our company had been mainly
focused on the research and development of our products and as a result had
limited 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 commercially viable 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 have experienced significant
operating losses every year since incorporation and are subject to the
uncertainties and risks associated with any new business. Our net losses for the
fiscal quarter that ended September 30, 2000 and the year that ended December
31, 1999 were $15,738,357 and $7,447,850 respectively, and for the fiscal
quarter that ended September 30, 1999 and the year that ended December 31, 1998
were $1,673,377 and $4,477,518 respectively. We have an accumulated deficit of
$41,317,141 as of September 30, 2000.
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.
3
<PAGE>
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
operations.
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.
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.
4
<PAGE>
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
policies 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 The Notes And
Exercise Of The Warrants
We are obligated to issue a substantial number of shares of common
stock upon the conversion of the notes and exercise of our outstanding warrants.
The price which we may receive for the common stock that are issuable upon
conversion or exercise of such convertible notes and warrants may be less than
the market price of the common stock at the time of such conversion or exercise.
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. The exercise
of all of the aforementioned securities may also adversely affect the terms
under which we could obtain additional equity capital.
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, would 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.
We Depend Upon Third Party Manufacturers And There Is Risk That, If These
Suppliers Become Unavailable For Any Reason, We May For An Unknown Period Of
Time Have No Product To Sell
We depend upon a limited number of third party manufacturers to make
our products. If our suppliers are not able to manufacture for us for any
reason, we would, for an unknown period of time, have difficulty finding
alternate sources of supply. 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 would
have a material adverse effect on our business, financial condition and results
of operations.
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.
5
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is a part of a registration statement on Form S-3 that
we filed with the Securities and Exchange Commission under the Securities Act of
1933. This prospectus omits certain information contained in the registration
statement and the exhibits to the registration statement. 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 it. 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 documents 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 current report, filed with the SEC on Form 8-K/A, on December
27, 2000;
(b) WaveRider's current report, filed with the SEC on Form 8-K/A, on December
15, 2000;
(c) WaveRider's current report, filed with the SEC on Form 8-K, on December 14,
2000;
(d) WaveRider's quarterly report, filed with the SEC on Form 10-Q, for the
fiscal quarter ended September 30, 2000;
(e) WaveRider's current report, filed with the SEC on Form 8-K, on October 16,
2000;
(f) WaveRider's quarterly report, filed with the SEC on Form 10-Q, for the
fiscal quarter ended June 30, 2000;
(g) WaveRider's Proxy Statement, filed with the SEC on DEF 14A, on May 25,
2000;
(h) WaveRider's quarterly report, filed with the SEC on Form 10-Q, for the
fiscal quarter ended March 31, 2000;
(i) WaveRider's annual report, filed with the SEC on Form 10-K, for the fiscal
years ended December 31, 1999 and 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.
6
<PAGE>
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
(416) 502-3200; Facsimile No.: (416) 502-2968
E-mail Address: [email protected]
USE OF PROCEEDS
WaveRider will not receive any proceeds from the sale of the shares of
common stock by the selling stockholders.
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.
7
<PAGE>
SELLING SHAREHOLDERS
We are registering all 12,525,000 shares covered by this prospectus on
behalf of the selling shareholders named in the table below. Except for the
25,000 beneficially shares owned by Avondale, all the shares are issuable upon
conversion of the promissory notes and exercise of the warrants that we sold to
the selling shareholder in a private placement transaction. We are registering
the shares to permit the selling shareholders and their pledgees, donees,
transferees or other successors in interest that receive their shares from the
selling shareholders as a gift, partnership distribution or another
nonsale-related transfer after the date of this prospectus to resell the shares
when they deem appropriate.
We have agreed to file with the SEC a registration statement on Form S-3, of
which this prospectus forms a part. We have also agreed to prepare and file any
amendments and supplements to the registration statement as may be necessary to
keep the registration statement effective until such date as is the earlier of
(i) the date on which all of the shares covered by this prospectus have been
sold and (ii) the date on which all of the shares covered by this prospectus may
be immediately sold to the public without registration or restriction pursuant
to Rule 144(k) under the Securities Act of 1933, as amended, or any other rule
of similar effect or any successor provision. We have also agreed to bear all
expenses, costs and fees in connection with the registration, other than
underwriting discounts and commissions and brokerage fees and commissions, up to
$50,000.
The following table sets forth the name of the selling shareholders,
the number of shares of common stock beneficially owned by the selling
shareholders as of the date of this prospectus, the number of shares of common
stock to be sold by the selling shareholders pursuant to this prospectus and the
percentage of the outstanding common stock to be held by them after this
offering. Pursuant to a registration rights agreement between us and Capital
Ventures International ("CVI"), we have agreed to register all of the shares of
common stock issuable upon conversion of the outstanding notes and exercise of
the outstanding warrants we issued to CVI in September 2000, but not less than
12,500,000 shares of common stock. Accordingly, the 12,525,000 number reflects
the aggregate number of shares being offered by CVI pursuant to this prospectus
plus the 25,000 shares issuable upon exercise of the warrants issued to
Avondale. Because the number of shares issuable upon conversion of the notes
will depend upon the price of the common stock in the future, the actual number
of shares issued may be more or less than 12,525,000. In addition, the number of
shares owned by CVI is based upon a determination of beneficial ownership under
Section 13(d) of the Securities Exchange Act, which results in a number of
shares lower than the total number we have agreed to register. Beneficial
ownership includes shares of outstanding common stock and shares of common stock
that a person has a right to acquire within 60 days after the date of this
prospectus. The percentage of common stock outstanding after this offering is
based on 62,771,898 shares of common stock issued and outstanding as of December
15, 2000. The selling shareholders are not obligated to sell all or any portion
of the shares covered by this prospectus, or to sell any of the shares
immediately under this prospectus. Because the selling shareholders may sell all
or part of its shares, no estimate can be given as to the number of shares that
will be held by the selling shareholders upon termination of any offering made
hereby.
<TABLE>
<CAPTION>
Prior to Offering After Offering
-------------------------------------- ---------------------------------
Number of Shares Number of Shares Number of Shares Percentage
Beneficially Owned Offered Hereby Beneficially Owned (1) of Class
-------------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C>
Capital Ventures International (2) 3,296,830 12,500,000 0 0
Avondale Capital Parners, Inc. 25,000 25,000 0 0
</TABLE>
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1. Assumes the sale of all shares owned by the selling shareholders covered by
this prospectus. However, the actual number of shares issuable upon
conversion of the notes will increase if the price of the common stock
declines and therefore the actual number cannot be determined at this time.
2. Heights Capital Management, Inc., as CVI's authorized agent, has
discretionary authority to vote and dispose of the CVI shares and may be
deemed to be a beneficial owner of those shares. CVI and Avondale do not
have, and within the past three years have not had, any position, office or
other material relationship with the Company.
3. Except under limited circumstances, no holder of the notes or the warrants
is entitled to convert any portion of the notes into, or exercise any
portion of the warrants for, shares of common stock or to dispose of any
portion of the notes or warrants to the extent that the right to effect
such conversion, exercise or disposition would result in the holder or any
of its affiliates beneficially owning more than 4.99% of the outstanding
shares of common stock. Therefore, the number of shares set forth herein
and which CVI may sell pursuant to this prospectus may exceed the number of
shares of common stock it would otherwise beneficially own as determined
pursuant to Section 13(d) of the Securities Exchange Act. Moreover,
pursuant to the regulations of the National Association of Securities
Dealers, Inc., in the absence of shareholder approval, the aggregate number
of shares of common stock issuable to CVI at a discount from market price
upon conversion of the notes and exercise of the warrants that have been or
may be issued to them pursuant to the Securities Purchase Agreement may not
exceed 19.99% of the outstanding common stock on December 8, 2000
(12,548,102 shares). Unless shareholder approval is obtained to issue
common stock to CVI in excess of the maximum amount set forth above, CVI
will not be entitled to acquire more than the maximum amount. For a
complete description of terms of the notes and the warrants, see the form
of note and the forms of warrant included as Exhibit 10.2, 10.4 and 10.5,
to our Current Report on Form 8-K dated December 14, 2000, which is
incorporated by reference to the registration statement of which this
prospectus forms a part.
4. Consists of shares of common stock issuable upon conversion of outstanding
convertible notes and upon exercise of the warrants. The actual number of
shares of common stock issuable upon conversion of the notes is
indeterminate and will equal (i) the aggregate principal amount of the
notes being converted, plus accrued interest thereon through the conversion
date, divided by (ii) the lower of (a) $2.4375 (subject to adjustment in
certain circumstances) and (b) ninety percent (90%) of the lower of the
average closing bid prices of the common stock on The Nasdaq National
Market (or such other principal U.S. securities exchange or trading market
where the common stock is then listed or traded) for the 20 trading days
immediately prior to the effective date of the registration statement, of
which this prospectus is a part, and the closing bid price on the last
trading day immediately prior to the effective date of the registration
statement of which this prospectus is a part. The amounts listed in the
table assume a conversion price of $1.92 for purposes of beneficial
ownership, which is 90% of the average closing bid prices of the common
stock on The Nasdaq National Market for the 20 trading days preceding the
date of the filing of the registration statement of which this prospectus
is a part. Pursuant to Rule 416 of the Securities Act, CVI may also offer
and sell common stock issued with respect to the notes and warrants as a
result of stock splits, stock dividends and anti-dilution provisions
(including by reason of changes in the conversion price of the notes in
accordance with the terms thereof).
DESCRIPTION OF CONVERTIBLE NOTES AND WARRANTS
On December 8, 2000, we issued convertible promissory notes in the
aggregate principal amount of $5 million to CVI. The promissory notes bear an
interest rate of 6%, compounded annually. The principal amount of the notes plus
accrued and unpaid interest automatically convert into shares of our common
stock upon the effectiveness of the registration statement, of which this
prospectus forms a part, covering the resale of the shares issuable upon the
conversion of the promissory notes and upon the exercise of the warrants,
subject to the limitation that the notes will not convert to the extent that the
right to effect such conversion would result in CVI beneficially owning more
9
<PAGE>
than 4.99% of our outstanding shares. If the limitation applies, then the rest
of the notes will convert one year following the effectiveness of the
registration statement of which this prospectus is a part. If the registration
statement, of which the prospectus is a part, is not declared effective by the
first anniversary of the date of issuance, then the outstanding principal and
interest under the notes will become due and payable. The conversion price is
initially $2.4375 and, upon the effective date of the registration statement,
will be reduced (if lower) to 90% of the lower of the average closing bid price
of our common stock during the 20 trading days immediately prior to the
effective date of the registration statement, of which this prospectus is a
part, and the closing bid price on the last trading day immediately prior to the
effective date of the registration statement.
SERIES J & K WARRANTS
In connection with the private placement, we also issued to CVI
warrants to purchase up to 2,461,538 and 5,907,592 shares of our common stock at
an exercise price of $3.35 per share and $2.539 per share, respectively. The
Series J warrants have a term of five years and the Series K warrants have a one
year term. Additionally, beginning on June 8, 2001, if the average closing bid
price for our common stock for 20 consecutive days is greater than $3.81, we can
require CVI to exercise the Series K warrants.
The conversion price of the promissory notes and the exercise price of the
warrants are subject to antidilution adjustments. For a complete description of
the terms of the notes and the warrants, see the form of note and forms of
warrant included as Exhibit 10.2, 10.4 and 10.5 to our Current Report on Form
8-K dated December 14, 2000, which is incorporated by reference to the
registration statement of which this prospectus forms a part.
In addition, subject to certain conditions, in connection with the private
placement, we also agreed to issue to CVI, on the later of (i) the March 8 and
(ii) the 30th day after the registration statement of which this prospectus
forms a part is declared effective by the SEC, additional 6% convertible
promissory notes in the aggregate principal amount of $7,000,000 and additional
Series L Warrants to purchase shares of our common stock, exercisable for 5
years from the date of issuance. The conversion price of the convertible notes
will intially be set at $2.64 and upon the effective date of a future
registration statement will be reduced (if lower) to 90% of the lower of the
average closing bid price of our common stock during the 20 trading days
immediately prior to the effectiveness of the second registration statement and
the closing bid price on the last trading day immediately prior to the effective
date of the second registration statement. The Series L Warrants will cover a
number of shares of our common stock equal to 7,000,000 divided by the average
closing bid price of our common stock during the 20 trading days immediately
prior to the date of issuance of such warrants at an exercise price equal to
165% of the average closing bid price of our common stock during such 20 trading
day period. The conversion price of the promissory notes and the exercise price
of the Series L Warrants are subject to antidilution adjustments. For a complete
description of the terms of the promissory notes and the Series L Warrants, see
the form of note and form of Series L Warrant included as Exhibit 10.3 and 10.6
to our Current Report on Form 8-K dated December 14, 2000, which is incorporated
by reference to the registration statement of which this prospectus forms a
part.
SERIES M WARRANTS
In connection with the private placement, WaveRider has agreed to pay Avondale
Capital Partners Inc. ("Avondale") a fee equal to 2% of the total aggregate
amount financing received by WaveRider pursuant to the Securities Purchase
Agreement, to a maximum fee of $400,000 plus 50,000 Series M warrants, for its
involvement as a consultant in connection with the Securities Purchase
Agreement. Upon the First Closing, WaveRider has issued to Avondale Series M
warrants to purchase 25,000 shares of common stock at an exercise price of $3.05
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per share. In addition, upon the Second Closing, WaveRider will issue to
Avondale warrants to purchase a further 25,000 shares of common stock at a price
equal to 150% of the market price at the time of the second closing. The First
Closing warrants will expire on December 8, 2005 and the Second Closing warrants
will expire five years from the Second Closing date. For a complete description
of the form of Series M Warrant included as Exhibit 4.9 to the registration
statement of which this prospectus forms a part
PLAN OF DISTRIBUTION
This prospectus covers 12,525,000 shares of our common stock. All of
the shares offered are being sold by the selling stockholders. We will not
realize any proceeds from the sale of the shares by the selling stockholders.
The selling stockholders purchased their shares in the ordinary course of
business and at the time of such purchase had no agreements or understandings,
directly or indirectly, with any person to distribute their shares.
The shares may be sold or distributed from time to time by the selling
stockholders, or by pledgees, donees or transferees of, or other successors in
interest to, the selling stockholders, directly to one or more purchasers
(including pledgees) or through brokers, dealers or underwriters who may act
solely as agents or may acquire shares as principals, at the market prices
prevailing at the time of sale, at prices related to the prevailing market
prices, at negotiated prices or at fixed prices, which may be changed. The
shares may be sold in one or more of the following methods:
-- ordinary brokers' transactions, which may include long sales or short sales
effected after the effective date of the registration statement of which this
prospectus is a part;
-- transactions involving cross or block trades or otherwise on The Nasdaq
National Market;
-- purchases by brokers, dealers or underwriters as principal and resale by the
purchasers for their own accounts pursuant to this prospectus;
-- "at the market" to or through market makers or into an existing market for
the shares;
-- in other ways not involving market makers or established trading markets,
including direct sales to purchasers or sales effected through agents;
-- through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise); or
-- any combination of the foregoing, or by any other legally available means.
The selling stockholders or their successors in interest may also enter into
option or other transactions with broker-dealers that require the delivery by
these broker-dealers of the shares, which shares may be resold thereafter
pursuant to this prospectus. In addition, from time to time, a selling
stockholder may pledge its shares to broker-dealers or other financial
institutions. Upon a default by a selling stockholder, the broker-dealer or
financial institution may offer and sell the pledged shares from time to time.
Brokers, dealers, underwriters or agents participating in the distribution of
the shares as agents may receive compensation in the form of discounts,
commissions or concessions from a selling stockholder and/or purchasers of the
shares for whom they may act as agent, or to whom they may sell as principal, or
both. The selling stockholder and any broker-dealers who act in connection with
the sale of shares of our common stock offered by this prospectus may be deemed
to be "underwriters" within the meaning of the Securities Act, and any
discounts, commissions or concessions they receive and proceeds of any sale of
shares may be deemed to be underwriting discounts and commissions under the
Securities Act. Neither we nor the selling stockholders can presently estimate
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the amount of this compensation. We know of no existing arrangements between a
selling stockholder, any other stockholder, broker, dealer, underwriter or agent
relating to the sale or distribution of the shares. Moreover, a selling
stockholder may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the shares against some
liabilities, including liabilities arising under the Securities Act.
Furthermore, in the event of a "distribution" of shares by a selling
stockholder, the selling stockholder, any selling broker or dealer and any
"affiliated purchasers" may be subject to Regulation M under the Securities
Exchange Act which would generally prohibit these persons from bidding for or
purchasing any security that is the subject of the distribution until his or her
participation in that distribution is completed. In addition, Regulation M
generally prohibits any "stabilizing bid" or "stabilizing purchase" for the
purpose of pegging, fixing or stabilizing the price of common stock in
connection with this offering.
We will pay substantially all of the expenses incident to the registration,
offering and sale of the shares to the public other than the commissions or
discounts of brokers, dealers, underwriters or agents. We have also agreed to
indemnify the selling stockholders and related persons against liabilities under
the Securities Act.
In order to comply with the securities laws of certain states, if applicable,
the shares will be sold in certain jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the shares may not
be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with by us and the selling stockholders.
The selling stockholders are not restricted as to the price or prices at which
they may sell their shares. Sales of these shares may have an adverse effect on
the market price of the common stock. Moreover, the selling stockholders are not
restricted as to the number of shares that may be sold at any time and it is
possible that a significant number of shares could be sold at the same time
which may also have an adverse effect on the market price of the common stock.
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.
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EXPERTS
The financial statements as at December 31, 1999 and 1998 and for the
years then ended incorporated in this registration by reference to the Annual
Report on Form 10-K for the year ended December 31, 1999 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.
The financial statements of ADE Network Technology Pty. Ltd. as at June
30, 2000 and for the year then ended incorporated in this registration by
reference to the Report on Form 8-K/A, dated December 27, 2000 have been so
incorporated in reliance on the report of Lundstrom Dickson Barbanti,
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 $ 4,697
Printing and engraving $ 500
Accountants' fees and expenses $ 12,000
Legal fees $ 2,500
Miscellaneous $ 303
----------
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
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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.
(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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Item 16. Exhibits
The exhibits below marked with an asterisk (*) are included with and filed as
part of this report.
Exhibit No. Description
3.1 Articles of Incorporation of the Company, incorporated by
reference to Exhibit 3.1 registration statement on Form S-18,
File no. 33-25889-LA.
3.2 Bylawsof 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 the
Company 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
incorporated by reference to Exhibit 3.7 on Form 10KSB for the
year ended December 31, 1997.
3.8 Certificate of Amendment to the Memorandum of the Company
changing the name to WaveRider Communications Inc., filed with
the Nevada Secretary of State on May 27, 1997 incorporated by
reference to Exhibit 3.8 on Form 10KSB for the year ended
December 31, 1997.
3.9 Certificate of Amendment to the Certificate of Designation of the
Series B Voting Convertible Preferred Stock, filed with the
Nevada Secretary of State on May 16, 1997 incorporated by
reference to Exhibit 99.1 on Form 8-K filed May 5, 1998.
3.10 Certificate of Amendment to the Articles of Incorporation of the
Company designating the Series C Voting 8% Convertible Preferred
Stock, filed with the Nevada Secretary of State on June 3, 1998
incorporated by reference to Exhibit 4 on Form 8-K filed June 18,
1998.
3.11 Certificate of Amendment to the Articles of Incorporation of the
Company filed with the Nevada Secretary of State on July 17,
2000, incorporated by reference to Appendix D on Form DEF 14A
filed May 25, 2000.
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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 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.
4.3 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.
4.4 Warrant Terms dated June, 1999, relating to the Class H Common
Stock Purchase Warrants, incorporated by reference to Exhibit
4.11 on a registration statement on Form S-3, File no. 333-82855
4.5 Warrant Terms dated December 1999, relating to Common Stock
Purchase Warrants, incorporated by reference to Exhibit 4.13 on a
registration statement on Form S-3, File no. 333-92591.
4.6 Warrant Terms dated December 8, 2000, relating to the Class J
Common Stock Purchase Warrants, incorporated by reference to
Exhibit 10.4 on Form 8-K filed December 14, 2000.
4.7 Warrant Terms dated December 8, 2000, relating to the Class K
Common Stock Purchase Warrants, incorporated by reference to
Exhibit 10.5 on Form 8-K filed December 14, 2000.
4.8 Form of Warrant Terms dated December 8, 2000, relating to the
Class L Common Stock Purchase Warrants, incorporated by reference
to Exhibit 10.6 on Form 8-K filed December 14, 2000.
4.9* Warrant Terms dated December 8, 2000, relating to the Class M
Common Stock Purchase Warrants.
5.1 Opinion of Foley, Hoag & Eliot LLP. (TO BE FILED BY AMENDMENT)
23.1* Consent of Johnson, Holscher & Company P.C., independent
auditors.
23.2* Consent of PricewaterhouseCoopers LLP, independent auditors
23.3* Consent of Lundstrom Dickson Barbanti, independent auditors
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;
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(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.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Bruce Sinclair, his true and lawful
attorney-in-fact and agent, with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits and schedules thereto, and
all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing, which
they, or either of them, may deem necessary or advisable to be done in
connection with this Registration Statement, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their substitute or
substitutes or any of them, may lawfully do or cause to be done by virtue
hereof.
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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 December 22, 2000.
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
December 22, 2000.
WAVERIDER COMMUNICATIONS INC.
By: /s/ D. 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 December 22, 2000.
Signature Title Date
/s/ Bruce Sinclair President, December 22, 2000
---------------------- Chief Executive Officer
D. Bruce Sinclair (Principal Executive
Officer) and Director
/s/ Cameron Mingay Secretary/Director December 22, 2000
----------------------
Cameron A. Mingay
/s/ Gerry Chastelet Director December 22, 2000
----------------------
Gerry Chastelet
/s/ John Curry Director December 22, 2000
----------------------
John Curry
/s/ Guthrie Stewart Director December 22, 2000
----------------------
Guthrie Stewart
/s/ Dennis Wing Director December 22, 2000
----------------------
Dennis Wing
19
