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An
outline:
A.
The introduction. The particularities
of Waverider’s activity.
B.
The negative economic issues facing
Waverider.
C.
The ways of improving the economic
situation of Company.
D.
The conclusions.
The
foreword:
WaveRider
Communications Inc. is the world leader in non-line-of-sight (NLOS) broadband
wireless products for license-exempt spectrum. WaveRider's NLOS products have
been deployed by wireless Internet service providers, municipal governments,
utility companies, telecommunications providers, and other network operators to
deliver high-speed communications services to subscribers. The company continues
to develop and market industry-leading technologies for the broadband wireless
market. WaveRider is traded on the OTC Bulletin Board, under the symbol WAVC1.
During the year ended December 31, 2002, WaveRider
Communications Inc. experienced a substantial decrease in the Company’s stock
price and market capitalization, continued losses from operations and
substantial and continuing dilution to existing stockholders due to the sale of
a significant number of common shares and the conversion features of convertible
securities sold by the Company.
For the year ended December 31, 2002, the Waverider
Communication Inc. has incurred a net loss of $11,249,702. As of December 31, 2002,
the Company had $1,025,604 in cash and cash equivalents and a net worth of $1,659,619.
The Waverider’s current liabilities, as of such date, aggregated $2,985,601.
The Company expects that its cash and cash equivalents at March 31, 2003, may
be less than $600,000 and that its current liabilities as of such date may
exceed $2,600,0002.
However, the Company has a plan that it believes will
allow it to achieve profitability and cash flow positive operations without the
need for additional financing. However, if the Waverider fails to achieve
positive cash flow in the near term, it does not presently have adequate cash
to fund ongoing operations. In that case, in order to meet its needs for cash to
fund its operations, the Company would need to obtain additional financing. In
the past, the Waverider has obtained financing primarily through the sale of
convertible securities. Due to the Company’s low stock price and the overhang represented
by outstanding convertible securities, the Company believes that it is unlikely
to be able to obtain additional financing3. If the Waverider is
unable to either achieve its planned cash flow positive operations and
profitability or obtain significant additional financing, it will, in all
likelihood, be obliged to seek protection under the bankruptcy laws in which event,
the Company believes it is unlikely that its common stock will have any value.
The Company’s independent auditors have issued an
opinion on the financial statements of the Waverider, as of December 31, 2002,
and for the year then ended, which includes an explanatory paragraph expressing
substantial doubt about the Company’s ability to continue as a going concern.
Among the reasons cited by the independent auditors as raising substantial
doubt as to the Company’s ability to continue as a going concern are the
following: the Waverider has incurred recurring losses from operations
resulting in an accumulated deficit and a working capital deficiency at
December 31, 20024.
These circumstances raise substantial doubt about the
Company’s ability to continue as a going concern. If the Waverider is unable to
achieve profitability and cash flow positive operations or to secure
significant additional financing, it will, in all likelihood, be obliged to
seek protection under the bankruptcy laws in which event, the Company believes
that it is unlikely that its common stock will have any value.
The waverider has limited intellectual property
protection and there is risk that its competitors will be able to appropriate
its technology. The Company depends upon third party manufacturers and there is
risk that, if these suppliers become unavailable for any reason, it may for an
unknown period of time have no product to sell. Waverider depends upon a
limited number of third party manufacturers to make its products. If Company’s
suppliers are not able to manufacture for it for any reason, the Company would,
for an unknown period of time, have difficulty finding alternate sources of
supply5. Inability to obtain manufacturing capacity would have a
material adverse effect on its business, financial condition and results of
operations.
Waverider’s future operating results are
subject to a number of risks, including its ability or inability to implement
the strategic plan, to attract qualified personnel and to raise sufficient
financing as required. Inability of Company’s management to guide growth
effectively, including implementing appropriate systems, procedures and
controls, could have a material adverse effect on its business, financial
condition and operating results. They are intended to retain any future earnings
to fund the operation and expansion of Waverider’s business. They do not
anticipate paying cash dividends on our shares in the foreseeable future.
Bibliography:
1. “WaveRider to Host Q2 2003
Conference Call and Webcast” – a story by WaveRider via BizWire, from July, 24,
2003.
2. Waverider Communication Inc. Annual
report, 2002.
3. “How will Waverider get its previous
positions” – by James Kurdin, 2003 (New-York Times).
4. Waverider Communication Inc. Annual
report, 2002.
5. “How will Waverider get its previous
positions” – by James Kurdin, 2003 (New-York Times).
