Management`s Discussions: 10-Q, WAVERIDER COMMUNICATIONS INC
(Edgar Online via COMTEX)
Company Name: WAVERIDER COMMUNICATIONS INC
(SYMBOL:WAVC)
Management's Discussion and Analysis or Plan of Operation.
The following discussion is intended to assist in an understanding of the
Company's financial position and results of operations for the quarter ending
September 30, 2000.
Liquidity and Capital Resources.
The Company has funded its operations for the most part through equity financing
and has had no line of credit or similar credit facility available to it. The
Company's outstanding shares of Common stock, par value $.001 per share, are
traded under the symbol "WAVC" NASDAQ National Market System. The Company must
rely on its ability to raise money through equity financing to pursue any
business endeavors. The majority of funds raised have been allocated to the
development of the WaveRider(R) line of wireless data communications products.
During the first three months of 2000, the Company has raised $13,686, 924
through completion of the December 23, 1999 financing and the exercise of
warrants and Employee Stock options. During the second and third quarter, the
Company raised an additional $2,642,911 and $ 380,594 respectively through the
exercise of warrants and Employee Stock options.
Current Activities.
The Company currently has over 150 employees located in its head office in
Toronto, Ontario, its Research and Development facility in Calgary, Alberta and
its sales offices in the United States, Canada, Mexico, Germany and China, as
well as at its subsidiary, JetStream Internet Services in Salmon Arm, British
Columbia and, effective October 1, 2000, its new subsidiary, ADE Network
Technology Pty Ltd in Australia. The majority of these employees are involved in
the design, development and marketing of the WaveRider(R) line of wireless data
communications products.
Results of Operations - Nine Months ended September 30, 2000
For the nine months ended September 30, 2000, the Company incurred a net loss of
$23,374,975 (1999 - $5,341,131). Included in the loss for the nine months ended
September 30, 2000 were special accounting charges of $10,944,485 (1999 - $Nil)
related to the extension of the Company's Stock Option (1997) Plan and
$1,357,620 (1999 - $Nil) related to the vesting of non-employee and employee
performance options and release of compensatory escrow shares. These special
charges were charged to sales, general and administration in the amount of
$10,301, 370 and research and development in the amount of $2,000,735.
Cash and cash equivalents amounted to $9,428,801 and current liabilities were
$3,061,717 including accruals for expenses. Accounts receivable increased by
$1,430,115 as the result of increased sales and the provision of extended
payment terms to certain customers. Inventory increased by $1,793,387 as the
Company acquired parts for the anticipated roll out and growth of new NCL and
LMS products during the fourth quarter of 2000.
The Company continues to invest significantly in research and development,
incurring expenses, net of special accounting charges, of $5,753,194 (1999 -
$2,002,881) during the period. The Company was focused on the roll out of its
Wireless Network products, the LMS2000 and LMS 3000 product families, and
continued the development of the sales and marketing strategies for the
WaveRider's Wireless Bridging products, the NCL family, incurring $6,129,512
(1999 - $3,718,522) in sales, general and administration expenses, net of
special accounting charges.
During the nine-month period, the Company shipped and recognized revenue from
ten LMS 2000 systems. In addition, the Company shipped one LMS 3000 system but
deferred the revenue recognition until the system is fully tested and
operational. Margins related to the network components of the LMS product line
are significantly higher than those realized on the current NCL product line.
Results of Operations - Nine months ended September 1999
For the nine months ended September 30, 1999, the Company incurred a net loss of
$5,341,131. Cash amounted to $401,282 and current liabilities were $1,743,718
including accruals for expenses. Activities during the period related primarily
to ongoing R&D, the acquisition of Transformation Techniques and the
establishment of sales and marketing programs for the NCL family of wireless
data communications product. Included in the loss for the period was a $425,000
non-cash expense for the estimated fair value of warrants issued for services
rendered and a $458,246 non-cash expense for shares issued to employees from the
Employee Stock Compensation (1997) Plan.
(c) 1995-1999 Cybernet Data Systems, Inc. All Rights Reserved.
Received by Edgar Online: Oct. 30, 2000
CIK Code: 0000844053
SEC Accession Number: 0001005444-00-000232 |
