DragonWave, Inc. (USA) (DRWI) Shares Tumble on Back of Equity Dilution


DragonWave, Inc. (USA) (NASDAQ:DRWI) shares were on the rise yesterday, after the microwave technology firm said that it has singed a Master Sales and Services Agreement with Ingram Micro’s Australian division. However, DragonWave shares changed direction this morning, falling nearly 15%, following the news that the company is raising approximately US$1.79 million in gross proceeds in an at-the-market registered direct offering and a concurrent private placement to institutional investors in the United States.

The Company is selling approximately 1,193,332 Common Shares in the registered direct offering. Concurrently in a private placement, the Company is issuing warrants to purchase approximately 596,666 Common Shares at an exercise price of $1.50 per share, a discount of 21% from yesterday’s closing price, subject to certain standard adjustments, which warrants are not exercisable for six months and one day from issuance and will expire five and half years from the date of issuance. The price per common share and half of a warrant is $1.50.

Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC is acting as the exclusive placement agent for the registered direct offering and concurrent private placement. The closing of the registered direct offering and the concurrent private placement is expected to take place on or about March 17, 2017, subject to the satisfaction of customary closing conditions.

The net proceeds of the offering, before expenses, will be approximately US$1.6 million. The Company intends to use the net proceeds from the sale of shares in the registered direct offering for general corporate purposes, which may include working capital, general and administrative expenses, capital expenditures and implementation of its strategic priorities. The Company expects that any exercise of the warrants will result in the cash proceeds from the exercise of such warrants being paid to the Company.

DragonWave, Inc. engages in the development and provision of packet microwave solutions. Its products include hybrid microwave, small cell solutions, network management, and packet microwave. It offers mobile backhaul, small cell networks, intelligence networks, infrastructure monitoring, last-mile fiber extension, and rural cellular backhaul services. 

 

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