DragonWave, Inc. (USA) (NASDAQ:DRWI) Explodes On NASDAQ Delisting Reversal

DragonWave, Inc. (USA) (NASDAQ:DRWI)

DragonWave, Inc. (USA) (NASDAQ:DRWI) has regained compliance with the NASDAQ having been hit with a delisting notice for failing to meet the minimum shareholders’ equity of $2.5 million. However, the company’s continued listing on the NASDAQ is still subject to meeting certain milestones which includes ensuring the minimum shareholder equity stands at $2.5 million.

While the company’s listing on the Toronto Stock Exchange is not impacted by the decision, DragonWave maintains it is working round the clock to meet the minimum requirement.

SmartSky Contract

Separately, the global supplier of packet microwave radio systems says it has inked a product supply and services contract with SmartSky Networks. The North American 4G LTE inflight service provider is to deploy the company’s Harmony Enhanced and Harmony Enhanced MC products as part of the contract.

“The DragonWave Harmony Enhanced MC product solution offers our desired capacity requirements for SmartSky. Harmony Enhanced MC delivers simple installation, operation, and sophisticated remote management, so we are thrilled to partner with them to further enhance SmartSky’s capabilities, “said SmartSky Networks vice president of services Dave Claassen.

SmartSky is in the process of deploying its coast-to-coast national network having recently secured $170 million Series B financing.

Disappointing Q4 Earnings

The signing of the contract with SmartSky comes on the heels of DragonWave, Inc. (USA) (NASDAQ:DRWI) posting disappointing financial results for its fourth quarter. The company has been experiencing difficult operating conditions after having posted a net loss of $3.9 million. Revenue for the fourth quarter tanked to $8 million from $10.2 million in the third quarter.

DragonWave, Inc. (USA) (NASDAQ:DRWI) Operating expense for F2017 dropped by $9.9 million compared to the previous fiscal year, to $27.9 million, having dropped to $6.7 million in the fourth quarter compared to $7 million as of the third quarter.

“Our results in Q4 reflect the difficult operating conditions. Earlier this year we communicated that we had made a restructuring proposal to our credit facility partners to reduce operating expenses and address working capital. In co-operation with our secured lenders we have engaged Alvarez & Marsal Canada ULC to assist us with the identification and assessment of strategic alternatives in relation to short-term liquidity requirements,” said CEO, Peter Allen.

DragonWave, Inc. (USA) (NASDAQ:DRWI) exited the fourth quarter with cash and cash equivalent of $4.1 million compared to $4.5 million as of the end of the third quarter.

DragonWave, Inc. (USA) (NASDAQ:DRWI) stock ended Wednesday trading session at $1.13 a share having rallied by 75.19%.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Monica Grey has an undergraduate degree in Accounting and an MBA she earned – with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.