Kanata tech firm DragonWave says it plans to ask for more time to get back into compliance with NASDAQ rules after the company failed to meet an April 17 deadline to adhere to the U.S. stock exchange’s listing requirements.
The company, which makes networking equipment for wireless communications firms, said it intends to request a hearing before a NASDAQ panel where it will present its plan to meet the minimum listing requirements – specifically maintaining at least $2.5 million in shareholders' equity.
If DragonWave (TSX:DWI) (NASDAQ:DRWI) didn’t ask for the hearing, it would be subject to delisting as of May 1. In a news release, the company said the NASDAQ panel can grant DragonWave up to an additional 180 days from April 20 to regain compliance.
The company reported shareholders' equity of $1,964,000 for the period ended Nov. 30, 2016.
Last year, DragonWave had said it intended to regain compliance and provide the NASDAQ with a plan ahead of the stock exchange’s Dec. 1, 2016 deadline. In mid-December, the company announced it had received an extension until April but did not release details of how it planned to meet the new deadline.
DragonWave officials did not immediately respond to a request for comment on Monday.
DragonWave’s shares spiked last fall on news that its equipment would be used in Sprint’s network densification efforts. However, since then the firm’s stock has fallen.
In January, DragonWave reported a third-quarter drop of revenue of more than 50 per cent from the same quarter a year earlier and a decrease of more than 75 per cent from two years before.
Third-quarter sales from its Nokia channel continued to decrease to 22 per cent of total revenue in the wake of Nokia’s deal with DragonWave competitor Alcatel-Lucent. That was nearly half of what the channel represented as a percentage of total revenues a year earlier.
DragonWave CEO Peter Allen told investors and analysts in January he was “disappointed” with the quarter, attributing the drop in revenue to operational challenges such as delays in customer deployment, supply chain issues and late payments from a few customers.
DragonWave is scheduled to issue its next earnings report on May 17.
Shares of the Kanata-based provider of packet microwave radio systems fell more than 10 per cent on the Toronto Stock Exchange on Monday afternoon and nearly seven per cent on the NASDAQ, sitting at $1.14 on the NASDAQ and $1.50 on the TSX.