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As filed with the Securities and Exchange Commission on May 3, 2012
o REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
ý ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended February 29, 2012
Commission file number: 001-34491
411 Legget Drive, Suite 600, Ottawa, Ontario, Canada, K2K 3C9
Corporation Service Company
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Securities registered or to be registered pursuant to Section 12(g) of the Act: N/A
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: N/A
For annual reports, indicate by check mark the information filed with this form:
Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: As at February 29, 2012, 35,586,206 common shares of the Registrant were issued and outstanding.
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. ý Yes o No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ý Yes o No
DragonWave Inc. ("we", "us", "our", the "Company" or the "Registrant") is a Canadian issuer eligible to file its annual report pursuant to Section 13 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, on Form 40-F pursuant to the multi-jurisdictional disclosure system of the Exchange Act. We are a "foreign private issuer" as defined in Rule 3b-4 under the Exchange Act. Our equity securities are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3.
This Annual Report on Form 40-F shall be incorporated by reference into the Registrant's Form S-8, SEC File No. 333-167806, filed on June 25, 2010.
This annual report on Form 40-F and the documents incorporated herein by reference, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or forward-looking information include, but are not limited to statements with respect to strategic plans and corporate goals and objectives.
Forward-looking statements, which involve assumptions and describe the future plans, strategies and expectations of the Company, are generally identifiable by use of the words "may", "will", "should", "continue", "expect", "anticipate", "estimate", "believe", "intend", "plan" or "project" or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements include, without limitation, statements regarding strategic plans, and corporate goals and objectives. There can be no assurance that forward-looking statements will prove to be accurate and actual results such as the goals and objectives of the Company's compensation programs for executives and directors, performance, achievements or developments and future events could differ materially from those expressed or implied in such statements. The following are some of the important risk factors relating to DragonWave and its business that could cause actual results, performance, achievements or developments to differ materially from those discussed in the forward-looking statements:
The risks and uncertainties related to the risk factors listed above, and the materializing of such risk and uncertainties, may be materially increased by the completion of the anticipated acquisition by us of the microwave transport business of Nokia Siemens Networks. In particular, material risks and uncertainties following and contingent upon closing of the acquisition will include, without limitation:
Although we have attempted to identify factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements and forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Forward-looking statements and forward-looking information are based upon management's beliefs, estimates and opinions at the time they are made and we undertake no obligation to update forward-looking statements and forward-looking information if these beliefs, estimates and opinions or circumstances should change, except as required by applicable law. There can be no assurance that forward-looking statements and forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements and information. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information.
The list above is not exhaustive of the factors that may affect our forward-looking statements and forward-looking information. Some of the important risks and uncertainties that could affect forward-looking statements and forward-looking information are described further in the exhibits attached to this annual report on Form 40-F. In light of these risks, uncertainties and assumptions, the forward looking events discussed in this annual report on Form 40-F and the documents incorporated herein by reference, including, without limitation, our published financial guidance, may not occur.
Unless specifically stated otherwise, all dollar amounts in this annual report on Form 40-F are in U.S. dollars. The exchange rate of U.S. dollars into Canadian dollars, based upon the closing rate of exchange on February 29, 2012 as reported by the Bank of Canada for the conversion of U.S. dollars into Canadian dollars, was US$1.00 = CAD$0.9895.
Our audited consolidated financial statements for the years ended February 29, 2012 and February 28, 2011, including the report of our independent auditor with respect thereto, are filed as Exhibit 99.1 and incorporated by reference in this annual report on Form 40-F.
Our management's discussion and analysis, or MD&A, for the year ended February 29, 2012 is filed as Exhibit 99.2 and incorporated by reference in this annual report on Form 40-F.
Purchasing, holding, or disposing of our securities may have tax consequences under the laws of the United States and Canada that are not described in this annual report on Form 40-F.
Disclosure Controls and Procedures
At the end of the period covered by this annual report for the fiscal year ended February 29, 2012, an evaluation was carried out under the supervision of, and with the participation of, our management, including our Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, which are our principal executive officer and principal financial officer, respectively, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based upon that evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were effective as at February 29, 2012, to give reasonable assurance that the information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and (ii) accumulated and communicated to management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management's Report on Internal Control over Financial Reporting
Our management is also responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f) as well as National Instrument 52-109 of the Canadian Securities Administration. These controls are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control Integrated Framework, our management concluded that our internal control over financial reporting was effective as of February 29, 2012.
Attestation Report of Independent Registered Public Accounting Firm
The attestation report of Ernst & Young LLP ("EY") is included in EY's report, dated May 2, 2012, to the shareholders of the Company, which accompanies the Registrant's audited consolidated financial statements for the fiscal year ended February 29, 2012, which is attached as Exhibit 99.1 to this annual report on Form 40-F and incorporated by reference herein.
Changes in Internal Control over Financial Reporting
During the period covered by this Annual Report on Form 40-F, no changes occurred in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
We have a separately designated standing Audit Committee established in accordance with section 3(a)(58)(A) of the Exchange Act and NASDAQ Rule 5605(c)(2). Our Audit Committee is composed of Tom Manley (Chair), Claude Haw, and Jean-Paul Cossart, each of whom, in the opinion of the directors, is financially literate and independent as determined under National Instrument 52-110 (Audit Committees) ("NI 52-110"), Rule 10A-3 of the Exchange Act and NASDAQ Rule 5605(a)(2). Information regarding the members of our Audit Committee can be found under "Audit Committee" in our most recently filed AIF.
The Audit Committee assists the board of directors in fulfilling its responsibilities for oversight of financial and accounting matters. In addition to recommending the auditors to be nominated and reviewing the compensation of the auditors, the Audit Committee is responsible for overseeing the work of the auditors and pre-approving non-audit services. The Audit Committee also reviews our annual and interim financial statements and news releases containing information taken from our financial statements prior to their release. The Audit Committee is responsible for reviewing the acceptability and quality of our financial reporting and accounting standards and principles and any proposed material changes to them or their application.
The Audit Committee has a published charter, which is available at www.sedar.com and on our website, www.dragonwaveinc.com.
Audit Committee Financial Expert
Our Board of Directors has determined that Thomas Manley qualifies as an "audit committee financial expert" within the meaning of the SEC's rules and each of the members of the audit committee is independent as determined under Exchange Act Rule 10A-3 and NASDAQ Rule 5605(a)(2). Information regarding each audit committee member's qualifications and experience can be found under "Audit Committee" in our most recently filed AIF.
The following table sets out the fees billed to us by Ernst & Young LLP and its affiliates for professional services for the year ended February 29, 2012 and the year ended February 28, 2011. During these years, E&Y was our only external auditor.
In addition to recommending the auditors to be nominated and reviewing the compensation of the auditors, the Audit Committee is responsible for overseeing the work of the auditors and pre-approving non-audit services. As a matter of practice, the Audit Committee, and/or the Audit Committee Chairman acting on behalf of the Audit Committee, will generally pre-approve all audit and permitted non-audit services to be performed by our external auditors. None of the fees reported above under the heading "External Auditor Service Fees" that were paid to Ernst & Young LLP were approved by our Audit Committee pursuant to the de minimus exception provided by Section (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Information about our off-balance sheet arrangements can be found under "Off-Balance Sheet Arrangements" in our management's discussion and analysis, or MD&A, for the year ended February 29, 2012 which section is incorporated herein by reference.
We have adopted a Code of Business Conduct and Ethics (the "Code of Ethics") that is applicable to each of our employees, including our principal executive officer, principal financial officer, principal accounting officer or controller. Our Code of Ethics is available at on our website at www.dragonwaveinc.com.
Any amendments to our Code of Ethics, and all waivers of the Code of Ethics with respect to any of the officers covered by it, will be posted on our website within five business days of such amendment or waiver and shall be provided in print to any shareholder who requests them.
There have been no waivers or implicit waivers to the Code of Ethics during the fiscal year ended February 29, 2012.
The following table presents a breakdown of our known outstanding contractual obligations by maturity as of February 29, 2012:
The amounts in the table above do not reflect the future tax consequences attributable to such amounts because we are unable to reasonably estimate the amount of such tax consequences.
We did not send any notices to directors and executive officers during the period covered by this annual report as required by Rule 104 of Regulation BTR concerning any equity securities in a pension or retirement plan subject to a blackout period and, generally, these requirements are inapplicable to us.
Our common shares are quoted for trading on the NASDAQ Global Select Market under the symbol DRWI. NASDAQ Marketplace Rule 5615(a)(3) permits a foreign private issuer to follow its home country practice in lieu of certain of the requirements of the Rule 5600 Series. A foreign private issuer that follows a home country practice in lieu of one or more provisions of the Rule 5600 Series is required to disclose in its annual report filed with the SEC, or on its website, each requirement of the Rule 5600 Series that it does not follow and describe the home country practice followed by the issuer in lieu of such NASDAQ corporate governance requirements.
We do not follow Marketplace Rule 5620(c), but instead follow our home country practice. The NASDAQ minimum quorum requirement under Rule 5620(c) for a meeting of shareholders is 33.33% of the outstanding common shares. In addition, Rule 5620(c) requires that an issuer listed on NASDAQ state its quorum requirement in its governing documents. Our quorum requirement is set forth in our by-laws. A quorum for a meeting of our shareholders is two persons present in person or by proxy who, in the aggregate, hold at least 25% of the issued shares entitled to be voted at the meeting. The foregoing is consistent with the laws, customs and practices in Canada and the rules of the Toronto Stock Exchange.
Concurrent with this filing, we have submitted to the SEC and posted on our corporate website, an Interactive Data File.
We undertake to make available, in person or by telephone, representatives to respond to inquiries made by the SEC's staff, and to furnish promptly, when requested to do so by the SEC staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.
We previously filed an Appointment of Agent for Service of Process and Undertaking on Form F-X with the SEC on May 6, 2010, with respect to the class of securities in relation to which the obligation to file this annual report on Form 40-F arises.
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.
Date: May 3, 2012
INCORPORATION BY REFERENCE
AUDITED ANNUAL FINANCIAL STATEMENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS
CONTROLS AND PROCEDURES
PRINCIPAL ACCOUNTING FEES AND SERVICES INDEPENDENT AUDITORS
PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES PROVIDED BY INDEPENDENT AUDITORS
OFF-BALANCE SHEET ARRANGEMENTS
CODE OF ETHICS
NOTICES PURSUANT TO REGULATION BTR
NASDAQ CORPORATE GOVERNANCE
INTERACTIVE DATA FILE
CONSENT TO SERVICE OF PROCESS