DragonWave's AirPair. (Image supplied)

DragonWave Inc. is planning an initial public offering of its common shares.

The Ottawa-based maker of Ethernet wireless technology announced late Tuesday that it has filed a preliminary prospectus with securities regulatory authorities.

DragonWave's prospectus did not specify as yet how many shares would be sold and for what price, but it noted that it plans to list on the Toronto Stock Exchange and on the London AIM market.

Dragonwave's revenues have been steadily growing, with sales in its fiscal 2006 year, which ended on Feb. 28 2006, more than doubling to $19.4 million from $9.3 million a year earlier. Net losses narrowed in fiscal 2006 by 62.4 per cent to $5.2 million or $2.43 per basic and fully diluted share.

However, the company's revenues were slightly lower in the nine months ended on Nov. 30 2006 than in the comparable period the year before, at $16.2 million compared to $17.2 million. Net losses were also 46.3-per-cent higher in the nine-month period at $8.1 million, or $2.23 per share.

DragonWave listed several risk factors that investors should take note of, including the relative youth of the broadband wireless market; the company's reliance on a small number of customers for a large percentage of its revenues; the limitations of radio frequency spectrum allocations; its use of an outsourced manufacturer which could mean that it might not always get its products on a timely basis; as well as the company's sensitivity to currency fluctuations.

The offering will be underwritten by a syndicate led by Canaccord Capital Corporation and including CIBC World Markets Inc. and Genuity Capital Market G.P.

The company has enjoyed some recent success abroad, winning several contracts to supply its AirPair wireless Ethernet solutions in Dubai, Pakistan, and Russia in November 2006.

Chief financial officer Russell Frederick couldn't say when the company would announce how many shares it would be selling and at what price, but said the company was "looking forward" to the listing.