TORONTO, June 10 /CNW/ - As announced on March 15, 2010, Redline Communications Group Inc. (the "Company") has established a Special Committee of its directors and its legal counsel has engaged Grant Thornton LLP to review the Company's prior years revenue recognition policies and practices after it was determined that proper accounting treatment was not being followed. As a result of this review, the Company has not filed its audited financial statements for the fiscal year ended December 31, 2009 and for the three month period ending March 31, 2010, related management's discussion and analysis, annual information form and CEO and CFO certificates for such periods. The Company also expects to be restating its audited financial statements for the fiscal years ending December 31, 2007 and 2008.
On April 7, 2010 the Ontario Securities Commission ("OSC") and the Autorité Des Marchés Financiers ("AMF") issued a temporary management cease trade order (a "MCTO") under National Policy 12-203 which prohibits trading in securities of the Company by certain insiders of the Company. In keeping with its practice of not extending a MCTO beyond a period of two months, the OSC and the AMF have indicated that they intend to issue a general cease trade order ("CTO") tomorrow which will effectively prohibit the trading in Ontario or Quebec by any person of any securities of the Company, including any trading on the Toronto Stock Exchange.
The Company expects that the CTO will stay in effect until the Company has filed all required outstanding disclosure documents. It is expected that the securities regulatory authorities in the other jurisdictions in Canada will issue a similar CTO in due course.
The investigative portion of the review is now essentially complete and the re-statement process is presently underway. The Company is working to complete this process, in cooperation with its external auditors, as expeditiously as possible. "We are committed to finalizing this process as soon as possible, reporting on our revised results and implementing improvements in our internal controls," stated Eric Melka, acting CEO of Redline. "We continue to make significant improvements in our business and look forward to sharing our vision and strategy with all stakeholders once we complete this required course of action".
About Redline Communications
Redline Communications (www.redlinecommunications.com) is a leading provider of advanced wireless broadband products with more than 150,000 installations in 130 countries, and a global network of over 150 partners. Redline's experience and expertise helps service providers, enterprises and government organizations roll out wireless broadband networks to cost-effectively deliver high-bandwidth services, including video, voice and data communications. Redline award-winning infrastructure products include The AN80i and RDL 2000, which support its continued commitment to maintaining its wireless industry leadership with the development advanced products.
Forward Looking Statements
Certain statements in this release, including the Company's intention to file the Disclosure Documents, constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws and are made pursuant to the "safe harbour" provisions of such laws. Readers are cautioned not to place undue reliance on such statement. Unless otherwise required by applicable securities laws, Redline assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE Redline Communications Group Inc.
For further information: For further information: Craig Armitage, Equicom, Tel: (416) 815-0700