Redline Reports Strong Second Half and Full Year 2006 Results



    /NOT FOR DISTRIBUTION IN THE UNITED STATES/

    Company demonstrates significant year on year growth with WiMAX and
    broadband wireless sales

    TORONTO, March 8 /CNW/ - Redline Communications, Inc. (AIM: REDL), a
leading provider of WiMAX and wireless broadband solutions today announced
strong revenue and financial results for the second half and year ended
December 31, 2006.

    All figures in U.S. Dollars unless specified

    
    Financial Highlights:
        -  Full year revenue increased to $35.5 million, a 52% increase over
           2005 revenues, which exceeded market expectations
        -  2H revenue increased 17% to $19.1 million compared to
           $16.4 million in 1H 2006; 9th consecutive six month period of
           revenue growth
        -  Net loss for the year of $15.2 million ($4.00 per share) compared
           to a loss of $15.6 million ($17.71 per share) for 2005 (weighted
           average number of common shares for the period increased to
           3,789,304 from 881,500)
        -  WiMAX Forum Certified(TM) RedMAX product revenue of $15 million or
           42% of total revenue; RedMAX gross margins met 2006 target
        -  $18.0 million in cash at year end compared to $7.5 million at
           close of 2005

    Operational Highlights
        -  Successful $24.8 million (pnds stlg 12.68 million) placing and
           admission to the AIM market of the London Stock Exchange ("AIM")
           on December 6, 2006, and an over-allotment exercise of
           $2.4 million in January 2007
        -  Multiple RedMAX customers with total orders of more than $1M;
           28 RedMAX customers with live commercial, revenue-generating WiMAX
           Forum Certified(TM) deployments
        -  Recognized revenue from more than 100 trials and deployments of
           WiMAX Forum Certified(TM) RedMAX at year end
        -  Strengthened broadband wireless infrastructure product family with
           the introduction of the high-performance AN-80i backhaul product
        -  Continued WiMAX product development leadership with initial
           testing of nomadic and mobile versions of the technology standard
        -  'First to market' leadership as the first company to achieve WiMAX
           Forum Certification(TM) for a complete WiMAX system
        -  Continued growth of Redline's emerging market footprint, with
           deployments in 50+ countries
    

    Majed Sifri, President and Chief Executive Officer of Redline:
    --------------------------------------------------------------
    "2006 was a pivotal year for Redline. Not only did we successfully
complete our listing on AIM but led the industry with the world's first WiMAX
Forum Certification, our RedMAX system, which in turn generated well over
100 WiMAX customers throughout the world. We also expanded our RedCONNEX
family, with the introduction of our AN-80i product line, a more powerful and
broader range of licensed exempt products.
    Our focus on bringing WiMAX connectivity to emerging markets continues at
pace and has helped us to capture a significant share of today's WiMAX market.
We have proven that Redline delivers a successful business model for carriers
in these regions and our continued investment in sales and marketing coupled
with our commitment to R&D will ensure we remain one of the leading providers
in this market place."

    Tom Hearne, Chief Financial Officer, Redline Communications Inc.
    ----------------------------------------------------------------
    "We are very pleased with our record 2006 results, having achieved our
revenue target and grown our RedMAX sales to more than 42% of total revenue.
With the success of our IPO and continued momentum in sales of WiMAX and
broadband wireless infrastructure products, we believe we are well positioned
to meet our growing targets in 2007."

    Chief Executive Officer Review

    With the announcement of the Company's first annual results following a
successful listing on AIM in December we are extremely pleased to report that
Redline has succeeded in maintaining its track record of strong year on year
growth achieving 52% year over year growth and a four year CAGR of 114%.
    Redline has positioned itself as a leader in the WiMAX market, which has
experienced accelerated growth throughout 2006 and into 2007.
Telecommunications carriers worldwide have made the strategic decision to
adopt WiMAX technology to rollout their fixed, nomadic and mobile
communications networks. With Redline's global sales and marketing efforts, we
have established a solid footprint in the market with more than 100 trials and
deployments in less than 11 months after the launch of our first WiMAX Forum
Certified products. To maintain its market leadership, Redline will continue
to invest in the development of WiMAX and broadband wireless infrastructure
solutions. We believe our product suite supports a number of advanced
communications services that carriers and other service providers must offer
to be successful in the highly competitive telecommunications market.
    As evidenced at recent industry events, WiMAX is now firmly established
as an alternative solution for operators that want to expand their networks
and service offering to generate additional revenue. Global telecommunications
equipment manufacturers, including 3G technology providers, have recognized
that WiMAX has emerged as a truly disruptive and competitive technology, and
is delivering a global, affordable and advanced alternative for delivering
fixed and mobile broadband services.

    Outlook
    Redline is now recognized in the WiMAX marketplace as a leading
technology provider and is well positioned for continued growth as more
operators choose to roll out WiMAX networks. The Company is focused on scaling
its resources to support the ongoing development and deployment of its WiMAX
and broadband wireless solutions. In 2007, Redline will focus on facilitating
the rapid expansion of our established customers' RedMAX networks, and will
generate additional carrier wins by demonstrating the technology and business
benefits of our products. We believe Redline is well positioned to meet
analyst expectations for revenues of between $25 million and $27 million for
the first six months of 2007.

    Majed Sifri


    Investor Conference Call

    Redline's FY2006 conference call will be held on Thursday, March 8 at
2pm GMT (9am EST). Qualified investors and members of the financial community
are invited to participate in the conference call by dialing (toll free):

    
    UK:       0808 109 1498
    US:       1866 793 4279
    Canada:   1866 270 8076
    

    For details on accessing the live webcast, visit the Investor section on
Redline's website www.citycomments.co.uk. An archive of the on-line broadcast
will be available following the call.


    
                         REDLINE COMMUNICATIONS, INC.
                         CONSOLIDATED BALANCE SHEETS
                         (EXPRESSED IN U.S. DOLLARS)

                                                   Year Ended December 31,
                                            ---------------------------------
                                                  2005              2006
                                            ---------------------------------
                                                                  (unaudited)
    Assets
    Current assets:
      Cash and cash equivalents............  $    7,495,996   $   17,985,391
      Restricted cash......................          93,634            8,033
      Accounts receivable..................       5,176,862       12,359,585
      Other receivables....................         242,023          468,028
      Inventories..........................       2,695,307        9,087,367
      Prepaid expenses.....................         438,346          352,358
                                            ---------------------------------
                                                 16,142,168       40,260,762
    Property, plant and equipment .........       1,114,076        1,166,377
    Other assets...........................         107,538          105,842
                                            ---------------------------------
    Total assets...........................  $   17,363,782   $   41,532,981
                                            ---------------------------------
                                            ---------------------------------

       Liabilities and Shareholders' Equity

    Current liabilities:
      Accounts payable and accrued
       liabilities.........................  $    4,759,085   $    9,221,150
      Deferred revenue.....................       1,578,556        2,362,612
      Current portion of capital lease
       obligations.........................         152,658          215,639
      Current portion of loan payable......               -        1,244,528
                                            ---------------------------------
                                                  6,490,299       13,043,929
    Loan payable...........................               -        3,255,472
    Capital lease obligations..............         175,818          151,653
    Shareholders' equity :
      Share capital........................      70,818,008       97,746,833
      Share purchase loan..................        (929,664)        (413,408)
      Contributed surplus..................       1,281,782        3,395,260
      Deficit..............................     (60,783,929)     (75,958,226)
      Cumulative translation adjustment....         311,468          311,468
                                            ---------------------------------
                                                 10,697,665       25,081,927
                                            ---------------------------------
      Total liabilities and shareholders'
       equity..............................  $   17,363,782       41,532,981
                                            ---------------------------------
                                            ---------------------------------


                         REDLINE COMMUNICATIONS, INC.
              CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
                         (EXPRESSED IN U.S. DOLLARS)

                             Years ended               Six months ended
                             December 31,                 December 31,
                     --------------------------------------------------------
                          2005         2006            2005         2006
                     --------------------------------------------------------
                             (Unaudited)                 (Unaudited)
    Revenue:
      Product....... $ 21,551,491  $ 32,905,403   $ 10,815,532  $ 17,744,688
      Maintenance...    1,869,726     2,580,903      1,070,024     1,369,558
                     --------------------------------------------------------
                       23,421,217    35,486,306     11,885,556    19,114,246
    Cost of
     revenue(1).....   15,378,632    22,371,398      7,994,881    12,227,243
                     --------------------------------------------------------
    Gross margin....    8,042,585    13,114,908      3,890,675     6,887,003
    Expenses:
      Research and
       develop-
       ment(1)......    7,403,351     9,126,903      4,033,590     4,802,192
      Finance and
       adminis-
       tration(1)...    3,542,312     4,180,955      2,142,712     2,005,455
      Sales and
       marketing(1)    11,202,807    13,332,240      5,808,070     6,770,366
                     --------------------------------------------------------
                       22,148,470    26,640,098     11,984,372    13,578,013
                     --------------------------------------------------------
    Loss before
     the undernoted   (14,105,885)  (13,525,190)    (8,093,697)   (6,691,010)
    Other expenses
     (income):
      Interest and
       other........      523,232        67,632        508,942        91,209
      Foreign
       exchange loss
       (gain).......      (54,819)      276,609        (94,842)      141,301
      Amortization
       of property,
       plant and
       equipment....    1,033,617     1,152,582        659,857       727,266
                     --------------------------------------------------------
                        1,502,030     1,496,823      1,073,957       959,776
                     --------------------------------------------------------
    Loss before
     income taxes...  (15,607,915)  (15,022,013)    (9,167,654)   (7,650,786)
    Income taxes....        5,147       152,284          3,402        96,628
                     --------------------------------------------------------
    Loss for
     the period.....  (15,613,062)  (15,174,297)    (9,171,056)   (7,747,414)
    Deficit,
     beginning of
     period.........  (45,170,867)  (60,783,929)   (51,612,873)  (68,210,812)
                     --------------------------------------------------------
    Deficit, end
     of period...... $(60,783,929)  (75,958,226)   (60,783,929)  (75,958,226)
                     --------------------------------------------------------
                     --------------------------------------------------------
    Basic and
     diluted loss
     per share...... $     (17.71) $      (4.00)        (10.40)        (1.16)
    Weighted average
     number of common
     shares used in
     basic and
     diluted loss
     per share......      881,500     3,789,304        881,500     6,697,108
                     --------------------------------------------------------
                     --------------------------------------------------------
    (1)Includes
     stock-based
     compensation
     expense as
     follows:
    Cost of
     revenue........ $    127,739  $    135,785  $      63,873  $     (5,495)
    Expenses:
      Research and
       development.       236,891       554,319        118,446       292,304
      Finance and
       administration      94,265       865,787         47,132       306,369
      Sales and
       marketing....      359,380       557,587        179,687       160,086



                         REDLINE COMMUNICATIONS, INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                         (EXPRESSED IN U.S. DOLLARS)


                                                 Years ended December 31,
                                            ---------------------------------
                                                 2005              2006
                                            ---------------------------------
                                                     (unaudited)
    Cash provided by (used in):
    Operating activities:
      Loss for the year....................  $  (15,613,062)  $  (15,174,297)
      Items not affecting cash:
        Amortization of property, plant
         and equipment.....................       1,033,617        1,152,582
        Stock-based compensation expense...         818,275        2,113,478
        Unrealized foreign exchange loss
         (gain)............................         405,000                -
      Change in non-cash operating working
       capital.............................         746,400       (8,466,983)
                                            ---------------------------------
                                                (12,609,770)     (20,375,220)
    Financing activities:
      Issuance of share capital, net of
       issuance  costs.....................      14,893,940       27,445,081
      Loan payable.........................                        4,500,000
      Principal payment of capital lease
       obligations.........................         (87,214)        (180,896)

                                            ---------------------------------
                                                 14,806,726       31,764,185
    Investing activities:
      Purchase of property, plant and
       equipment...........................        (759,299)        (985,171)
      Decrease in restricted cash..........         736,366           85,601
                                            ---------------------------------
                                                    (22,933)        (899,570)
                                            ---------------------------------
    Increase in cash and cash
     equivalents...........................       2,174,023       10,489,395
    Cash and cash equivalents, beginning of
     year..................................       5,321,973        7,495,996
                                            ---------------------------------
    Cash and cash equivalents,
     end of year...........................  $    7,495,996   $   17,985,391
                                            ---------------------------------
                                            ---------------------------------
    Supplemental cash flow information:
    Interest paid..........................  $      171,089   $      145,512
    Supplemental disclosures relating to
     non-cash financing and investing
     activities:
      Purchase of property, plant and
       equipment under capital leases......         273,938          219,712
                                            ---------------------------------
                                            ---------------------------------
    

    Non-GAAP financial measures
    This press release contains non-GAAP financial measures, including net
income and earnings per share for the second quarter of fiscal 2007 excluding
the impact of stock compensation charges. Redline management believes that
these non-GAAP financial measures, when considered together with the GAAP
financial measures, provide information that is useful to investors in
understanding period-over-period operating results separate and apart from
items that may, or could, have a disproportionately impact on results in any
particular period. Management also believes that these non-GAAP financial
measures enhance the ability of investors to analyze Redline business trends
and to better understand the company's performance. In addition, Redline may
utilize non-GAAP financial measures as a guide in its forecasting, budgeting,
and long-term planning process and to measure operating performance for some
management compensation purposes. Any analysis of non-GAAP financial measures
should be used only in conjunction with results presented in accordance with
GAAP.

    

                                                Year ended Dec 31, 2006
                                   ------------------------------------------

                                         GAAP       Adjustment     Non-GAAP
                                                    (Unaudited)
    Revenue:
    Product Revenue...............    32,905,403                  32,905,403
    Maintenance...................     2,580,903                   2,580,903
                                   ------------------------------------------
                                      35,486,306             -    35,486,306
    Cost of revenue...............    22,371,398      (135,785)   22,235,613
                                   ------------------------------------------
    Gross margin..................    13,114,908       135,785    13,250,693
    Expenses:
    Research and development......     9,126,903      (554,319)    8,572,584
    Finance and administration....     4,180,955      (865,787)    3,315,168
    Sales and marketing...........    13,332,240      (557,587)   12,774,653
                                   ------------------------------------------
                                      26,640,098    (1,977,693)   24,662,405
    Loss before undernoted........   (13,525,190)    2,113,478   (11,411,712)
    Interest and other............        67,632                      67,632
    Foreign exchange loss
     (gain).......................       276,609                     276,609
    Amortization of property,
     plant and equipment..........     1,152,582                   1,152,582
                                   ------------------------------------------
                                       1,496,823             -     1,496,823
                                   ------------------------------------------
    Loss before income
     taxes........................   (15,022,013)    2,113,478   (12,908,535)
    Income taxes..................       152,284                     152,284
    Loss for the period...........   (15,174,297)    2,113,478   (13,060,819)
    Deficit, beginning of
     year.........................   (60,783,929)                (60,783,929)
                                   ------------------------------------------
    Deficit, end of period........   (75,958,226)    2,113,478   (73,844,748)
    Basic and diluted loss per
     share........................         (4.00)                      (3.45)
    Weighted average number of
     common shares................     3,789,304                   3,789,304
                                   ------------------------------------------



                                        Six months ended December 31, 2006
                                   -----------------------------------------

                                         GAAP       Adjustment     Non-GAAP
                                                    (Unaudited)
    Revenue:
    Product Revenue...............    17,744,688                  17,744,688
    Maintenance...................     1,369,558                   1,369,558
                                   ------------------------------------------
                                      19,114,246             -    19,114,246
    Cost of revenue...............    12,227,243         5,495    12,232,738
                                   ------------------------------------------
    Gross margin..................     6,887,003        (5,495)    6,881,508
    Expenses:
    Research and development......     4,802,192      (292,304)    4,509,888
    Finance and administration....     2,005,455      (306,369)    1,699,086
    Sales and marketing...........     6,770,366      (160,086)    6,610,280
                                   ------------------------------------------
                                      13,578,013      (758,759)   12,819,254
    Loss before undernoted........    (6,691,010)      753,264    (5,937,746)
    Interest and other............        91,209                      91,209
    Foreign exchange loss
     (gain).......................       141,301                     141,301
    Amortization of property,
     plant and equipment..........       727,266                     727,266
                                   ------------------------------------------
                                         959,776             -       959,776
                                   ------------------------------------------
    Loss before income
     taxes........................    (7,650,786)      753,264    (6,897,522)
    Income taxes..................        96,628                      96,628
                                   ------------------------------------------
    Loss for the period...........    (7,747,414)      753,264    (6,994,150)
    Deficit, beginning of
     year.........................   (68,210,812)                (68,210,812)
                                   ------------------------------------------
    Deficit, end of period........   (75,958,226)      753,264   (75,204,962)
    Basic and diluted loss per
     share........................         (1.16)                      (1.04)
    Weighted average number of
     common shares................      6,697,108                   6,697,108
                                   ------------------------------------------
    

    Background
    Redline Communications, Inc. designs, manufactures, and sells broadband
wireless products that connect individuals and businesses together. Redline's
products are used by broadband service providers, network operators and their
subscribers as well as enterprises worldwide to establish fast, reliable
wireless communications networks for Internet infrastructure and private
network applications.
    Redline offers two main product lines: RedMAX family of WiMAX products -
currently the Company's primary focus, and proprietary broadband wireless
infrastructure products used by enterprises and communications service
providers to establish high-bandwidth links. Both Redline's WiMAX and
proprietary broadband wireless infrastructure products provide high capacity,
high-bandwidth, and Non Line of Sight ('NLOS') connections with demonstrated
performance, reliability and security.
    With more than 35,000 installations in 75 countries, and a global network
of over 100 partners, Redline's experience and expertise helps service
providers, enterprises and government organizations roll out the services and
applications that drive their business forward.

    Company history
    Redline was founded in 1999 with the aim of becoming a leader in
developing and marketing products for the broadband wireless communications
industry. At that time, carriers and other large operators were beginning to
examine the use of wireless solutions to deliver broadband services. The
Company's products mix, which are WiMAX Forum Certified, have been trialed
with and/or deployed for fixed and nomadic broadband applications by more than
100 carriers, other service providers and enterprises in over 40 countries. In
addition, the Company continues to develop WiMAX technologies to expand its
portfolio of products to include devices that will enable the delivery of
portable or mobile broadband wireless access services in a range of
environments.

    Product summary
    Redline designs, manufactures, and sells broadband wireless products that
connect individuals and businesses together. The Company's products are used
by broadband service providers, network operators and their subscribers as
well as enterprises worldwide to establish fast, reliable wireless
communications networks for Internet infrastructure and private network
applications. Redline offers two main product lines with primary focus is its
RedMAX branded portfolio of WiMAX products. The Company also offers
proprietary broadband wireless infrastructure products used by enterprises and
communications service providers to establish high-bandwidth links. Both of
the Company's WiMAX and proprietary broadband wireless infrastructure products
provide high capacity, high-bandwidth, and NLOS connections with demonstrated
performance, reliability and security.

    The market opportunity
    Redline addresses certain principal markets, including emerging broadband
markets that are served by carriers that do not have sufficient infrastructure
to support the delivery of broadband services and in developed broadband
markets as an extension or alternative to existing broadband wireline
infrastructures.
    Redline is also focused on current and future WiMAX solutions that will
address a need in mature broadband markets and bring mobile broadband wireless
services based on the WiMAX standards to consumers as soon as 2008.
    Broadband wireless technologies are becoming a reliable and
cost-effective complement or alternative to wireline networks for the
provision of data, voice and video services. Currently, there close to 2.5
million broadband wireless access subscribers worldwide with predictions that
there will be an accumulated 87 million subscribers by the end of 2012, of
which 67 million will be WiMAX subscribers.
    (Source Maravedis: "Worldwide Market Analysis and Trends 2006-2012",
September 2006)

    Financial Review

    Redline has generated significant year-on-year revenue growth from its
product and services offerings. Over the last five years, the Company has
generated a majority of its annual revenues from its broadband wireless
product lines, including its RedMAX branded portfolio of WiMAX products and
its wireless backhaul products. These products are sold through distributors
and resellers throughout the world.
    The Company's first mover advantage and commitment to customer service
has caused revenue to grow in the last four fiscal years from $1.7 million in
the 2002 fiscal year to $23.4 million in the 2005 fiscal year to $35.5 million
in the 2006 fiscal year.

    Redline's Products

    Redmax - WiMAX Forum Certified Products
    Redline's RedMAX(TM) system is the world's first WiMAX Forum
Certified(TM) solution to deliver the elements operators need to enable the
profitable delivery of revenue-generating fixed and nomadic wireless broadband
services. Redline's WiMAX-based RedMAX family of products is delivering the
benefits of its third-generation OFDM technology and its core products to a
larger customer base, including operators with last-mile access requirements
for SOHO and residential customers.
    The RedMAX family of products includes the AN-100U WiMAX Forum Certified
sector controller, which was designed for easy and cost-effective deployment,
and facilitates the rapid provisioning of fixed and nomadic broadband wireless
services. Its low latency is designed to ensure reliable delivery of
time-sensitive services, including voice traffic, VoIP, video and prioritized
data traffic. Up to six RedMAX sector controllers can be deployed to form a
network base station, each supporting hundreds of simultaneous subscribers per
sector, or thousands per base station.
    Redline's WiMAX products also include the RedMAX Indoor and Outdoor
Subscriber Units. The outdoor RedMAX SU-O subscriber unit is designed for NLOS
or LOS connections and includes an integrated antenna for easy installation.
The RedMAX SU-I is an indoor modem with an integrated antenna that offers plug
and play capability for easy installation by the end-user. The RedMAX SU-I
features an LED signal-strength indicator that makes it easy for end-users to
determine the best positioning and signal strength for their subscriber unit.
The user-install feature eliminates the need for expensive professional
installations by the carrier, presenting a more attractive business model for
rolling out services to individual and residential users.

    RedMAX Management Suite (RMS): The Company's RedMAX Management Suite
enables carriers to easily deploy, control, monitor and upgrade their Company
components network-wide through an intuitive, user-friendly GUI. The Company's
RMS acts as an element management gateway between the Company network
equipment and the operator's existing core network, enabling integrated
services, alarm management, performance management and billing systems. The
RedMAX Management Suite offers flexible and adaptive architecture to enable
carriers to easily integrate WiMAX into their network and benefit from the
delivery of advanced broadband wireless services.

    RedCONNEX Proprietary Broadband Wireless Infrastructure Products

    RedCONNEX AN-50e: The AN-50e is the Company's high speed wireless
ethernet bridge configured for point-to-point operation, with point to
multipoint operation capabilities in the 5.4 and 5.8 GHz license-exempt bands.
Accommodating both backhaul and access functions, the AN-50e system is the
industry's first true high performance, high capacity, multi-services OFDM
platform. The AN-50e system delivers an over the air rate of up to 72 Mbps,
link distances of up to 50 miles (80 kilometres) and robust NLOS capabilities.

    RedCONNEX AN-30e: The AN-30e is a carrier-grade backhaul solution for
mobility and enterprise network operators in the 5.4 and 5.8 GHz
license-exempt bands. The AN-30e delivers high-throughput, reliable links
exceeding 80 km (50 mi) in clear LOS conditions. The system is the ideal
platform for migration to VoIP - capable of supporting up to eight T1/E1
circuits and mixed TDM/IP traffic applications. The AN-30e is a cost-effective
alternative to leasing circuits and installing new wired services.

    RedCONNEX AN-80i: The AN-80i broadband wireless system is a high
capacity, NLOS, low-cost backhaul and bridging solution. Operating in the
license-exempt 5.4 and 5.8 GHz frequency bands, the AN-80i is ideal for
point-to-point links, of up to 80 km (50 miles) in clear LOS conditions, as
well as robust NLOS connections. The AN-80i supports advanced applications
including transparent LAN, VoIP and high-quality video.

    Redline's Sales and Distribution
    The Company has implemented a global distribution and channel sales
strategy. The Company has established a direct sales organization that is
supported by a network of more than 100 Redline certified partners, value
added distributors and OEM partners. These channels have enabled the Company
to scale its global sales and support resources to reach more customers
worldwide than it would have been able to independently. The Company's sales
teams operate in four international regions: Americas, Europe and Africa,
Middle East and Asia Pacific, each with a designated managing director that
oversees a team of regional sales directors. The sales directors manage the
Company's relationships with its regional distributors, channel partners and
systems integrators, and are responsible for demand creation, identifying and
generating new customer opportunities.
    The Company also has a team of sales engineers that can deliver a high
level of support to customers through each stage of the Company's product
deployments. In addition, the Company has increased its sales force in key
emerging markets including Asia Pacific, Africa, the Middle East, Latin
America and Eastern Europe, which are the markets the Directors expect to be
the primary adopters of WiMAX technologies. The Company has formed strategic
relationships with vendors in the WiMAX ecosystem for the ongoing development
and sales of its RedMAX and other broadband wireless products. The Company's
products are also distributed through a number of broadband wireless OEMs,
including Selex Communications Ltd., Fastcomm (Fast Communications Systems
(PTY) Ltd.), Nateks Networks, Datang Telecom Technology and Industry Company,
SIAE Microelettronica S.p.A., Alvarion Ltd. and Airspan Networks Inc. These
companies purchase, re-brand and sell the Company's wireless backhaul and
access products as part of their wireless offerings.

    Forward-Looking Statements

    This document includes statements that are, or may be deemed to be,
'forward-looking statements'. These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
'believes', 'estimates', 'plans', 'projects', 'anticipates', 'expects',
'intends', 'may', 'will', or 'should' or, in each case, their negative or
other variations or comparable terminology. These forward-looking statements
include matters that are not historical facts. They appear in a number of
places throughout this document and include statements regarding the
Directors' current intentions, beliefs or expectations concerning, among other
things, the Company's results of operations, financial condition, liquidity,
prospects, growth, strategies and the broadband industry.
    By their nature, forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances. Actual results and
developments could differ materially from those expressed or implied by the
forward-looking statements. Please see the factors discussed in Part II of
this document in this regard, in particular those relating to the legal and
regulatory risks associated with the BWA market.
    Forward-looking statements may and often do differ materially from actual
results. Any forward-looking statements in this document are based on certain
factors and assumptions, including the Directors' current view with respect to
future events and are subject to risks relating to future events and other
risks, uncertainties and assumptions relating to the Company's operations,
results of operations, growth strategy and liquidity. While the Directors
consider these assumptions to be reasonable based on information currently
available, they may prove to be incorrect. Prospective investors should
specifically consider the factors identified in this document that could cause
actual results to differ before making an investment decision. Save as
required by law or by the AIM Rules, the Company undertakes no obligation
publicly to release the results of any revisions to any forward-looking
statements in this document that may occur due to any change in the Directors'
expectations or to reflect events or circumstances after the date of this
document.

    About Redline Communications
    Redline Communications is the leading provider of standards-based
wireless broadband solutions. Redline's RedMAX(TM) WiMAX Forum Certified(TM)
systems and award-winning RedCONNEX(TM) family of broadband wireless
infrastructure products enable service providers and other network operators
to cost-effectively deliver high-bandwidth services including voice, video and
data communications. Redline is committed to maintaining its wireless industry
leadership with the continued development of WiMAX and other advanced wireless
broadband products. With more than 35,000 installations in 75 countries, and a
global network of over 100 partners, Redline's experience and expertise helps
service providers, enterprises and government organizations roll out the
services and applications that drive their business forward. For more
information, visit www.redlinecommunications.com.

    NOTE: All registered and unregistered trademarks mentioned in this
    release are the property of their respective owners.





For further information:

For further information: Redline Communications: Tom Hearne, Chief
Financial Officer, Carolyn Anderson, Communications Director,
canderson@redlinecommunications.com, Tel: (905) 479-8344; Buchanan
Communications: Jeremy Garcia, James Strong, Bobby Morse,
jeremyg@buchanan.uk.com, Tel: +44 (0)20 7466 5000; Canaccord Adams: Chris
Bowman, Tel: +44 (0)20 7050 6500


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