TORONTO, March 15 /CNW/ - Redline Communications Group Inc. ("Redline" or the "Company") today announced that a preliminary internal review has revealed that the Company may not have been following proper revenue recognition accounting policies.
As a result, the Company has formed a special committee of its directors, consisting of Mr. Eric Melka and Ms. Nancy Orr. The Special Committee is responsible for supervising a review of the Company's historical financial statements and determining the extent to which these issues could result in the Company being required to restate any of these financial statements. The Special Committee will also be considering the adequacy of the Company's internal controls. The Special Committee is being advised by external legal counsel, which has engaged Grant Thornton LLP to assist in the review.
While it is too early to determine the precise amounts or effect of the issues that have been identified, the preliminary review indicates that they are material. As a result of this review, the Company anticipates that it will not be in a position to finalize, by the deadline of March 31, 2010, its audited financial statements for the fiscal year ended December 31, 2009, related management's discussion and analysis and annual information form. The Company and its advisors intend to work expeditiously to conclude the review, determine the scope and nature of any issues, and finalize any outstanding financial statements and related disclosure as soon as possible, although at this stage it is uncertain as to when this will occur.
The Company will provide updates on its affairs in accordance with its obligations under Canadian securities laws and as its internal review progresses.
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 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. Statements related to the Special Committee's planned internal review into Redline's revenue recognition accounting policies and the adequacy of Redline's internal controls, and the potential for a restatement of Redline's historical financial statements as a result of such investigation are forward-looking statements which are subject to certain assumptions, risks and uncertainties. These risks and uncertainties include such factors as the Special Committee's ability to conclude its review in a timely manner, the results of the internal review and Redline's ability to restate its historical financial statements in a timely manner if such a restatement is required and other similar factors that may cause the actual results or performance of Redline to differ materially from the results or performance expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on such statements. 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, (416) 815-0700