Additional Capital will Drive Accelerated Sales and Product Development
TORONTO, Nov. 22, 2021 /CNW/ - Redline Communications
Group Inc. ("Redline Communications" or the "Company") (TSX:
RDL), a leading provider of mission-critical data infrastructure
for remote and harsh environments, announces today it has
entered into a new credit agreement (the "Credit
Agreement") with Edgepoint Wealth Management ("Edgepoint") and
two existing investors. The Company intends to use the
proceeds to further drive new product development as well as to
expand the sales
and marketing efforts to drive increased revenues.
Terms of the CDN$7,000,000 term
loan facility include: 10% interest rate, serviced with
interest-only payments for the entire three-year term (only
the first year interest is guaranteed), and the issuance
of 3,500,000 common share purchase warrants (the "Warrants").
Each Warrant will be exercisable for one common share of the
Company for a period of three years from the date hereof, at
exercise prices of: (i) CDN$0.65 per common share with respect
to one-third of the Warrants; (ii) CDN$0.75 per common share with respect to
one-third of the Warrants, and (iii) CDN$0.85 per common share with respect
to one-third of the Warrants. One insider of the Company is
being issued 670,500 Warrants (so as to maintain its pro rata
ownership percentage) and the issuance of Warrants to such insider
will not materially affect control of the
Company.
Redline Communications CEO, Richard
Yoon, commented, "We are grateful for the support we
have received from Edgepoint and certain existing investors.
The proceeds from this facility will enable Redline
to accelerate sales and drive product innovation. As we noted
in our Q3 2021 earnings release last week, we are hitting some
notable milestones in our financial performance including a gross
margin of 66%, the second highest in the Company's history and
a backlog of orders of $12.5 million
which is the highest it has been in six years."
Commented Lee Matheson, partner
at Edgepoint Investment Group,"Redline appears to us to be at
a critical stage in its development as market acceptance of
its solutions is clearly building. The proceeds from this
facility should ensure that Redline has the ability to fully
capitalize on the opportunity in
front of it. Edgepoint has a
long history of providing long-term, stable
capital to high-growth, high potential
companies and we are happy to now
include Redline in this portfolio."
About Redline Communications
Redline Communications (TSX:RDL) designs and manufactures
powerful wide-area wireless networks for mission-critical
applications in challenging locations. Redline networks are used by
Oil & Gas companies onshore and offshore, Mining companies
on surface and underground operations, Distribution
Utilities for last mile broadband, Municipalities to remotely
monitor infrastructure, and by specialized telecom service
providers to deliver premium services. Hundreds of businesses
worldwide rely on Redline to engineer, plan and deliver
ruggedized, secure and reliable networks for their IoT, voice,
data, and video communications needs. For more
information, visit www.rdlcom.com.
About EdgePoint Wealth Management Inc.
EdgePoint Wealth Management Inc. is an independent investment
management firm based in Toronto. Owned and operated by
investors, it specializes in equity and fixed-income investing.
EdgePoint's long- term investment approach enables
partnerships with quality companies to find creative and
flexible financing solutions. Find out
more at www.edgepointwealth.com
Forward Looking Statements
Certain statements in this release may constitute
forward-looking statements or forward-looking information
within the meaning of applicable securities laws. In some cases,
forward-looking statements can be identified by terms such as
"could", "expect", "may", "will", "anticipate", "believe",
"intend", "estimate", "plan", "potential", "project" or other
expressions concerning matters that are not
historical facts. Readers are
cautioned not to place undue reliance
upon any such forward-looking statements. Such
forward-looking statements are not promises or guarantees of future
performance and involve both known and unknown risks and
uncertainties that may cause the actual results,
performance, achievements or developments of Redline to differ
materially from the results, performance, achievements or
developments expressed or implied by such forward-looking
statements. Forward- looking statements, by their nature, are
based on certain assumptions regarding expected
growth, management's current plans, estimates, projections,
beliefs, opinions and business prospects and opportunities
(collectively, the "Assumptions"). While the Company considers
these Assumptions to
be reasonable, based on the information currently
available, they may prove to be incorrect.
Many risks, uncertainties and other factors could cause the
actual results of Redline to differ materially from the results,
performance, achievements or developments expressed or implied by
such forward-looking statements. These risks, uncertainties and
other factors include but are not limited to the following:
significant competition, competitive pricing practices, cautious
capital spending by customers, industry consolidations, rapidly
changing technologies, evolving industry standards, frequent new
product introductions, short product life cycles and other trends
and industry characteristics affecting the telecommunications
industry; any material, adverse effects on Redline's performance if
its expectations regarding market demand for particular products
prove to be wrong; any negative developments associated with
Redline's suppliers and contract manufacturing agreements including
the Company's reliance on certain suppliers for key components;
potential penalties, damages or cancelled customer contracts from
failure to meet delivery and installation deadlines and any defects
or errors in Redline's current or planned products; fluctuations in
foreign currency exchange rates; potential higher operational and
financial risks associated with Redline's efforts to expand
internationally; a failure to protect Redline's intellectual
property rights, or any adverse judgments or settlements arising
out of disputes regarding intellectual property; changes in
regulation of the wireless industry or other aspects of the
industry; any failure to successfully operate or integrate
strategic acquisitions, or failure to consummate or succeed with
strategic alliances; and Redline's potential inability to attract
or retain the personnel necessary to achieve its business
objectives or to maintain an effective risk management strategy
(collectively, the "Risks").
For additional information on these Risks, see Redline's most
recently filed Annual Information Form ("AIF") and Annual
MD&A, which are available on SEDAR at www.sedar.com and on the
Company's website at www.rdlcom.com. Redline assumes no
obligation to update or revise any forward-looking statements
or forward-looking information, whether as a result of new
information, future events or otherwise, except as expressly
required by law. All forward looking statements contained in this
release are expressly qualified in their
entirety by this cautionary statement.
SOURCE Redline Communications Group Inc.