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.
REDLINE COMMUNICATIONS GROUP INC.
Condensed Consolidated Interim Statements of Financial
Position
(Unaudited, Expressed in U.S. dollars)
September 30, December 31,
2021 2020
ASSETS
Current assets:
Cash $ 3,803,539 $ 5,334,486
Trade receivables 5,184,606 4,237,183
Other receivables 209,687 180,881
Inventories 4,679,132 5,492,931
Deferred cost of revenue 23 498
Prepaid expenses and other deposits 417,722 431,559
14,294,709 15,677,538
Non-current assets:
Property, plant and equipment 700,457 901,234
Intangible assets 922,459 1,148,050
Right of use assets 464,778 565,213
Other assets 85,278 65,223
2,172,972 2,679,720
Total Assets $ 16,467,681 $ 18,357,258
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade and other payables $ 3,641,582 $ 3,944,374
Income tax payable 29,459 29,459
Deferred revenue 931,300 2,057,944
Lease liabilities 298,456 250,068
4,900,797 6,281,845
Non-current liabilities:
Deferred revenue 1,151,589 364,391
Lease liabilities 356,902 554,396
Other financial liabilties - SIF Loan 307,162 -
Deferred Grant Income - SIF Loan 493,090 -
2,308,743 918,787
Total Liabilities 7,209,540 7,200,632
SHAREHOLDERS' EQUITY
Share capital 172,929,341 172,929,341
Contributed surplus 9,785,302 9,704,769
Deficit (173,456,503) (171,477,484)
9,258,140 11,156,626
Total Liabilities and Equity $ 16,467,681 $ 18,357,258
See accompanying notes to the interim condensed consolidated
financial statements
REDLINE COMMUNICATIONS GROUP INC.
Condensed Consolidated Interim Statements of Comprehensive
Loss
(Unaudited, Expressed in U.S. dollars)
Three months ended Nine months ended September
September 30, 30,
2021 2020 2021 2020
Revenue $5,194,806 $ 5,234,885 13,678,100 $ 13,832,804
Cost of revenue 1,789,633 2,506,794 4,829,013 5,909,158
Gross profit 3,405,173 2,728,091 8,849,087 7,923,646
Expenses:
Research and
development 1,063,194 946,317 3,439,727 3,116,847
General and
administrative 1,188,355 1,179,184 3,373,983 3,599,198
Sales and
marketing 1,294,906 1,103,574 3,849,943 3,959,091
Operations and
customer
support 316,828 221,574 971,165 667,848
3,863,283 3,450,649 11,634,818 11,342,984
Loss before
undernoted
items (458,110) (722,558) (2,785,731) (3,419,338)
Other (income)
expenses:
Canada
Emergency Wage
Subsidy (243,273) (334,763) (912,721) (1,040,717)
Finance
(income)
expense 11,501 7,422 23,379 16,179
Loss (Gain) on
fair market
value of
financial
instruments (93,654) (77,476) 26,564 (151,169)
Foreign
exchange loss
(gain) (45,785) 17,680 2,854 (51,170)
(371,211) (387,137) (859,924) (1,226,877)
Loss before
income taxes (86,899) (335,421) (1,925,807) (2,192,461)
Income tax
expense 9,841 14,498 53,212 58,644
Net loss and
total
comprehensive
loss $ (96,740) $ (349,919) $(1,979,019) $ (2,251,105)
Loss per share
Basic and
diluted $ (0.01) $ (0.02) $ (0.11) $ (0.13)
See accompanying notes to the interim condensed consolidated
financial statements
REDLINE COMMUNICATIONS GROUP
INC.
Condensed Consolidated Interim Statements of Changes
in Equity
(Unaudited, Expressed in
U.S. dollars)
Share Contributed Deficit Total
capital surplus
Balance at
January 1,
2020 $172,929,341 $ 9,525,694 $(167,577,777) 14,877,258
Net loss - - (2,251,105) (2,251,105)
Stock
option
expense - 137,626 - 137,626
Balance at
September
30, 2020 $172,929,341 $ 9,663,320 $(169,828,882) $ 12,763,779
Balance at
January 1,
2021 $172,929,341 $ 9,704,769 $(171,477,484) $ 11,156,626
Net loss - - (1,979,019) (1,979,019)
Stock
option
expense - 80,533 - 80,533
Balance at
September
30, 2021 $172,929,341 $ 9,785,302 $(173,456,503) $ 9,258,140
See accompanying notes to the interim condensed consolidated
financial statements
REDLINE COMMUNICATIONS GROUP INC.
Condensed Consolidated Interim Statements of Cash
Flows
(Unaudited, Expressed in U.S. dollars)
Three months ended Nine months ended September
September 30, 30,
2021 2020 2021 2020
Cash flows from