Redline Communications Announces Conversion of Debentures

TORONTO, Dec. 23, 2011 /CNW/ - Redline Communications Group Inc. (TSX: RDL) ("Redline" or the "Company"), a leading provider of specialized broadband wireless solutions, is pleased to announce that holders of an aggregate of $7,005,000 Cdn. principal amount of its senior secured convertible debentures (the "Debentures") have elected to convert their respective Debentures into common shares in the capital of the Company ("Common Shares").  The Debentures were issued on June 10, 2011 pursuant to a private placement of an aggregate principal amount of $8,300,000 Cdn. senior secured convertible debentures and are convertible at a price of $0.46 Cdn per Common Share. Subsequent to the conversion, $1,295,000 Cdn. principal amount of senior secured convertible debentures will remain outstanding.

In connection with the conversion of the Debentures, the Company will issue an aggregate of 16,036,414 Common Shares to the holders of the Debentures. This total includes the Common Shares issuable upon the conversion of all amounts attributable to the accrued but unpaid interest payable pursuant to the terms of the Debentures. The total number of Common Shares of the Company outstanding subsequent to this conversion is 37,558,852.

"The conversion of the Debentures is reflective of the support from our major shareholders and the Company's continued progress" said George Kypreos, Redline CFO. "One of our objectives was to ensure that the Company ended the 2011 calendar year with an improved balance sheet. The conversion of the Debentures helped us deliver on this objective as it strengthens the Company's balance sheet through the reduction of long-term debt and stabilizes the Company's results of operations by reducing interest expense and the quarterly fair market adjustment expense."

More information about the Debentures may be found at www.sedar.com.

About Redline Communications
Redline Communications (www.rdlcom.com) the innovator of Virtual Fiber™, a specialized broadband wireless solution used by companies and governments worldwide to cost-effectively deploy distributed services and applications.  Redline wireless Virtual Fiber™ solutions are used to facilitate and enhance public safety networks, deploy and extend secure networks, connect digital oil fields and smart grids, and bring dedicated internet access wherever and whenever it's needed. Redline has been delivering powerful, versatile and reliable wireless systems to governments, the military, oil and gas, and the telecom industry for over a decade through certified partners in the Americas, the Middle East, and Africa.

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.