Smart Grid Networks Kevin F. R. Suitor VP, Corporate Marketing Redline Communications Inc. Telephone: (905) 948-2299 [email_address]

Legal Disclaimer This documentation is a presentation of general background information about Redline Communications Group Inc.’s (“Redline”) business and activities current as of the date of this presentation, unless otherwise indicated. It is information in a summary form and does not purport to be complete. Certain statements in this presentation may contain words such as "could", "expects", "may", "anticipates", "believes", "intends", "estimates", "targets", "envisions", "seeks" and other similar language which may constitute forward-looking statements or information under applicable securities legislation. These statements are based on Redline’s current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which Redline operates. These statements are subject to important assumptions, risks and uncertainties, which are difficult to predict and the actual outcome may be materially different. Further, actual results or events could differ materially from those contemplated in forward-looking statements as a result of the following (i) risks and uncertainties relating to Redline’s business including: significant competition, competitive pricing practice, cautious capital spending by customers, industry consolidation, rapidly changing technologies, evolving industry standards, frequent new product introductions and short product life cycles, and other trends and industry characteristics affecting the telecommunications industry; any material adverse affects 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 our 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; Redline’s potential inability to attract or retain the personnel necessary to achieve its business objectives or to maintain an effective risk management strategy; (ii) risks and uncertainties relating to Redline’s liquidity, financing arrangements and capital including: any inability of Redline to manage cash flow fluctuations to fund working capital requirements or achieve its business objectives in a timely manner or obtain additional sources of funding; or any negative impact on Redline’s ability to make future acquisitions, raise capital, issue debt and retain employees arising from stock price volatility and any declines in the market price of Redline’s publicly traded securities. Unless otherwise required by applicable securities laws, Redline disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

This documentation is a presentation of general background information about Redline Communications Group Inc.’s (“Redline”) business and activities current as of the date of this presentation, unless otherwise indicated. It is information in a summary form and does not purport to be complete.

Certain statements in this presentation may contain words such as "could", "expects", "may", "anticipates", "believes", "intends", "estimates", "targets", "envisions", "seeks" and other similar language which may constitute forward-looking statements or information under applicable securities legislation. These statements are based on Redline’s current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which Redline operates. These statements are subject to important assumptions, risks and uncertainties, which are difficult to predict and the actual outcome may be materially different.

Further, actual results or events could differ materially from those contemplated in forward-looking statements as a result of the following (i) risks and uncertainties relating to Redline’s business including: significant competition, competitive pricing practice, cautious capital spending by customers, industry consolidation, rapidly changing technologies, evolving industry standards, frequent new product introductions and short product life cycles, and other trends and industry characteristics affecting the telecommunications industry; any material adverse affects 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 our 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; Redline’s potential inability to attract or retain the personnel necessary to achieve its business objectives or to maintain an effective risk management strategy; (ii) risks and uncertainties relating to Redline’s liquidity, financing arrangements and capital including: any inability of Redline to manage cash flow fluctuations to fund working capital requirements or achieve its business objectives in a timely manner or obtain additional sources of funding; or any negative impact on Redline’s ability to make future acquisitions, raise capital, issue debt and retain employees arising from stock price volatility and any declines in the market price of Redline’s publicly traded securities. Unless otherwise required by applicable securities laws, Redline disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

“ The nicest thing about standards is that there are so many of them to choose from.” Ken Olsen, founder of Digital Equipment Corporation, 1977 US computer engineer & industrialist

“ The nicest thing about standards is that there are so many of them to choose from.”

Ken Olsen, founder of Digital Equipment Corporation, 1977

US computer engineer & industrialist

Definition of Smart Grids EPRI’s definition of smart grid as “a modernization of the electricity delivery system” to monitor, protect, and optimize operations of its interconnected elements, “from the central and distributed generator … to industrial users and building automation systems …,” gives credence to the Automation Federation’s efforts to ensure the use of internationally recognized standards, like those developed by ISA, and automation professionals’ involvement to the success of the smart grid framework.

EPRI’s definition of smart grid as “a modernization of the electricity delivery system” to monitor, protect, and optimize operations of its interconnected elements, “from the central and distributed generator … to industrial users and building automation systems …,” gives credence to the Automation Federation’s efforts to ensure the use of internationally recognized standards, like those developed by ISA, and automation professionals’ involvement to the success of the smart grid framework.

Smart Grid Characteristics Self Heals – The grid monitors itself and automatically detects, analyzes, responds to, and restores grid components or network sections to maintain reliability, security, affordability, power quality, and an efficient state. Motivates and Includes the Consumer – Individual, business, and industry consumers become integral, active parts of the electric power system. Participating in electricity markets will benefit both the individual consumer and overall system reliability. Resists Attack – It is critical for the modern grid to address security from the outset, making security a requirement and ensuring an integrated and balanced approach across the system. Provides Power Quality For 21st Century Needs – Sensitive loads represent an increasing portion of the total power system load. The power quality delivered by the modern grid must be improved to meet the requirements of these sensitive loads. In addition, improvements in the design of the loads will make them more tolerant of distorted power. Accommodates all Generation and Storage Options – The modern grid will accommodate a portfolio of diverse generation types, necessitating a greatly simplified interconnection process analogous to plug-and-play in today’s computer environment, particularly at the distributed energy resources level. Enables Markets – The modern grid will integrate electricity markets into the fabric of the electric system because operations, planning, pricing, and reliability are dependent on how open-access markets are designed and instituted. For this reason, it will not only support wholesale electric markets but also retail markets where applicable. Optimizes Assets and Operates Efficiently – Assets will be managed in concert so that, as a system, they can deliver functionality at a minimum cost. For example, advanced sensing and robust communications will allow early problem detection, preventive maintenance and corrective action.

Self Heals – The grid monitors itself and automatically detects, analyzes, responds to, and restores grid components or network sections to maintain reliability, security, affordability, power quality, and an efficient state.

Motivates and Includes the Consumer – Individual, business, and industry consumers become integral, active parts of the electric power system. Participating in electricity markets will benefit both the individual consumer and overall system reliability.

Resists Attack – It is critical for the modern grid to address security from the outset, making security a requirement and ensuring an integrated and balanced approach across the system.

Provides Power Quality For 21st Century Needs – Sensitive loads represent an increasing portion of the total power system load. The power quality delivered by the modern grid must be improved to meet the requirements of these sensitive loads. In addition, improvements in the design of the loads will make them more tolerant of distorted power.

Accommodates all Generation and Storage Options – The modern grid will accommodate a portfolio of diverse generation types, necessitating a greatly simplified interconnection process analogous to plug-and-play in today’s computer environment, particularly at the distributed energy resources level.

Enables Markets – The modern grid will integrate electricity markets into the fabric of the electric system because operations, planning, pricing, and reliability are dependent on how open-access markets are designed and instituted. For this reason, it will not only support wholesale electric markets but also retail markets where applicable.

Optimizes Assets and Operates Efficiently – Assets will be managed in concert so that, as a system, they can deliver functionality at a minimum cost. For example, advanced sensing and robust communications will allow early problem detection, preventive maintenance and corrective action.

Value of the Smart Grid Increase Energy Productivity Both utility and consumer could become more efficient, thus saving up to 10% in electric usage while conserving finite natural resources Increase power reliability and quality Reduce power disturbances by more than 75% by 2020, thus saving customers in excess of $50B through a reduction in outages Reduce CO 2 emissions Reduce US total carbon emmisions up to 25%. This would equate to the same CO 2 benefits as planting up to 167 million acres of forest (equal to the state of Texas) and the NO x benefits of taking up to 130 million cars off the road. Increase safety and security Reduce potential hazards associated within the grid, by increasing public and worker safety, and ensuring the availability of critical and emergency equipment.

Increase Energy Productivity

Both utility and consumer could become more efficient, thus saving up to 10% in electric usage while conserving finite natural resources

Increase power reliability and quality

Reduce power disturbances by more than 75% by 2020, thus saving customers in excess of $50B through a reduction in outages

Reduce CO 2 emissions

Reduce US total carbon emmisions up to 25%. This would equate to the same CO 2 benefits as planting up to 167 million acres of forest (equal to the state of Texas) and the NO x benefits of taking up to 130 million cars off the road.

Increase safety and security

Reduce potential hazards associated within the grid, by increasing public and worker safety, and ensuring the availability of critical and emergency equipment.

Attributes of Smart Grids Self healing power systems Predict and react to disturbances Optimize generation and loads Enables visualization of assets Power system reconfiguration Communications enabling AMI Personnel & public safety Availability of electric assets Cyber security and private networks Reliability and Optimization Connectivity Safety & Security

Self healing power systems

Predict and react to disturbances

Optimize generation and loads

Enables visualization of assets

Power system reconfiguration

Communications enabling AMI

Personnel & public safety

Availability of electric assets

Cyber security and private networks

The Power Grid (The Simplistic View) Generation Transmission Sub-Station Distribution (Step Down) Sub-Station Residential High Voltage Lines Medium Voltage Lines

A Reference Architecture for Smart Grids

Smart Grid Verticals Generation Transmission Distribution Industrial Commercial Residential Broadband Wireless Infrastructure and Access Applications

Key application requirements There are many Utility applications to integrate and connect Identify and rank the applications in terms of priority Know the critical requirements and usage cases for each Source: From IBM Presentation for UTC on Utility of the Future Application Protocol Latency Bandwidth Reliability Scope Security Reclosers DNP3/Serial & DNP/LAN 10s msec <56 kbps Medium P2P + HR Medium Capacitor Banks DNP3/Serial & DNP/LAN 100s msec <56 kbps High HR Medium Remote Terminal Unit DNP3/Serial & DNP/LAN 1000s msec <56 kbps High HR Medium Motor Operated Disconnect DNP3/Serial & DNP/LAN 1000s msec <56 kbps High HR Medium Line Regulator DNP3/Serial & DNP/LAN 100s msec <56 kbps High HR Medium Advanced Metering C12.22/LAN 100s msec 56 kbps High HR Low Interval Data Recorder C12.22/LAN 100s msec <56 kbps Low HR Low Demand Management TBD 100s msec <56 kbps Medium HR Medium MWM Voice G.729 & VoIP 100s msec <56 kbps High P2P + HR NA MWM Data UDP/IP 100s msec 1000’s kbps Medium P2P + HR High Aggregate Serial + IP 100s msec 1000’s kbps High P2P High

There are many Utility applications to integrate and connect

Identify and rank the applications in terms of priority

Know the critical requirements and usage cases for each

Cyber Security Landscape (The good, the bad and the ugly) Insider Attacks According to the 2008 Computer Security (CSI) Survey, 44% of respondents indicated insider abuse was their most prevalent problem Financial Fraud According to the 2008 CSI Survey, financial fraud accounted for the most expensive incident on average, costing organizations $463,100 on average per incident . Targeted Attacks According to the 2008 CSI Survey, 27% of respondents who suffered multiple security incidents said at least one was a “targeted attack” at their organization “ BOT” Computers According to the 2008 CSI Survey, dealing with “bot” computers within a corporate network accounted for an average cost of $350,000 per incident .

Insider Attacks

According to the 2008 Computer Security (CSI) Survey, 44% of respondents indicated insider abuse was their most prevalent problem

Financial Fraud

According to the 2008 CSI Survey, financial fraud accounted for the most expensive incident on average, costing organizations $463,100 on average per incident .

Targeted Attacks

According to the 2008 CSI Survey, 27% of respondents who suffered multiple security incidents said at least one was a “targeted attack” at their organization

“ BOT” Computers

According to the 2008 CSI Survey, dealing with “bot” computers within a corporate network accounted for an average cost of $350,000 per incident .

What do Utilities Need? High throughput GIS‐based applications require transmission of large files. Low latency and advanced multimedia capabilities Protection & Control, M2M, SCADA & Monitoring, Mobile workforce QoS and advanced traffic management capabilities E.g. deep packet inspection, virtual networks Secure access to protect the utilities’ communications, and, by extension, the safety of their staff and customers. IP‐based connectivity to facilitate integration of applications with the core IT functions within the utility. No need for SIM cards Handoffs to support mobility access , mostly for in‐vehicle and mobile workforce applications. Cost Efficiency Keep network costs while capacity explodes – reduce $/Mb dramatically Easy Installation and Maintenance Scalability Support the multiple logical interfaces required for the co-existence of disparate networks throughout the migration times Utilizing already existing assets Reasonable upgrade costs Flexibility to adapt to actual traffic volumes Transport Quality (BER and QoS) Minimal impact on service quality Maximal efficiency and flexibility (Adaptive BW) Transport Reliability (availability) Reduce service outages Keep maintenance costs low Source: © Senza Fili Consulting LLC

High throughput

GIS‐based applications require transmission of large files.

Low latency and advanced multimedia capabilities

Protection & Control, M2M, SCADA & Monitoring, Mobile workforce

QoS and advanced traffic management capabilities

E.g. deep packet inspection, virtual networks

Secure access to protect the utilities’ communications, and, by extension, the safety of their staff and customers.

IP‐based connectivity to facilitate integration of applications with the core IT functions within the utility.

No need for SIM cards

Handoffs to support mobility access , mostly for in‐vehicle and mobile workforce applications.

Cost Efficiency

Keep network costs while capacity explodes – reduce $/Mb dramatically

Easy Installation and Maintenance

Scalability

Support the multiple logical interfaces required for the co-existence of disparate networks throughout the migration times

Utilizing already existing assets

Reasonable upgrade costs

Flexibility to adapt to actual traffic volumes

Transport Quality (BER and QoS)

Minimal impact on service quality

Maximal efficiency and flexibility (Adaptive BW)

Transport Reliability (availability)

Reduce service outages

Keep maintenance costs low

Last Mile Options for Smart Grid Meter Collection Point Meter Collection Point Commercial Services Wi-Fi Mesh WiMAX PTP Backhaul Utility Control Center Carrier Central Office Broadband Connection Commercial Wireless Smart Meters and Aggregation Backhaul & Transport Control & Management

Network Options for Smart Grid Last Mile Source: Pike Research analyst Clint Wheelock Wireless Option Application Pro Con RF Mesh : Bit rate up to 1 Mbps, variable range, variable frequency Smart meters, distribution automation Able to be customized for specific deployments, self-organizing, self-healing Proprietary, lack economies of scale, equipment can be expensive Cellular : Bit rate at 20-800 kbps, 1-2 mile typical range, frequency 700 MHz to 2.1 GHz Smart meters (AMI), mobile work force management Able to leverage existing networks, low upfront capital investment, short time-to-market, low module cost Recurring cost per megabyte, lack of direct utility control over network Broadband Over Power Lines (BPL) : Bit rate at 256 kbps to 10 Mbps, variable range, frequency at 1.6 to 80 MHz electric carrier Substations, smart meters, monitoring/ control at customer premise, distribution automation Robust capabilities, integrated communications throughout grid and home area network environments, low recurring costs High capital costs, expensive chips and equipment, not widely adopted WiMAX : Bit rate up to 3 Mbps per MHz, range of 1-2 miles, frequency 1.8 GHz, 2.3-3.5 GHz Smart meters, mobile work force management, distribution automation High bandwidth capabilities, low latency Not widely deployed, not yet proven for smart grid deployments, high equipment cost Metro Wi-Fi : Bit rate 1-5 Mbps, typical range up to ½ mile, frequency between 2.4 GHz and 5.8 GHz Smart meters, mobile work force management, distribution automation Low-cost equipment, mesh topology is well-suited for smart grid needs, low latency Not widely deployed, not yet proven for smart grid deployments

Why Use WiMAX in the Smart Grid? Versatility— support, in any environment, fixed, portable, and remote connectivity to a wide range of devices, from video cameras to handheld devices. Redline’s Base stations and SUs can be customized to operate in any licensed or license-exempt band from 450 MHz to 11 GHz, with any channelization up to 10 MHz, allowing utilities to benefit from RedMAX in any market in which they operate and leveraging any spectrum available to them. Carrier-grade performance and reliability— combine high throughput levels (up to 35 Mbps in a 7 MHz channel) with extremely low latency (below 15 msec) and jitter. Security — Data transmission security is provided by over-the-air encryption with the Advanced Encryption Standard (AES).

Versatility— support, in any environment, fixed, portable, and remote connectivity to a wide range of devices, from video cameras to handheld devices.

Redline’s Base stations and SUs can be customized to operate in any licensed or license-exempt band from 450 MHz to 11 GHz, with any channelization up to 10 MHz, allowing utilities to benefit from RedMAX in any market in which they operate and leveraging any spectrum available to them.

Carrier-grade performance and reliability— combine high throughput levels (up to 35 Mbps in a 7 MHz channel) with extremely low latency (below 15 msec) and jitter.

Security — Data transmission security is provided by over-the-air encryption with the Advanced Encryption Standard (AES).

Why Use WiMAX in the Smart Grid? Applications support — enable full support for smart grid applications, including those that require Voice over Internet Protocol (VoIP), video (uplink and downlink), Virtual Private Network (VPN), and dynamic Quality of Service (QoS). Utilities can optimize the network to host multiple concurrent applications with different requirements to ensure that mission-critical and emergency communications have priority over other traffic, and to establish fine-grained policies for different applications and terminal devices. Standards-based approach— WiMAX is a standards-based approach to technologies that give electric utilities the flexibility to expand their network through time and according to their changing needs. With its adoption of Orthogonal Frequency Division Multiple Access (OFDMA), WiMAX is the most advanced wireless broadband technology commercially available. Entirely based on IP to allow utilities to benefit from a flatter, less complex network core structure and to facilitate integration with the rest of the smart grid network. Range— Use Multiple Input Multiple Output (MIMO) technology to extend the base station range. For PMP links, some base stations have a range of up to 12 miles (20 km) in Line Of Sight (LOS) conditions and of up to 2 miles (3 km) in non-LOS conditions. For a Point-To-Point (PTP) link in LOS, the range can extend to 28 miles (40 km).

Applications support — enable full support for smart grid applications, including those that require Voice over Internet Protocol (VoIP), video (uplink and downlink), Virtual Private Network (VPN), and dynamic Quality of Service (QoS).

Utilities can optimize the network to host multiple concurrent applications with different requirements to ensure that mission-critical and emergency communications have priority over other traffic, and to establish fine-grained policies for different applications and terminal devices.

Standards-based approach— WiMAX is a standards-based approach to technologies that give electric utilities the flexibility to expand their network through time and according to their changing needs.

With its adoption of Orthogonal Frequency Division Multiple Access (OFDMA), WiMAX is the most advanced wireless broadband technology commercially available.

Entirely based on IP to allow utilities to benefit from a flatter, less complex network core structure and to facilitate integration with the rest of the smart grid network.

Range— Use Multiple Input Multiple Output (MIMO) technology to extend the base station range.

For PMP links, some base stations have a range of up to 12 miles (20 km) in Line Of Sight (LOS) conditions and of up to 2 miles (3 km) in non-LOS conditions.

For a Point-To-Point (PTP) link in LOS, the range can extend to 28 miles (40 km).

Which Technology is The Right Fit? Customer Need Customer Weighting WiMAX Wi-Fi Mesh Proprietary RF Mesh BPL Commercial Services Performance Supplier Choice Reliability Reusability Compatibility Features System Options Usability Security Price Total Weighted Score

Using WiMAX to Connect the Smart Grid Residential customers AMR (Automatic Meter ) / AMI (Automatic Meter Infrastructure) Real-time time-of-day pricing using Demand-Side Management ( DSM) Home displays In-home energy conservation management Smart appliances Fault and outage detection and management Solar panels management Optional add-ons : Home security Broadband services Business customers AMR/AMI, industrial metering Remote surveillance and monitoring Remote load shifting Real-time time-of-day pricing using DSM Fault and outage detection and management Generation and distribution Supervisory Control And Data Acquisition (SCADA) Distributed Control Systems (DCS) Fault and outage detection and management Remote surveillance and monitoring Asset tracking Remote control Energy Management Systems (EMSs) with grid optimization applications (self-healing, self-restoration) Mobile assets and remote workforce Fleet telematics and Automatic Vehicle Location (AVL), with Location-Based Services (LBS) supported by Global Positioning System (GPS) Broadband connectivity to in-vehicle modules, laptops, and handheld devices to support and monitor the remote workforce. Applications include mobile dispatching, reporting, remote video or VoIP consultations, data sharing within the utility’s Virtual Private Network (VPN), and Geographic Information System (GIS) applications Emergencies Broadband connectivity to affected area during disaster recovery or in response to faults. Cell On Wheels (COW) connects staff, vehicles, and, in some cases, selected customers Coordination of emergency response, data sharing, remote consultation with off-site staff, and communication and coordination with safety agencies

AMR (Automatic Meter ) / AMI (Automatic Meter Infrastructure)

Real-time time-of-day pricing using Demand-Side Management ( DSM)

Home displays

In-home energy conservation management

Smart appliances

Fault and outage detection and management

Solar panels management

Optional add-ons :

Home security

Broadband services

AMR/AMI, industrial metering

Remote surveillance and monitoring

Remote load shifting

Real-time time-of-day pricing using DSM

Fault and outage detection and management

Supervisory Control And Data Acquisition (SCADA)

Distributed Control Systems (DCS)

Fault and outage detection and management

Remote surveillance and monitoring

Asset tracking

Remote control

Energy Management Systems (EMSs) with grid optimization applications (self-healing, self-restoration)

Fleet telematics and Automatic Vehicle Location (AVL), with Location-Based Services (LBS) supported by Global Positioning System (GPS)

Broadband connectivity to in-vehicle modules, laptops, and handheld devices to support and monitor the remote workforce. Applications include mobile dispatching, reporting, remote video or VoIP consultations, data sharing within the utility’s Virtual Private Network (VPN), and Geographic Information System (GIS) applications

Broadband connectivity to affected area during disaster recovery or in response to faults. Cell On Wheels (COW) connects staff, vehicles, and, in some cases, selected customers

Coordination of emergency response, data sharing, remote consultation with off-site staff, and communication and coordination with safety agencies

Q&A

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