AirIQ Inc.
TSX : IQ

AirIQ Inc.

August 13, 2009 19:48 ET

AirIQ Delivers Second Consecutive Quarter of Positive EBITDAS

Further Increase in Gross Profit and Expense Reduction

TORONTO, ONTARIO--(Marketwire - Aug. 13, 2009) - AirIQ Inc. ("AirIQ") (TSX:IQ), a leader in Wireless Location-Based Services, specializing in Telematics and Security, today announced its results for the quarter ended June 30, 2009.

"We are particularly pleased to announce a second and consecutive quarter of positive earnings (EBITDAS), as it demonstrates that the expense reduction programs continue to deliver tangible results", said Mr. Stephen Willey, President and Chief Executive Officer of AirIQ. "Combined with a sixth consecutive quarter of improved gross profit, the Company's operations appear stable and able to support new sales growth initiatives that are presently underway", continued Mr. Willey.

Highlights

Second Quarter Business Review

- Met corporate goal of delivering positive EBITDAS for a second and consecutive quarter.

- Company staff are finding ways to reduce operating expenses, as noted below under Financial Highlights. Expenses as a percentage of revenue dropped for the third consecutive quarter.

- As a consequence of a weak economy, both Land and Marine operating businesses experienced some subscriber churn, however management believe that this trend will abate once the economy rebounds.

- Marine business unit released new software applications to specific commercial customers. Feedback has been positive and will drive additional investment in the Company's SaaS initiative.

- AirIQ's Heavy Equipment rental services are now in testing with a flagship national customer in eight geographic areas across the United States.

Financial Highlights

- The Company's operating activities generated positive EBITDAS for the second consecutive quarter.

- Increase in quarterly gross profit and gross profit as percentage of revenue from the prior quarter; from $1.815 million to $1.817 million and from 55.8% to 58.6%, respectively.

- Due to an ongoing commitment to cost management, expenses (as adjusted) declined by $205 thousand from the prior quarter; and to 46.9% of revenue as compared to 51% in the prior quarter.

- Foreign exchange loss was $163 thousand in the quarter, as compared with $87 thousand gain in the prior quarter, resulting from the strengthening of the Canadian dollar against the US dollar.

Update on Patent Litigation

As previously announced, on May 10, 2007, LunarEye, Inc. sued AirIQ for patent infringement in the United States District Court for the Eastern District of Texas seeking injunctive relief and unspecified damages. AirIQ denied the allegations of the complaint, and requested a declaratory judgment that it is not infringing the patent, and that the patent is invalid. In 2008, the United States Patent and Trademarks Office ("USPTO") issued an office action in a re-examination proceeding rejecting the single claim that was asserted against AirIQ, and the litigation against AirIQ was suspended pending resolution of the reexamination proceeding. The USPTO recently issued a decision, based on certain arguments made by LunarEye, finding that the original claim under examination is patentable and allowing additional claims. The Court has now removed the stay and the case will proceed, with a trial scheduled in May 2010. The Company continues to believe that it is not infringing any valid claim of the patent, and intends to vigorously defend itself in the case, although the outcome is not determinable.

Transfer from TSX to TSV

As previously announced, the Company requested a voluntary delisting of the Company's shares on The Toronto Stock Exchange (the "TSX"), and were seeking a listing on the TSX Venture Exchange ("TSV"). The TSX has granted an extension of the delisting date of the Company's shares on the TSX to September 7, 2009, to enable the Company to complete its application for listing of its common shares on the TSX Venture Exchange ("TSV"); and the Company has received conditional approval of the Company's listing application to list its common shares on Tier 2 of the TSV. The listing on the TSV is subject to satisfaction of certain customary listing requirements, including the completion of a private placement financing in the minimum amount of $450,000.

Overview

The accompanying condensed unaudited interim balance sheets are presented as at June 30, 2009 and December 31, 2008, and the consolidated statements of loss, comprehensive loss and cash flows are presented for the three months and six months ended June 30, 2009 and June 30, 2008, comparatively, and include the operating results of AirIQ Inc. and its subsidiaries. The accompanying condensed consolidated interim financial statements have been prepared by management and have not been reviewed by the Company's auditors. The Company's unaudited interim consolidated financial statements as at and for the period ended June 30, 2009, including notes thereto and the accompanying Management's Discussion and Analysis for the three months and six months ended June 30, 2009 will be filed with the Canadian securities regulatory authorities and will be available on the Company's website (www.airiq.com) and on the System for Electronic Document Analysis and Retrieval ("SEDAR") website (www.sedar.com).

Unless otherwise noted herein, all references to dollar amounts are in Canadian dollars.

Amendment of Financial Statements

The quarter ended June 30, 2008 comparative financial statements of the Company have been amended in relation to the period over which certain amounts of deferred revenue were recognized in the statement of loss. Previously, revenues related to sales of equipment in the marine reporting unit were deferred and recognized as revenue over the term of the related service contract. Canadian GAAP requires that such revenue related to sale of equipment that cannot be separated from the service contract be deferred and recognized over a period representing the longer of the service contract term and the customer life, although not over a period longer than the estimated life of the actual equipment. Therefore, revenue from the sale of equipment in the marine reporting unit that was previously recognized over a one year period should have been recognized over a period of four years.

A summary of the impact of the amendment on the Company's past eight quarters' results is as follows:



Revenue
--------------------------------------------------------------
Three As
months previously
ended, reported As amended Change
--------------------------------------------------------------
30-Jun-09 $3,098,158 no change no change
31-Mar-09 $3,250,220 no change no change
31-Dec-08 $3,079,466 no change no change
30-Sep-08 $3,078,636 $3,025,447 ($53,189)

30-Jun-08 $3,237,234 $3,159,453 ($77,781)
31-Mar-08 $3,545,771 $3,392,485 ($153,286)
31-Dec-07 $4,004,396 $3,832,862 ($171,534)
30-Sep-07 $4,673,202 $4,479,192 ($194,010)



Gross Profit
--------------------------------------------------------------
Three As
months previously
ended, reported As amended Change
--------------------------------------------------------------
30-Jun-09 $1,817,006 no change no change
31-Mar-09 $1,815,130 no change no change
31-Dec-08 $1,556,212 no change no change
30-Sep-08 $1,506,735 $1,484,822 ($21,913)

30-Jun-08 $1,362,892 $1,339,636 ($23,256)
31-Mar-08 $1,270,682 $1,219,441 ($51,241)
31-Dec-07 $676,010 $615,284 ($60,726)
30-Sep-07 $1,735,930 $1,667,624 ($68,306)



Net Income (Loss)
--------------------------------------------------------------
Three As
months previously
ended, reported As amended Change
--------------------------------------------------------------
30-Jun-09 ($308,974) no change no change
31-Mar-09 ($215,099) no change no change
31-Dec-08 ($3,903,581) no change no change
30-Sep-08 ($1,132,977) ($1,154,890) ($21,913)

30-Jun-08 ($1,477,523) ($1,500,779) ($23,256)
31-Mar-08 ($1,542,918) ($1,594,159) ($51,241)
31-Dec-07 ($2,976,571) ($3,037,297) ($60,726)
30-Sep-07 ($3,395,608) ($3,463,914) ($68,306)



Loss per Share
--------------------------------------------------------------
Three As
months previously
ended, reported As amended Change
--------------------------------------------------------------
30-Jun-09 ($0.00) no change no change
31-Mar-09 ($0.00) no change no change
31-Dec-08 ($0.02) ($0.02) no change
30-Sep-08 ($0.01) ($0.01) no change

30-Jun-08 ($0.01) ($0.01) no change
31-Mar-08 ($0.01) ($0.01) no change
31-Dec-07 ($0.02) ($0.02) no change
30-Sep-07 ($0.02) ($0.02) no change


Revenues

Revenues for the three months ended June 30, 2009, decreased 2.0% to $3,098,158 from $3,159,453 for the comparative three month period ended June 30, 2008, and decreased by 4.9% from $3,250,220 for the three months ended March 31, 2009. Revenues for the six months ended June 30, 2009, decreased 3.2% to $6,348,377 from $6,551,938 for the comparative six month period ended June 30, 2008.

The average U.S. dollar exchange rate increased to $1.17 for the three months ended June 30, 2009 from $1.01 for the three months ended June 30, 2008. The difference in the average US dollar exchange rates had an estimated notional positive effect on the Company's June 30, 2009 quarterly revenues of approximately $423,680. As a result, revenues decreased by approximately $484,975 without the effect of the U.S. exchange impact. The average U.S. dollar exchange rate increased to $1.21 for the six months ended June 30, 2009 from $1.01 for the six months ended June 30, 2008. The difference in the average US dollar exchange rates had an estimated notional positive effect on the Company's six month revenues of approximately $1,049,319 for the period ended June 30, 2009 when compared to the same six month period ended June 30, 2008. As a result, revenues decreased by approximately $1,252,880 without the effect of the U.S. exchange impact.

The decrease in revenues (before the foreign exchange impact) can be attributed to the expiration of customer hardware and service contracts due to a lower subscriber base following the termination of the analog networks in Canada and the United States.

Included in the Company's reported revenues during the three months and six months ended June 30, 2009, is approximately $196,536 and 374,367 respectively, primarily from product only sales which are in addition to the Company's contracted service revenue arrangements with its customers. During the comparative three and six month periods ended June 30, 2008, the Company recorded approximately $147,454 and 298,575 respectively, from product only sales.

Gross Profit

Gross profit for the three months and six months ended June 30, 2009, increased 35.6% and 41.9%, respectively, to $1,817,006 and $3,632,136, respectively, from $1,339,636 and $2,559,077, respectively, for the comparative three month and six month periods ended June 30, 2008.

Overall, gross profit increased by $477,370 and $1,073,059, respectively, during the three months and six months ended June 30, 2009 when compared to the same three month and six month periods the previous year.

The difference in the average US dollar exchange rates had an estimated notional positive effect on the Company's quarterly gross profit of approximately $228,890. In addition, the Company reduced its wireless service costs by approximately $90,793 when compared to the same three month period the previous year. Also, the Company's gross profit improved by $100,000 related to revenues associated with a dealer revenue sharing program that was completed during the second quarter of 2009.

The difference in the average US dollar exchange rates had an estimated notional positive effect on the Company's six months ended June 30, 2009 gross profit of approximately $472,705. In addition, the Company reduced its wireless service costs by approximately $372,215 when compared to the same three month period the previous year. The decrease in service costs was primarily due to lower wireless costs resulting from the expiration of customer service contracts following the termination of the analog networks in Canada and the United States. In addition, the Company has negotiated more favourable service contract terms with its wireless service providers. The Company's gross profit also improved by $100,000 related to revenues associated with a dealer revenue sharing program that was completed during the second quarter of 2009.

Expenses

Expenses totalled $1,676,466 and $3,308,761, respectively, for the three months and six months ended June 30, 2009 compared to $2,483,223 and $4,950,962, respectively, for the three month and six month periods ended June 30, 2008.

Overall, expenses were reduced by $806,757 for the three month period ended June 30, 2009 when compared to the same three month period the previous year. Expense reductions were achieved in the following areas; a) wages and related expense reductions of approximately $300,000 due to the Company's restructuring initiatives completed in December 2008, b) bad debt expense of approximately $400,000, and c) other general net cost reductions of approximately $100,000.

Overall, expenses were reduced by $1,642,201 for the six month period ended June 30, 2009 when compared to the same six month period the previous year. Expense reductions were achieved in the following areas; a) wages and related expense reductions of approximately $785,000 due to the Company's restructuring initiatives completed in December 2008, b) bad debt expense of approximately $435,000, c) consulting fees of approximately $165,000, d) legal costs of approximately $65,000, e) communication costs of approximately $41,000 and, f) other general net cost reductions of approximately $150,000.

For the three months and six months ended June 30, 2009, the Company recorded foreign exchange losses of $162,493 and $75,643, respectively, and stock-based compensation expense of $60,000 and $120,000, respectively. This compares with recorded foreign exchange loss of $63,559 and a foreign exchange gain of $135,328, respectively, and $45,000 and $90,000, respectively, in stock-based compensation expense for the three month and six month periods ended June 30, 2008.

Net Interest and other financing charges

Net interest expense for the three months and six months ended June 30, 2009, was $100,279 and $208,655, respectively, compared to $126,288 and $241,648, respectively for the three months and six months ended June 30, 2008.

The decrease in net interest expense for the three months and six months ended June 30, 2009 compared to the same three month and six month periods the previous year is primarily due to the repayment of principal by the Company of the term loans. (See Term Loans below under Cash from financing activities.)

Restructuring charges

During 2008, the Company finalized severance arrangements with approximately 36% of its employees. The amount remaining to be paid under these restructuring arrangements at June 30, 2009 is $213,931 and is included in accounts payable and accrued liabilities.

Depreciation and Amortization

Amortization for the three months and six months ended June 30, 2009, was $349,235 and $638,793, respectively, compared with $231,904 and $462,405, respectively, for the three months and six months ended June 30, 2008.

Net Loss

The net loss for the three months and six months ended June 30, 2009 was $308,974 and $524,073, respectively, or (nil) and (nil) per share, respectively, compared with $1,500,779 and $3,094,938, respectively, or ($0.01) and ($0.01) per share, respectively, for the three months and six months ended June 30, 2008.

Liquidity and Capital Resources

As at June 30, 2009, the Company had unrestricted cash of $1,666,786 and negative working capital of $17,024. Working capital has been calculated by netting current assets and current liabilities excluding deferred revenue that are non-cash items.

The Company has incurred significant losses, including $308,974 and $524,073 for the three months and six months ended June 30, 2009, and has an accumulated deficit of $96,806,925 as at June 30, 2009.

The Company's continuation as a "going concern" is uncertain and may depend upon its ability to achieve profitable operations and upon its ability to obtain additional financing or equity in the future. The outcome of these matters cannot be predicted at this time.

The Company forecasts having sufficient cash and working capital to continue operations and meet all of its obligations as they come due through fiscal 2009. The Company expects to make all of its debt payments in 2009, and does not foresee significant risk in meeting its debt covenants.

The accompanying condensed unaudited interim consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.



AirIQ Inc.

Notice to Reader: The following condensed unaudited interim consolidated
financial statements have been prepared by management of
AirIQ Inc. and have not been reviewed by the Company's
external auditors.


CONSOLIDATED BALANCE SHEETS
(in thousands of Canadian dollars)
(Going Concern Uncertainty)

Unaudited

As at June 30, 2009 December 31, 2008
$ $
----------------------------------------------------------------------------

ASSETS
Current
Cash 1,667 2,439
Accounts receivable 1,338 2,397
Inventory 757 739
Prepaid expenses 228 154
----------------------------------------------------------------------------
Total current assets 3,990 5,729
----------------------------------------------------------------------------
Property, plant and equipment, net 784 1,183
Intangible assets, net 892 1,272
Deferred service contract costs, net 1,667 2,450
----------------------------------------------------------------------------
7,333 10,634
----------------------------------------------------------------------------
----------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIENCY)
Current
Accounts payable and accrued liabilities 2,653 4,086
Income taxes payable 230 241
Deferred revenue 1,901 2,487
Obligations under capital lease 122 141
Current portion of term loan 904 1,053
----------------------------------------------------------------------------
Total current liabilities 5,810 8,008
----------------------------------------------------------------------------
Deferred revenue 1,432 1,838
Obligations under capital lease 63 117
Term loan 1,109 1,348
----------------------------------------------------------------------------
Total liabilities 8,414 11,311
----------------------------------------------------------------------------

Shareholders' equity (deficiency)
Share capital 89,066 89,066
Other paid-in capital 4,448 4,448
Contributed surplus 2,212 2,092
Deficit (96,807) (96,283)
----------------------------------------------------------------------------
Total shareholders' equity (deficiency) (1,081) (677)
----------------------------------------------------------------------------
7,333 10,634
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Commitments and contingencies



AirIQ Inc.


CONSOLIDATED STATEMENTS OF LOSS AND
COMPREHENSIVE LOSS
(in thousands of Canadian dollars except per share information)

Unaudited

Three months ended June 30, 2009 June 30, 2008
$ $
----------------------------------------------------------------------------
(amended)

Revenues 3,098 3,159
Direct cost of sales 1,281 1,819
----------------------------------------------------------------------------
Gross profit 1,817 1,340
----------------------------------------------------------------------------

Expenses
Sales and marketing 448 390
Engineering and research 207 537
General and administration 799 1,447
Stock-based compensation 60 45
Foreign exchange loss (gain) 163 64
----------------------------------------------------------------------------
1,677 2,483
----------------------------------------------------------------------------
Income (loss) before the following 140 (1,143)
----------------------------------------------------------------------------
Interest expense, net 100 126
Amortization and depreciation 349 232
----------------------------------------------------------------------------
449 358
----------------------------------------------------------------------------
Net loss and comprehensive loss for
the period (309) (1,501)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Loss per share - basic and diluted ($0.00) ($0.01)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Weighted average number of common shares
used in computing loss per share, basic
and diluted 160,813,408 160,813,408
----------------------------------------------------------------------------
----------------------------------------------------------------------------



AirIQ Inc.


CONSOLIDATED STATEMENTS OF LOSS AND
COMPREHENSIVE LOSS
(in thousands of Canadian dollars except per share information)

Unaudited

Six months ended June 30, 2009 June 30, 2008
$ $
----------------------------------------------------------------------------
(amended)

Revenues 6,348 6,552
Direct cost of sales 2,716 3,993
----------------------------------------------------------------------------
Gross profit 3,632 2,559
----------------------------------------------------------------------------

Expenses
Sales and marketing 913 859
Engineering and research 434 1,181
General and administration 1,765 2,955
Stock-based compensation 120 90
Foreign exchange loss (gain) 76 (135)
----------------------------------------------------------------------------
3,308 4,950
----------------------------------------------------------------------------
Income (loss) before the following 324 (2,391)
----------------------------------------------------------------------------
Interest expense, net 209 242
Amortization and depreciation 639 462
----------------------------------------------------------------------------
848 704
----------------------------------------------------------------------------
Net loss and comprehensive loss for
the period (524) (3,095)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Loss per share - basic and diluted ($0.00) ($0.02)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Weighted average number of common shares
used in computing loss per share, basic
and diluted 160,813,408 160,813,408
----------------------------------------------------------------------------
----------------------------------------------------------------------------



AirIQ Inc.


CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of Canadian dollars)

Unaudited

Three months ended June 30, 2009 June 30, 2008
$ $
----------------------------------------------------------------------------
(amended)
OPERATING ACTIVITIES
Net loss for the period (309) (1,501)
Add (deduct) items not involving cash
Stock-based compensation 60 45
Interest accreted on term loan 31 40
Amortization of property, plant and equipment 233 159
Amortization of intangible assets 190 144
Changes in non-cash balances related to
operations
Accounts receivable 254 2,467
Inventory (42) 292
Prepaid expenses (106) (182)
Accounts payable and accrued liabilities (783) (2,545)
Income taxes payable (20)
Deferred revenue (454) (316)
Deferred service contract costs 353 446
----------------------------------------------------------------------------
Cash provided by (used in) operating activities (593) (951)
----------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of property, plant and equipment (2) (26)
Proceeds from disposal of property, plant and
equipment 8 -
----------------------------------------------------------------------------
Cash provided by (used in) investing activities 6 (26)
----------------------------------------------------------------------------
FINANCING ACTIVITIES
Transfer of proceeds to (from) sale of certain
assets and liabilities transferred to
restricted cash
Repayment of obligations under capital lease (37) (33)
Repayment of term loan (230) -
Repayment of obligations for service contracts - (11)
----------------------------------------------------------------------------
Cash provided by (used in) financing activities (267) (44)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net increase (decrease) in cash during the
period (854) (1,021)
Cash, beginning of period 2,521 4,929
----------------------------------------------------------------------------
Cash, end of period 1,667 3,908
----------------------------------------------------------------------------
Supplementary cash flow information
Cash interest 89 105
Non-cash investing and financing transactions
Property, plant and equipment purchased
under capital leases - 10
----------------------------------------------------------------------------
----------------------------------------------------------------------------



AirIQ Inc.


CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of Canadian dollars)

Unaudited

Six months ended June 30, 2009 June 30, 2008
$ $
----------------------------------------------------------------------------
(amended)
OPERATING ACTIVITIES
Net loss for the period (524) (3,095)
Add (deduct) items not involving cash
Stock-based compensation 120 90
Interest accreted on term loan 65 81
Amortization of property, plant and equipment 404 423
Amortization of intangible assets 380 287
Changes in non-cash balances related to
operations
Accounts receivable 1,059 3,238
Inventory (18) 87
Prepaid expenses (75) (233)
Accounts payable and accrued liabilities (1,434) (3,119)
Income taxes payable (12)
Deferred revenue (992) (455)
Deferred service contract costs 784 738
----------------------------------------------------------------------------
Cash provided by (used in) operating activities (243) (1,958)
----------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of property, plant and equipment (13) (73)
Proceeds from the disposal of property, plant
and equipment 8
----------------------------------------------------------------------------
Cash provided by (used in) investing activities (5) (73)
----------------------------------------------------------------------------
FINANCING ACTIVITIES
Transfer of proceeds to (from) sale of certain
assets and liabilities
transferred to restricted cash - 1,946
Repayment of obligations under capital lease (71) (84)
Repayment of term loan (453) -
Repayment of obligations for service contracts - (43)
----------------------------------------------------------------------------
Cash provided by (used in) financing activities (524) 1,819
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net increase (decrease) in cash during the
period (772) (212)
Cash, beginning of year 2,439 4,120
----------------------------------------------------------------------------
Cash, end of period 1,667 3,908
----------------------------------------------------------------------------
Supplementary cash flow information
Cash interest 170 212
Non-cash investing and financing transactions
Property, plant and equipment purchased
under capital leases - 20
----------------------------------------------------------------------------
----------------------------------------------------------------------------



AirIQ Inc.


CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY (DEFICIENCY)
(in thousands of Canadian dollars except per share information)

Unaudited

Other Contributed
Share capital paid-in surplus Deficit Total
capital
# $ $ $ $ $
----------------------------------------------------------------------------
Balance,
December 31,
2007, as
amended 160,813,408 89,066 4,448 1,893 (88,130) 7,277
----------------------------------------------------------------------------
Stock-based
compensation - - - 199 - 199
Net loss for
the year - - - - (8,153) (8,153)
----------------------------------------------------------------------------
Balance,
December
31, 2008 160,813,408 89,066 4,448 2,092 (96,283) (677)
----------------------------------------------------------------------------
Six months
ended June
30, 2009 - - - 120 (524) (404)
----------------------------------------------------------------------------
Balance,
June 30,
2009 160,813,408 89,066 4,448 2,212 (96,807) (1,081)
----------------------------------------------------------------------------
----------------------------------------------------------------------------


No Conference Call

AirIQ will not be holding a conference call to discuss results. The Company's quarterly report, including complete financial statements, notes and Management's Discussion and Analysis will be available today on SEDAR at www.sedar.com and later on the Company's website www.airiq.com.

Non-GAAP Disclosure

EBITDAS is defined by the Company as net income before interest expense, income taxes, other charges, depreciation, amortization, stock-based compensation, restructuring charges, special committee charges, gain on sale of assets and goodwill impairment. The Company has included information concerning EBITDAS because it believes that it may be used by certain investors as one measure of the Company's financial performance. EBITDAS is not a measure of financial performance under Canadian GAAP and is not necessarily comparable to similarly titled measures used by other companies. EBITDAS should not be construed as an alternative to net income or to cash flows from operating activities (as determined in accordance with Canadian GAAP) or as a measure of liquidity.

About AirIQ

AirIQ trades on the Toronto Stock Exchange (the "TSX") under the symbol IQ. A leader in Wireless Location Services specializing in Telematics and Security, AirIQ has offices in Pickering, Ontario, Canada, and in San Diego, California, United States. The Company offers a suite of location based services (LBS) under a 'software as a service' (SaaS) model that yields recurring revenues for each device deployed. AirIQ delivers services to three primary markets: Commercial Fleets; dealers that service Consumer segments; and Marine Fleets (fisheries and workboat). AirIQ provides vehicle and vessel owners with the ability to monitor, manage and protect their mobile assets. Services include: instant vehicle locating, boundary notification, automated inventory reports, maintenance reminders, security alerts and vehicle disabling and unauthorized movement alerts. Management believes that AirIQ maintains a dominant market share in North America, in three segments, namely, rental vehicle fleets, regulated fisheries, and marine workboat markets. For additional information on AirIQ or its products and services, please visit the Company's website at www.airiq.com.

Forward-looking Statements

This news release contains forward-looking information based on management's best estimates and the current operating environment. These forward-looking statements are related to, but not limited to, AirIQ's operations, anticipated financial performance, business prospects and strategies. Forward-looking information typically contains statements with words such as "goal", "anticipate", "believe", "expect", "plan" or similar words suggesting future outcomes. These statements are based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including AirIQ's perception of historical trends, current conditions and expected future developments as well as other factors management believes are appropriate in the circumstances. Such forward-looking statements are as of the date which such statement is made and are subject to a number of known and unknown risks, uncertainties and other factors, which could cause actual results or events to differ materially from future results expressed, anticipated or implied by such forward-looking statements. Such factors include, but are not limited to, changes in market and competition, technological and competitive developments and potential downturns in economic conditions generally. Therefore, actual outcomes may differ materially from those expressed in such forward-looking statements. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Other than as may be required by law, AirIQ disclaims any intention or obligation to update or revise any such forward-looking statements, whether as a result of such information, future events or otherwise.

The current global financial market downturn has resulted in some of the world's best known financial institutions disappearing, as well as significant erosion of stock market values, and severe restrictions on credit availability. The volatile and uncertain economic environment presents many companies with new business challenges, not the least of which is communicating the impact of the current economic environment to its shareholders. For a more complete analysis of risks faced by the Company, and additional comments on the global economic environment, please refer to the section "Risk Factors" section included in management's discussion and analysis of the financial condition and results of operations for the three months and six months ended June 30, 2009.

For additional information on AirIQ or its products and services, please visit the Company's website at www.airiq.com.

Contact Information