AirIQ Inc.

TSX VENTURE : IQ


AirIQ Inc.

November 13, 2012 17:00 ET

AirIQ Announces Closing of $300K Financing and Issuance of Shares for Debt to Directors

TORONTO, ONTARIO--(Marketwire - Nov. 13, 2012) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

AirIQ Inc. (the "Company" or "AirIQ") (TSX VENTURE:IQ), a supplier of wireless location-based services, today announced the closing of the previously announced $300,000 financing comprised of a $150,000 loan and a non-brokered private placement for gross proceeds of $150,000 (the "Private Placement"). In addition, the Company issued an additional 350,000 common shares in satisfaction of $28,000 of accrued directors' fees for annual non-executive Board compensation.

Loan Financing

The Company entered into a Credit Agreement with Mosaic Capital Partners LP ("Mosaic") and 2204671 Ontario Inc. ("2204671") (collectively the "Lenders") for a loan of $500,000 (the "Loan").

Pursuant to the terms of the Credit Agreement, the Company executed a promissory note in favour of each of the Lenders; $100,000 to Mosaic and $50,000 to 2204671. The Loan has a maturity date of November 12, 2012 and bears interest at a rate of 15% per annum, accrued daily and compounded monthly. The Company paid a fee of $3,000 to the Lenders in connection with the advance of the Loan proportionate to their respective contribution. Interest only is payable on the Loan on a monthly basis in arrears, and the Loan is secured by a charge over all of AirIQ's property and assets. The Loan is not convertible into shares of the Company.

Mosaic is a shareholder of the Company and Vernon Lobo, a director and Chairman of AirIQ, is a managing director of Mosaic. 2204671 is the personal holding company of Donald Gibbs, a director, President and Chief Executive Officer of the Company. During the Company's approval of the Loan, Messrs. Lobo and Gibbs each declared their conflict on the matter and abstained from voting in respect of their interest.

Non-Brokered Private Placement

The Company issued 1,875,000 common shares under the Private Placement at a price of $0.08 per share for gross proceeds of $150,000.

Certain officers, directors and insiders of the Company purchased the common shares under the offering, representing 100% of the total number of common shares issued under the Private Placement. Following completion of the offering, and the shares for debt transaction described below, these parties together with other officers, directors and insiders of the Company will have beneficial ownership of, or control or direction over, an aggregate of 9,300,511 common shares of the Company, which represents 51.5% of the total number of outstanding shares of the Company post-offering and post shares for debt transaction.

Following completion of the Private Placement, Mosaic owns 12.46% of the issued and outstanding common shares of the Company, and will file a report under National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues.

Pursuant to applicable Canadian securities laws, the securities issued under the Private Placement are subject to a four-month hold period from the date of closing of the Private Placement, expiring on March 13, 2013. No fees or commissions were paid in connection with the Private Placement.

The Private Placement remains subject to the receipt of all necessary approvals, including the final approval of the TSX Venture Exchange.

Shares for Debt

The Company also issued a total of 350,000 shares at a price of $0.08 per share to satisfy indebtedness in the aggregate amount of $28,000 to its non-executive directors for annual director compensation. The Company issued 150,000 common shares to Vernon Lobo, and 100,000 common shares to each of Emmanuel Mounouchos and Mathew Wilson, all current directors of the Company. The Company elected to satisfy the indebtedness with shares in order to preserve its cash for operations.

Pursuant to applicable Canadian securities laws, the securities issued in connection with the shares for debt are subject to a four-month hold period from the date of issuance, expiring on March 13, 2013.

The Private Placement and the shares for debt transaction constitute related party transactions under Canadian Multilateral Instrument 61-101 ("MI 61-101") by virtue of the participation in such transactions of the directors of the Company referenced above, but the transactions are otherwise exempt from the formal valuation and minority approval requirements of MI 61-101.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities referenced herein, nor shall there be any offer or sale of such securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Following completion of the Private Placement and the shares for debt issuance, AirIQ now has a total of 18,058,947 common shares issued and outstanding.

About AirIQ

AirIQ currently trades on the TSX Venture Exchange under the symbol IQ. AirIQ's office is located in Pickering, Ontario, Canada. The Company offers a suite of asset management services that generate recurring revenues from each device deployed. AirIQ delivers services to two primary markets: Commercial Fleets and dealers that service Consumer segments. AirIQ provides vehicle 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. 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 "hope", "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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • AirIQ Inc.
    Donald Gibbs
    President and Chief Executive Officer
    (905) 831-6444, Ext. 4255
    dgibbs@airiq.com