TORONTO, ONTARIO--(Marketwired - Dec. 17, 2013) -
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 $485,000 financing comprised of a $100,000 loan and a non-brokered private placement for gross proceeds of $385,000 (the "Private Placement").
The Company entered into a Credit Agreement with Mosaic Capital Partners LP ("Mosaic") for a loan of $100,000 (the "Loan").
Pursuant to the terms of the Credit Agreement, the Company executed a promissory note in favour of Mosaic for $100,000. The Loan has a maturity date of June 17, 2015 and bears interest at a rate of 15% per annum, calculated daily and payable monthly in arrears. The Company paid a fee of $5,000 to Mosaic in connection with the advance of the Loan. Interest only is payable on the Loan on a monthly basis, 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.
In consideration of the Loan, the Company issued a warrant to Mosaic to purchase up to 700,000 common shares of the Company (the "Warrant") at an exercise price of $0.05 per share. The Warrant will expire on December 17, 2018. The Company had originally agreed to issue a warrant to purchase 500,000 common shares of the Company to Mosaic as part of this financing, but as consideration for a shorter term of expiry, has agreed to issue a warrant for 700,000 common shares.
Concurrent with the Loan and the issuance of the Warrant, Mosaic has agreed to cancel warrants to purchase up to 133,333 common shares of the Company which were granted to Mosaic on November 30, 2009.
Mosaic is a shareholder of the Company and Vernon Lobo, a director and Chairman of AirIQ, is a managing director of Mosaic. During the Company's approval of the Loan, Mr. Lobo declared his conflict on the matter and abstained from voting.
Non-Brokered Private Placement
The Company issued 7,700,000 common shares under the Private Placement at a price of $0.05 per share for gross proceeds of $385,000.
Certain officers, directors and insiders of the Company purchased the common shares under the offering, representing approximately 56% of the total number of common shares issued under the Private Placement. Following completion of the offering, 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 12,521,756 common shares of the Company, which represents approximately 43% of the total number of outstanding shares of the Company post-offering.
The remaining approximate 44% of the total number of common shares issued under the Private Placement (representing approximately 11.75% of the issued and outstanding shares of the Company post-offering) were purchased by employees and consultants of the Company.
Following completion of the Private Placement, Mosaic owns 18.07% of the issued and outstanding common shares of the Company, and Donald Gibbs, President and Chief Executive Officer of the Company, owns 19.83% of the issued and outstanding common shares of the Company. Both parties will file any required reports 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 April 17, 2014. 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.
The Private Placement constitutes 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, AirIQ now has a total of 29,058,947 common shares issued and outstanding.
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.
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.