AirIQ Inc.
TSX VENTURE : IQ

AirIQ Inc.

November 29, 2010 16:30 ET

AirIQ Announces Q3 2010 Interim Results

TORONTO, ONTARIO--(Marketwire - Nov. 29, 2010) - AirIQ Inc. ("AirIQ" or "the Company") (TSX VENTURE:IQ), a supplier of Wireless Location-Based Services (LBS) and telematics technology, today announced its financial results for the third quarter ended September 30, 2010.

Business Highlights for the Quarter:

  1. The Company continues to grow a sales pipeline of qualified customer leads which have the potential of doubling the Company's installed base over the next year.
  2. The Company's SafetyIQ™ offering was met with tremendous response at the National Realtors show in New Orleans in early November.
  3. Moving of the Company's co-location premises is scheduled to be completed in December and will result in decreased operating costs and a faster and more resilient network infrastructure.

"With the Company's continued focus on the rental program we are seeing a greater component of our total sales coming from recurring revenue, which accounted for 80% in the third quarter", said Don Gibbs, President and Chief Executive Officer of AirIQ. "Along with this is the Company's continued decline in losses this fiscal year in each of the three quarters. But the most important milestone that the Company has achieved is that it is showing operating cash flow positive after the removal of payments related to the settlement of an alleged class action suit. Exciting things are happening in the Personal Safety market and the Company expects a significant market opportunity for its offering," continued Mr. Gibbs.

Revenue for the quarter was $669 thousand compared to $1,142 thousand for the third quarter of 2009, a decrease of $473 thousand. The decrease is primarily a result of the expiration of customer hardware contracts that had been deferred from sales in prior periods.

Gross profit for the third quarter 2010 was $431 thousand compared to $612 thousand in the comparable third quarter of 2009. Gross profit margins increased by nearly 11% and by almost 10% for the three months and nine months ended September 30, 2010 respectively, when compared to the same periods the previous year.

Sales and marketing, engineering and research and general and administrative expenses totalled $621 for the three months ended September 30, 2010 compared to $963, for the three months ended September 30, 2009. The decrease was comprised of approximately $136 thousand in wages and related expense reductions due to the Company's restructuring initiatives completed in 2009, approximately $33 thousand in premise lease savings due to the relocation of the Company's head office in 2009, and, approximately $173 thousand in other general net cost reductions.

Net loss from continuing operations for the third quarter of 2010 was $256 thousand as compared to a loss of $599 thousand in the third quarter of 2009.

A former customer filed a product liability claim against the Company in the District Court, East Central Judicial District in Fargo, North Dakota. The Company has been unsuccessful in negotiating a settlement with the former customer, and has decided to defend the claim. The plaintiff is claiming damages in excess of US$50,000, and a trial has been scheduled for October 18, 2011.

Subsequent to the quarter end, on October 7, 2010 the Company entered into a Credit Agreement with Eventi and Mosaic (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 for $250,000 each. The Loan has a maturity date of October 7, 2011 and bears interest at a rate of 15% per annum, accrued daily and compounded monthly. The Company paid a fee of $7,500 to each Lender in connection with the advance of the Loan. 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.

The Company's unaudited interim consolidated financial statements as at and for the three months and nine months ended September 30, 2010, including notes thereto, and the accompanying Management's Discussion and Analysis were filed with the Canadian securities regulatory authorities today, November 29, 2010, and will be available on the Company's website (www.airiq.com) and on the System for Electronic Document Analysis and Retrieval website (www.sedar.com).

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 location based services (LBS) 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.

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