AirIQ Inc.

AirIQ Inc.

March 16, 2007 09:01 ET

AirIQ Announces Sale of Vehicle Finance Division

Cash Proceeds of CDN $22,350,000 Accelerate Strategic Initiatives

TORONTO, ONTARIO--(CCNMatthews - March 16, 2007) - AirIQ Inc. (TSX:IQ) today announced the sale of its Vehicle Finance division, which consists of certain assets of its wholly owned subsidiary, AirIQ U.S., Inc., to CalAmp DataCom, Inc., a subsidiary of CalAmp Corp. The proceeds of US $19,000,000 in cash converts to CDN $22,350,000 at an exchange rate of 1.1764. The transaction, which was approved by both the CalAmp and AirIQ Boards of Directors, is expected to close today.

The Board of Directors of AirIQ considered the sale of the Vehicle Finance division as part of its previously announced intent to review strategic alternatives and determined that the sale of this division was the best course of action for the Company at this time. GMP Securities L.P., the financial advisor engaged in connection with this ongoing review, provided an opinion to the Board that the sale of the Vehicle Finance division was fair, from a financial point of view, to the Company and its shareholders.

"This transaction signals a strategic shift for the Company," said Steve Willey, interim Chief Executive Officer of AirIQ. The sale will allow us to re-focus our resources on markets that provide greater leverage of our core infrastructure and experience. AirIQ will continue to develop strategic relationships and partnerships with the goal of becoming the leading global provider of these services in commercial, marine and consumer markets.

"The cash to be received for the sale of the Vehicle Finance assets will significantly improve the Company's working capital position and balance sheet strength," said Mark Kohler, Chief Financial Officer of AirIQ. "As part of a further series of transactions to be executed today, the Company will repay the $6.4 million of senior secured debts initially entered into on June 20, 2006, and the $1.25 million short-term loan entered into February 28, 2007, thereby reducing the Company's forecast monthly interest expenses by over $126,000.

AirIQ and CalAmp have also entered into various service agreements, whereby AirIQ will for various periods provide technology and client care support from Canada for CalAmp's customer base acquired in this transaction. The sale includes the transfer of two US patents, both titled a "method for retrieving vehicular collateral" from AirIQ and the grant of a royalty-free license from CalAmp to AirIQ for the life of the patents. In addition, AirIQ has licensed a version of its host system software to CalAmp for use in the "Vehicle Finance" market and certain other markets that do not compete with AirIQ's other businesses. CalAmp will also assume the leased facility in Lake Forest, California, where AirIQ's Vehicle Finance division has been located.

As part of the transaction, the parties also entered into an escrow agreement whereby US $1.9 million of the proceeds will be held in escrow for a period of twelve months from the closing date in support of certain representations and warranties made by the Company to CalAmp.

About AirIQ

AirIQ trades on the Toronto Stock Exchange under the symbol IQ. A leader in Global Wireless Security, AirIQ is headquartered in Pickering, near Toronto, Canada, with an office in San Diego, California, U.S.A. The Company operates as a wireless Internet applications service provider specializing in location-based services. AirIQ's services are offered to three primary markets: Commercial Fleets; Consumer; and Marine Fleets. AirIQ gives vehicle and vessel owners the abilities to manage and protect their mobile assets. AirIQ's services include: vehicle locating, boundary notification, automated inventory, maintenance reminders, security alerts, vehicle disabling, unauthorized movement alerts and many more features. For additional information on AirIQ or its products and services, please visit the Company's website at

About CalAmp Corp.

CalAmp is a leading provider of wireless communication products that enable anytime/anywhere access to critical information, data and entertainment content. With comprehensive capabilities ranging from product design and development through volume production, CalAmp delivers cost-effective high quality solutions to a broad array of customers and end markets. CalAmp is the leading supplier of Direct Broadcast Satellite (DBS) outdoor customer premise equipment to the U.S. satellite television market. CalAmp also provides wireless data communication solutions for the telemetry and asset tracking markets, private wireless networks, public safety communications and critical infrastructure and process control applications. For additional information, please visit CalAmp's website at

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 words such as "anticipate", "believe", "expect", "plan" or similar words suggesting future outcomes. 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 and results may differ materially from those expressed in such forward-looking statements. 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 new information, future events or otherwise.

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