AirIQ Inc.

AirIQ Inc.

May 26, 2005 07:16 ET

AirIQ Extends Date of Potential Earn Out Payment to ACP

TORONTO, ONTARIO--(CCNMatthews - May 26, 2005) -

Payment may follow expiry date of outstanding warrants

AirIQ Inc. (TSX:IQ), a leader in the Telematics industry, announces that it has reached an agreement with ACP, LLC, the vendor of the Aircept business acquired by AirIQ in June 2004, whereby the first earn out payment of USD$4,250,000 due to ACP pursuant to the asset purchase agreement that governed the purchase of the Aircept business, may be extended at AirIQ's option to no earlier than January 2, 2006. The first earn out payment is further described in note 16 - Commitments and Contingencies of AirIQ's December 31, 2004 annual consolidated financial statements.

The extension moves the earliest possible date for the first earn out payment, if earned, to a date which is after the expiry date of the Company's 13,347,267 outstanding common share purchase warrants. The warrants are exercisable into common shares of the Company on a one-for-one basis at an exercise price of $0.60 per common share.

"The exercise of all the $0.60 warrants currently outstanding would generate cash proceeds of over $8,000,000 for the Company," states Don Simmonds, CEO of AirIQ Inc. "If a sufficient number of these warrants are exercised, it will strengthen our balance sheet through the first earn out payment, without the need for the Company to issue further equity." There can be no assurance that it will be in the economic interest of the warrantholders to exercise any or all of the warrants.

"The extension of the earliest possible date for the earn out payment beyond the warrant expiry date provides the Company with greater flexibility should the earn out payment become due," states Mark Kohler, CFO of AirIQ Inc. "With the successful growth of the Aircept business, this added flexibility serves the Company's financing objectives well," he adds.

In consideration of the extension, AirIQ has agreed to pay interest to ACP on the principal amount of the first earn-out payment should it become due before January 2, 2006, at a rate of 7% per annum for the period from the date the first earn out payment would have become due to the date it is paid.

Unless otherwise indicated, all dollar figures used herein are Canadian dollars.

About AirIQ

AirIQ trades on the Toronto Stock Exchange under the symbol IQ. A leader in the Telematics marketplace, AirIQ is headquartered in Pickering, near Toronto, Canada. The Company operates as a wireless Internet applications service provider specializing in Telematics. Telematics is the name given to information and control messages sent wirelessly to and from vehicles and vessels. AirIQ's services are offered to five primary markets: Commercial Fleets; Consumer; Vehicle Finance; Indirect Distribution; 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, its products and services, please visit the Company'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. 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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