AirIQ and ACP Negotiate Settlement of Earn Outs
First payment extended to April 5 2006; Second by issuance of shares
TORONTO, ONTARIO – November 15, 2005 – AirIQ Inc. (TSX: IQ), a leader in Global Wireless Security specializing in Telematics services, announces that it has reached an agreement with ACP, LLC, (the vendor of the Aircept business acquired by AirIQ in June 2004) to extend payment of the first earn out amount of USD$4,250,000 to be paid on April 5, 2006. In addition, AirIQ will issue 7,296,429 common shares from treasury to ACP in full satisfaction of the second potential earn out amount of USD$4,250,000. The two earn out amounts were potentially payable under the asset purchase agreement governing the acquisition of the Aircept business and are further described in note 16 – Commitments and Contingencies of AirIQ’s December 31, 2004 annual consolidated financial statements.
“Extending the date of the first earn out payment and satisfying the second earn out payment with 60% of its potential value in shares is an excellent outcome of these negotiations with our partner, ACP,” states Mark Kohler, Chief Financial Officer of AirIQ. “This provides the Company with greater flexibility and removes the perceived uncertainty over the Company’s near term financing plans.” The payment of the earn out amounts will initially be booked as additions to purchased goodwill.
The newly issued common shares are subject to a lock up agreement whereby fifty percent are released following the first anniversary of the date of the issuance of the shares and the remaining fifty percent are released eighteen months after such issuance. The new issuance of the shares is subject to the approval of the Toronto Stock Exchange and is expected to occur by November 21, 2005.
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 offices in Lake Forest and San Diego, California, U.S.A. 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 www.airiq.com.
For more information please contact:
Chief Financial Officer
905-831-6444, Ext. 4250
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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