SYS-CON MEDIA Authors: Elizabeth White, Greg Ness, Sean Houghton, Glenn Rossman, Ignacio M. Llorente

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AirIQ Announces Profitable 1st Quarter Results; Positive EBITDAS; Net Income and Cash Flows from Operations

TORONTO, ONTARIO -- (Marketwired) -- 08/20/14 -- AirIQ Inc. ("AirIQ") (TSX VENTURE: IQ), a supplier of wireless asset management services, today announced its financial results for the three months ended June 30, 2014.

"The Company is pleased to announce that it achieved positive EBITDAS of $105,535, net income of $53,661 and positive cash flows from operations of $95,874 for the three months ended June 30, 2014, said Michael Robb, President and Chief Executive Officer of AirIQ. "I am extremely pleased with the results of this quarter and, more importantly, excited that the Company is now positioned to continue to achieve positive results going forward," continued Mr. Robb.

The Company also appointed Michael Robb as President and Chief Executive Officer of the Company, removing 'Interim' from his title.

"In his first quarter leading the Company, Mike made all the right moves," said Vernon Lobo, Chairman of the Board of AirIQ. "He refocused on key revenue opportunities, instituted operational discipline and implemented critical cost savings measures. As a result, the Company produced its first operating profit in over 10 years. With the swift and decisive turnaround Mike led, he clearly earned his new title and we look forward to further shareholder value creation under his leadership," continued Mr. Lobo.

The main highlights of the quarter were as follows (with comparisons made between the 1st quarter of 2014 and 1st quarter of 2013):


--  Achieved positive EBITDAS (earnings before interest, taxes, depreciation
    and amortization, and stock-based compensation) of $105,535,
    representing a $170,494 improvement
--  Achieved net income of $53,661, representing a $160,853 improvement
--  Achieved positive cash flows from operations of $95,874, representing a
    $223,874 improvement.
--  Revenue of $677,275 representing a 12% increase while also adding
    $121,630 to the deferred revenue pool
--  Recurring revenue was $474,368 with a gross profit of $356,808 or 75%
--  Expenses decreased by 27% to $334,507
--  Achieved positive working capital of $45,982 representing a 262%
    improvement.

Unless otherwise noted herein, and except share and per share amounts, all references to dollar amounts from this point forward are in thousands of Canadian dollars.



Financial Highlights

                                               Three months    Three months
                                                      ended           ended
                                                30-Jun-2014     30-Jun-2013
----------------------------------------------------------------------------
Total Revenue                                   $       677     $       604
Gross Margin                                    $       441     $       394
Gross Margin %                                         65.1%           65.3%
Expenses (1)                                    $       335     $       459
EBITDAS (2)                                     $       106     $       (65)
Other expenses                                  $        52     $        42
Net Income (loss)                               $        54     $      (107)
Net Income (loss) per share, basic and
 diluted                                        $      0.00     $     (0.01)
----------------------------------------------------------------------------
(1)  Excludes share-based compensation.
(2)  The Company has included information concerning EBITDAS because it
     believes that it may be used by certain investors as one measure of the
     Company's financial performance. EBITDAS is not a measure of financial
     performance under IFRS and is not necessarily comparable to similarly
     titled measures used by other companies. EBITDAS should not be
     construed as an alternative to net income or to cash flows from
     operating activities (as determined in accordance with IFRS) or as a
     measure of liquidity.

Business Review

The Company continues to focus on its key strategy elements to build revenues and reduce costs to achieve sustained profitability and positive cash flow and to seek opportunities to form value creating strategic partnerships.

Revenues

Revenues for the three months ended June 30, 2014, increased 12% to $677 from $604 for the three months ended June 30, 2013. Approximately 70% of the total revenue for the period represents recurring revenue from the Company's airtime customers.

Revenues received from equipment sold in connection with service contracts are recorded as deferred revenue and recognized over the initial term of the service contract.

Sales of hardware units associated with service contracts recorded to deferred revenues were approximately $244, during the three months ended June 30, 2014, compared to $155 during the three months ended June 30, 2013. Revenues recognized from deferred revenues for the three months ended June 30, 2014 were approximately$122 compared to $141 during the three months ended June 30, 2013.

Overall, revenues related to service contracts sold in connection with hardware equipment increased by $25 from $449, for the three months ended June 30, 2013 to $474 for the three months ended June 30, 2014.

Included in the Company's revenues are sales of units that were sold without a fixed term service contract of approximately $75 and $13 respectively, during the three months June 30, 2014 and June 30, 2013 respectively.

Included in the Company's reported revenues are miscellaneous parts, repair, warranty and lost unit sales of approximately $6, during the three months ended June 30, 2014, compared to $14, for the three months ended June 30, 2013.

Gross Profit

Overall, gross profit increased by 12 % to $441 for the three months ended June 30, 2014 compared to $394 for the three months ended June 30, 2013.

Equipment gross profits increased by approximately 45% to $84 during the three months ended June 30, 2014 from $58 for the three months ended June 30, 2013. The increase in gross profit can be primarily attributed to the increased margins related to units sold without fixed term service contracts.

Service contract gross profits increased by approximately 6% to $357 for the three months ended June 30, 2014 from $336 for the three months ended June 30, 2013.

Expenses and Other Items

Sales and marketing, research and development and general and administrative expenses totalled $342 for the three months ended June 30, 2014 compared to $467 for the three months ended June 30, 2013.

Overall these expenses were reduced by $125 for the three months ended June 30, 2014 when compared to the three months ended June 30, 2013.

Expense reductions for the three months ended June 30, 2014 when compared to the three months ended June 30, 2013 were achieved in the following areas; (a)wages and related expense of approximately $55, (b) consulting fee costs were reduced by $48, (c) computer operating expense savings of approximately $4 due to the reduction of co-location costs, audit and legal costs were reduced by $2, and (d) other cost reductions of approximately $17 related primarily to communication costs, facility costs, director fees and stock based compensation. These savings were offset by increases in foreign exchange expense of approximately $1.

Net Profit/Loss

The Company's net profit for the three months ended June 30, 2014 was $54 or $0.00 as compared to a net loss of $107 or ($0.01) for the three months ended June 30, 2013, an improvement of $161.

The increase in net profit for the three months ended June 30, 2014 when compared to the three months ended June 30, 2013 can be attributed to improvement in the following areas; a) expense reductions of approximately $125 and, b) increased gross profits of $47. These improvements were offset by a) an increase in depreciation and amortization of approximately $5 and, b) an increase in interest expense of $6.

Financial Statements & MDA

The Company's unaudited consolidated condensed interim financial statements for the three months ended June 30, 2014 including notes thereto, and Management's Discussion and Analysis for the same period are being filed with the Canadian securities regulatory authorities on today's date, and will be available on the Company's website (www.airiq.com) and on the System for Electronic Document Analysis and Retrieval ("SEDAR") website (www.sedar.com). Such statements should be read in conjunction with the Company's consolidated financial statements as at and for the years ended March 31, 2014 and 2013, and accompanying notes. The Company's financial statements include the accounts of AirIQ and its subsidiaries, AirIQ U.S. Holdings, Inc., AirIQ U.S., Inc., and AirIQ, LLC. All inter- company balances and transactions have been eliminated on consolidation.

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 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.

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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