Press Release Source: AirIQ Inc.
AirIQ Updates Status of Subsidiary's Dispute With a Supplier
Monday May 1, 10:34 pm ET
TORONTO, ONTARIO--(MARKET WIRE)--May 1, 2006 -- AirIQ Inc. ("AirIQ") (TSX:IQ.TO - News), a leader in global wireless security, provided an update today on the result of the hearing on April 28, 2006 in Ventura County Superior Court in Ventura, California involving a dispute between its subsidiary, AirIQ U.S., Inc. ("AirIQ US"), and CalAmp, Corp. ("CalAmp"), a former component supplier of GPS tracking devices. The court ruled that it will issue CalAmp a right to attach order against AirIQ US's assets in the amount of US$625,000 provided that CalAmp first post a bond to the court for the same amount.
ADVERTISEMENT
AirIQ US may prevent the attachment order from being carried out by posting its own bond (or depositing a payment with the court in the amount of US$625,000) within 14 days. Except as noted above with respect to the right to attach order, the court further ordered that the case be stayed for the next 30 days while the parties attempt to settle the dispute through mediation.
The right to attach order is only in effect until there is a trial on the merits of all claims or until further order of the court.
The right to attach order was issued in connection with a previously disclosed California lawsuit between CalAmp and AirIQ US. CalAmp's Complaint, filed in early April 2006, alleges that AirIQ US breached a June 2005 supply agreement and seeks damages for components already delivered to AirIQ US in the amount of approximately US$1.1 million, and for additional components which CalAmp alleges AirIQ US had agreed to order in the amount of approximately US $2 million. AirIQ US has filed a Cross-Complaint against CalAmp and Answer to the Complaint, which assert various defenses including that CalAmp materially breached the supply agreement and breached its warranties for the components. Specifically, AirIQ US alleges that CalAmp is not entitled to recovery and is liable to AirIQ for damages because CalAmp was materially late with its deliveries, missed various deliveries, and supplied large quantities of defective and non-conforming components.
AirIQ US had already recorded in its 2005 year end accounts payable the amount of approximately US$1.1 million for components already delivered. AirIQ US recently made a payment in the amount of approximately US$415,000 against the US$1.1 million balance for delivered components, which represents AirIQ US' current estimate of the undisputed amounts owing to CalAmp.
The dispute with CalAmp will not have an impact on AirIQ's customers, and is not expected to have a material impact on AirIQ. AirIQ will vigorously defend and prosecute the action.