Mr. Josh Bruni reports

AMERICAN AIRES GENERATES RECORD QUARTERLY ORDER VOLUME AND SALES IN Q3/2024; GROSS PROFIT MARGIN IMPROVES TO 63%

American Aires Inc. has filed its Q3 (third quarter) 2024 results.

During the three months ended Sept. 30, 2024, order volume (total value of orders placed minus sales discounts) increased by 61 per cent year over year (YOY) to an all-time company record of $4.92-million. After taking into account relevant accounting adjustments (shipping revenue, returns, return provision and deferred revenue), the company's reported sales increased by 57 per cent year over year to a record of $4.59-million, compared with the combined non-IFRS (international financial reporting standards) sales of $2.92-million a year ago. The increase this quarter in order volume and reported sales was driven largely by the efficient deployment of scaled-up advertising and marketing budgets, which included strategic partnerships the company entered into during Q2 (second quarter) and Q3 2024, with the UFC, NHL Captain John Tavares, Canada Basketball, NBA star RJ Barrett and the WWE. The quarterly performance extends the company's multiyear trend of strong revenue growth through widening its user base, opening new market segments, and expanding its overall reach and brand name recognition.

Cash as of Sept. 30, 2024, was reported at $1.79-million and inventory was reported at $2.23-million. Continued and seasonal investments in scaling up promotional efforts contributed to increased advertising and marketing expenses in Q3 (see details below), which resulted in an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss reported at $1.17-million, compared with combined adjusted EBITDA loss of $380,000 a year ago. Management anticipates that figure to improve over the coming quarters as the company continues to realize incremental benefits from the partnerships mentioned above.

American Aires chief executive officer Josh Bruni commented: "Achieving our highest-ever order volume and sales in Q3 is our latest important milestone. That growth confirms our strategy and efforts in Q1 and Q2 were correct. It also reaffirms how all the inspiration and heavy lifting we put in during the first six months of a year bear their biggest results in Q3 and Q4, just like we saw in 2022 and 2023 -- a model we'll continue to use to scale our growth. Our order volume from Oct. 1 through 25, meanwhile, has also shown strong growth, totalling $2,004,516 (versus $813,059 in 2023), which represents an increase of 147 per cent for the same date range YOY; gross margin percentage for the same date range was 62 per cent (versus 63 per cent in 2023). In the meantime, we remain committed to executing our long-term vision of efficiently increasing sales, hitting our growth targets, and building Aires Tech into a global and household brand that's the clear choice in our market segment."

Operational highlights

The company notes that the partnerships it forged in Q2 and Q3, together with the ability to create and leverage related content for the company's marketing strategy, helped drive order volume and sales growth in Q3 2024. Among other refinements to the company's organic marketing and advertising strategy, which is part of the continuing effort to continue innovating and identifying incremental revenue opportunities, management notes that collaboration with Gray Wolf on the public relations front provided Aires with the ability to hone and amplify its customer-facing messaging. This collaboration also helped bring awareness of Aires's technology and products to a wider audience, both within the technology and sports worlds.

The company's Q3 2024 results are consistent with management expectations. Given that the agreements mentioned above represent longer-term contracts varying from one year to several years, management anticipates that the company should continue to realize related incremental benefits over the lengths of the contracts involved. Management also notes that each individual collaboration requires initial ramp-up time to devise an effective strategy, create content, build, test and optimize advertising campaigns, to reach the full potential of the investment in the way of order volume and sales growth.

The monthly order volume table attached demonstrates how the company's continuing advertising and marketing strategies have contributed to improving sales growth.

Financial highlights

Gross profit increased 61 per cent year over year to $2.91-million from $1.81-million and gross margin percentage was reported at 63 per cent versus 62 per cent in the same period last year.

During the three months ended Sept. 30, 2024, advertising and promotion expenses increased 101 per cent year over year to $2.31-million and marketing expenses saw an increase of 94 per cent year over year to $1.14-million. Advertising expenses increased as the company continued executing the strategy focused on strong sales growth and building Aires into a well-recognized brand in the EMF radiation protection segment. In addition, an increase in advertising expenses in September and October is part of the company's annual organic sales growth strategy leading into the seasonally strong holiday period. Management anticipates the benefit of those higher advertising expenses to be realized in Q4 (fourth quarter) 2024, when the customers acquired in Q3 2024 tend to return during the holiday shopping season.

Management also notes that an additional factor driving advertising expenses higher during Q3 2024 is the continuing political campaigning for presidential elections in the United States. The higher media spend activity by political parties seems to be increasing advertising rates based on management and industry observations. A recent Axios study forecast that U.S. election ad dollars spent in 2024 will grow to roughly $16-billion, up 31.2 per cent compared with the last presidential election in 2020. Based on previous election years, marketing experts expect scarcer ad inventory and higher competition, while planning for related ad rate increases to ultimately reach 15 to 50 per cent during the core six weeks of the election.

Marketing expenses increase is reflective of new partnerships and collaborations that the company entered into during the course of year, as well as the addition of some new vendors aimed at amplifying the value of those partnerships and collaborations.

About American Aires Inc.

American Aires is a Canadian-based nanotechnology company committed to enhancing well-being and environmental safety through science-led innovation, education and advocacy. The company has developed a proprietary silicon-based resonator that protects against the potentially harmful effects of electromagnetic field (EMF) radiation. Aires's Lifetune products diffract EMF radiation emitted by consumer electronic devices, such as cell phones, computers, baby monitors and Wi-Fi, including the more powerful and rapidly expanding high-speed 5G networks. Aires is listed on the Canadian Securities Exchange under the ticker WIFI and on the OTCQB under the symbol AAIRF.

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