Mr. Josh Bruni reports

AMERICAN AIRES ANNOUNCES RECORD PRELIMINARY Q4/2024 PERFORMANCE & PROVIDES 2025 GUIDANCE

American Aires Inc. has provided preliminary unaudited results for the three months ended Dec. 31, 2024, and 12 months ended Dec. 31, 2024.

Management expects to file audited annual financial statements and management's discussion and analysis for fiscal 2024 in April of 2025. The company is providing investors with preliminary and unaudited Q4 2024 metrics at this time due to the relevance of the quarter's contribution to the annual 2024 results and also its strategic importance for the company's success in 2025.

Cash and inventory balances at record $6.5-million

As of Dec. 31, 2024, inventories were $2.3-million, reflecting the significant investments the company made into building up inventory levels to facilitate sales growth. As of Jan. 24, 2025, Aires's cash balance was $4.2-million, reflecting two separate revenue-based lending arrangements the company had entered into in December, 2024, and January, 2025, to finance the expected growth in inventory and sales. Both lenders -- ClearCo and Shopify Capital -- have worked with the company in the past, scaling up their respective lending facilities to $520,000 (U.S.) and $2.77-million (Canadian), respectively. Management expects additional lending renewals during the summer of 2025. Management also expects both lenders to become long-term inventory financing partners for the company, increasing their lending amounts with Aires's sales and inventory levels, thus facilitating the company's growth plans and lowering the company's overall cost of capital.

2025 guidance

Management expects 2025 sales in the $28-million to $32-million range and earnings before interest, taxes, depreciation and amortization in the range of a $2-million loss to a $2-million profit. The ranges represent management's increased focus on advertising and marketing efficiencies compared with 2024. The company has already made significant investments in 2024, and expects advertising expenses on a percentage of sales basis to decrease in 2025. In addition, management has already renegotiated several of the line items that will lower the company's cost of goods, including lowered product and fulfilment costs. EBITDA is expected to be significantly affected by the timing of cost reductions impacting the income statement since the company is entering 2025 with a large inventory position from before said cost reductions were in place, which may delay the beneficial impact of said cost reductions until all precost reduction inventory has been sold.

While still a young and rapidly growing company, as evidenced by 75-per-cent sales growth in 2024, 79 per cent in 2023 and 128 per cent in 2022, management's data-driven approach enables a higher degree of confidence in the company's predictable growth trajectory. Growth realized over the past three years demonstrates the success of management's long-term strategy to build a brand with staying power, while balancing challenging financial and consumer markets and seasonal volume spikes to prioritize strategic growth. Its strong Q4 2024 performance has set the stage for a promising 2025, with a focus on market share, efficiency and scaling successful partnerships.

Management is also pleased to disclose that from Jan. 1 through Jan. 24, order volumes grew 111 per cent year over year, reflecting continued momentum in early 2025 and an early indication of the company benefiting from and building on the success of strategic efforts in 2024.

Aires chief executive officer Josh Bruni commented: "In many ways, 2024 was our year for laying a foundation of really significant partnerships, and Q4 2024 was the first full quarter where we had a lot of those partnerships and related assets up to speed and operating in the market at one time. The ability to leverage those partnerships enabled us to create Q4 growth that wouldn't have been possible otherwise in the face of the higher media costs and the election distractions.

"When it comes to 2025 and beyond, I'm super optimistic and excited. First, we'll have the full year to strategically amplify and benefit from our partnerships and all the conversations around them, so it will be a lot of fun, and we expect it to be transformative for our business. The reality with bigger partnerships is you can't expect real-time returns. But the more we ramp up and build momentum, the more we're able to realize advertising efficiencies from building on the efforts and investments we've already made.

"Second, we'll also be increasing our focus on reaching consumers that might not follow sports through mass market exposure opportunities, such as our upcoming Q1 2025 appearance on one of America's leading branded reality TV shows, Military Makeover with Montel Williams.

"Third, we're very well prepared operationally thanks to having a strong cash balance and much needed inventory and growth lending arrangements.

"That excitement and our multiyear growth trend is reflected in our first ever guidance on sales and EBITDA, as we remain confident in and committed to aggressive growth to strengthen our leading brand position while balancing for profitability at the same time."

Record Q4 2024 revenue of $8.8-million grew 135 per cent year over year

Q4 2024 set yet another quarterly record with $8.8-million in sales, marking a 135-per-cent increase over the $3.7-million reported in Q4 2023 (on a combined Aires + Huck basis). The record Q4 2024 sales performance continues the trend of high year-over-year growth the company had previously reported. This growth is largely driven by the execution of strategic marketing partnerships entered into during 2024. Management notes that only a portion of the overall benefits from 2024 initiatives were realized in Q4 as the company continued to ramp up sales partnerships during that period, and not all partnerships had yet begun contributing to sales. In addition, Q4 2024 represented significantly higher media costs and consumer behaviour distractions due to the U.S. presidential election and a shorter-than-usual shipping window for the holiday shopping season. The level of partnerships and investments made earlier in the year enabled the company to balance promotional activity to maintain high margins and leverage pent-up demand without excessive discounting, which is reflected in gross profit margin improvement.

Gross profit margin improved 400 basis points to 63 per cent (from 59 per cent reported a year ago) largely due to certain cost-cutting measures undertaken in early 2024, as well as a more strategic and measured approach to discounting. Advertising expenses increased 197 per cent year over year to $3.4-million (from $1.1-million in the prior year) as the company made a concerted effort to increase its scale and the prominence of Aires as a brand in the eyes of consumers, to extract the most out of the key partnerships with the UFC, WWE, Canada Basketball, and other athletes and celebrities, and to prepare Aires for continued growth in 2025. Marketing expenses increased 187 per cent to $1.8-million (from $600,000 a year ago), reflecting amortization of the previously mentioned strategic marketing partnerships along with some minor cost reductions.

As a result, Q4 2024 EBITDA was reported at ($300,000) (versus $80,000 reported last year).

2024 revenue of $18.2-million: highest annual sales, following similar 2023 performance

On an annual basis, sales increased 75 per cent year over year to $18.2-million (from $10.4-million in 2023), while gross profit margin improved 100 basis points to 62 per cent (from 61 per cent a year earlier). Advertising and marketing expenses increased 115 per cent and 97 per cent, respectively, to $8.1-million and $4.2-million for the same factors as mentioned in the Q4 2024 overview above. EBITDA loss for 2024 increased to $3.3-million (from $1.5-million in 2023).

The company is entering 2025 with the strongest operational foundation in its history, ensuring sustained growth. Unlike in 2024, management expects to realize the full annual benefit from existing strategic partnerships in 2025. Partnerships with prominent organizations like the UFC and Canada Basketball provide credibility and enable Aires to reach new markets, regions and demographics. Record Q4 2024 performance has also enabled management to leverage customer insights to tailor marketing strategies, ensuring alignment with consumer preferences and potentially enhancing product offerings.

About American Aires Inc.

Aires is a Canadian-based nanotechnology company committed to enhancing well-being and environmental safety through science-led innovation, education and advocacy. The company is selling a line of proprietary patented silicon-based resonator products that protect against the potentially harmful effects of electromagnetic field radiation. Aires's Lifetune products diffract EMF radiation emitted by consumer electronic devices such as cellphones, computers, baby monitors and WiFi, 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.

We seek Safe Harbor.