"The revenue recognized during this quarter demonstrates both the progress and the opportunities that the successful execution of Cell-Loc's business model offers," said Sheldon Reid, President & CEO, Cell-Loc Inc.

The Q4 conference call will take place at 11 am ET (9 am MT) on Tuesday, August 27, 2002. Call details are included at the end of this news release.

CORPORATE HIGHLIGHTS

Commercial Cellocate Beacon^TM Network
On June 1, 2002, the Company successfully delivered a commercial Cellocate Beacon^TM Network to its licensee IQ2 Communications. This network is the most significant commercial milestone in Cell-Loc's history. TimesThree Calgary (the Cell-Loc / IQ2 joint venture) is currently offering location-based services such as stolen vehicle recovery and fleet tracking in the Calgary market. As well, TimesThree Calgary has entered into a service agreement with Co-operators General Insurance Company.

California License Agreement
On June 28, 2002, Cell-Loc reached an agreement with a US-based corporation with over $10 billion (US) in assets to work jointly to license and deploy Cell-Loc's proprietary Cellocate^TM technology throughout the state of California.

Board and Executive Appointments
Sheldon Reid was appointed President and Chief Executive Officer (CEO) on June 28, 2002. Previously, Mr. Reid was Executive Vice President, Corporate and Business Development. Dr. Michel Fattouche has been appointed Chief Technical Officer. Previously, Dr. Fattouche was President and CEO of the Company.

$40 million (US) Equity Line of Credit
On May 16, 2002, the Company announced that it had received final receipts from the Alberta and Ontario securities commissions and closed its prospectus offering of subscription shares and commitment warrants under an equity line of credit for proceeds of up to $40 million (US). As of June 30, 2002, the Company has not drawn on this equity line of credit.

Interim Management Discussion & Analysis

During the quarter ended June 30, 2002 the Company incurred a loss of $575,000. The loss is a substantial decrease from the $3.78 million loss for the same period last year. The improved performance can be attributed to a commitment to commercialize our product, the continued focus on core competencies, limiting capital and discretionary expenditures and the reduced staffing levels. The Company generated $3.35 million from operations this quarter, which is a 323 percent increase from the $1.5 million used for the quarter ended March 2002 and a 204 percent increase from the same quarter last year. Network and capital expenditures for the quarter increased to $213,000 from $128,000 last quarter and $97,000 for the quarter ended June 2001.

Deferred Revenue
In March 2002, the Company received $800,000, which has been recorded as deferred revenue, from the license agreement with IQ2 Communications Corp. (IQ2) for exercising its option to acquire from Cell-Loc the sole rights to Cell-Loc's intellectual property for use in the Austin, Texas geographic market, subject to an agreement between the parties dated October 5, 2001. As of June 30, 2002 this amount is still recorded as deferred revenue pending certain performance obligations by the Company.

Advances
In February 2002, the Company received $238,000 from Jinmei. This payment covered equipment provided by Cell-Loc to Cell-Loc (Chongqing) as well as general and administrative costs incurred by the Company on behalf of the joint venture. As of June 30, 2002 all of the goods and services had been delivered to Chongqing.

Operations
Operation expenses increased 46 percent to $1.1 million from the previous quarter and decreased 25 percent from $1.418 million for the same quarter last year. The increased costs can be attributed to the amendments in the length of the term of US tower lease contracts. The lease terms have been adjusted and reflected in the commitment note in the financial statements. Cost savings continue to be realized through consolidation of the number of inventory storage facilities.

Marketing and Business Development
Expenses for marketing and business development for the quarter ended June 2002 were $57,000. This number has increased marginally from $54,000 for last quarter and decreased 67 percent from the same period last year. The lower costs for the last two quarters were realized as a result of the restructuring program undertaken in September 2001 and a continued focus on reducing travel and related expenses.

General and Administration
The reduction of staff levels and the focus on ensuring expenditures are limited to core projects and essential items have resulted in a consistent level of general and administrative expenditures.

Research and Development
As the Company continues to upgrade and develop the Cell-Loc technology, research and development expenses will remain constant. The expenditures are and will continue to be specifically related to the ongoing technical development and refinement required to commercialize our products. The $555,000 of expenses this quarter reflects a 17 percent decrease from the $666,000 last quarter, and reflects a 45 percent decrease from the $1.014 million for the quarter ended June 2001.

Liquidity and Capital Resources
The June 2002 total cash balance of $2.85 million represents a $350,000, or 14 percent, increase from the March quarter cash balance of $2.5 million. The increase in working capital deficit for the period ended June 2002 is a direct result of deferring a portion of the funds received from IQ2 Communications Corp. The monthly burn continues to be scrutinized to ensure optimal use of the Company's cash resources.

Business Risks and Prospects
The Company is actively negotiating commercial contracts. The joint venture agreements as executed are examples of the focused business strategy. Joint venture arrangements, such as those negotiated with IQ2 and Cell-Loc Chongqing, and PST will enable the Company to continue to deploy its technology.

The ability to source products and continue research and development is contingent on the Company's ability to be able to continue the working relationships that have been established with the vendors and creditors who supply goods and services to Cell-Loc.

The Company's ability to continue to generate revenue and achieve positive cash flow in the future is dependent upon various factors, including the level of market acceptance of its services, the degree of competition encountered by the Company, the cost of acquiring new customers, technology risks, the ability to fund continued network deployment and operations, general economic conditions and regulatory requirements.

About Cell-Loc Inc.
Cell-Loc Inc. (www.cell-loc.com), a leader in the wireless location industry, is the developer of Cellocate^TM, a family of network-based wireless location products that enable location-based services. Located in Calgary, Alberta, Cell-Loc currently develops, markets and supports its patented wireless location technology in Asia as well as North and South America, with a view to expanding globally. Cell-Loc equipment will be manufactured in under licenses in Brazil and China. Commercial deployment has been successfully tested in Canadian markets and will now proceed under agreements in major U.S. markets as well. Cell-Loc is listed on the Toronto Stock Exchange (TSX) under the trading symbol: "CLQ."

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