CORPORATE HIGHLIGHTS

Contingent Liabilities
On May 23, 2003 Cell-Loc announced that a settlement had been reached which concludes the ongoing $46 million (US) litigation action before the Supreme Court of British Columbia initiated by Aimtronics Corporation ("Aimtronics") against Cell-Loc Inc. ("Cell-Loc") and Dr. Michel Fattouche, former CEO of Cell-Loc. Under the settlement agreement, Ansen Corporation ("Ansen"), the assignee of the Aimtronics interest in the claim, releases Cell-Loc and Dr. Fattouche from that claim. As well, upon its payment under a promissory note for $2.5 million (US), which is due and payable in two years, Cell-Loc will take ownership of finished network inventory from Ansen worth approximately $2.5 million (US). The promissory note is secured by an option to convert the note to Cell-Loc common shares at a price per share of $0.50 (US) or a technology license agreement for a specific territory in the United States.

On May 28, 2003 Cell-Loc reached a settlement with a third party which concludes the ongoing $1.9 million action. This action was initiated against Cell-Loc in the Court of Queen's Bench of Alberta on May 11, 2001. Under the terms of the settlement agreement, Cell-Loc is released from the claim in consideration for 750,000 Cell-Loc common shares.

On April 30, 2003 Cell-Loc reached a settlement on a claim of $1.3 million (US), which concludes the ongoing litigation action before the Court of Queen's Bench of Alberta initiated by Symmetricom Inc. (formerly Datum-Irvine ) against Cell-Loc Inc. Under the settlement agreement, for a period of three years from the date of the agreement, Symmetricom has first right of refusal to provide Cell-Loc with GPS clocks at any time that Cell-Loc wishes to purchase GPS clocks.

On May 8, 2003 Cell-Loc reached a settlement on a claim of $133,000, which concludes the ongoing litigation action before the Court of Queen's Bench of Alberta initiated by a third party.

Private Placements
In January 2003, Cell-Loc completed a private placement of 1,702,456 units, which resulted in proceeds of approximately $970,400. In March 2003, the Company completed a private placement of 805,251 units, which resulted in proceeds of approximately $306,000. In May 2003, the Company completed a private placement of 357,143 units, which resulted in proceeds of approximately $150,000

INTERIM MANAGEMENT DISCUSSION & ANALYSIS

During the quarter ended March 31, 2003 Cell-Loc incurred a net loss of $3.33 million. The loss is primarily attributed to the write-down on network assets. Cell-Loc used $1.06 million for operating activities this quarter, which is a 62 percent increase from the $655,000 used for the quarter ended December 31, 2002 and a 185 percent increase from the same quarter last year. Network and capital expenditures for the quarter decreased to $10,000 from $13,000 last quarter and $128,000 for the quarter ended March 31, 2002.

Operations
Operations expenses were $359,000 for the third quarter relative to $1.0 million for the previous quarter and $579,000 for the same quarter last year. The reduction in operating expenses reflects the de-consolidation of TimesThree Inc. 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 March 31, 2003 were $71,000. This number has increased 45 percent from $40,000 for the previous quarter and increased 31 percent from the same period last year. The increase in cost can be attributed to marketing activities in Brazil.

General and Administration
Expenses for general and administration costs for the quarter ended March 31, 2003 were $475,000. 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. The current quarter shows a 37 percent increase from the $346,000 spent during the same period last year. The increase reflects the one-time write-off of the deferred financing costs related to the Roseworth equity line of credit.

Research and Development
As the Company continues to upgrade and develop its technology, research and development expenditures will be required. The expenses are and will continue to be specifically related to the ongoing technical development required to refine the Company's commercial products. The $301,000 expense this quarter reflects a 18 percent decrease from the $367,000 last quarter, and reflects a 55 percent decrease from the $666,000 for the quarter ended March 31,2002.

Liquidity and Capital Resources
The March 31, 2003 total cash balance of $920,000 represents a $358,000, or 64 percent increase from the second quarter cash balance of $562,000. The working capital deficiency has increased to $609,000 from a working capital balance of $307,000 for the period ended December 2002 The increase in working capital deficiency for the period ended March 31, 2003 is a direct result of the re-classification of a portion of the "assets held for disposal." Subsequent to the quarter-end, the Company received $150,000 from the May 2003 private placement. The Company has entered into contracts with third parties to sell, on the Company's behalf a portion of the assets formerly classified as available for deployment. The proceeds from any such sale(s), the amounts of which are uncertain at this time, will be a source of near term cash. In the absence of the Company selling the network equipment contracted for sale or the Company generating cash by licensing its technology to third parties, the Company will deplete its cash reserves prior to the end of June 2003. The Company's monthly use of cash continues to be scrutinized to ensure optimal use of cash resources.

Business Risks and Prospects
The Company is actively negotiating commercial contracts. The joint venture agreements currently being negotiated are examples of the focused business strategy that Cell-Loc has now undertaken. Joint venture arrangements, such as those negotiated with IQ2 and Cell-Loc Chongqing will enable the Company to introduce Cell-Loc's technology to the global market.

The ability to source products and continue research and development is contingent on the Company's ability 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™, 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 is listed on the Toronto Stock Exchange (TSX) under the trading symbol: "CLQ."

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Forward Looking Statements: This news release contains certain forward-looking statements. All statements, other than statements of historical fact, included herein, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and Cell-Loc does not undertake an obligation to update forward-looking statements should conditions or management's estimates or opinions change.

Note to Editors: Cell-Loc, Cellocate, Cellocate System, Cellocate Beacon, TimesThree and LocationBroker are trademarks of Cell-Loc Inc.

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

Cell-Loc contact:

Tammy Yamkowy
Director, Corporate Communications & Investor Relations
Phone: (403) 569-5748
tammy.yamkowy@cell-loc.com