Calgary, AB, November 27, 2003 – Cell-Loc Inc. (TSX: CLQ) ("Cell-Loc" or the "Company") today reported its financial results for the first quarter of fiscal year 2004 ended September 30, 2003. The net loss for the first quarter was $721,000, or $0.02 per share, compared to $15.97 million, or $0.55 per share, for the same period last year. 

Sheldon Reid, President and CEO also announced today that following the completion of the Plan of Arrangement as described in the Company’s recently distributed Notice of Petition and Information Circular, Newco will use the technology assets to carry out the wireless location intellectual property business, substantially as carried on by Cell-Loc Inc. prior to the completion of the Arrangement. Accordingly, 1073691 Alberta Ltd. (“Newco”) has been renamed to Cell-Loc Location Technologies Inc. (“CLTI”).

Interim Management Discussion And Analysis

During the quarter ended September 30, 2003 Cell-Loc incurred a net loss of $0.7 million. The loss is attributed costs incurred by the Company to maintain ongoing operations and prepare for the Annual and Special meeting on December 1, 2003.

Revenue

License revenue of $50,000 was realized from granting a 27.5 percent interest in the right to sell and distribute Cell-Loc technology products in Saskatchewan.

Operations

Operations expenses were $75,000 for the first quarter compared to $2.4 million for the previous year. The reduction in operating expenses reflects the continued cost savings realized through consolidation of operations and inventory facilities.

General and Administration

Expenses for general and administration costs for the quarter ended September 30, 2003 were $453,000 which continues to reflect reduced staff levels as well as a focus on core projects and essential activities.

Liquidity and Capital Resources

The Company has depleted its cash reserves to $51,000 at September 30, 2003 from $417,000 at June 30, 2003. The working capital deficiency increased by $0.4 million to $1.5 million from the June 30, 2003 level of $1.1 million. The increase in working capital deficiency for the period ended September 30, 2003 resulted from operating activities. The operating cash requirements were partially offset by the issue of common shares under the Company’s stock option program and the receipt of a licensing fee.

The Company has negotiated a settlement with many suppliers that in the future will reduce the cash payment necessary to relieve these obligations by $346,000.

Subsequent to September 30, 2003 the Company generated $420,060 from the exercise of options ($278,620) and warrants ($141,440). 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 Company’s ability to source products and continue operations is contingent on the working relationships with 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.

Subsequent Event

On November 17, 2003, the Company entered into an agreement with The Roseworth Group Ltd. to terminate their respective obligations under an Equity Facility Purchase Agreement entered into on May 16, 2002. The Corporation and Roseworth have also agreed that 350,000 warrants previously issued to and held by Roseworth will survive and will be included in the Corporation's previously announced "Plan of Arrangement" transaction on the same terms as other issued and outstanding warrants of the Corporation. Each warrant held by Roseworth entitles it to acquire a corresponding number of common shares at an exercise price of $2.05 on or before May 15, 2005.

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 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 information that may constitute forward-looking statements under applicable securities laws. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Actual results achieved may vary from the results anticipated or implied herein and variations may be material. There is no representation by the Company that actual results achieved will be the same in whole or in part as those implied in any forward looking statements. 

Neither the TSX nor the TSX Venture Exchange has approved nor disapproved of the contents of this news release.

Tammy Yamkowy
Director, Corporate Communications & Investor Relations
Phone: 403.569.5748
tammy.yamkowy@cell-loc.com