| News
Release |
|
| For immediate release |
Trading Symbol: LTI |
Cell-Loc Location Technologies reports third quarter results for FY 2004
Calgary, AB, May 31, 2004 –
Cell-Loc Location Technologies Inc. (TSX-V:
LTI) ("CLTI" or the "Company") today reported its interim
financial results for the quarter ended March 31, 2004. The net loss for the
period was $666,000 or $0.02 per share.
Management's Discussion
and Analysis
Management’s discussion and
analysis (MD&A) should be read in conjunction with the unaudited interim
consolidated financial statements of Cell-Loc Location Technologies Inc. (the
“Company” or “CLTI”) for the periods ended March 31, 2004. This
discussion contains forward-looking statements that are not historical in nature
and involve risks and uncertainties. Forward-looking statements are not
guarantees as to the Company’s future results since there are inherent
difficulties in predicting future results. Accordingly, actual results could
differ from those expressed or implied in the forward-looking statements.
As more fully described in
Note 1 to the interim consolidated financial statements, CLTI commenced
operations as a result of the transfer to it of substantially all of the assets
and liabilities related to its business from its former parent, Cell-Loc Inc.
under a plan of arrangement approved December 1, 2003. Because the arrangement
has been accounted for under the continuity of interests basis of accounting,
amounts shown in the financial statements for periods commencing prior to the
date of the plan of arrangement include the results and financial position of
Cell-Loc Inc. for the relevant periods. The
financial statements for the period ended December 31, 2003 have been amended to
add comparative figures for the prior periods, and are being re-issued.
Prior to the plan of
arrangement, Cell-Loc Inc. had made a concerted effort to reduce its ongoing
operating costs. As a result, the
operating costs and general and administrative costs for the current periods are
lower than for comparative periods.
Overview
During the four months ended
March 31, 2004 CLTI incurred a net loss of $1,039,000 including a net loss of
$666,000 for the quarter.
Operations
Operations expenses for the
quarter of $105,000 resulted primarily from operating the Calgary network.
Operating expenses also include costs incurred during deployment of the
Saskatoon network.
General and
Administrative
Expenses for general and
administrative costs were $389,000 during the quarter. The direct cost of the
Brazilian venture was $31,000 with the remaining $358,000 incurred to operate
and staff the corporate office.
Liquidity and
Capital Resources
The Company had a cash
balance of $2,100,000 at March 31, 2004. The Company’s monthly use of cash
continues to be scrutinized to ensure optimal use of cash resources.
Note Payable
During the period ended March
31, 2004, the Company entered into an amending agreement with the holder of a
long-term Note payable. Under this amending agreement the Note holder
relinquished all previously granted rights to commercial license use of the
Company’s product in the event of default and transferred title to the
inventory free and clear of any lien, security interest or other encumbrance. As
a result of this amendment, the related assets have been reclassified to Network
assets. The Note holder has the option to convert the Note to common shares of
the Company at an exercise price of USD$0.50 per share. The Company has reserved
five million shares relative to this obligation.
Business Risks and
Prospects
The Company is continuing to
actively pursue and negotiate commercial contracts.
The Company’s ability 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
partners, technology risks, the ability to fund continued network deployment and
operations, general economic conditions and regulatory requirements.
The Company, through its 75
percent owned subsidiary - citytrac Ltd., is completing a wireless location
network in the Saskatoon, Saskatchewan. CLTI has constructed and deployed a
network in Saskatoon, which is now in the process of being commissioned.
The market for location-based
services is just beginning to develop and is subject to rapid technological
change. The Company's business plan in focused on attracting and contracting
other entities to apply its patented technology in city, regional or national
networks. These third parties will be required to operate the project and invest
funds in the infrastructure, working capital and staff to develop the potential
of their contracted area. The Company's continuing research, development and
testing may cause significant strain on the Company's management, technical,
financial and other resources.
To remain competitive the
Company must be able to keep pace with the technological developments and change
its product lines to meet new demands. The Company will depend on designing and
developing products that have not been commercially tested to achieve much of
its future growth.
The wireless location
solution that the Company plans to offer is an emerging technology, and the
application of existing, proposed or future regulation to the Company's offering
cannot be reliably determined at this stage of development.
The Company's ability to
continue ongoing operations is dependent upon contracting parties to license the
Company’s technology and then implementing a commercialize service business.
The Company's ability to generate net income and positive cash flow in the
future is dependent upon various factors, including:
the level of market acceptance of its technology;
the ability to enter into license agreement to deploy and operate the Company’s proprietary wireless location network technology;
the degree of competition encountered by the Company; and
the Company’s ability to manage growth.
About
Cell-Loc Location Technologies Inc.
Cell
Loc Location Technologies Inc. (www.cell-loc.com) 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 North and South America
and Asia, with a view to expanding globally. Cell-Loc is listed on the TSX
Venture Exchange under the trading symbol: "LTI."
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.
TSX Venture Exchange has neither approved nor disapproved of the contents of this news release.
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For further information about CLTI and the ongoing technology business, please contact:
Tammy
Yamkowy
Director, Corporate Communications & Investor Relations
Cell-Loc
Location Technologies Inc.
Phone: 403.569.5748
investor@cell-loc.com