Cell-Loc Location Technologies Inc.
TSX VENTURE : XCT

Cell-Loc Location Technologies Inc.

March 12, 2010 00:29 ET

Cell-Loc Location Technologies Provides Corporate Update

CALGARY, ALBERTA--(Marketwire - March 12, 2010) - Cell-Loc Location Technologies Inc. (TSX VENTURE:XCT) ("CLTI" or the "Company") makes the following announcements.

Challenging economic conditions in the Company's markets and ongoing constrained consumer and business spending continue to hamper CLTI's ability to finalize agreements with new customers in Brazil and to secure additional sales from its existing Brazilian customers. In addition, the Company and its joint venture partner Samsung have been unable to deliver on any material milestones under their joint development project. Specifically, no definitive release date has been set for the commercial SoC product for the Company's beacon nor has any material progress been achieved in developing a receiver system for a small size transceiver module and single-chip solution. Due to these ongoing challenges, and in an effort to further reduce its operating costs, the Company has today provided working notice to 6 of its Calgary based employees.

As a result of these challenges CLTI intends to explore all reasonable alternatives to monetize some or all of its operating assets, including its equity interest in its indirect majority owned operating subsidiary X3 Telecomunicações e Equipamentos Ltda ("X3"), while also working to increase and secure all revenue streams payable to the Company by X3, including under the Company's technology license agreement with X3. The Company also continues to negotiate with potential new customers for the Company's location-based service offering in Brazil.

Despite the Canadian layoffs, CLTI expects to be able to service its existing Brazilian customer base through its remaining Brazilian based technical staff. However, in the event of the occurrence of a material technical problem with the Company's network which cannot be adequately remediated by the Company's remaining technical staff, customers may be entitled to reduce the number of the Company's beacons being employed in customers' fleets. In this event, the Company's revenue base could be materially eroded. In addition, due to the Canadian layoffs, the Company's ability to make advances to the functionality of its technology has become materially hampered.

Certain officers of the Company had previously provided unsecured debt financing to the Company and the Company's officers have deferred salary to facilitate the Company's ongoing operations. These individuals have agreed to temporarily forbear under their existing loans and salary deferrals, pending the results of the above cost cutting and asset monetization measures. If successful, the Company believes that these measures should lead to free cash flow being realized by the Company, which cash flow could be used to meet the Company's ongoing business obligations. Provided that the foregoing measures are successful in the near term, the Company will continue to operate its business in Canada and in Brazil. If the foregoing efforts are not successful in the near term, and the Company is unable to secure additional debt or equity financing, including from insiders (of which no assurance can be given), the Company believes that existing lenders will not continue to forbear under their loan arrangements. In such event it is unlikely that the Corporation will be able to continue as a going concern.

CLTI also reports that Mr. Bohdan Romaniuk has advised the Company of his decision not to seek re-election for another term on the Board of Directors. Mr. Romaniuk, who served for twelve years as a Director and the past ten years as Chairman, has accordingly submitted his resignation to allow an opportunity for a replacement to be found prior to the upcoming Annual and Special General Meeting of shareholders. Mr. Mike Lisogurski, who has served on the CLTI Board for ten years, has also provided notice that he will not be seeking re-election for another term and has likewise stepped down from the Board of Directors. CLTI would like to sincerely thank both Mr. Romaniuk and Mr. Lisogurski for their many years of service with the Company. The resignations were not due to any disagreement between the Company and the Directors. 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS:

Certain statements regarding Cell-Loc Location Technologies Inc. including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve known and unknown risks and uncertainties, most of which are beyond CLTI's control. These risks may cause actual financial and operating results, performance, levels of activity and achievements to differ materially from those expressed in, or implied by, such forward-looking statements.

Such risks and uncertainties include, but are not limited to: the impact of general economic conditions in Canada and Brazil; industry conditions including changes in laws and regulations including adoption of new laws and regulations, and changes in how they are interpreted and enforced, both in Canada and Brazil; competition; the lack of availability of qualified personnel; fluctuations in foreign exchange or interest rates; the ability to access sufficient capital from internal and external sources and the effectiveness of the Company's planned cost cutting measures. Readers are also referred to the risk factors described in other documents that CLTI files from time to time with securities regulatory authorities.

Accordingly, CLTI gives no assurance nor makes any representations or warranty that the expectations conveyed by the forward-looking statements will prove to be correct and actual results may differ materially from those anticipated in the forward looking statements. CLTI undertakes no obligation to publicly update or revise any forward-looking statements.

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

Contact Information

  • Cell-Loc Location Technologies Inc.
    Sheldon Reid
    President and CEO
    403.569.5700