<PAGE>   1
================================================================================


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001

                          COMMISSION FILE NO. 000-31885

                             SIGNALSOFT CORPORATION
             (Exact Name of Registrant as Specified in its Charter)

              DELAWARE                                     84-1268226
  (State or other jurisdiction of                       (I.R.S. Employer
   incorporation or organization)                    Identification Number)

                               1495 CANYON BLVD.,
                             BOULDER, COLORADO 80302
          (Address of Principal Executive Offices, Including Zip Code)

         Issuer's telephone number, including area code: (303) 381-3000

        Securities registered pursuant to Section 12(b) of the Act: NONE

    Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     As of August 8, 2001, there were 25,186,817 shares of $0.001 par value
Common Stock outstanding,

================================================================================

<PAGE>   2





                     SIGNALSOFT CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q

                                      INDEX


<TABLE>
<CAPTION>
                                                                                                      PAGE
                                                                                                     NUMBER
                                                                                                     ------
<S>         <C>                                                                                      <C>
PART I - FINANCIAL INFORMATION

Item 1.     Condensed Consolidated Financial Statements:

            Unaudited Condensed Consolidated Balance Sheets at December 31, 2000 and
            June 30, 2001.........................................................................     3

            Unaudited Condensed Consolidated Statements of Operations and Comprehensive
            Loss for the three and six months ended June 30, 2000 and 2001........................     4

            Unaudited Condensed Consolidated Statements of Cash Flows for the six months
            ended June 30, 2000 and 2001..........................................................     5

            Notes to Unaudited Condensed Consolidated Financial Statements........................     6

Item 2.     Management's Discussion and Analysis of Condition and Results of Operations...........     9

Item 3.     Quantitative and Qualitative Disclosures about Market Risk............................    13

PART II -   OTHER INFORMATION

Item 1.     Legal Proceedings.....................................................................    14

Item 2.     Change in Securities and Use of Proceeds..............................................    14

Item 3.     Defaults Upon Senior Securities.......................................................    14

Item 4.     Submission of Matters to a Vote of Security Holders...................................    14

Item 5.     Other Information.....................................................................    14

Item 6.     Exhibits and Reports on Form 8-K......................................................    15

SIGNATURES.........................................................................................   16
</TABLE>




                                       2
<PAGE>   3

                                     PART I
                              FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                     SIGNALSOFT CORPORATION AND SUBSIDIARIES

                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS



<TABLE>
<CAPTION>

                                                                            DECEMBER 31,          JUNE 30,
                                                                                2000                2001
                                                                           -------------       -------------
                                      ASSETS
<S>                                                                        <C>                 <C>
Current assets:
 Cash and cash equivalents ..........................................      $  58,374,899       $  24,195,625
 Trade accounts receivable, net .....................................          7,964,648           4,712,821
 Prepaid expenses and other .........................................          1,307,509           2,170,419
 Short-term investments, held to maturity ...........................         18,072,154          28,979,906
                                                                           -------------       -------------
         Total current assets .......................................         85,719,210          60,058,771

Equipment and leasehold improvements, net ...........................          3,579,067           4,805,349
Intangible and other assets, net ....................................          3,838,969          17,974,195
Restricted cash .....................................................                 --             597,810
Investment, at cost .................................................          1,863,650           1,863,650
Long-term investments, held to maturity .............................          8,869,788          18,866,336
                                                                           -------------       -------------
         Total assets ...............................................      $ 103,870,684       $ 104,166,111
                                                                           =============       =============

                       LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Capital lease obligation ...........................................      $      26,589         $         -
 Trade accounts payable .............................................            872,151             606,080
 Accrued compensation payable .......................................          1,924,942           3,211,046
 Other accrued expenses .............................................            931,618           1,203,433
 Deferred revenue ...................................................          1,340,244             257,385
                                                                           -------------       -------------
         Total current liabilities ..................................          5,095,544           5,277,944

Stockholders' equity:
 Preferred stock, par value $.001, 10,000,000 shares authorized, none
    issued ..........................................................                 --                  --
 Common stock, par value $.001, 65,000,000 shares
    authorized, 23,509,765 and 25,148,140 shares
    issued and outstanding
    in 2000 and 2001, respectively ..................................             23,510              25,148
 Additional paid-in capital .........................................        133,782,219         146,257,543
 Deferred stock option compensation .................................         (3,222,919)         (2,637,793)
 Accumulated deficit ................................................        (31,732,358)        (44,630,476)
 Treasury shares, at cost (5,370 shares, par value $.001) ...........            (28,622)            (28,622)
 Accumulated other comprehensive loss ...............................            (46,690)            (97,633)
                                                                           -------------       -------------
         Total stockholders' equity .................................         98,775,140          98,888,167
                                                                           -------------       -------------
         Total liabilities and stockholders' equity .................      $ 103,870,684       $ 104,166,111
                                                                           =============       =============
</TABLE>

                             See accompanying notes.



                                       3
<PAGE>   4

                     SIGNALSOFT CORPORATION AND SUBSIDIARIES

                 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

                        OPERATIONS AND COMPREHENSIVE LOSS




<TABLE>
<CAPTION>
                                                                            THREE MONTHS ENDED              SIX MONTHS ENDED
                                                                                 JUNE 30,                        JUNE 30,
                                                                      ----------------------------     ----------------------------
                                                                           2000            2001             2000            2001
                                                                      ------------    ------------     ------------    ------------
<S>                                                                   <C>             <C>              <C>             <C>
Revenue:
  License fees ....................................................   $  2,791,156    $  3,079,740     $  3,537,061    $  8,616,823
  Maintenance fees ................................................         83,201         101,046          151,401         282,087
  Professional services and other .................................        326,952         614,589        1,137,855       1,106,312
                                                                      ------------    ------------     ------------    ------------
          Total revenue ...........................................      3,201,309       3,795,375        4,826,317      10,005,222

Cost of revenue (exclusive of stock option compensation
  expense of $39,727 and $62,069 and $43,781 and $87,563 for
  the three and six months ended June 30, 2000 and 2001,
  respectively) ...................................................      1,003,772       1,732,699        1,615,331       3,391,266
                                                                      ------------    ------------     ------------    ------------
          Gross profit ............................................      2,197,537       2,062,676        3,210,986       6,613,956

Operating expenses:
Selling, general and administrative (exclusive of stock option
  compensation expense of $150,649 and $206,692 and $172,189 and
  $344,377 for the three and six months ended
  June 30, 2000 and 2001, respectively)............................      2,894,254       6,523,312        4,917,994      12,928,629
Research and development (exclusive of stock option
  compensation expense of $58,719 and $97,179 and $76,593
  and $153,186 for the three and six months ended June 30, 2000
  and 2001, respectively) ..........................................     2,293,602       3,560,368        4,136,450       6,576,414
Depreciation and amortization .....................................        382,771         927,432          452,630       1,522,508
Stock option compensation expense .................................        249,094         292,563          365,940         585,126
                                                                      ------------    ------------     ------------    ------------
          Total operating expenses ................................      5,819,721      11,303,675        9,873,014      21,612,677
                                                                      ------------    ------------     ------------    ------------

          Loss from operations ....................................     (3,622,184)     (9,240,999)      (6,662,028)    (14,998,721)

Interest and other income, net ....................................        215,589         951,338          580,586       2,100,603
                                                                      ------------    ------------     ------------    ------------
              Loss before minority interest .......................     (3,406,595)     (8,289,661)      (6,081,442)    (12,898,118)

Minority interest in loss of subsidiary ...........................         50,453              --           50,453
                                                                      ------------    ------------     ------------    ------------
              Net loss ............................................     (3,356,142)     (8,289,661)      (6,030,989)    (12,898,118)

Preferred stock dividend requirement and accretion of mandatory
  redeemable convertible preferred stock to redemption
  value ...........................................................       (979,698)             --       (1,891,205)             --
                                                                      ------------    ------------     ------------    ------------

          Net loss attributable to common stockholders ............   $ (4,335,840)   $ (8,289,661)    $ (7,922,194)   $(12,898,118)
                                                                      ============    ============     ============    ============

Loss per share -- basic and diluted ...............................   $      (0.59)   $      (0.34)    $      (1.15)   $      (0.54)
                                                                      ============    ============     ============    ============
Weighted average number of common shares outstanding--
   Basic and diluted ..............................................      7,387,780      24,184,471        6,915,914      23,864,612
                                                                      ============    ============     ============    ============

Other comprehensive loss -- foreign currency translation
  adjustment.......................................................         (6,774)        (10,052)          (6,774)        (50,943)
                                                                      ------------    ------------     ------------    ------------
          Comprehensive loss.......................................   $ (3,362,916)   $ (8,299,713)    $ (6,037,763)   $(12,949,061)
                                                                      ============    ============     ============    ============
</TABLE>



                             See accompanying notes.



                                       4
<PAGE>   5

                     SIGNALSOFT CORPORATION AND SUBSIDIARIES

            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



<TABLE>
<CAPTION>

                                                                            SIX MONTHS ENDED
                                                                                JUNE 30,
                                                                     --------------------------------
                                                                          2000              2001
                                                                     ------------       -------------
<S>                                                                  <C>                <C>
Cash flows from operating activities:
  Net loss ....................................................      $ (6,030,989)      $(12,898,118)
  Adjustments to reconcile net loss to net cash used by
    operating activities:
    Depreciation and amortization .............................           478,657          1,565,678
    Compensation expense related to issuance of
      common stock options ....................................           365,940            585,126
    Minority interest in loss of subsidiary ...................           (50,453)                --
    Changes in operating assets and liabilities:
      Trade accounts receivable ...............................        (3,088,227)         3,256,837
      Prepaid expenses and other ..............................            20,783           (786,253)
      Trade accounts payable ..................................          (967,836)          (704,811)
      Accrued expenses ........................................         1,436,078           (528,115)
      Deferred revenue ........................................          (102,508)           257,385
                                                                     ------------       ------------
         Net cash used by operating activities ................        (7,938,555)        (9,252,271)
                                                                     ------------       ------------

Cash flows from investing activities:
  Additions to equipment and leasehold improvements ...........        (1,569,947)        (1,916,540)
  Cash paid for short-term and long-term securities ...........                --        (20,904,300)
  Prepaid acquisition costs ...................................          (301,865)                --
  Restricted cash .............................................                --           (368,280)
  Cash paid in purchase of wholly owned subsidiary, net of cash
   acquired....................................................        (1,347,039)        (1,790,400)
                                                                     ------------       ------------
         Net cash used by investing activities ................        (3,218,851)       (24,979,520)
                                                                     ------------       ------------

Cash flows from financing activities:
  Prepaid stock offering costs ................................          (678,401)                --
  Proceeds from issuance of mandatorily redeemable,
    convertible preferred stock ...............................        12,122,295                 --
  Proceeds from the exercise of stock options .................           211,348             79,106
  Principal payments on debt and capital lease
    obligations ...............................................           (53,052)           (26,589)
                                                                     ------------       ------------
         Net cash provided by financing activities ............        11,602,190             52,517
                                                                     ------------       ------------
Net increase (decrease) in cash and cash equivalents ..........           444,784        (34,179,274)
Cash and cash equivalents at beginning of period ..............        18,051,349         58,374,899
                                                                     ------------       ------------
Cash and cash equivalents at end of period ....................      $ 18,496,133       $ 24,195,625
                                                                     ============       ============
Supplemental disclosures of cash flow from operations:
  cash paid for interest ......................................      $     36,441       $      1,567
                                                                     ============       ============
Supplemental disclosures of non-cash financing and investing
  activities:
common stock issued in purchase of subsidiaries ...............      $  2,975,861       $ 12,397,856
                                                                     ============       ============
</TABLE>

                             See accompanying notes.



                                       5
<PAGE>   6

                     SIGNALSOFT CORPORATION AND SUBSIDIARIES

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



(1)   BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

      (a)   Business and Basis of Presentation

      SignalSoft Corporation (the Company) is a Boulder, Colorado based
developer of location-based software services for wireless intelligent networks.
The Company operates in one business segment. The Company has three wholly owned
subsidiary companies, Bfound.com Services Inc. (Bfound.com), located in
Victoria, British Columbia, mobilePosition located in Kista, Sweden and
SignalSoft Japan Kabushiki Kaisha located in Tokyo, Japan. All significant
intercompany balances and transactions have been eliminated in consolidation.

      The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ significantly from those estimates.

      The accompanying unaudited financial information as of and for the three
and six months ended June 30, 2000 and 2001 has been prepared in accordance with
generally accepted accounting principles for interim financial information. All
significant adjustments, consisting of only normal and recurring adjustments,
that, in the opinion of management, are necessary for a fair presentation of the
results of operations and cash flows for the three and six months ended June 30,
2000 and 2001 have been included. Operating results for the six months ending
June 30, 2001 are not necessarily indicative of the results that may be expected
for the year ended December 31, 2001. These condensed consolidated financial
statements should be read in conjunction with the financial statements and notes
thereto for the year ended December 31, 2000 included in the Company's Annual
Report on Form 10-K.

      (b)   Revenue Recognition

      In accordance with the provisions of SOP 97-2, Software Revenue
Recognition (SOP 97-2), as amended by Statement of Position 98-9, Modification
of SOP 97-2, Software Revenue Recognition with Respect to Certain Transactions
(SOP 98-9), the Company recognizes software license revenue when persuasive
evidence of an arrangement exists, delivery has occurred, the fee is fixed or
determinable and collectibility is probable. In addition, SOP 97-2 requires that
revenue recognized from software arrangements be allocated to each element of a
multiple element arrangement based on the vendor specific objective evidence of
fair value for each element. The Company records revenue from licensing fees as
individual products are delivered and accepted by the customer. Revenue relating
to separate maintenance and service contracts is recognized ratably over the
service period. Professional services consulting fees are recognized as services
are provided.

      (c)   Loss per Share

      Loss per share is presented in accordance with the provisions of Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS No. 128).
Under SFAS No. 128, basic earnings (loss) per share (EPS) excludes dilution for
potential common stock issuances and is computed by dividing earnings or loss
available to common stockholders by the weighted average number of common shares
outstanding for the period. Diluted EPS reflects the potential dilution that
would occur if securities or other contracts to issue common stock were
exercised or converted into common stock. Basic and diluted EPS are the same in
2000 and 2001, as all potential common stock instruments, consisting of common
stock options and warrants and convertible preferred stock, are anti-dilutive.




                                       6
<PAGE>   7

      The following is a reconciliation of the numerators and denominators of
the basic and diluted EPS computations (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED                SIX MONTHS
                                                                JUNE 30,                     JUNE 30,
                                                       ------------------------       -----------------------
                                                         2000            2001           2000           2001
                                                       ---------       --------       --------       --------
<S>                                                     <C>            <C>            <C>            <C>
Numerator:
  Net loss attributable to common stockholders....      $ (4,336)      $ (8,290)      $ (7,922)      $(12,898)

Denominator:
  Basic weighted average shares outstanding ......         7,388         24,184          6,916         23,865
  Dilutive effect of employee stock options ......            --             --             --             --
                                                        --------       --------       --------       --------

  Basic and diluted weighted average shares
    outstanding...................................         7,388         24,184          6,916         23,865

  Loss per share basic and diluted ...............      $  (0.59)      $  (0.34)      $  (1.15)      $  (0.54)
</TABLE>


The number of antidilutive stock options (options whose exercise price is
greater than the average SignalSoft stock price during the period) omitted from
the computation of weighted average shares - diluted was 594,320 and 837,427 for
the three and six months ended June 30, 2000 and 2001, respectively.

      (d)   Reclassifications

      Certain prior period amounts have been reclassified to conform to the 2001
financial statement presentation.


      (e)   New Accounting Pronouncements

      In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 141, "Business Combinations"
which requires the use of the purchase method and eliminates the option of using
the pooling-of-interests method of accounting for all business combinations. The
provisions in this statement apply to all business combinations initiated after
June 30, 2001, and all business combinations accounted for using the purchase
method for which the date of acquisition is July 1, 2001, or later. The Company
does not believe the adoption of this statement will have a material impact on
the Company's financial position, results of operations or cash flows.

      In June 2001, the FASB issued Statement of Financial Accounting Standards
No. 142, "Goodwill and Other Intangible Assets" (FAS 142) which requires that
all intangible assets acquired, other that those acquired in a business
combination, be initially recognized and measured based on the asset's fair
value. The Company is required to adopt the provisions of FAS 142 effective
January 1, 2002. Goodwill and certain identifiable intangible assets will not be
amortized under SFAS 142, but instead will be reviewed for impairment at least
annually in accordance with the provisions of this statement. Other identifiable
intangibles will continue to be amortized over their useful lives. Management
has not determined the potential impact that this statement will have on the
Company's financial position, results of operations or cash flows.

(2)   INVESTMENTS

      The Company has invested proceeds from the initial public offering in
varying types of debt securities. Contractual maturities vary from 91 days to no
more than 5 years. The amortized cost, gross unrealized holding gains, gross
unrealized holding losses and fair value of held-to-maturity securities by major
security type and class of security at June 30, 2001 were as follows.

<TABLE>
<CAPTION>

                                                           GROSS               GROSS
          AT JUNE 30, 2001             AMORTIZED        UNREALIZED          UNREALIZED        AGGREGATE
          HELD-TO-MATURITY               COST          HOLDING GAINS      HOLDING LOSSES      FAIR VALUE
          ----------------           ------------      -------------      --------------     ------------
<S>                                    <C>             <C>                <C>                <C>
          Corporate bonds ........     20,980,668      $     61,454       $         --       $ 21,042,122
          Government securities...     26,865,574            36,769                (71)        26,902,272
                                     ------------      ------------       ------------       ------------
                                     $ 47,846,242      $     98,223       $        (71)      $ 47,944,394
                                     ============      ============       ============       ============
</TABLE>

Maturities of debt securities classified as held-to-maturity were as follows at
June 30, 2001:

<TABLE>
<CAPTION>

                   AT JUNE 30, 2001                                          AMORTIZED         AGGREGATE
                   HELD-TO-MATURITY                                            COSTS          FAIR VALUE
                   ----------------                                         ------------     ------------
<S>                                                                         <C>              <C>
                   Due greater than 90 days but less than 1 year........    $ 28,979,906     $ 29,023,339
                   Due after 1 years through 5 years....................      18,866,336       18,921,055
                                                                            ------------     ------------
                                                                            $ 47,846,242     $ 47,944,394
                                                                            ============     ============
</TABLE>



                                       7
<PAGE>   8

      The Company did not sell any securities classified as held-to-maturity,
nor did it realize any realized gains or losses on securities held-to-maturity
for the three months or six months ended June 30, 2001.

      On December 21, 2000, the Company purchased an approximate 1.3% interest
in Webraska Mobile Technologies, a French Limited Liability Company, for a cash
payment of $1,863,650. The Company uses the cost method to account for this
investment.

(3)   PURCHASE OF SUBSIDIARY

      On April 4, 2000 the Company purchased 76% of the common stock of
Bfound.com for 9,976 shares of SignalSoft common stock and 413,175 shares of
Class B common stock of our Nova Scotia subsidiary with a combined fair value of
approximately $2.3 million and $1.1 million in cash. On May 16, 2000, the
Company acquired the remaining 24% of Bfound.com's common stock for 135,172
shares of Class B common stock of its Nova Scotia subsidiary with fair value of
approximately $0.7 million and $0.4 million in cash. As a result of the
acquisition, the Company recorded approximately $4.7 million of intangible
assets, representing primarily the technology purchased from Bfound.com, and is
amortizing the intangible assets on a straight-line basis over five years. This
transaction has been accounted for using the purchase method of accounting. The
shares of the Nova Scotia subsidiary are convertible on a one-to-one basis into
shares of SignalSoft common stock at any time within five years of the
acquisition at the option of the holder. On the five-year anniversary of the
acquisition, the shares will convert at the Company's option.

      Pursuant to the terms of a Share Purchase Agreement, on May 25, 2001 the
Company acquired approximately 99% of all issued and outstanding capital stock
of mobilePosition AB, ("mobilePosition") a corporation organized under the laws
of Sweden. In consideration for the acquired shares of mobilePosition, the
Company paid $1.0 million in cash and issued 1,510,662 shares of its Common
Stock with a fair value of approximately $12.1 million to such former holders of
the mobilePosition shares . In relation to the Share Purchase Agreement, the
Company also agreed to reimburse mobilePosition for payments totaling $350,000
to certain of mobilePosition's employees as a result of the closing of the
acquisition. Such payments will be made in four equal installments at the end of
each of the next four quarters beginning June 30, 2001. As a result of the
acquisition, the Company recorded approximately $14.9 million of intangible
assets, representing primarily the technology, market presence and employee
value provided by mobilePosition. The intangible assets will be amortized on a
straight-line basis over the next five years.

      In August 2001, the Company acquired all remaining shares of
mobilePosition. The consideration paid by the Company for such remaining
acquisitions was 0.733 shares of the Company's Common Stock per share of
mobilePosition, or an aggregate of approximately 19,351 shares of the Company's
Common Stock for all remaining shares of mobilePosition.

      The pro forma results listed below are unaudited and reflect the impact of
purchase price adjustments (in thousands, except per share data):
<TABLE>
<CAPTION>

                                                                             THREE MONTHS ENDED            SIX MONTHS ENDED
                                                                                   JUNE 30,                     JUNE 30,
                                                                           -----------------------      -------------------------
                                                                              2000           2001           2000           2001
                                                                           ---------      --------      ---------      ----------
<S>                                                                        <C>            <C>            <C>            <C>
     Total revenue:..................................................      $  3,216       $  3,800       $  4,888       $ 10,086
     Net loss attributed to common stockholders......................      $  6,977       $ (9,866)      $(11,826)      $(17,984)
     Basic and diluted loss per share................................      $  (0.97)      $  (0.39)      $  (1.54)      $  (0.76)
</TABLE>

      MobilePosition is engaged in developing location based applications and
technical solutions for location provisioning services to the wireless
communications market. SignalSoft presently intends to have mobilePosition
continue these business activities.

(4)   SIGNIFICANT CUSTOMERS AND CONCENTRATION OF CREDIT RISK

      Revenue earned from significant customers for the three and six months
ended June 30, 2000 and 2001, respectively, is as follows:

<TABLE>
<CAPTION>
                                     THREE MONTHS ENDED               SIX MONTHS ENDED
                                          JUNE 30,                        JUNE 30,
                                ---------------------------    -------------------------------
                                    2000             2001            2000             2001
                                -----------    ------------    -------------    --------------
<S>                             <C>            <C>             <C>              <C>
             Customer A                84%               --             56%               22%
             Customer B                 --               38%             --               29%
             Customer C                 --               12%             --               --
             Customer D                 --               17%             --               --
             Customer E                 --               12%             --               --
             Customer F                 --               --              20%              --
</TABLE>



                                       8
<PAGE>   9
<TABLE>

<S>                             <C>            <C>             <C>              <C>

             Customer G               --                 --              --               12%
</TABLE>


      At June 30, 2000 and 2001, receivables from these customers represented
81% and 48% and 80% and 39%, respectively, of trade accounts receivable.

      As of June 30, 2001, the Company has approximately $49 million and $23
million on deposit with two financial institutions.

ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

      This Quarterly Report on Form 10-Q contains a number of forward-looking
statements (as such term is defined in the Private Securities Litigation Reform
Act of 1995) that reflect our current views with respect to future events and
financial performance. We use words such as "estimates," "projects," "believes,"
"anticipates," "intends," "expects," "future," and similar expressions to
identify forward-looking statements. Such statements are based on currently
available information and are subject to risks and uncertainties that could
cause actual results to differ materially from those contemplated in such
forward-looking statements. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this Form
10-Q. We do not undertake any obligation to release publicly any revisions to
these forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.

OVERVIEW

      Since 1995, we have been developing and marketing mobile location services
products to the wireless industry. We have focused our efforts on designing a
software platform and building related applications that help carriers generate
new revenue from one of their key assets -- the location of their subscribers.
Our software products enable the delivery of location-based voice and data
services to wireless operators and help operators to capitalize on the growing
trend toward mobile use of the Internet.

      We were incorporated in Colorado in 1994 and reincorporated in Delaware in
1998. We have a limited operating history. From our inception until 1997, our
efforts were primarily devoted to research and development, raising capital,
recruiting personnel and establishing key industry partnerships. We generated
total revenue of approximately $1.1 million in 1998, $2.0 million in 1999, $13.6
million in 2000 and $10.0 million for the six months ended June 30, 2001. We
incurred net losses of approximately $4.5 million in 1998, $7.6 million in 1999,
$13.2 million in 2000, and $12.9 million for the six months ended June 30, 2001.
We expect that for the next few years our losses will continue on a quarterly
basis. As of June 30, 2001, we had an accumulated deficit of $44.7 million.

      In 1996, the Federal Communications Commission mandated that all wireless
carriers offer a 911 service with features equivalent in many respects to those
of wireline 911 services. We used this mandate as an opportunity to develop a
mobile location services product called Wireless 911 that met the requirements
of the telecommunications industry. Although we realized that the revenue
potential for Wireless 911 was somewhat limited, we believed that our
development and rollout of Wireless 911 was an opportunity to capture market
share in mobile location services and to develop valuable partnerships in the
wireless industry.

      We introduced Wireless 911 in 1997. Three of the four largest wireless
operators in the United States, based on the number of subscribers at the end of
June 30, 2001, have licensed our Wireless 911 product. Actual deployment of the
product has been slow. We believe this is due primarily to contractual and
liability issues among carriers, local safety agencies and local exchange
carriers. Following our launch of Wireless 911, we focused on our core strategy
of developing mobile location services products that help wireless carriers
differentiate their service offerings, build subscriber loyalty and generate
additional revenue. We launched two products in 1998 -- local.info and Location
Sensitive Billing. In addition, we opened our first international office in the
United Kingdom, and began actively marketing our services to network operators
in Europe. During 2001 we announced our Bfound product, the latest addition to
our product line. Additionally, in May 2001 we announced our most recent
acquisition, mobilePosition, a Sweden-based company that develops
consumer-oriented mobile location-based applications for wireless network
operators. This purchase brings us additional marketing and distribution
relationships with major industry players and allows us to immediately provide
an extended range of corporate and consumer applications to wireless network
operators worldwide. We continued our strategy of establishing partnerships
throughout the industry, expanding our selling and marketing efforts in Europe,
Japan, Asia


                                       9
<PAGE>   10

      Pacific, Sweden, Australia and the United States and adding features to
our products.

      Our limited operating history makes it difficult to forecast future
operating results. Since our inception, we have continued to invest
substantially in research and development, marketing, domestic and international
sales channels, professional services and our operational and administrative
infrastructure, resulting in losses and negative operating cash flows since our
inception. We expect that for the next few years our losses will continue on a
quarterly basis. Although our revenue has grown in recent quarters, our revenue
may not increase at a rate sufficient to achieve and maintain profitability, if
at all. Also, if our customers continue to purchase our products with perpetual
licenses, then our revenue will continue to vary significantly from quarter to
quarter. We anticipate that our operating expenses will increase for the
foreseeable future as we expand our product development, sales and marketing,
professional services and operational and administrative staff.


RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2000 COMPARED WITH THREE MONTHS ENDED JUNE 30, 2001

      Revenue

      Total revenue increased $0.6 million, from approximately $3.2 million for
the three months ended June 30, 2000 to approximately $3.8 million for the three
months ended June 30, 2001. The increase in revenue during the three months
ended June 30, 2001, resulted primarily from an increase in license fees
associated with the sale of licenses for various products under our reseller
agreements and the direct sale of our Wireless 911 products in the United
States. The increase in related maintenance fees results primarily from
deployment of our products by our resellers. During the three months ended June
30, 2001 approximately 38%, 17%, 12% and 12% of our revenue resulted from sales
to Sprint, Orange UK, Compaq and AT&T Wireless respectively.

      License fees. License fee revenue increased $0.3 million, from
approximately $2.8 million for the three months ended June 30, 2000 to $3.1
million for the three months ended June 30, 2001. The increase in license fee
revenue during the three months ended June 30, 2001 resulted primarily from the
sale of licenses for various products under our reseller agreements and the
direct sale of our Wireless 911 products in the United States. The license fees
for the three months ended June 30, 2000 were derived primarily from the direct
sale of licenses for various products under our reseller agreements.

      Maintenance fees. Maintenance fee revenue increased approximately $18,000,
from approximately $83,000 for the three months ended June 30, 2000 to
approximately $101,000 for the three months ended June 30, 2001. The change in
maintenance fee revenue is primarily due to the deployment of our products by
our resellers.

      Professional services and other. Professional services and other revenue
increased $0.3 million, from approximately $0.3 million for the three months
ended June 30, 2000 to $0.6 million for the three months ended June 30, 2001.
The increase resulted primarily from channel partner support services as they
deploy SignalSoft products to their customer base.

      Cost  of Revenue

      Cost of revenue increased $0.7 million, from approximately $1.0 million
for the three months ended June 30, 2000 to approximately $1.7 million for the
three months ended June 30, 2001. The dollar increase in cost of sales was due
primarily to the growth in operations personnel from 18 at June 30, 2000 to 48
at June 30, 2001, which accounted for approximately $0.3 million of the
increase, and an increase of approximately $0.4 million relating to increased
operations consulting and travel costs. As a percentage of total revenue, cost
of revenue increased to 45% for the three months ended June 30, 2001 from 31%
for the three months ended June 30, 2000. This increase resulted from greater
revenue in 2000 to cover fixed costs.

      Selling, General and Administrative

      Selling, general and administrative costs increased $3.6 million, from
approximately $2.9 million for the three months ended June 30, 2000 to
approximately $6.5 million for the three months ended June 30, 2001. The change
was due primarily to an increase in selling, general and administrative
personnel from 57 as of June 30, 2000 to 110 as of June 30, 2001, which
represented approximately $2.2 million in additional salary and benefits, an
increase of $0.5 million in commission expense, an $0.4 increase in costs
relating to the acquisition of mobilePosition, an increase of approximately
$0.4 million in marketing and travel expenses.




                                       10
<PAGE>   11

      Research and Development

      Research and development expenses increased $1.3 million, from
approximately $2.3 million for the three months ended June 30, 2000 to
approximately $3.6 million for the three months ended June 30, 2001. The change
in research and development costs was due primarily to an increase in research
and development personnel from 52 as of June 30, 2000 to 96 as of June 30, 2001,
which represented approximately $0.8 million of the change, an increase in
consulting costs of approximately $0.1 million and an increase of approximately
$0.4 million in operating costs resulting from benefits and office expense.

      Depreciation and Amortization

      Depreciation and amortization increased $0.5 million, from approximately
$0.4 million for the three months ended June 30, 2000 to $0.9 million for the
three months ended June 30, 2001. The increase was due primarily to an increase
of approximately $0.3 million in the amortization of intangible assets during
the three months ended June 30, 2001, resulting from the acquisition of
mobilePosition completed in May 2001 and an increase in depreciation expense as
a result of an increase in equipment and leasehold improvements from
approximately $2.0 million at June 30, 2000 to approximately $4.8 million at
June 30, 2001.

      Stock Option Compensation Expense

      Stock option compensation expense increased approximately $44,000, from
approximately $249,000 for the three months ended June 30, 2000 to approximately
$293,000 for the three months ended June 30, 2001. These costs relate to options
granted in 1997, 1998, 1999 and 2000 under our stock option plans with exercise
prices deemed to be at less than fair value of the common stock at the date of
grant. Unrecognized compensation expense as of June 30, 2001 totaled
approximately $2.6 million.

      Interest and Other Income, Net

      Other income increased $0.7 million, from approximately $0.2 million for
the three months ended June 30, 2000 to approximately $0.9 million for the three
months ended June 30, 2001. The increase results primarily from interest income
derived from higher cash and cash equivalents and investment balances resulting
from proceeds from our private placement in January 2000, and net proceeds of
approximately $78.9 million received upon the completion of our initial public
offering in August 2000.


SIX MONTHS ENDED JUNE 30, 2000 COMPARED WITH SIX MONTHS ENDED JUNE 30, 2001

      Revenue

      Total revenue increased $5.2 million, from approximately $4.8 million for
the six months ended June 30, 2000 to approximately $10.0 million for the six
months ended June 30, 2001. The increase in revenue during the six months ended
June 30, 2001, resulted primarily from an increase in license fees associated
with the sale of licenses for various products under our reseller agreements and
the direct sale of our Wireless 911, Location Manager, and local.info products.
The increase in related maintenance fees results primarily from deployment of
our products. During the six months ended June 30, 2001, approximately 22%, 12%
and 29%, respectively, of our revenue resulted from sales to Lucent
Technologies, Inc., Siemens, and Sprint.

      License fees. License fee revenue increased $5.1 million, from
approximately $3.5 million for the six months ended June 30, 2000 to
approximately $8.6 million for the six months ended June 30, 2001. The increase
in license fee revenue during the six months ended June 30, 2001 resulted
primarily from the sale of licenses for various products under our reseller
agreements and the direct sale of our Wireless 911 products in the United
States. The license fees for the six months ended June 30, 2000 were derived
primarily from the direct sale of our local.info product line and sale of
licenses for various products under our reseller agreements.

      Maintenance fees. Maintenance fee revenue increased $131,000, from
approximately $151,000 for the six months ended June 30, 2000 to approximately
$282,000 for the six months ended June 30, 2001. The change in maintenance fee
revenue is due to the deployment of our products.

      Professional services and other. Professional services and other revenue
decreased approximately $32,000, from approximately $1.138 million for the six
months ended June 30, 2000 to approximately $1.106 million for the six months
ended June 30, 2001. The decrease resulted primarily from our channel partners
becoming more self-sufficient as they deploy SignalSoft products to their
customer base.



                                       11
<PAGE>   12

     Cost of Revenue

      Cost of revenue increased $1.8 million, from approximately $1.6 million
for the six months ended June 30, 2000 to approximately $3.4 million for the six
months ended June 30, 2001. The dollar increase in cost of sales was due
primarily to the growth in operations personnel from 24 at June 30, 2000 to 48
at June 30, 2001, which accounted for approximately $1.0 million in additional
salary and benefits of the increase, an increase of approximately $0.2 million
relating to increased operations consulting and travel costs, and an increase of
approximately $0.6 million resulting from the cost of third party products
associated with the sale of our products. As a percentage of total revenue, cost
of revenue increased to 34% for the six months ended June 30, 2001 from 33% for
the six months ended June 30, 2000. This increase resulted from greater revenue
in 2000 to cover fixed costs.

      Selling, General and Administrative

      Selling, general and administrative costs increased $8.0 million, from
approximately $4.9 million for the six months ended June 30, 2000 to
approximately $12.9 million for the six months ended June 30, 2001. The change
was due primarily to an increase in selling, general and administrative
personnel from 46 as of June 30, 2000 to 110 as of June 30, 2001, which
represented approximately $4.0 million of additional salary and benefits
expense, an increase of $2.0 million in commission expense, an increase of
approximately $0.4 million associated with the acquisition of mobilePosition, an
increase of approximately $0.5 million in travel and approximately $1.1 million
in marketing expenses.

      Research and Development

      Research and development expenses increased $2.5 million, from
approximately $4.1 million for the six months ended June 30, 2000 to
approximately $6.6 million for the six months ended June 30, 2001. The change in
research and development costs was due primarily to an increase in research and
development personnel from 54 as of June 30, 2000 to 96 as of June 30, 2001,
which represented approximately $2.4 million of the change in additional salary
and benefit expense and an increase of approximately $0.1 million in travel
costs.

     Depreciation and Amortization

      Depreciation and amortization increased $1.1 million, from approximately
$0.4 million for the six months ended June 30, 2000 to approximately $1.5
million for the six months ended June 30, 2001. The increase was due primarily
to an increase of approximately $0.6 million in the amortization of intangible
assets during the six months ended June 30, 2001, resulting from the acquisition
of mobilePosition completed in May 2001, and an increase in depreciation expense
increased as a result of an increase in equipment and leasehold improvements
from approximately $2.0 million at June 30, 2000 to approximately $4.8 million
at June 30, 2001.

      Stock Option Compensation Expense

      Stock option compensation expense increased approximately $0.2 million,
from approximately $0.4 million for the six months ended June 30, 2000 to
approximately $0.6 million for the six months ended June 30, 2001. These costs
relate to options granted in 1997, 1998, 1999 and 2000 under our stock option
plans with exercise prices deemed to be at less than fair value of the common
stock at the date of grant. Unrecognized compensation expense as of June 30,
2001 totaled approximately $2.6 million.

      Interest and Other Income, Net

      Other income increased $1.5 million, from approximately $0.6 million for
the six months ended June 30, 2000 to approximately $2.1 million for the six
months ended June 30, 2001. The increase results primarily from interest income
derived from higher cash and cash equivalents and investment balances resulting
from proceeds from our private placement in January 2000, and net proceeds of
approximately $78.9 million received upon the completion of our initial public
offering in August 2000.


LIQUIDITY AND CAPITAL RESOURCES

      Since our inception and until our initial public offering in August 2000,
we financed our operations primarily through the private offering of mandatorily
redeemable convertible preferred stock, which totaled $44.3 million, net of
issuance costs. In addition, we financed our operations through an equipment
loan, capital leases and short-term bridge loans. Upon completion of our initial
public


                                       12
<PAGE>   13

offering, a total of 5,060,000 common shares were sold to the public, which
resulted in net proceeds to the Company after expenses of approximately $78.9
million. Additionally, upon completion of the initial public offering, all the
mandatorily redeemable, convertible preferred stock converted into common stock.
We also receive funds, from time to time, from the exercise of options to
purchase shares of our stock.

      During the six months ended June 30, 2001, cash and cash equivalents
decreased $34.2 million from approximately $58.4 million at December 31, 2000 to
approximately $24.2 million at June 30, 2001. This decrease resulted from cash
used by investing activities of $25.0 million and by cash used in operating
activities of $9.2 million.

      Net cash used in operating activities of $9.2 million during the six
months ended June 30, 2001 resulted primarily from the net operating loss, which
reflects our continued investment in growth, cash expenditures for prepaid
expenses and other assets, decrease of deferred revenue and accrued expenses.
This cash usage is offset by the change in accounts receivable.

      Net cash used by investing activities of $25.0 million for the six months
ending June 30, 2001, resulted primarily from a $21.0 million investment in
short and long-term securities, and capital expenditures of $2.0 million
expended in our expansion efforts and increased personnel from 200 at December
31, 2000, to 254 at June 30, 2001. As of June 30, 2001, we had cash, cash
equivalents, and marketable short-term and long-term investments of $72.0
million.

      Net cash provided by financing activities of $53,000 for the six months
ended June 30, 2001 resulted primarily from proceeds of approximately $80,000
received from the exercise of stock options, offset by principal payments on
capital lease obligations of $27,000.

      As of June 30, 2001, our principal commitments consisted of obligations
outstanding under operating leases and a capitalized lease. In addition, we have
a revolving line of credit agreement providing for borrowings up to $0.4 million
through April 2002. No borrowings were outstanding under this line of credit as
of June 30, 2001. We anticipate an increase in capital expenditures and lease
commitments consistent with our future growth and expansion plans.

      We believe that our current cash and investment securities will be
sufficient to meet our current operating cash needs. If our plans or assumptions
change or are inaccurate or if we make any acquisitions, we may need to seek
capital sooner than anticipated either through public or private debt or equity
offerings. If we raise funds through the issuance of equity securities, the
percentage ownership of our then-current stockholders may be reduced and the
holders of new equity securities may have rights, preferences or privileges
senior to our common stock. If we obtain additional funds through a bank credit
facility or through issuance of debt securities or preferred stock, this
indebtedness or preferred stock would have rights senior to the rights of our
common stock, and their terms could impose significant restrictions on our
operations. If we are unable to obtain additional financing, we may be required
to reduce the scope of our planned expansion, product development and marketing
efforts which could have an adverse impact on our business, financial condition
and operating results.

      Based on our limited operating experience, we do expect some degree of
seasonality in our sales. Such seasonality, if any, we would expect to be
minimal and would be realized in the third and fourth quarter during the year.
Additionally, we do not expect that inflation will have a material effect on our
results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

      The following discusses our exposure to market risk related to changes in
interest rates and foreign currency exchange rates. This discussion contains
forward-looking statements that are subject to risks and uncertainties. Actual
results could vary materially as a result of a number of factors including those
set forth in the Risk Factors section of the Company's Annual Report on Form
10-K for the year ended December 31, 2000. As of June 30, 2001, we had
short-term investments of $29.0 million and long-term investments of $18.9
million. These investments are subject to interest rate risk and will decrease
in value if market interest rates increase. A hypothetical increase or decrease
in market interest rates by 10% from the June 30, 2001 rates would cause the
fair value of these investments to change by an insignificant amount. We have
the ability to hold these investments until maturity, and therefore we do not
expect the value of these investments to be affected to any significant degree
by the effect of a change in market interest rates. Declines in interest rates
over time would, however, reduce our interest income.

      During the six months ended June 30, 2001, approximately 27% of our
revenue resulted from sales outside the United States, predominantly in Europe.
Fluctuations in the value of foreign currencies relative to the United States
dollar could cause us to incur currency exchange losses. We expect that as a
result of our partner sales channel strategy that we will be paid in United
States dollars for the majority of our international sales. However, to the
extent our international revenue increases and we are paid in currency other


                                       13
<PAGE>   14

than United States dollars, we will be exposed to greater foreign currency
exchange risk. We have experienced some fluctuation in the value of payments
made to us in currencies other than United States dollars. Although these
fluctuations have not materially affected our financial results, these types of
fluctuations subject us to potential foreign currency gains and losses that may
have a material effect on our financial results in the future. Additionally, we
do not maintain significant asset or cash account balances in currencies other
than the United States dollar. Therefore, we do not believe that we currently
have any significant direct foreign currency exchange rate risk.

      We have not engaged in foreign currency or other hedging activities and do
not enter into derivative financial instrument transactions for trading or other
speculative purposes. We have no experience with any such activities or
transactions, and if we enter into them in the future, we could incur
substantial losses on these activities.


                                     PART II
                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      We are not a party to any material legal proceedings, nor are we currently
aware of any threatened material legal proceedings. From time to time, we may
become involved in litigation relating to claims arising out of our operations
in the normal course of our business.

ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS

      On August 2, 2000, in connection with our initial public offering, a
Registration Statement on Form S-1 (No. 333-34670) was declared effective by the
Securities and Exchange Commission, pursuant to which 5,060,000 shares of our
common stock, including underwriters' over-allotment, were offered and sold for
our account at a price of $17.00 per share. The managing underwriters were
Salomon Smith Barney, Donaldson, Lufkin & Jenrette, and Lehman Brothers.
Aggregate gross proceeds from the offering were approximately $86.0 million.

      From our initial public offering, we incurred approximately $6.0 million
in underwriters' discounts and commissions and approximately $1.1 million in
legal, accounting and document preparation fees. After deducting expenses of the
offering, we received net offering proceeds of approximately $78.9 million. The
net proceeds were invested in short-term financial instruments. No payments
constituted direct or indirect payments to any of our directors, officers or
general partners or their associates, to persons owning 10% or more of any class
of our equity securities or to any of our affiliates.

      During the six months ended June 30, 2001, net proceeds from the initial
public offering were utilized primarily for research and development activities,
general corporate activities, acquisitions and capital expenditures. The actual
amount of net proceeds we spend on a particular use will depend on many factors,
including our future revenue growth; additional financing sources, if any,
availability and desirability of acquisition candidates; the amount of
expenditures required for other uses; and the amount of cash generated or used
by our operations. Many of these factors are beyond our control. Therefore, our
management has broad discretion in the use of the net proceeds. Until we use the
net proceeds of the offering as described above, we intend to continue to invest
the majority of net proceeds in investment grade marketable securities and
limited funds in longer term investment grade securities.

      During the three and six months ended June 30, 2001, we issued
148,390 and 207,390, respectively, shares of common stock upon the exercise of
employee stock options granted under the Company's 1995 Non-Qualified Stock
Option Plan resulting in total proceeds of $80,000.

      During the three and six months ended June 30, 2001, in connection with
the purchase of mobilePosition, we issued 1,510,662 shares of our Common Stock
pursuant to Regulation S promulgated under the Securities Act of 1933.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

      Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      Not applicable.

ITEM 5. OTHER INFORMATION



                                       14
<PAGE>   15

      Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

      (a)   Exhibits

            None.

      (b)   Reports on Form 8-K

            On May 29, 2001, the Company filed a report on Form 8-K reporting
the acquisition of mobilePosition AB, a corporation organized under Swedish
Laws, on May 25, 2001.

            On August 2, 2001, the Company filed a report on Form 8-K disclosing
that no financial statements were required to be filed in connection with the
mobilePosition acquisition and clarifying the revenue effect of a contract
discussed during its webcast conference call on July 25, 2001.



                                       15
<PAGE>   16

                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                         SIGNALSOFT CORPORATION

                                         By    /s/ ANDREW M. MURRAY
                                           -------------------------------------
                                                     Andrew M. Murray
                                           Senior Vice President of Finance and
                                                  Chief Financial Officer

Date: August 13, 2001

                                       16