<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                       SECURITIES AND EXCHANGE ACT OF 1934
(Mark One)

[ ]     ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934

[X]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934


        FOR THE TRANSITION PERIOD FROM JANUARY 1, 2002 TO AUGUST 31, 2002

                         COMMISSION FILE NUMBER 0-26140

                          MINORPLANET SYSTEMS USA, INC.
             (Exact name of Registrant as specified in its charter)

            DELAWARE                                          51-0352879
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                          Identification Number)

                            1155 KAS DRIVE, SUITE 100
                             RICHARDSON, TEXAS 75081
          (Address of principal executive offices, including zip code)

       (Registrant's telephone number, including area code) (972) 301-2000

        Securities Registered Pursuant to Section 12(b) of the Act: NONE

           Securities Registered Pursuant to Section 12(g) of the Act:

                          COMMON STOCK, $.01 PAR VALUE

                              (Title of each Class)

         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   .
             ---    ---

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ___

         Indicate by check mark whether the Registrant is an accelerated filer
(as defined in Exchange Act Rule 12b-2).

         YES     NO  X
             ---    ---

         The aggregate market value of the common equity held by non-affiliates
of the Registrant as of November 22, 2002 was $3,905,069.*

The number of shares outstanding of Registrant's Common Stock was 48,349,161 as
of November 22, 2002.

<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the Company's definitive proxy statement to be filed with
the Securities and Exchange Commission within 120 days after August 31, 2002
(the "Proxy Statement") are incorporated by reference into Part III of the Form
10-K.

----------

*Excludes the Common Stock held by executive officers, directors and by
stockholders whose ownership exceeds 5% of the Common Stock outstanding at
November 22, 2002. Exclusion of such shares should not be construed to indicate
that any such person possesses the power, direct or indirect, to direct or cause
the direction of the management or policies of the Registrant or that such
person is controlled by or under common control with the Registrant.



<PAGE>


                          Minorplanet Systems USA, Inc.

                                    FORM 10-K
           For the Eight Month Transition Period Ended August 31, 2002

                                      INDEX

<Table>
<Caption>
                                                                           Page
                                                                           ----
<S>           <C>                                                         <C>

PART I
     ITEM 1.  BUSINESS....................................................... 1
     ITEM 2.  PROPERTIES.....................................................18
     ITEM 3.  LEGAL PROCEEDINGS..............................................18
     ITEM 4.  SUBMISSIONS OF MATTERS TO VOTE OF SECURITY HOLDERS.............18

PART II
     ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
              STOCKHOLDER MATTERS............................................19
     ITEM 6.  SELECTED FINANCIAL DATA........................................20
     ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS............................22
     ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.....31
     ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA....................31
     ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT AUDITORS ON
              ACCOUNTING AND FINANCIAL DISCLOSURE............................31

PART III
     ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.............31
     ITEM 11. EXECUTIVE COMPENSATION.........................................31
     ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
              AND MANAGEMENT.................................................32
     ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................32
     ITEM 14. CONTROLS AND PROCEDURES........................................32


PART IV
     ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
              ON FORM 8-K....................................................33
</Table>


                                       i
<PAGE>


                                     PART I

ITEM 1. BUSINESS

GENERAL

         The following discussion is qualified in its entirety by the more
detailed information and financial statements (including the notes thereto)
appearing elsewhere in this Transition Report on Form 10-K. Stockholders should
carefully consider the information presented under "Risk Factors" below.

HISTORICAL BACKGROUND

         Minorplanet Systems USA, Inc., a Delaware Corporation (the "Company"),
develops and implements mobile communications solutions for service vehicle
fleets, long-haul truck fleets, and other mobile-asset fleets, including
integrated voice, data and position location services. The Company markets and
sells the Vehicle Management Information(TM) ("VMI") product, licensed from
Minorplanet Limited, in the automatic vehicle location ("AVL") market in the
United States. VMI is designed to maximize the productivity of a mobile
workforce as well as reduce vehicle mileage and fuel-related expenses.

         The initial application for the Company's wireless enhanced services,
the Series 5000, was developed for, and sold to, companies that operate in the
long-haul trucking market. The Company provides mobile communications services
to the long-haul trucking market through a wireless enhanced services network,
which utilizes patented technology developed and owned by the Company, to
integrate various transmission, long-distance, switching, tracking and other
services provided through contracts with certain telecommunications companies
and cellular carriers. The Company's communications network covers 98% of the
available cellular service areas in the United States and 100% of the available
A-side coverage in Canada. A-side coverage refers to a type of license awarded
by the FCC to provide cellular service in a specific area. See "Infrastructure
and Operations - Wireless Infrastructure" on page 7 for a more detailed
description of A-side coverage. Call processing and related functions for the
Company's network are provided through the Company's Network Services Center
(the "NSC"). The Company holds 41 United States and 13 foreign patents that
cover certain key features of its network that are used in locating and
communicating with vehicles using the existing cellular infrastructure.

         On December 31, 1999, the Company's wholly owned subsidiary,
HighwayMaster Corporation, a Delaware corporation, merged with and into the
Company. Following the consummation of the merger, the Company was the sole
surviving and operating entity. The merger was undertaken primarily to eliminate
an unnecessary corporate layer, and thus, reduce administrative expenses
associated with maintaining the separate existence of HighwayMaster Corporation.
When the merger became effective, all assets, obligations and liabilities of
HighwayMaster Corporation became the assets, obligations and liabilities of the
Company by operation of law. In connection with the merger, the Company obtained
consents to the assignment of third party contracts from HighwayMaster
Corporation to the Company, and other consents deemed necessary or advisable by
the Company.

         Effective April 10, 2000, the Company amended its Certificate of
Incorporation to change its corporate name to @Track Communications, Inc.

         On June 5, 2001, the Company effected a 1-for-5 reverse stock split
that was approved by the stockholders at the annual meeting.

         On June 21, 2001, the Company consummated the stock issuance
transactions approved by the Company's stockholders at the annual meeting on
June 4, 2001. As a result of the closing of transactions contemplated by that
certain Stock Purchase and Exchange Agreement by and among the Company,
Minorplanet Systems PLC, a United Kingdom public limited company ("Minorplanet
UK"), and Mackay Shields LLC, dated February 14, 2001 (the "Purchase
Agreement"), the Company issued 30,000,000 shares of its common stock (post
reverse stock split) in a change of control transaction to Minorplanet UK, which
is now the majority stockholder of the Company. In exchange for this stock
issuance, Minorplanet UK paid the Company $10,000,000 in cash and transferred to
the Company all of the shares of its wholly-owned subsidiaries, Minorplanet
Limited and its wholly-owned subsidiary, Mislex(302) Limited, now known as,
Minorplanet Systems USA Limited, which holds an exclusive, royalty-free, 99-year
license to market, sell and operate Minorplanet UK's vehicle management
information technology in the United States, Canada and Mexico (the "License
Rights"). Minorplanet UK now beneficially owns approximately


                                       1
<PAGE>


62% of the outstanding shares of the Company's common stock (on a non-fully
diluted basis), which is now the sole voting security of the Company.

         On March 15, 2002, the Company completed the sale to Aether Systems,
Inc. ("Aether") of certain assets and licenses related to the Company's
long-haul trucking and asset-tracking businesses pursuant to the Asset Purchase
Agreement effective as of March 15, 2002, by and between the Company and Aether
(the "Sale"). Under the terms of the Asset Purchase Agreement, the Company sold
to Aether assets and related license rights to its Platinum Service software
solution, 20/20V(TM), and TrackWare(R) asset and trailer-tracking products. In
addition, the Company and Aether agreed to form a strategic relationship with
respect to the Company's long-haul customer products, pursuant to which the
Company assigned to Aether all service revenues generated post-closing from its
HighwayMaster Series 5000 ("Series 5000") customer base. Aether, in turn, agreed
to reimburse the Company for the network and airtime service costs related to
providing the Series 5000 service. The two companies have also agreed to work
jointly in the adaptation of the Minorplanet Vehicle Management Information
technology (VMI(TM)) ("VMI") technology for the potential distribution of
VMI(TM) by Aether to the long-haul-trucking market.

         As consideration for the Sale, the Company received $3 million in cash,
of which $0.8 million remains held in escrow as of August 31, 2002 to be
released to the Company during the next fiscal year provided certain conditions
are met by the Company. The Company also received a note for $12 million
payable, at the option of Aether, in either cash or convertible preferred stock
in three equal installments of $4 million on April 14, May 14, and June 14,
2002. The consideration for the Sale was determined through arms length
negotiation between the Company and Aether. Aether later irrevocably agreed to
pay cash in lieu of preferred stock for each of the three $4 million
installments. As of August 31, 2002, all three $4 million cash installments had
been received by the Company from Aether. See the Form 8-K filed by the Company
on March 27, 2002 which is incorporated by reference herein and Note 4 to the
Consolidated Financial Statements attached hereto.

         Effective July 22, 2002, the Company amended its Certificate of
Incorporation to change its corporate name to Minorplanet Systems USA, Inc.

PRODUCTS AND SERVICES

         The Company's products and services can be classified into two major
operating categories: Minorplanet Vehicle Management Information (VMI(TM)) and
NSC Systems. NSC Systems includes three separate product and service categories:
truck fleet mobile communications, SBC service vehicles and mobile asset
tracking. The Company began marketing the VMI product during the third quarter
of 2001. Approximately 97% and 3% of the Company's total revenues were derived
from the NSC Systems and VMI operating segments, respectively, during the eight
months ended August 31, 2002.

MINORPLANET VEHICLE MANAGEMENT INFORMATION (VMI(TM))

         On June 21, 2001, the Company acquired an exclusive, royalty-free,
99-year license to market, sell and operate Minorplanet UK's VMI technology in
the United States, Canada and Mexico.

         VMI is designed to maximize the productivity of a mobile workforce as
well as reduce vehicle mileage and fuel related expenses. The VMI technology
consists of: (i) a data control unit ("DCU") that continually monitors and
records a vehicle's position, speed and distance traveled; (ii) a command and
control center ("CCC") which receives and stores in a database information
downloaded from the DCU's; and (iii) software used for communication, messaging
and detailed reporting. VMI uses satellite-based Global Positioning System
("GPS") location technology to acquire a vehicle location on a minute-by-minute
basis and a global system for mobile communications ("GSM") based cellular
network to transmit data between the DCU's and the CCC. GSM is a digital
technology developed in Europe and has been adapted for North America. GSM is
the most widely used digital standard in the world. The VMI application is
targeted to small and medium sized fleets in the metro marketplace which the
Company believes represents a total U.S. market of approximately 21 million
vehicles.

         VMI provides minute-by-minute visibility into the activities of a
mobile workforce via an extensive reporting system that provides real-time and
exception-based reporting. Real-time reports provide information regarding a
vehicle's location, idling, stop time, speed and distance traveled. With
real-time reporting, the user can view when an employee starts or finishes work,
job site arrival times and site visit locations. In addition, exception


                                       2
<PAGE>


reports allow the user to set various parameters within which vehicles must
operate, and the system will report exceptions including speeding, extended
stops, unscheduled stops, route deviations, visits to barred locations and
excessive idling.

         The VMI system also enables text messages to be sent from the CCC to
any mobile phone. Employees can also send messages using free text and
preformatted forms on their mobile phones.

NSC SYSTEMS

Truck Fleet Mobile Communications

         The initial application for the Company's wireless enhanced services
network, the Series 5000, was developed for and, prior to the Sale to Aether on
March 15, 2002, was marketed and sold to companies that operate mobile fleets in
the long-haul trucking market. The Company provides long-haul trucking customers
with a total communications solution Series 5000 that combines voice and data
communications services with satellite-based GPS location technology. The
Company also provides engine monitoring, scanning, mapping and dispatch
management applications. The Series 5000 solutions enable trucking companies of
all sizes to maximize their efficiency as they manage trucks that are often
dispersed across the country.

         The Series 5000 mobile communications and information system is fully
integrated with the AS/400, UNIX, and Windows(R) fleet management software
solutions from 18 key industry suppliers. Integration partners include Creative
Systems, Innovative Transportation Systems (ITS), Maddocks Systems' TruckMate(R)
for Windows, ProMiles, TMW Truck Systems and Tom McLeod LoadMaster(TM) Software.
Full system integration provides an end-to-end mobile communications and
information system solution by combining the on-road communications, data
collection and tracking capabilities of the Series 5000 with vendor dispatch
software, enabling fleet operators to improve customer service, manage their
dispatch operations more effectively and, ultimately, increase revenue miles per
truck.

         Prior to the Sale to Aether, the Company also maintained value-added
assembly line installation programs with seven major heavy truck original
equipment manufacturers for the Series 5000 mobile communications and
information system. Prewire programs, designed to preinstall system cabling and
mounting brackets at the factory, existed with Freightliner, International,
Kenworth, Mack, Peterbilt, Sterling and Volvo. Full system installations were
also available through Freightliner, Mack and Sterling. Each of these programs
enabled fleets to reduce their "new vehicle receipt -to- new vehicle revenue
generation" cycle times by reducing new vehicle 'make-ready' times.

         In addition to the hardware device and network connectivity, the
Company also operates a national network of service and repair centers. The
corporate office in Richardson, Texas also houses representatives providing
Level I and II technical support to its customers.

         As discussed on page 2, the Company completed the Sale to Aether of
certain assets and licenses related to the Company's long-haul trucking and
asset-tracking businesses on March 15, 2002. Under the terms of the March 15,
2002 Sale, the Company and Aether agreed to form a strategic relationship with
respect to the Company's long-haul customer products, pursuant to which the
Company assigned to Aether all service revenues generated post-closing from its
Series 5000 customer base. Aether, in turn, agreed to reimburse the Company for
the network and airtime service costs related to providing the Series 5000
service. See the Form 8-K filed by the Company on March 27, 2002 for more
information on the Sale which is incorporated by reference herein and Note 4 to
the Consolidated Financial Statements attached hereto.

SBC Service Vehicles

         The Company's initial product application was modified to assist the
member companies of SBC Communications, Inc. (the "SBC Companies") in maximizing
the productivity of their service vehicle fleets. The units installed are Series
5005S Mobile Units and are based on the Series 5000 platform with customized
proprietary hardware and software, which uses the Company's NSC for data
transmission. Integral to this development effort was the ability to interface
with the GSM/digital network.

         In addition to fleet monitoring and voice and data communications
capabilities, the Series 5005S mobile units feature alarm-monitoring
functionality. This product feature provides the driver the ability to summon


                                       3
<PAGE>


emergency assistance by pressing a panic alarm button on a key fob when away
from, but in close proximity to, the service vehicle. The panic alarm signal is
intelligently routed to a third party alarm-monitoring center under contract
with the Company that confirms the validity of the alarm with the technician and
then summons the appropriate safety agency. The GPS data is also transmitted to
the monitoring center to pinpoint the location of the vehicle for the most
efficient dispatch of the safety personnel.

         As of August 31, 2002, the SBC Companies have purchased and installed
approximately 40,000 Series 5005S mobile units. However, new shipments of the
Series 5005S mobile units are expected to be minimal during the Company's next
fiscal year. The Series 5005S mobile units were not part of the March 15, 2002
Sale.

Mobile Asset Tracking - TrackWare(R) & 20/20V(TM)

         The Company entered the mobile-asset-tracking market in October 1999
with the introduction of its trailer-tracking product, TrackWare. The TrackWare
product combines the technologies of GPS and control channel messaging to report
location details and specific trailer events, such as connection and
non-connection to a tractor, loaded/unloaded and door open/close status of a
trailer. The TrackWare Remote Unit ("TrackWare Unit") comes equipped with a GPS
satellite receiver, a Cellemetry(R)-enabled cellular transceiver,
microprocessor, antenna, battery and cables. The term Cellemetry-enabled
receiver refers to the analog wireless transceiver utilized by the Company's
TrackWare product which utilizes the Cellemetry network owned and operated by
Cellemetry LLC to send short data messages over the overhead control channel of
the existing analog wireless infrastructure. The Company's analog wireless
transceiver in its TrackWare unit utilizes the Cellemetry network via a Service
Agreement with Cellemetry LLC which includes a license to use the Cellemetry
technology. Cellemetry is a federally registered trademark of Cellemetry LLC.

         The Company believes that TrackWare offers the dry-van trailer market a
cost effective, reliable way to track a fleet of trailers that may be in various
locations all over the country and that trucking companies now have a powerful
tool available to them that should increase the utilization of their trailers,
resulting in lower trailer operation and management expenses and higher trailer
revenue miles. A dry-van trailer is a transportation industry term referring to
a type of trailer pulled by Class 8 over-the-road tractors (commonly referred to
as 18-Wheelers) in which only dry goods are transported as opposed to perishable
goods which require refrigeration.

         In March of 2001, the Company announced the launch of 20/20V, a low
cost tracking solution designed for small fleets in the transportation
marketplace. 20/20V uses the Cellemetry data network to communicate location
information at predetermined intervals. Users of the 20/20V application may
access location based information via the Internet.

         The March 15, 2002 Sale of certain assets included assets related to
the 20/20V and TrackWare product lines. Accordingly, the Company will no longer
distribute and sell these product lines as part of its business. See the Form
8-K filed by the Company on March 27, 2002 which is incorporated by reference
herein and Note 4 to the Consolidated Financial Statements attached hereto for
more information on this transaction.

COMPETITION

MINORPLANET VEHICLE MANAGEMENT INFORMATION (VMI(TM))

The Company believes that its primary competitors in the automatic vehicle
location market include:

o    TELETRAC - Teletrac is currently managing the transition of customers from
     their private radio network to their AT&T Wireless' proprietary Cellular
     Digital Packet Data ("CDPD") network-based product. Teletrac's operating
     results are now being consolidated into Trafficmaster's operating results.
     The Company believes that Teletrac, the United States arm of Trafficmaster,
     currently has approximately 60,000 units in service.

o    @ROAD - @Road currently sells an Internet-based solution using either AT&T
     Wireless' proprietary CDPD network or the Nextel network. The Company
     believes that @Road currently has approximately 70,000 units in service.

o    OTHER REGIONAL COMPETITORS - There are numerous smaller regional companies
     vying for a local presence, including FleetBoss and Discreet Wireless.


                                       4
<PAGE>


         A third party study of the service vehicle market conducted by the
Strategis Group noted that this market consists of over 21 million vehicles and
is currently less than 5% penetrated. The Company believes that this market is
highly fragmented. Based on a market size of 21 million vehicles, Teletrac,
@Road, and the Company would each have less than one-half of one percent of the
market share.

NSC SYSTEMS

Truck mobile communications

         Qualcomm, Inc. ranks number one in the truck mobile communications
market with substantially greater than 50% of the market share. Prior to the
Sale to Aether, the Company believed that the Company and Aether ranked second
and third in the marketplace with a market share of approximately 8% and 5%,
respectively. Both Qualcomm and Aether have significantly greater financial and
other resources than the Company.

o    QUALCOMM - As Qualcomm launched its mobile communications product several
     years before the Company, Qualcomm was able to capture the number one
     position in the marketplace. Qualcomm continues to aggressively target and
     market to the transportation marketplace.

o    AETHER - Motient has been in the marketplace for several years using
     satellite and Ardis networks as a foundation for its products. Motient's
     MobileMax and Mobile Messaging Service were sold to Aether Systems in 2000.
     Aether is aggressively developing and implementing wireless solutions
     targeting the transportation and logistics industries. As noted, on March
     15, 2002, Aether also purchased certain assets from the Company relating to
     the Company's long haul trucking and asset tracking business.

o    TERION - Terion's products and services utilize both digital cellular and
     FM radio transmission to send data. Terion products utilize 8-12 foot-high
     frequency towers distributed throughout the United States to transmit
     return data. In January 2002, Terion filed for protection under Chapter 11
     of the U.S. Bankruptcy Code and announced the discontinuance of its in-cab
     mobile communications product.

o    PEOPLENET COMMUNICATIONS, INC. - PeopleNet offers an analog cellular-based
     solution that includes positioning, messaging and voice.

SBC Service Vehicles

         The Company believes that it currently possesses the largest single
customer in the service vehicle category with the SBC Companies. At August 31,
2002, the Company had approximately 37,500 units in service with the SBC
Companies. The initial three-year term of the service contract with the SBC
Companies expired on December 31, 2001. The Company subsequently renewed its
service contract with the SBC Companies for a one-year term which will expire on
January 30, 2003. The renewed service contract provides for a one-year extension
beyond the initial term at the option of the SBC Companies.

The Company believes that its primary competitors in the service vehicle market
include:

o    TELETRAC - Teletrac is currently managing the transition of customers from
     their private radio network to their AT&T Wireless' proprietary CDPD
     network-based product. Teletrac's operating results are now being
     consolidated into Trafficmaster's operating results. The Company believes
     that Teletrac, the United States arm of Trafficmaster, currently has
     approximately 60,000 units in service.

o    @ROAD - @Road currently sells an Internet-based solution using either AT&T
     Wireless' proprietary CDPD network or the Nextel network. The Company
     believes that @Road currently has approximately 70,000 units in service.

o    OTHER REGIONAL COMPETITORS - There are numerous smaller regional companies
     vying for a local presence, including FleetBoss and Discreet Wireless.

         A third party study of the service vehicle market conducted by the
Strategis Group noted that this market consists of over 21 million vehicles and
is currently less than 5% penetrated. The Company believes that this market is
highly fragmented. Based on a market size of 21 million vehicles, Teletrac,
@Road, and the Company would each have less than one-half of one percent of the
market share.


                                       5
<PAGE>


Mobile Asset Tracking

     Prior to the Sale to Aether, the Company believed that its primary
competitors in this market included:

o    QUALCOMM, INC. - Qualcomm announced commercial launch into this market in
     January 2001. Qualcomm tested an untethered tracking product with several
     of its current customers during 2001. In the third quarter of 2001,
     Qualcomm discontinued testing of their untethered tracking product and
     pulled the product from the market.

o    TERION -In January of 2000, Terion introduced a mobile unit which utilizes
     the existing analog network to send data over a voice channel. In January
     2002, Terion filed for protection under Chapter 11 of the U.S. Bankruptcy
     Code and plans to restructure its business to focus exclusively on its
     mobile asset tracking product.

o    AIRINC - Airinc initially targeted the refrigerated van market with a
     high-end product which utilized the Orbcomm LEO satellite constellation.
     The Company believes that Airinc is currently in the process of
     transitioning from the Orbcomm LEO satellite product to a TMI satellite
     product. Airinc has recently expanded its focus to target the dry-van
     market segment.


INDUSTRY SEGMENTS

         The Company considers its operations to be classified into one industry
segment: Cellular and Other Wireless Communications.

EMPLOYEES

         At August 31, 2002, the Company had 333 employees. The Company's
employees are not represented by a collective bargaining agreement.

INFRASTRUCTURE AND OPERATIONS

         Networks. The Company uses wireless data and/or voice technologies,
combined with GPS satellite technology, for all of its products. The Company's
strategy is to select and use wireless networks that provide the "best fit" for
each product and application or specific customer need.

         The March 15, 2002 Sale to Aether of certain assets and related license
rights included the Company's Platinum Service software solution, 20/20V(TM),
and TrackWare(R) asset and trailer-tracking products. In addition, the Company
and Aether agreed to form a strategic relationship with respect to the Company's
long-haul customer products, pursuant to which the Company assigned to Aether
all service revenues generated post-closing from its Series 5000 customer base.
Aether, in turn, agreed to reimburse the Company for the network and airtime
service costs related to providing the Series 5000 service. The Sale did not
include the Company's NSC.

         Series 5000 Mobile Units. These units use circuit-switched analog
cellular technology for transmitting location, as well as other information, to
the Company's NSC. The NSC then routes the data to the appropriate destination,
which may be a customer's dispatcher workstation for data or any other telephone
for voice communication. In addition, these units take advantage of the
Company's patented Advanced Cellular Transmission Technology ("ACTT"). ACTT is a
one-way data communication technology from the mobile unit back to the NSC. ACTT
takes advantage of unused fields in the cellular control channel to provide very
short data bursts suitable for providing status updates of vehicle location
information. The primary benefit of ACTT is reduced cost to the customer and the
Company. The Company believes that analog cellular technology provides the best
ubiquitous coverage for over-the-road vehicles that travel across the United
States. As digital technologies further penetrate existing cellular
infrastructure, digital cellular networks may become a viable alternative for
over-the-road vehicles.

         Series 5005S Mobile Units. For service vehicles, as part of the
Company's "best fit" strategy, these units also may be integrated with a GSM
telephone utilizing the 1900 MHz frequency, where required. GSM is a digital
technology developed in Europe and has been adapted for North America. GSM is
the most widely used digital standard in the world. Since service vehicles
primarily operate in urban areas, these digital networks provide appropriate
coverage.


                                       6
<PAGE>


         VMI. The VMI technology uses a GSM digital network. Currently, there
are three major carriers providing GSM coverage in the United States: T-Mobile,
Cingular and AT&T Wireless, which all provide coverage in the major metropolitan
areas in the United States. These carriers have announced joint arrangements to
continue to expand GSM coverage in the United States, including interoperability
among the three carriers. The Company believes the coverage, bandwidth and price
of the GSM network make it best suited for the VMI technology.

         TrackWare and 20/20V Product. The TrackWare Remote Unit and 20/20V unit
use proprietary overhead control channel technology to provide short two-way
data messages on a national basis. This network is provided by a third party
provider, Cellemetry LLC, and the Company's NSC which has been adapted to
integrate with the Cellemetry network.

         Network Services Center. The Company's NSC provides switching services
among each Series 5000 and 5005S Mobile Unit (hereinafter collectively referred
to as "Mobile Unit" or "Mobile Units"), the nationwide network of cellular
providers, the customer's dispatcher workstation and the nationwide landline
telephone network. The NSC is capable of processing, storing and transmitting
data and provides a gateway for the Cellemetry network to enable transmission of
data to customers. Additionally, voice communications are routed from each
Series 5000 Mobile Unit through the Company's nationwide enhanced-services
network to the NSC, which automatically completes the call through the public
telephone network to the end user. Voice communications from the customer's
dispatcher or personal calls for the driver are routed through a toll-free
telephone number to the NSC, which completes the call through the appropriate
wireless cellular system for the region in which the truck is operating. Data
packets from the host or a Mobile Unit are stored in the NSC, and then
transmitted in cost-effective batches. Time-critical information, as configured
by the customer, is immediately transmitted to the receiving party. The NSC
records data from each transmission, generates a call record and processes the
information into customer billing records.

         Call Routing. Each time a Mobile Unit travels into a new cellular
metropolitan statistical area ("MSA") or rural statistical area ("RSA"), it
automatically registers with the cellular carrier under contract with the
Company. The cellular carrier routes the message to Telecommunications Services
Incorporated, formerly GTE-TSI ("TSI"). Pursuant to a contract with the Company,
TSI provides the NSC with call delivery information utilized by the NSC to
deliver calls to the Mobile Unit as it travels through a new MSA or RSA.

         Navigation Technology. GPS technology allows customers to identify the
location of any asset at any time via satellite. GPS is operated by the United
States government and broadcasts navigational information from a network of
dedicated satellites orbiting the earth. GPS navigational receivers interpret
signals from multiple satellites to determine the receiver's geographical
coordinates, elevation and velocity. GPS navigational signals can be received
worldwide, without adaptation of the receiver unit to foreign standards. The
Company believes that the network of GPS navigational satellites will be
maintained by the United States Defense Department in an operational status for
the foreseeable future. Although stand-alone GPS units are available for
purchase by any consumer at relatively low cost, the Company believes that raw
navigational information is of little use in tracking assets unless the GPS
receiver is integrated with a computer system, such as the Company's mobile
communication units, to record routes traveled relative to mapped roadways or to
transmit position reports to a central dispatcher.

         The Company believes that its use of government-operated GPS satellites
differs substantially from competitors' use of satellites for two-way
communications. GPS satellites send one-way signals to mobile receivers,
allowing the Company's products to plot their geographical coordinates. GPS
satellites are not capable of two-way communication, and no charges are assessed
to users of the GPS services. For two-way mobile communications, the Company
relies exclusively on terrestrial wireless systems. The Company's primary
competitor in the NSC Systems segment utilizes leased or owned communication
satellites for two-way data communications, incurring costs associated with
ownership or leasing of satellite communication capacity.

         Wireless Infrastructure. The Federal Communications Commission ("FCC")
has provided for a two-operator duopoly in each cellular market. Only two
licenses were awarded to provide cellular service in any specific cellular MSA
or RSA. One of the two licenses in each market was initially awarded to a
company or group that was affiliated with a local landline telephone carrier in
the market (the "Wireline" or "B-Side" license) and the other license in each
market was initially awarded to a company, individual or group not affiliated
with any landline telephone carrier (the "Non-Wireline" or "A-Side" license).
However, once a license was awarded, the license holder could sell the license
to another qualified entity, including the sale of "B-Side" licenses to groups
not affiliated with the landline telephone carrier, and the sale of "A-Side"
licenses to a landline telephone carrier. The


                                       7
<PAGE>


Company's system utilizes both the A-Side and B-Side carriers in its coverage
areas, and has agreements with both A-Side and B-Side carriers in approximately
75% of its markets, allowing system redundancy and greater flexibility. In
addition to cellular licenses, the FCC has issued up to six licenses in each
market for the 1.9 megahertz ("PCS") spectrum. PCS is generally available in
certain metropolitan markets and surrounding areas.

         A number of cellular carriers are in the process of upgrading from
existing analog cellular systems to enhanced systems utilizing digital
technology. However, the Company believes that the large number of analog
telephones already owned by cellular subscribers will ensure that cellular
telephone operators continue to offer services to existing analog users
concurrently with digital users over an extended phase-in period that exceeds
the expected useful life of the current analog Mobile Units.

STRATEGIC SERVICE ALLIANCES OF THE COMPANY

         Wireless Carriers. The Company has established a network for the United
States that offers mobile communication coverage in 98% of the available
wireless service areas in the United States (which covers approximately 95% of
the United States interstate highway system) and 100% of the A-Side coverage in
Canada. The Company has agreements in place with 66 wireless carriers, including
all the regional Bell operating companies, AT&T Wireless Inc. and Rogers Cantel,
Inc., in 706 markets in the United States and Canada. The Company has entered
into contracts with both A-side and B-side carriers in approximately 75% of
United States wireless coverage regions. In most cases, current terms of
contracts between the Company and each of its cellular carriers are generally
for one year, with automatic one-year successive renewal terms unless either
party elects to terminate the contract upon 30-day notice prior to the end of
the term. The Company has recently executed new contracts with certain of its
wireless carriers that are substantially similar to the existing contracts
except that they provide for an initial three-year term. The Company's
agreements with wireless carriers provide that the Company will not be required
to reimburse carriers for fraudulent usage unless the carriers have fully
implemented the Company's protocol. Although the Company's protocol has been
effective in preventing fraud to date, there can be no assurance that this will
be the case in the future.

         Certain of the Company's contracts with wireless carriers only permit
the Company to utilize their cellular networks to provide mobile communications
services to vehicles engaged in long-haul transportation and certain
recreational uses so long as such vehicles travel outside of their home areas
for specified periods of time.

         TSI. TSI provides clearinghouse functions to the cellular industry,
creating the data link between a foreign network and a traveling vehicle's home
cellular service area, performing credit checking functions and facilitating
roamer incoming call delivery functions. The Company's contract with TSI covers
certain functions that are critical to the Company's ability to instantly
deliver calls nationwide. It covers an initial term that began on May 3, 1999
and ends on April 15, 2004. Following the expiration of the initial term, either
party to the agreement may terminate the agreement for convenience upon six
months prior written notice. See the "Risk Factor" on page 13 relating to the
TSI agreements.

         Tekelec. Tekelec, formerly IEX Corp., designed, tested and constructed
the NSC. The NSC constitutes a critical link in providing certain enhanced call
processing and data management services and is necessary for the Company to
receive, store and route voice and data transmissions to and from its NSC
Systems customers. The Company currently has a three-year software maintenance
and support agreement with Tekelec that expires on December 31, 2003. See the
"Risk Factors" on page 12 relating to the NSC.

         Cingular Wireless LLC. On March 30, 1999, the Company and Southwestern
Bell Mobile Systems Inc., now known as Cingular Wireless LLC ("Cingular"),
executed an Administrative Carrier Agreement with an initial term of three years
that automatically renews for five additional consecutive one-year terms under
which Cingular provides to the Company clearinghouse services and cellular
service. See the "Risk Factor" on page 13 regarding risks associated with this
relationship. On July 8, 2002, the Company and Cingular executed an Authorized
Agency Agreement and First Amendment thereto whereby the Company will act as an
agent of Cingular to market and sell Cingular GSM data services to the Company's
VMI system customers so that such customers will have a direct contractual
relationship for the purchase of GSM data services from Cingular.

         Alarm Monitoring Services. On May 25, 2000, the Company and Criticom
International Corporation ("CIC") entered into a Monitoring Services Agreement
with an initial term of three years that automatically renews for successive
two-year terms pursuant to which CIC provides certain panic alarm monitoring
services for the


                                       8
<PAGE>


Company in connection with the Company's obligations to the SBC Companies. See
the "Risk Factor" on page 13 relating to the CIC relationship.

         Key Suppliers. The Company does not manufacture or assemble its
products. The Company purchases its VMI products from manufacturers retained by
Minorplanet UK as per the Exclusive Distribution and License Agreement entered
into on June 21, 2001 with Minorplanet UK. The Company also subcontracts for the
manufacture of its other products from various suppliers.

PATENTS AND PROPRIETARY TECHNOLOGY

         The Company has obtained 41 United States patents and 13 foreign
patents and has applied for additional United States and foreign patents. In
general, the Company's existing patents cover the Company's innovative and novel
utilization of the existing wireless infrastructure as well as the particular
operational features and functionality of the Company's products and services.
The Company's software is also protected under patents, federal and state trade
secret law and federal copyright law. See the "Risk Factor" on page 16 relating
to risks associated with the Company's intellectual property.

RESEARCH AND DEVELOPMENT

         The Company now relies on Minorplanet UK for research and development
for new products and services. Pursuant to the Exclusive License and
Distribution Agreement with Minorplanet UK, the Company pays $1 million per year
to Minorplanet UK for research and development. This charge is subject to review
and increase annually. See the "Risk Factor" on page 14 regarding research and
development reliance.

REGULATION

         The Company's products and services are subject to various regulations
promulgated by the FCC that apply to the wireless communications industry
generally. The Company's Mobile Units, DCU's, CCC's and its TrackWare(R) Units
must meet certain radio frequency emission standards so as to avoid interfering
with other devices. The Company relies on the manufacturer of the cellular
transceiver components of the Mobile Units, DCU's, CCC's and the TrackWare(R)
Units to carry out appropriate testing and regulatory compliance procedures
regarding the radio emissions of the cellular transceiver component.

         The FCC also controls several other aspects of the wireless industry
that affect the Company's ability to provide services. The FCC controls the
amount of radio spectrum available to cellular carriers, which could eventually
limit growth in cellular carrier capacity.

         The FCC also regulates telecommunications service providers or common
carriers, requiring approval for entry into the marketplace and regulating the
service rates offered through tariff filing requirements. Additionally, most
state regulatory commissions regulate rate and entry for telecommunications
service providers. In order to encourage growth within the information services
segment of the telecommunications industry, the FCC issued an order creating the
enhanced services exemption from regulation. In general, providers of enhanced
services are not subject to regulation by the FCC or the various state
regulatory agencies. Services qualify as enhanced services if data is
transmitted between the provider and customer so that the customer is able to
interact with or manipulate the data regardless of whether the services provided
include telecommunications transmission components, such as wireless or long
distance services. The Company believes that the services it provides to its
customers in connection with the Mobile Units, DCU's, CCC's and TrackWare(TM)
Units qualify as enhanced services and are exempt from both FCC and state
regulation. Alternatively, the Company believes that its services may be
characterized as a private network not offered to the public at large but
offered to specific group of users, which management believes should also serve
to exempt the Company from FCC and state regulation.

         The wireless telecommunications industry currently is experiencing
significant regulatory changes that may require a re-examination of laws and
regulations applicable to the Company's operations. The Company's services may
be characterized by the FCC as Commercial Mobile Radio Services ("CMRS"). If the
Company's services are classified as CMRS, the Company may be subject to FCC
regulation as a telecommunications service provider. However, the FCC has
decided to forbear from most regulation of the CMRS marketplace, including
regulation of the rates and terms of entry for interstate services offered by
CMRS providers. In addition, the U.S. Congress has preempted state regulation of
CMRS entry and rates. FCC decisions thus far have enhanced the development of


                                       9
<PAGE>


CMRS, including requiring local telephone companies to offer interconnection and
access to their networks to CMRS providers and to establish reciprocal
compensation arrangements with CMRS providers for the transportation and
termination of calls at prices that are cost-based and reasonable.

         If any services offered by the Company are determined to be
telecommunications services by the FCC, the revenues generated from these
services would be subject to the required contribution to the federal universal
service fund. At this time, revenues generated from the Company's services that
meet the definition of enhanced services are not subject to FCC-mandated
universal service fund contribution. However, based on a conservative
interpretation, the Company has reported certain revenues generated by the
personal calling plan service offered by the Company as a telecommunications
service for purposes of federal universal service fund contribution filings.
Various states have instituted their own universal service fund mechanisms which
may or may not follow the federal statutes in exempting revenues generated by
enhanced services. The Company cannot predict the impact of any future
requirements to contribute to state and federal universal service mechanisms.
See the "Risk Factor" on page 14 relating regarding these risks.

         Long-distance providers face regulatory schemes similar to cellular
carriers, with greater state involvement in requiring posting of bonds as
security against customer deposits and in other matters. The Company believes
current long-distance regulations apply to those companies providing
long-distance services directly to its customers, without long-distance
regulatory involvement by the Company.

RECAPITALIZATION TRANSACTION

         On June 21, 2001, the Company consummated the stock issuance
transactions approved by the Company's stockholders at the annual meeting on
June 4, 2001. As a result of the closing of transactions contemplated by the
Purchase Agreement, the Company issued 30,000,000 shares of the its common stock
(post reverse stock split) in a change of control transaction to Minorplanet UK,
which is now the majority stockholder of the Company. In exchange for this stock
issuance, Minorplanet UK paid the Company $10,000,000 in cash and transferred to
the Company all of the shares of its wholly-owned subsidiary, Minorplanet
Limited, which holds an exclusive, royalty-free, 99-year license to market, sell
and operate Minorplanet UK's vehicle management information technology in the
United States, Canada and Mexico. Minorplanet UK raised the $10,000,000 cash
proceeds from a private placement of its shares in the United Kingdom.
Minorplanet UK now beneficially owns approximately 62% of the outstanding shares
of the Company's common stock (on a non-fully diluted basis), which is now the
sole voting security of the Company.

         Also, the Company issued 12,670,497 shares of its common stock (valued
at $1.60 per share) to holders of its Senior Notes due 2005 ("Senior Notes"), in
exchange for the cancellation of Senior Notes with an aggregate principal amount
of $80,022,000 (the "Exchange Offer"). The total principal amount of Senior
Notes that remains outstanding is $14,333,000. The foregoing stock issuance
transactions are hereinafter collectively referred to as the "Recapitalization."
As a result of the Recapitalization, the Company significantly reduced its
indebtedness and related interest expense. In addition, the Company acquired the
VMI technology and commenced distribution of Minorplanet UK's VMI product in the
United States.

         Pursuant to the Purchase Agreement, the Company appointed two
additional directors to the Company's board of directors that were designated by
Minorplanet UK: Messrs. Robert Kelly and Andrew Tillman. Mr. Tillman was
subsequently replaced with Michael Abrahams as one of the two Investor
Designees. The Purchase Agreement provides that Minorplanet UK has the right to
designate two of the seven directors in the future (the "Investor Directors"),
and to maintain proportionate representation on the board of directors and its
committees. However, given Minorplanet UK's current ownership, it has the right
to elect all eight directors if it decides to do so in the future. In addition,
the Purchase Agreement also provides that so long as Minorplanet UK has the
right to designate Investor Directors (i.e., it owns at least 5% of the
outstanding common stock of the Company), none of the following actions may be
taken unless approved by all of the Investor Directors:

     o   any capital expenditure by the Company that is not contemplated in any
         current annual budget which exceeds $200,000;

     o   the hiring and firing of any Company officer or senior executive
         reporting to the chief executive officer who has an annual salary of
         $130,000 or more, or entering into employment agreements with these
         individuals or amendments to existing agreements;


                                       10
<PAGE>


     o   the direct or indirect redemption, purchase or making of any payments
         with respect to stock appreciation rights and similar types of stock
         plans;

     o   the sale, lease or transfer of any assets of the Company representing
         5% or more of the Company's consolidated assets, or the merger,
         consolidation, recapitalization, reclassification or other changes to
         the capital stock of the Company; except as required under law, the
         taking or instituting of bankruptcy or similar proceedings;

     o   the issuance, purchase, acquisition or redemption of any capital stock
         or any notes or debt convertible into equity;

     o   the acquisition of another entity;

     o   the entering into any agreement or contract which commits the Company
         to pay more than $1,000,000 or with a term in excess of 12 months and
         requiring payments in the aggregate which exceed $200,000;

     o   the amendment of the Company's Certificate of Incorporation or Bylaws
         that would adversely affect holders of the Company's common stock or
         Minorplanet UK's rights under the Purchase Agreement;

     o   the exiting of, or entering into a different line of business;

     o   the incurrence of any indebtedness or liability or the making of any
         loan except in the ordinary course of business;

     o   the placing of any lien on the Company's assets or properties; or

     o   the adoption or implementation of any anti-takeover provision that
         would adversely affect Minorplanet UK.

RISK FACTORS

Forward-Looking Statements.

         This Transition Report on Form 10-K contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended, that are based upon management's current beliefs and projections, as
well as assumptions made by and information currently available to management.
In some cases, you can identify these forward-looking statements by words such
as, "anticipate," "believe," "estimate," "expect," "may," "could," "intend,"
"predict," "potential" and similar expressions are intended to identify
forward-looking statements. Any statement or conclusion concerning future events
is a forward-looking statement, and should not be interpreted as a promise or
conclusion that the event will occur. The Company's actual operating results or
the actual occurrence of any such event could differ materially from those
projected in the forward-looking statements. Factors that could cause or
contribute to such differences include those discussed in this risk factor
section, as well as those discussed elsewhere in this Form 10-K or in the
documents incorporated herein by reference.

The Company has operated at a significant loss in recent periods and it is
anticipated that such losses may continue in the near future.

         The Company has incurred significant operating losses since inception
and has limited financial resources to support it until such time that it is
able to generate positive cash flow from operations. Net cash used for operating
activities was $10.2 million and $12.4 million for the eight months ended August
31, 2002 and the twelve months ended December 31, 2001 respectively. For the
eight months ended August 31, 2002, cash used for operating activities was
primarily attributable to the hiring and staffing of personnel for the expansion
of VMI sales to open market locations in Dallas, Houston, Atlanta and Los
Angeles.

         As of August 31, 2002, the Company had $18.1 million in cash and
short-term investments representing an increase from December 31, 2001 of $3.2
million. This increase is primarily attributable to $14.2 million in cash
received as consideration for the Sale to Aether of certain assets and licenses
related to the Company's long-haul trucking and asset-tracking businesses offset
by net cash used in operating and other investing activities.


                                       11
<PAGE>


         As a result of the Recapitalization in June 2001, the Company has
reduced its Senior Notes due in 2005 in the principal amount of $80 million and
its related annual cash outflow for interest service by $11 million. In
addition, the Company believes the acquisition of the License Rights will
provide the Company significant marketing potential of the licensed VMI
technology, enhancing future results of operations and reducing the need for
capital resources to develop similar technology. Also, as a result of the Sale
to Aether of certain assets and licenses related to the Company's long-haul
trucking and asset-tracking businesses, Aether is contractually obligated to
continue to reimburse the Company for the network and airtime service costs
related to providing the Series 5000 service (see Note 4 to the Consolidated
Financial Statements attached hereto).

Critical success factors in Management's plans to achieve positive cash flow
from operations include:

     o   Significant market acceptance of the VMI product line in the U.S.
         Management believes the market for products such as VMI represents a
         total potential of approximately 21 million vehicles. Currently,
         management believes this market is approximately 5 percent penetrated
         with asset tracking and vehicle information management solutions.

     o   Maintain and expand the Company's direct sales channel. New
         salespersons will require training and time to become productive. In
         addition, there is significant competition for qualified salespersons,
         and the Company must continue to offer attractive compensation plans
         and opportunities to attract qualified salespersons.

     o   Renewal of the contract with SBC. At August 31, 2002, the Company had
         approximately 37,500 units in service with the SBC Companies that
         accounted for approximately 55% of the Company's installed base,
         including network services subscribers. The current contract with the
         SBC Companies expires on January 30, 2003 and may be renewed under the
         same terms for an additional one-year term at the option of the SBC
         Companies.

     o   Securing and maintaining adequate third party leasing sources for
         customers who purchase VMI.

         Based on projected operating results, the Company believes its existing
capital resources will be sufficient to fund its currently anticipated operating
needs and capital expenditure requirements for the next 12 months. If cash
generated from operations is not sufficient to meet its working capital
requirements, the Company may seek to sell additional equity or debt securities.
The sale of additional equity or convertible debt securities could result in
additional dilution to existing stockholders. If additional funds are raised
through debt securities, holders of these securities could obtain certain rights
and preferences senior to holders of the Company's common stock, as well as
restrict the Company's operations. If additional working capital is required,
there can be no assurance that additional financing will be available, which in
this case, the Company may be required to reduce the scope of its operations
which could negatively impact its financial condition and operating results.

A natural disaster, terrorist attack or similar event could significantly hinder
the delivery of the Company's services to its customers due to the lack of an
effective remote back-up communications system.

         Currently, the Company's disaster recovery systems focus on internal
redundancy and diverse routing around and within the NSC operated by the
Company. The Company does not currently have access to a remote back-up complex
that would enable it to continue to provide mobile communications services to
customers in the event of a natural disaster or other occurrence that rendered
the NSC unavailable. Accordingly, the Company's business is subject to the risk
that such a disaster, terrorist attack or other occurrence could hinder or
prevent the Company from continuing to provide services to some or all of its
customers. See "Business -- Infrastructure and Operations."

If the Company's sole provider of software maintenance and support for the
Company's NSC becomes unable to provide such services, the Company's future
business and financial condition could be adversely affected.

         The Company operates and maintains the NSC that was previously operated
and maintained by Tekelec. The Company has limited experience maintaining and
supporting the NSC and its software and hardware systems. The Company currently
has limited internal abilities to provide software maintenance and support for
the NSC and must rely primarily on the third party services provided by Tekelec
pursuant to a three-year term software maintenance and support agreement entered
into by the Company with Tekelec on December 28, 2000. If the Company is unable
to renew the software maintenance and support agreement with Tekelec, and any
significant performance or other operational problems occur with the NSC, the
Company may be unable to resolve such issues and such failure may have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business - Strategic Service Alliances of the
Company."


                                       12
<PAGE>


If the Company's sole provider of alarm-monitoring services for SBC becomes
unable to provide such services in support of the Series 5005S units in service
with SBC, the Company's costs to obtain this service could increase, or the
Company may be forced to expend funds to develop this service itself.

         The Company relies on CIC as its sole provide of certain alarm
monitoring services to the SBC Companies as required by the SBC Contract. The
contract has an initial term of three years and automatically renews for
successive two-year terms unless terminated by either party on 120 days notice.
While the Company has no reason to believe that this contract will not be
renewed by CIC, it is possible that CIC could fail to renew the contract in an
attempt to renegotiate higher rates to be paid by the Company. If the Company is
unable to renew its Monitoring Services Agreement with CIC or renew it with
rates similar to the current rates paid by the Company under the contract, the
Company may be required to develop its own alarm monitoring center, including
obtaining the required licenses, or execute an agreement with another alarm
monitoring services provider, which agreement may not be available on
commercially acceptable terms. As the Company has limited resources, it may be
unable to develop its own monitoring services center. This could have a material
adverse effect on the Company's business, financial condition and results of
operations.

The Company relies on wireless service agreements to deliver its vehicle
tracking services that have fairly short terms, and the failure by the Company
to renew or replace these agreements as they expire could increase the cost to
the Company of delivering its services.

         The Company utilizes the existing wireless telephone infrastructure,
with certain enhancements, as the wireless segment of the Company's network. In
most cases, current terms of contracts between the Company and each of its
wireless carriers are for one year, with automatic one-year successive renewal
terms, unless either party elects to terminate the contract upon 30 days notice
prior to the end of the term. The Company has executed new contracts with
certain of its wireless carriers that are substantially similar to the existing
contracts, except that they provide for an initial three-year term. In order to
continue to provide mobile communications services to its customers, the Company
must continue to renew its agreements with individual wireless carriers. A
failure on the part of the Company to renew or replace its contracts with
wireless carriers at rates similar to those charged to its competitors could
have a material adverse effect on its business, financial condition and results
of operations.

As the Company heavily relies on TSI to provide essential clearinghouse
services, its inability to renew its agreements with TSI could force the Company
to make costly design changes to the Company's network.

         TSI provides clearinghouse functions to the cellular industry, creating
the data link between a foreign network and a traveling vehicle's home cellular
service area, performing credit checking functions and facilitating roamer
incoming call delivery functions. The Company's contract with TSI covers certain
functions that are critical to the Company's ability to instantly deliver calls
nationwide. It covers an initial term that began on May 3, 1999 and ends on
April 15, 2004. Following the expiration of the initial term, either party to
the agreement may terminate this agreement for convenience upon six months prior
written notice. A failure in the TSI network could have a material adverse
effect on the Company's business, financial condition and results of operations.

As the Company relies on Cingular for various cellular clearinghouse services,
its inability to renew its agreement with Cingular could significantly increase
the Company's cost of obtaining this necessary service.

         On March 30, 1999, the Company and Southwestern Bell Mobile Systems,
Inc., now known as Cingular Wireless, executed an Administrative Carrier
Agreement whereby Cingular provides clearinghouse services to the Company,
including the direct payment of the Company's cellular service providers for
cellular airtime through the cellular clearinghouse process. The Agreement
provides for an initial term of three years that automatically renews for five
additional consecutive one-year terms. While the Company has no reason to
believe that Cingular will not renew the Agreement, it is possible that Cingular
will attempt to renegotiate higher rates for the services which it provides at
the time of renewal. If the Company is unable to negotiate commercial reasonable
rate increases, the Company's service margins could be reduced substantially. If
the Company is unable to renew because it cannot reach agreement on commercially
reasonable rate increases, the failure to renew this contract and continue
existing arrangements for payment to the Company's cellular service providers
could require the Company to post security deposits or provide other financial
assurances, which could have a material adverse effect on its business,
financial condition or results of operations. Cingular also provides the
Company's customers with analog cellular service as per a Cellular Service
Agreement originally entered into on June 7, 1993 and last amended on May 7,
1999 for a


                                       13
<PAGE>


three year term with automatic renewal for successive one year terms unless
either party provides a minimum of 90 days written notice of intent to
terminate. See "Business -- Strategic Service Alliances of the Company."

If the Company's services are deemed to be certain telecommunication services
due to FCC and other state regulations, the Company would have to begin paying
into state and federal universal service contribution funds.

         If any services offered by the Company are determined to be
telecommunications services by the FCC, the revenues generated from these
services would be subject to the required contribution to the federal universal
service fund. At this time, revenues generated from the Company's services that
meet the definition of enhanced services are not subject to FCC mandated
universal service fund contribution. However, based on a conservative
interpretation, the Company has reported certain revenues generated by the
personal calling plan service offered by the Company as a telecommunications
service for purposes of federal universal service fund contribution filings.
Various states have instituted their own universal service fund mechanisms that
may or may not follow the federal statutes in exempting revenues generated by
enhanced services. The Company cannot predict the impact of any requirement to
contribute to state and federal universal service mechanisms.

         Long-distance providers face regulatory schemes similar to cellular
carriers, with greater state involvement in requiring posting of bonds as
security against customer deposits and in other matters. The Company believes
current long-distance regulations apply to the companies providing long-distance
services directly to Company customers, without long-distance regulatory
involvement by the Company. The reclassification of the Company's services as
long distance services could have a material adverse effect on the Company's
business, financial condition and results of operations.

The Company depends heavily on its key personnel, and the loss of one or more of
these individuals could have a material adverse effect on the Company.

         The Company is dependent on the efforts of:

o    W. Michael Smith, Executive Vice President, Chief Financial Officer and
     Treasurer;

o    J. Raymond Bilbao, Senior Vice President, General Counsel and Secretary;

o    David Bagley; Vice President - Network Operations;

o    Ron Thompson, Vice President - Operations; and

o    a group of employees with technical knowledge regarding the Company's
     systems.

         On August 25, 2002, Jana Ahlfinger Bell, the Company's former Chief
Executive Officer, resigned to pursue other business interests. Andrew Tillman,
one of the Company's former directors and the present operations director of
Minorplanet UK, is serving as the Company's Chief Executive Officer on an
interim basis while the Company continues its search for a permanent
replacement.

         The Company has one-year term employment agreements with Messrs. Smith
and Bilbao. The initial one-year term of these employment agreements expired on
June 21, 2002. The employment agreements for Mr. Smith and Mr. Bilbao are
renewed automatically on a month-to-month basis. The loss of services of one or
more of these individuals could materially and adversely affect the business of
the Company and its future prospects. The Company does not maintain key-man life
insurance on any of the Company's officers or employees. The Company's future
success will also depend on its ability to attract and retain additional
management and technical personnel required in connection with the growth and
development of its business.

The Company is dependent on Minorplanet UK for its research and development
associated with the VMI products.

         The Company is dependent on Minorplanet UK research and development to
provide modifications, upgrades and new product versions for the VMI product.
The timeliness and quality of these development efforts are not in the direct
control of the Company. The failure of Minorplanet UK to provide timely and
quality changes to the VMI product could have material adverse effect on the
Company's business, financial condition and results of operations.


                                       14
<PAGE>


The Company's current business plan contemplates significant expansion, which
the Company may be unable to manage.

         To the extent that the Company is successful in implementing its
business strategy, the Company may experience periods of rapid expansion in the
future. In order to manage growth effectively in the complex environment in
which it operates, the Company will need to maintain and improve its operating
and financial systems and expand, train and manage its employee base. In
addition, the Company must carefully manage production and inventory levels to
meet product demand and facilitate new product introductions. Inaccuracies in
demand forecasts could result in insufficient or excessive inventories and
disproportionate overhead expenses. The Company must also expand the capacity of
its sales, distribution and installation networks in order to achieve continued
growth in its existing and future markets. In general, the failure to manage
growth effectively could have a material adverse effect on the Company's
business, financial condition and results of operations.

Much of the Company's sales are derived from one customer, the loss of which
could significantly reduce the Company's revenues.

         The SBC Companies accounted for approximately 56% of the Company's
installed base, including network services subscribers, as of August 31, 2002.
The term of the Company's contract with the SBC Companies expires on January
30, 2003. While the Company expects to renew the contract, there can be no
assurances that the Company will be able to renew such contract on commercially
reasonable terms or at all. The loss of SBC, or any event, occurrence or
development which adversely affects the relationship between the Company and
SBC, could have a material adverse effect upon the Company's business, financial
condition and results of operations.

Substantial product liability claims could have a material adverse effect on the
Company by creating additional costs to the Company to pay and/or settle these
claims.

         Testing, manufacturing and use of the Company's products entail the
risk of product liability. Although management believes its products offer
safety advantages over conventional cellular telephones, it is possible that
operation of the product may give rise to product liability claims. Product
liability claims present a risk of protracted litigation, substantial money
damages, attorney's fees, costs and expenses, and diversion of management
attention. In addition, as the Company expands its business to include the
provision of alarm monitoring services in connection with the SBC contract, the
Company is exposed to an increased risk of litigation regarding various safety,
performance and other matters. Product liability claims that exceed policy
limits applicable to the Company's liability insurance or that are excluded from
the policy coverage could have a material adverse effect on the business or
financial condition of the Company.

The Company does not expect to pay dividends in the foreseeable future.

         The Company has never paid cash dividends on its Common Stock and has
no plans to do so in the foreseeable future. The Company intends to retain
earnings, if any, to develop and expand its business.

The price of the Company's common stock is volatile.

         Historically, the market prices for securities of emerging companies in
the telecommunications industry have been highly volatile. Future announcements
concerning the Company or its competitors, including results of technological
innovations, new commercial products, financial transactions, government
regulations, proprietary rights or product or patent litigation, may have a
significant impact on the market price of the Company's common stock. The
Company's stock price has been highly volatile in recent periods.

The Liquidity of the Company's common stock could be adversely affected if it is
delisted from the Nasdaq Smallcap Market.

         On October 11, 2002, the Company received notification from Nasdaq that
its common stock had closed below the minimum $1.00 per share requirement for
the previous 30 consecutive trading days as required under Marketplace Rule
4310(c)(4). The Company was provided with 180 calendar days, or until April 9,
2003, to regain compliance by having the bid price for its common stock close at
$1.00 or greater for a minimum period of 10 consecutive trading days. As of
November 22, 2002, the Company had not regained compliance. In the event that


                                       15
<PAGE>


the Company does not regain compliance, Nasdaq staff will determine whether it
meets the initial listing criteria for The NASDAQ SmallCap Market under
Marketplace Rule 4310(c)(2)(A). If the Company meets the initial listing
criteria, the staff will notify the Company that it has been granted an
additional 180 calendar day grace period to demonstrate compliance. Otherwise,
the staff will provide written notification that the Company's securities will
be subject to delisting from the Nasdaq SmallCap Market and would trade on the
OTC Bulletin Board. A delisting from the Nasdaq SmallCap Market may have a
material adverse effect on the Company's stock price and its ability to raise
capital through the issuance of additional equity. In the event the Company's
common stock is delisted from the Nasdaq SmallCap Market, it would become
subject to certain securities law restrictions requiring broker/dealers who
recommend low-priced securities to persons (with certain exceptions) to satisfy
special sales practice requirements, including making an individualized written
suitability determination for the purchaser and receiving the purchaser's
written consent prior to the transaction. The securities laws also require
additional disclosure in connection with any trades involving low-priced stocks
(subject to certain exceptions), including the delivery, prior to any
transaction, of a disclosure schedule explaining the market for such stocks and
the associated risks. These requirements could severely limit the market
liquidity of the Company's common stock and the ability of its stockholders to
sell the Company's common stock in the secondary market.

The Company may not be able to adequately protect its patents and other
proprietary technology, and its rights may be challenged by others.

         The Company's services are highly dependent upon its technology and the
scope and limitations of its proprietary rights therein. In order to protect its
technology, the Company relies on a combination of patents, copyrights and trade
secret laws, as well as certain customer licensing agreements, employee and
third-party confidentiality and non-disclosure agreements, and other similar
arrangements. If the Company's assertion of proprietary rights is held to be
invalid or if another party's use of the Company's technology were to occur to
any substantial degree, the Company's business, financial condition and results
of operations could be materially adversely affected.

         The patents and other intellectual property rights of the Company
cannot prevent competitors from developing competing systems using other
terrestrial wireless communications systems or using the cellular system through
a different method. While the Company believes that the nature and scope of the
Company's communications system, including the Company's strategic business and
technological relationships, would be difficult for a competitor to duplicate,
there can be no assurance that a competitor would consider these hindrances to
be material in light of the market potential. A competitor could invest time and
resources in an attempt to duplicate certain key features of the Company's
products and services, which could result in increased competition and have a
material adverse effect on the Company's business.

         Several of the Company's competitors have obtained and can be expected
to obtain patents that cover products or services directly or indirectly related
to those offered by the Company. There can be no assurance that the Company is
aware of all patents containing claims that may pose a risk of infringement by
its products or services. In addition, patent applications in the United States
are confidential until a patent is issued and, accordingly, the Company cannot
evaluate the extent to which its products or services may infringe on future
patent rights held by others. In general, if it were determined that any of the
Company's products, services or planned enhancements infringed valid patent
rights held by others, the Company would be required to obtain licenses (which
might require the payment of royalties) to develop and market such products,
services or enhancements from the holders of the patents, to redesign such
products or services to avoid infringement, or cease marketing such products or
services or developing such enhancements. In such event, the Company also might
be required to pay past royalties or other damages. There can be no assurance
that the Company would be able to obtain licenses on commercially reasonable
terms, or that it would be able to design and incorporate alternative
technologies, without a material adverse effect on its business, financial
condition and results of operations.

The failure of wireless carriers to offer circuit switched data on GSM networks
may require the Company to retrofit its installed base of VMI units with VMI
units which utilize GSM/GPRS.

         The Company's VMI product currently utilizes circuit-switched data on
existing GSM networks to transmit data messages. Several major U.S. wireless
carriers have indicated that they may cease to support circuit switched data on
their GSM networks but will require users to utilize General Packet Radio
Services ("GPRS") to transmit data messages on their GSM networks. Minorplanet
UK, the supplier of the Company's VMI product, is currently developing a VMI
product which utilizes GPRS instead of circuit switched data. The Company
anticipates that the


                                       16
<PAGE>


GPRS version of the VMI product will be commercially available in the first half
of the 2003 calendar year. If the U.S. wireless carriers fail to continue to
support circuit-switched data on their GSM networks and/or the Company fails to
obtain a GPRS-enabled VMI unit, such failures could have a material adverse
effect on its business, financial condition and results of operations.

The Company faces significant competition in the automatic vehicle location
marketplace.

         The Company's vehicle management information product faces significant
competition from several other suppliers of similar products, some of which may
have greater financial and technological resources. The Company can provide no
assurance that its products will compete successfully with the products of its
competitors or that we will adapt to changes in the business, regulatory or
technological environment as successfully as the Company's competitors.

The Company may be unable to take advantage of the potential benefits of its
relationship with Minorplanet UK.

         The success of the Company's business strategy depends upon the Company
successfully achieving infrastructure, product and development synergies derived
from the Company's application of the vehicle management information technology
and from the mutual leveraging by Minorplanet UK and the Company of its
respective core competencies. The Company can provide no assurance that the
Company's new vehicle management information products will gain market
acceptance. The Company can also provide no assurance that it can effectively
utilize the prior experience of Minorplanet UK in marketing to small and
medium-sized companies that manage service vehicle fleets, nor can the Company
ensure that it will successfully leverage the development experience and
resources of Minorplanet UK. The factors that may affect the Company's ability
to successfully take advantage of the Company's potential synergies with
Minorplanet UK include:

     o   the ability of the Company's management to leverage the design and
         development competencies of Minorplanet UK to ensure that the vehicle
         management information technology has the features and functionality
         to allow it to compete successfully in the Company's targeted markets;

     o   the ability of the Company's management to successfully deploy
         products based on the vehicle management information technology that
         deliver the functions and benefits sought by the Company's customers;
         and

     o   the ability of the Company's management to combine their experiences
         with the management of Minorplanet UK and design a strategy for
         successfully penetrating the U.S. small and medium-sized service fleet
         market.

         If the Company is unable to take advantage of the potential benefits
derived from the Company's relationship with Minorplanet UK, its business,
financial condition and results of operations could be materially adversely
affected.

A small number of the Company's stockholders own a substantial amount of the
Company's shares of common stock, and if such stockholders were to sell those
shares in the public market within a short period of time, the price of the
Company's common stock on the Nasdaq SmallCap Market could drop significantly.

         Minorplanet UK currently holds 30,000,000 shares of the Company's
common stock (approximately 62% of the Company's outstanding shares on a fully
diluted basis), 3,183,491 shares of which are eligible for resale under this
prospectus, and the selling stockholders other than Minorplanet UK collectively
hold 12,670,497 shares of the Company's common stock (approximately 26% of the
Company's outstanding shares on a fully diluted basis), of which 12,593,745
shares are eligible for resale under this prospectus upon the expiration of
certain lock-up restrictions. On December 18, 2001, 3,167,624 of these shares
were released from such restrictions. On March 18, 2002, an additional 3,167,624
shares were released, and on June 16, 2002, the balance of these shares were
released. In addition, other stockholders also own substantial amounts of shares
of the Company's common stock. Sales of a large number of shares of the
Company's common stock or even the availability of a substantial number of
shares for sale could have the effect of reducing the price per share of the
Company's common stock on the Nasdaq SmallCap Market, especially given that the
Company's common stock is thinly traded on that market.


                                       17
<PAGE>


ITEM 2. PROPERTIES

REAL PROPERTY AND LEASES

         The Company does not own any real property. The Company leases
approximately 73,400 square feet of office space for its corporate headquarters
in Richardson, Texas, of which approximately 34,200 square feet is sub-leased to
two other companies. The Company leases approximately 25,000 square feet of
warehouse and office space in Plano, Texas. The Company also leases a total of
10,300 square feet for three VMI sales and operations offices located in
Houston, Texas, Atlanta, Georgia and Los Angeles, California.

ITEM 3. LEGAL PROCEEDINGS

LEGAL PROCEEDINGS

         In the first quarter of 2001, K*TEC Electronics Corporation ("K*TEC"),
the outsource manufacturer that supplies substantially all of the Company's
finished goods inventory asserted a claim against the Company for reimbursement
for excess and obsolete inventory purchased in its capacity for use in the
manufacture of the Company's products. Following review of the claim, the
Company believed that it had meritorious defenses to the alleged claim and
vigorously denied liability. In April 2001, K*TEC refused to ship products,
placing the Company on "credit hold," refused to ship finished goods unless the
Company prepaid for such finished goods, refused to ship finished goods unless
the Company paid the excess inventory balance, refused to manufacture goods, and
refused to process goods received under Return Merchandise Authorizations
("RMA's"). K*TEC also refused to return to the Company certain test equipment
and RMA equipment owned by the Company.

         On May 18, 2001, the Company filed an Original Petition styled and
numbered @Track Communications, Inc, f/k/a HighwayMaster Corporation v. K-TEC
Electronics Corporation, Cause No. 01-04173 in the B44th District Court of
Dallas County, Texas seeking recovery against K*TEC for breach of contract,
breach of bailment and conversion, replevin, and also seeking a declaratory
judgment, an accounting, attorney's fees and costs of court (the "Dallas
Lawsuit").

         On June 21, 2001 K*TEC filed an Original Petition styled and numbered
K*Tec Electronics Corporation, L.P. doing business as K*Tec Electronics v.
@Track Communications, Inc. formerly known as HighwayMaster Corporation, Cause
No. 01CV-119321 in the 268th District Court of Fort Bend County, Texas seeking
recovery against the Company for sworn account, breach of contract, promissory
estoppel, quasi-estoppel, equitable estoppel, quantum meruit, negligent
misrepresentation, attorney's fees and costs of court (the "Fort Bend Lawsuit").

         On July 10, 2001, the Company and K*TEC reached agreement on all
material terms of settlement of the lawsuits subject to the execution of a
definitive settlement document. As per the settlement, the Company will continue
to utilize K*TEC as a manufacturer. On October 9, 2001, the Company and K*TEC
executed a Compromise Settlement Agreement. In accordance with the Compromise
Settlement Agreement, the parties have filed an Agreed Order Dismissing with
Prejudice both the Dallas Lawsuit and the Fort Bend Lawsuit. Based on
information currently available, the Company has recorded a provision of $2.2
million as its estimate of the cost to be incurred to settle this litigation, of
which $0.5 million had been paid as of August 31, 2002.

         The Company is involved in various claims and lawsuits incidental to
its business, primarily collections lawsuits in which the Company is seeking
payment of amounts owed to it by customers. In connection with the Company's
efforts to collect payments from a small number of former customers, such former
customers have on occasion alleged breaches of contractual obligations under
service agreements with the Company. The Company does not believe that these
claims and lawsuits will have a material adverse affect on the Company's
business, financial condition and results of operations.

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

         No matters were submitted to a vote of security holders during the
two-month transition period ending August 31, 2002 covered by this report
through the solicitation of proxies or otherwise.


                                       18
<PAGE>


                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company's Common Stock was initially offered to the public on June
22, 1995, and was quoted on the Nasdaq National Market ("Nasdaq NMS") through
close of business on February 1, 1999, after which time it began trading on the
Nasdaq SmallCap Market ("Nasdaq SmallCap") under the symbol "HWYM." The
Company's common stock currently trades under the symbol "MNPL." The following
table sets forth the range of high and low trading prices on the Nasdaq SmallCap
Market, as applicable, for the Common Stock for the periods indicated. Such
price quotations represent inter-dealer prices without retail markup, markdown
or commission and may not necessarily represent actual transactions.

<Table>
<Caption>
                                                       BID PRICES
                                                  HIGH             LOW
                                                  ----             ---
<S>                                               <C>              <C>
2000
First Quarter                                     $11.80           $0.03
Second Quarter                                    $ 6.00           $1.72
Third Quarter                                     $ 2.41           $0.75
Fourth Quarter                                    $ 1.69           $0.03

2001
First Quarter                                     $ 1.31           $0.38
Second Quarter                                    $ 1.90           $0.32
Third Quarter                                     $ 1.79           $0.93
Fourth Quarter                                    $ 1.65           $0.84

2002
First Quarter                                     $ 4.00           $1.22
Second Quarter                                    $ 2.18           $0.96
Two months ended August 31, 2002                  $ 1.06           $0.82
</Table>

         The prices of the Company's Common Stock for the second, third, and
fourth quarters of 2001 as well as the first and second quarter of 2002 and the
two months ended August 31, 2002, reflect a 1-for-5 reverse stock split which
the Company effected during the second quarter of 2001.

         There were 98 registered holders of common stock and an estimated 3,800
broker/dealers who beneficially hold common stock on behalf of stockholders as
of November 22, 2002. The last sales price for the Company's Common Stock as
reported on November 22, 2002 was $0.55. The Company did not pay dividends on
its Common Stock for the transition period ended August 31, 2002 and has no
plans to do so in the foreseeable future.

         On September 18, 1998, the SEC declared effective the Company's
registration statement on Form S-3 which was filed to register warrants and
warrant shares as required pursuant to the Warrant Registration Rights Agreement
entered into as part of the Company's 1997 Debt Offering. Under the terms of the
Warrant Registration Rights Agreement, the Company is obligated to use its best
efforts to keep the Registration Statement continuously effective until the
earlier of (i) the expiration of the warrants or (ii) the time when all warrants
have been exercised; provided, however, that during any consecutive 365-day
period, the Company may suspend the effectiveness of the registration statement
on up to two occasions for a period of not more than 45 consecutive days in
connection with a possible acquisition, business combination or other
development affecting the Company if the board of directors determines that
disclosure thereof would not be in the best interests of the Company. The
Company will not receive any proceeds from the sale of the warrants by the
selling warrant holders. To the extent that any warrants are exercised, the
Company will receive the exercise price for the warrant shares. During the
transition period ending August 31, 2002, no warrants were sold and no warrant
shares were exercised.

         The holders of the Company's common stock that acquired their shares
pursuant to the Purchase Agreement or the Exchange Offer transactions the
Company completed on June 21, 2001 are entitled to certain registration rights
pursuant to a registration rights agreement the Company also entered into with
these stockholders. Pursuant

                                       19
<PAGE>


to this registration rights agreement, 15,293,745 shares of the Company's common
stock (2,700,000 shares of which were owned by Minorplanet UK) were registered
for resale under a Form S-3 registration statement that was declared effective
with the SEC on October 23, 2001. On up to three separate occasions, but no more
than twice in any twelve-month period, the holders of at least ten percent (10%)
of the Company's shares that were registered are entitled to request that the
Company undertake an underwritten offering of such shares if the proposed
offering has anticipated aggregate proceeds in excess of $10,000,000 at the time
of the request. The Company is required to keep this Form S-3 registration
statement effective until any holders entitled to sell shares of the Company's
common stock under it are otherwise entitled to sell such shares without
restriction pursuant to Rule 144 under the Securities Act.

         In addition to the registration rights described above, pursuant to
this registration rights agreement, the holders of at least fifteen percent
(15%) of the then outstanding common stock issued pursuant to the Purchase
Agreement and Exchange Offer transactions are entitled to require the Company,
on up to five separate occasions, but no more than twice in any twelve-month
period, to register shares of the Company's common stock for resale if the
proposed offering has anticipated aggregate proceeds in excess of $10,000,000 at
the time the registration request is made. Also, subject to certain limitations,
all of these stockholders that are deemed to be parties to this registration
rights agreement are generally entitled to include such shares (a piggyback
right) in any transaction in which we sell our common stock to the public. The
foregoing registration rights are subject to limitations as to amount by the
underwriters of any offering and to black-out periods in which the Company's
management may delay an offering for a limited period of time.

         Under the terms of the Purchase Agreement and a Lockup Agreement
executed by the exchanging noteholders in connection with the June 21, 2001
Exchange Offer, all of the selling stockholders (except for Minorplanet UK)
agreed to certain contractual lock-up restrictions regarding the resale of the
shares they acquired in the Exchange Offer. On June 16, 2002, all remaining
shares were released from lock-up provisions and such stockholders are now free
to resell all of their shares subject to compliance with applicable securities
laws.

         In connection with the closing of the transactions contemplated by the
Purchase Agreement, the stockholders approved Amendment Number 2 to the
Company's 1994 Amended and Restated Stock Option Plan (the "Plan") which
increased the number of shares of the Company's common stock available for
issuance (on a post reverse stock split basis) to 5,100,000 shares. Accordingly,
on October 10, 2001, the Company filed a Form S-8 registration statement
covering an additional 4,729,737 shares that may be issued under the Plan.

         At the Company's 2002 Annual Meeting of Stockholders held on May 21,
2002, the stockholders approved the amendment to the Company's Amended and
Restated 1994 Stock Option Plan increasing the number of shares of common stock
issuable under the stock option plan to 7,208,000 shares.

ITEM 6. SELECTED FINANCIAL DATA

SELECTED FINANCIAL DATA

         The selected financial data set forth for each of the years 1998, 1999,
2000 and 2001 as well as the eight month "transition period" ended August 31,
2002, due to the change in fiscal year end, have been derived from audited
financial statements, including the balance sheets at August 31, 2002, December
31, 2001, 2000, 1999 and 1998 and the related statements of operations, of cash
flows and of changes in stockholders' equity (deficit) for each of the four
years in the period ended December 31, 2001, as well as the eight month period
ending August 31, 2002, and notes thereto appearing elsewhere herein. The
selected financial data provided for the eight months ended August 31, 2001 is
provided for comparable purposes and has been derived from unaudited financial
statements, including the balance sheet at August 31, 2001. As a result of the
adoption of SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in
Financial Statements," as a cumulative effect change in accounting principle in
2000, results for 2000, 2001 and the eight months ended August 31, 2002 are not
comparable to prior periods.


                                       20
<PAGE>


<Table>
<Caption>
                                                          Eight months ended August 31,        Twelve months ended December 31,
                                                                            Unaudited        ------------------------------------
                                                             2002              2001              2001                    2000
                                                         ------------      ------------      ------------            ------------
                                                                                            (In thousands, except per share data)
<S>                                                      <C>               <C>               <C>                     <C>
STATEMENT OF OPERATIONS DATA
Revenues:
  Product                                                $      5,074      $     12,796      $     19,658            $     41,971
  Ratable product                                               6,780             7,026             9,864                  12,093
  Service                                                      30,102            32,844            47,958                  48,066
                                                         ------------      ------------      ------------            ------------
     Total revenues                                            41,956            52,666            77,480                 102,130
                                                         ------------      ------------      ------------            ------------
Cost of revenues:
  Product                                                       3,996             9,810            15,239                  30,031
  Ratable product                                               5,213             5,814             8,236                  10,006
  Service                                                      16,155            18,204            26,563                  30,636
  Inventory write-down to net realizable value                     --                --             4,693                      --
  Provision for settlement of litigation                          100             2,100             2,100                      --
                                                         ------------      ------------      ------------            ------------
    Total cost of revenues                                     25,464            35,928            56,831                  70,673
                                                         ------------      ------------      ------------            ------------

Gross profit                                                   16,492            16,738            20,649                  31,457
                                                         ------------      ------------      ------------            ------------

Expenses:
  General and administrative                                    7,943             8,349            12,482                  12,478
  Customer service                                              3,411             5,051             7,036                   7,146
  Sales and marketing                                           8,600             2,784             4,570                   4,980
  Engineering                                                   1,374             4,107             5,166                   4,345
  Network services center                                         461             1,168             1,753                   1,512
  Severance and AutoLink termination costs                         --                --                --                      --
  Depreciation and amortization                                 4,322             4,673             7,438                   5,907
                                                         ------------      ------------      ------------            ------------
                                                               26,111            26,132            38,445                  36,368
                                                         ------------      ------------      ------------            ------------

    Operating loss                                             (9,619)           (9,394)          (17,796)                 (4,911)

Interest income                                                   457               420               501                   1,371
Interest expense                                               (1,411)           (6,642)           (7,355)                (13,368)
Other income (expense)                                           (183)               --                --                   1,569
                                                         ------------      ------------      ------------            ------------
    Loss before income taxes, extraordinary item and
       cumulative effect of accounting change                 (10,756)          (15,616)          (24,650)                (15,339)
Income tax benefit                                                978                                  --                      --
                                                         ------------      ------------      ------------            ------------
    Loss before extraordinary item and
       cumulative effect of accounting change                  (9,778)          (15,616)          (24,650)                (15,339)
Extraordinary item                                                               59,461            59,461                      --
Cumulative effect of accounting change                             --                --                --                  (5,206)
                                                         ------------      ------------      ------------            ------------
    Net income (loss)                                    $     (9,778)     $     43,845      $     34,811            $    (20,545)
                                                         ============      ============      ============            ============

Basic and diluted income (loss) per share:
    Loss before extraordinary item and cumulative
       effect of accounting change                       $      (0.20)     $      (0.88)     $      (0.88)           $      (3.03)
    Extraordinary item                                             --              3.36              2.13                      --
    Cumulative effect of accounting change                         --                --                --                   (1.03)
                                                         ------------      ------------      ------------            ------------
    Basic and diluted net income (loss) per share        $      (0.20)     $       2.48      $       1.25            $      (4.06)
                                                         ============      ============      ============            ============

Weighted average number of shares outstanding
   Basic and diluted                                           48,233            17,649            27,928                   5,058

OTHER OPERATING DATA (unaudited)
Units installed, including network subscribers,
at end of period                                               68,220            69,199            70,932                  67,336

<Caption>

                                                                      Twelve months ended December 31,
                                                              ------------------------------------------------
                                                                  1999              1998              1997
                                                              ------------      ------------      ------------
                                                                    (In thousands, except per share data)
<S>                                                           <C>               <C>               <C>
STATEMENT OF OPERATIONS DATA
Revenues:
  Product                                                     $     43,018      $     16,950      $     27,187
  Ratable product                                                       --                --                --
  Service                                                           52,655            46,463            27,445
                                                              ------------      ------------      ------------
     Total revenues                                                 95,673            63,413            54,632
                                                              ------------      ------------      ------------
Cost of revenues:
  Product                                                           34,752            13,222            22,133
  Ratable product                                                       --                --                --
  Service                                                           26,724            32,419            21,397
  Inventory write-down to net realizable value                          --                --                --
  Provision for settlement of litigation                                --                --                --
                                                              ------------      ------------      ------------
    Total cost of revenues                                          61,476            45,641            43,530
                                                              ------------      ------------      ------------

Gross profit                                                        34,197            17,772            11,102
                                                              ------------      ------------      ------------

Expenses:
  General and administrative                                        14,706            22,875            11,872
  Customer service                                                   7,770            10,604            11,493
  Sales and marketing                                                4,091             7,372             7,723
  Engineering                                                        2,685             5,399             4,604
  Network services center                                            1,437             1,992             1,416
  Severance and AutoLink termination costs                            (189)            5,357                --
  Depreciation and amortization                                      6,551             5,829             2,684
                                                              ------------      ------------      ------------
                                                                    37,051            59,428            39,792
                                                              ------------      ------------      ------------

    Operating loss                                                  (2,854)          (41,656)          (28,690)

Interest income                                                      2,037             4,827             2,500
Interest expense                                                   (13,422)          (17,099)           (4,857)
Other income (expense)                                               2,715                --                --
                                                              ------------      ------------      ------------
    Loss before income taxes, extraordinary item and
       cumulative effect of accounting change                      (11,524)          (53,928)          (31,047)
Income tax benefit                                                      --                --
                                                              ------------      ------------      ------------
    Loss before extraordinary item and
       cumulative effect of accounting change                      (11,524)          (53,928)          (31,047)
Extraordinary item                                                      --            18,867                --
Cumulative effect of accounting change                                  --                --                --
                                                              ------------      ------------      ------------
    Net income (loss)                                         $    (11,524)     $    (35,061)     $    (31,047)
                                                              ============      ============      ============

Basic and diluted income (loss) per share:
    Loss before extraordinary item and cumulative
       effect of accounting change                            $      (2.31)     $     (10.83)     $      (6.24)
    Extraordinary item                                                  --              3.79                --
    Cumulative effect of accounting change                              --                --                --
                                                              ------------      ------------      ------------
    Basic and diluted net income (loss) per share             $      (2.31)     $      (7.04)     $      (6.24)
                                                              ============      ============      ============

Weighted average number of shares outstanding
   Basic and diluted                                                 4,995             4,980             4,973

OTHER OPERATING DATA (unaudited)
Units installed, including network subscribers,
at end of period                                                    50,825            47,657            33,122
</Table>


                                       21
<PAGE>

<Table>
<Caption>
                                                                            December 31,
                                       August 31,   -----------------------------------------------------------------
                                          2002         2001         2000          1999          1998          1997
                                       ----------   ----------   ----------    ----------    ----------    ----------
<S>                                    <C>          <C>          <C>           <C>           <C>           <C>
BALANCE SHEET DATA

Cash and short-term investments        $   18,090   $   14,889   $   20,641    $   17,768    $   26,169    $   46,486
Working capital                             8,337       12,486       20,825        35,660        29,143        64,729
Network, equipment and software, net        6,425        8,583       12,851        15,703        20,649        15,482
Total assets                               81,403       87,597       81,044        74,073       103,126       146,473
Notes payable                              14,254       14,109       92,484        92,090        91,697       120,956
Stockholders' equity (deficit)             35,418       44,179      (58,341)      (38,051)      (26,791)        8,270

Capital expenditures                   $    1,251   $    1,587   $    2,600    $    3,103    $   10,520    $    9,499
</Table>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

GENERAL

         During the third quarter of 2001, the Company commenced marketing the
VMI product licensed from Minorplanet Limited into the automatic vehicle
location marketplace in the United States. VMI is designed to maximize the
productivity of a mobile workforce as well as reduce vehicle mileage and fuel
related expenses. The VMI technology consists of: (i) a data control unit
("DCU") that continually monitors and records a vehicle's position, speed and
distance traveled; (ii) a command and control center ("CCC") which receives and
stores in a database information downloaded from the DCU's; and (iii) software
used for communication, messaging and detailed reporting. VMI uses GPS to
acquire a vehicle location on a minute-by-minute basis and a GSM based cellular
network to transmit data between the DCU's and the CCC. The VMI application is
targeted to small and medium sized fleets in the metro marketplace which the
Company believes represents a total U.S. market of approximately 21 million
vehicles.

         VMI provides minute-by-minute visibility into the activities of a
mobile workforce via an extensive reporting system that provides real-time and
exception-based reporting. Real-time reports provide information regarding a
vehicle's location, idling, stop time, speed and distance traveled. With
real-time reporting, the user can view when an employee starts or finishes work,
job site arrival times and site visit locations. In addition, exception reports
allow the user to set various parameters within which vehicles must operate, and
the system will report exceptions including speeding, extended stops,
unscheduled stops, route deviations, visits to barred locations and excessive
idling.

         Through its NSC Systems segment, the Company provides long-haul
trucking companies with a comprehensive package of mobile communications and
management information services, thereby enabling its trucking customers to
effectively monitor the operations and improve the performance of their fleets.
The initial product application was customized and has been sold to and
installed in the service vehicle fleets of the member companies of SBC
Communications, Inc., pursuant to the service vehicle contract (the "Service
Vehicle Contract" or "Contract"). Until the Sale to Aether on March 15, 2002,
the Company also provided mobile asset tracking solutions with its
trailer-tracking products, TrackWare(R) and 20/20V(TM).

         On June 4, 2001, all 1,000 shares of Class B Common Stock were
converted into 320,000 shares of Common Stock at the option of the sole holder
of those shares. On June 5, 2001, the Company effected a reverse stock split in
the ratio of one (1) share of post-split common stock for every five (5) shares
of pre-split common stock and amended the Company's Certificate of Incorporation
to increase the number of authorized shares of common stock from 50,000,000
shares to 100,000,000 shares. All references to Common Stock and all per share
references for periods prior to the stock split have been restated to reflect
the 1- for -5 reverse stock split.

         In addition, the Company created a new class of Series E Preferred
Stock and on June 5, 2001 issued one (1) share of Series E Preferred Stock. The
Series E Preferred Stock has a liquidation preference of $1,000 per share


                                       22
<PAGE>


and is entitled to the payment of annual dividends at the rate of 7% per share.
The Series E Preferred Stock does not have any voting, conversion or preemptive
rights.


         On June 21, 2001, the Company consummated the stock issuance
transactions approved by the Company's stockholders at the annual meeting on
June 4, 2001. As a result of the closing of transactions contemplated by a stock
purchase and exchange agreement dated February 14, 2001, the Company issued
30,000,000 shares of its common stock in a change of control transaction to
Minorplanet UK, which is now the majority stockholder of the Company. In
exchange for this stock issuance, Minorplanet UK paid the Company $10,000,000 in
cash and transferred to the Company all of the shares of its wholly-owned
subsidiary, Minorplanet Limited, which holds an exclusive, royalty-free, 99-year
license to market, sell and operate Minorplanet UK's VMI technology in the
United States, Canada and Mexico. As a result of this transaction, Minorplanet
UK beneficially owns approximately 62% of the outstanding shares of the
Company's common stock (on a non-fully diluted basis), which is now the sole
voting security of the Company. The "License Rights" acquired are valued in the
accompanying Consolidated Balance Sheet as an asset purchase at an amount which
reflects the fair value of the common stock issued by the Company based on the
market price of the Company's common stock on the date of consummation of the
transaction ($1.60 per share on June 21, 2001), plus the incremental direct
costs incurred in effecting the transaction.

         Also, the Company issued 12,670,497 shares of its common stock (valued
at $1.60 per share) to holders of its Senior Notes, in exchange for the
cancellation of Senior Notes with an aggregate principal amount of $80,022,000
in the Exchange Offer. The total principal amount of Senior Notes that remains
outstanding is $14,333,000. As a result of this Exchange Offer, the Company
recognized a $59,461,000 gain, net of $995,000 of Federal income taxes and
$3,067,000 in the aggregate amount of unamortized debt discount and issuance
costs, and including $3,773,000 of waived accrued interest payable, which is
reflected as an extraordinary item in the accompanying Consolidated Statements
of Operations.


         The foregoing stock issuance transactions are hereinafter collectively
referred to as the "Recapitalization." As a result of the Recapitalization, the
Company significantly reduced its indebtedness and related interest expense. In
addition, the Company acquired the VMI technology and commenced distribution of
Minorplanet UK's VMI product in the United States.

         The Company earns revenues from service contracts and from related
products sold to customers (for which title generally passes on shipment). In
accordance with previously existing interpretations of generally accepted
accounting principles, the Company generally recognized revenues from product
sales and licensing of product software at the time the mobile units were
shipped to customers. During 2000, as a result of new interpretations of
generally accepted accounting principles by the Securities and Exchange
Commission (the "SEC"), through issuance of SEC Staff Accounting Bulletin No.
101, "Revenue Recognition in Financial Statements" ("SAB 101") the Company was
required to change its accounting policy for product revenue recognition as
described below.

         The Company sells mobile communications systems and related enhanced
mobile communications and management information services that are provided
through the Company's proprietary network. With respect to the Series 5000
mobile units sold to the Company's long-haul trucking customers, these units
function only when used in conjunction with the Company's proprietary network.
In accordance with these new interpretations, the Company changed its product
revenue recognition policy for sales to long-haul trucking customers, to defer
product revenue previously recognized upon shipment and instead recognize such
revenue ratably over the longer of the term of the service contract or the
estimated life of the customer relationship. Such terms range from three to ten
years. The product costs associated with these revenues are also deferred and
amortized over such period. The product revenues and related costs are portrayed
in the accompanying Consolidated Statements of Operations as "Ratable Product
Revenues" and "Ratable Product Costs," respectively.

         Product revenues from sales of mobile units pursuant to the service
contract with SBC Companies, are recognized currently, after a brief acceptance
period, because these mobile units have different functionality that permit
their use on other than the Company's proprietary network.

         The VMI product includes both hardware and software components. Due to
the interdependency of the functionality of the elements, revenue recognition is
governed by SAB 101 and Statement of Position 97-2, "Software Revenue
Recognition" ("SOP 97-2"). Currently, the Company resells cellular airtime to
customers of its VMI products. Therefore, in accordance with SAB 101, the
Company defers VMI product revenues and recognizes this revenue


                                       23
<PAGE>
ratably over the longer of the term of the customer contract or the estimated
life of the customer relationship. Such terms range from one to five years. In
addition, the Company has also deferred revenue consistent with the provisions
of SOP 97-2.

         The Company provides lease financing to certain customers of its VMI
products. Leases under these arrangements are classified as sales-type leases or
operating leases. These leases typically have terms of one to five years, and
all sales type leases are discounted at interest rates ranging from 14% to 18%
depending on the customer's credit risk. The net present value of the lease
payments for sales-type leases is recognized as product revenue and deferred
under the Company's revenue recognition policy described above. Income from
operating leases is recognized ratably over the term of the leases.

         As a result of the change in accounting principle described above, for
which restatement of prior years is not permitted, the Company's revenues and
cost of revenues for the 2000 and 2001 fiscal years as well as the eight month
transition period ending August 31, 2002 are not directly comparable to prior
years.

         On March 15, 2002, the Company completed the Sale to Aether of certain
assets and licenses related to the Company's long-haul trucking and
asset-tracking businesses pursuant to the Asset Purchase Agreement effective as
of March 15, 2002, by and between the Company and Aether. Under the terms of the
Asset Purchase Agreement, the Company sold to Aether assets and related license
rights to its Platinum Service software solution, 20/20V(TM), and TrackWare(R)
asset and trailer-tracking products. In addition, the Company and Aether agreed
to form a strategic relationship with respect to the Company's long-haul
customer products, pursuant to which the Company assigned to Aether all service
revenues generated post-closing from its Series 5000 customer base. Aether, in
turn, agreed to reimburse the Company for the network and airtime service costs
related to providing the Series 5000 service. Hereinafter, Series 5000 units for
which the Company provides network services are referred to as network services
subscribers. The two companies also agreed to work jointly in the adaptation of
the VMI product technology for the potential distribution of VMI by Aether to
the long-haul-trucking market.

         As consideration for the Sale, the Company received $3 million in cash,
of which $0.8 million remains held in escrow as of August 31, 2002 to be
released to the Company during the next fiscal year provided certain conditions
are met by the Company. The Company also received a note for $12 million
payable, at the option of Aether, in either cash or convertible preferred stock
in three equal installments of $4 million on April 14, May 14, and June 14,
2002. The consideration for the Sale was determined through arms length
negotiation between the Company and Aether. Aether later irrevocably agreed to
pay cash in lieu of preferred stock for each of the three $4 million
installments. As of August 31, 2002, all three $4 million cash installments had
been received by the Company from Aether. See the Form 8-K filed by the Company
on March 27, 2002 which is incorporated by reference herein and Note 4 to the
Consolidated Financial Statements attached hereto.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Estimates Inherent in the Preparation of Financial Statements

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 revenues and
expenses during the reporting period. Management bases its estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources.

         The significant accounting policies and estimates, which are believed
to be the most critical to aid in fully understanding and evaluating reported
financial results, are stated in this section. The following policies and
estimates should be read in conjunction with the financial statements and notes
thereto.


                                       24
<PAGE>

Revenue Recognition

         Sales proceeds pertaining to the Series 5000, TrackWare, 2020V and VMI
product lines are deferred initially and recognized over the greater of the
contract life or the life of the estimated customer relationship. The deferral
of these items is prescribed by SAB 101 and SOP 97-2. The Company has estimated
such periods to range from one to ten years. The Company's estimate of the life
of a customer relationship is determined based upon the Company's historical
experience with its customers together with the Company's estimate of the
remaining life of the applicable product offering. If the customer relationship
is terminated prior to the end of the estimated customer relationship period,
such deferred sales proceeds are recognized as revenue in the period of
termination. The Company periodically reviews its estimates of the customer
relationship period as compared to historical results and adjusts its estimates
prospectively.

         For the Series 5005S product line sold to SBC under the Service Vehicle
Contract, revenues are recognized upon shipment of the products or upon customer
acceptance of the delivered products, if terms of the sales arrangement gives
the customer right of acceptance.

         Service revenue generally commences upon product installation and is
recognized ratably over the period such services are provided.

Allowance for Doubtful Accounts

         The Company continuously monitors collections and payments from its
customers and maintains a provision for estimated credit losses based upon
historical experience and specific customer information. There is no guarantee
that the Company will continue to experience the same credit loss history in
future periods. If a significant change in the liquidity or financial condition
of a large customer or group of customers were to occur, it could have a
material adverse affect on the collectability of accounts receivable and future
operating results.

Inventory Valuation

         Inventories consist primarily of component parts and finished products
that are valued at the lower of cost or market. Cost is determined using the
first-in, first-out (FIFO) method. The Company records a write-down for excess
and obsolete inventory based on a usage formula for component parts and specific
identification criteria for finished goods. Actual demand or market conditions
may be different than those projected by management, which could have a material
impact on operating results and financial position.

Valuation of Long-Lived Assets

         Management evaluates the recoverability of the Company's long-lived
assets under Statement of Financial Accounting Standards No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144
requires management to review for impairment of its long-lived assets, whenever
events or changes in circumstances indicate that the carrying amount of an asset
might not be recoverable and exceeds its fair value. Impairment evaluations
involve management estimates of asset useful lives and future cash flows. When
such an event occurs, management estimates the future cash flows expected to
result from the use of the asset and its eventual disposition. If the
undiscounted expected future cash flows are less than the carrying amount of the
asset and the carrying amount of the asset exceeds its fair value, an impairment
loss is recognized. Management utilizes an expected present value technique, in
which multiple cash flow scenarios that reflect the range of possible outcomes
and a risk-free rate are used, to estimate fair value of the asset. Actual
useful lives and cash flows could be different from those estimated by
management. This could have a material affect on the Company's operating results
and financial position.

         Management assesses the impairment in value to its long-lived assets
whenever events or circumstances indicate that the carrying value may not be
recoverable. Significant factors, which would trigger an impairment review,
include the following:

               o    significant negative industry trends,

               o    significant changes in technology,

               o    significant underutilization of the asset, and

               o    significant changes in how the asset is used or is planned
                    to be used.



                                       25
<PAGE>
License Rights

         Management accounts for the License Rights in accordance with Statement
of Financial Accounting Standards No. 142, "Goodwill and Other Intangible
Assets" ("SFAS 142"). The License Rights acquired are valued in the accompanying
Consolidated Balance Sheet as an asset purchase at an amount which reflects the
fair value of the common stock issued by the Company based on the market price
of the Company's common stock on the date of consummation of the transaction
($1.60 per share on June 21, 2001), plus the incremental direct costs incurred
in effecting the transaction.

         Based on the Company's evaluation of the useful life of the existing
technology, probability of future developments to bring new products to market
and projected cash flows from these products, the License Rights are being
amortized over a 15-year life. SFAS 142 requires management to evaluate the
remaining useful life of the License Rights each reporting period to determine
whether events and circumstances warrant a revision to the remaining period of
amortization. If the estimate of the License Rights' remaining useful life
changes, the remaining carrying amount of the License Rights is amortized
prospectively over that revised remaining useful life. Actual useful lives could
be different from those estimated by management. This could have a material
affect on the Company's operating results and financial position.

         In accordance with SFAS 144, management also tests for impairment
losses on the License Rights consistent with the policies discussed above in
"Valuation of Long-Lived Assets".

Accounting for Income Taxes

         The Company provides a full valuation asset allowance on tax loss
carryforwards and other potential tax benefits according to SFAS No. 109,
"Accounting for Income Taxes." As a result, to the extent that the Company
realizes those benefits in future periods, these benefits will favorably impact
net income.

Litigation and Contingencies

         From time to time, the Company has been subject to legal proceedings
and claims in the ordinary course of business.

RESULTS OF OPERATIONS

EIGHT MONTHS ENDED AUGUST 31, 2002, COMPARED TO EIGHT MONTHS ENDED AUGUST 31,
2001

         Total revenues for the eight months ending August 31, 2002 decreased to
$42.0 million from $52.7 million during the eight months ended August 31, 2001.
Product revenues, including ratable product revenue, for the same periods
decreased to $11.9 million during 2002 from $19.8 million in 2001 due to a
reduction in NSC Systems sales. The decrease in NSC Systems product revenue was
primarily due to lower sales under the Service Vehicle Contract with SBC as well
as a reduction in long haul trucking product sales due to the Sale of certain
assets to Aether in March of 2002.

         The Company began marketing the VMI product in the Dallas, Texas market
during the third quarter of 2001, the Houston, Texas market during the fourth
quarter of 2001, the Atlanta, Georgia market during the first quarter of 2002,
and the Los Angeles, California and Austin, Texas markets beginning in July of
2002. Approximately 3,600 VMI units were sold during the eight months ended
August 31, 2002. However, in accordance with the Company's revenue recognition
policies, revenue and the associated cost of sales are deferred under SAB 101
and SOP 97-2, and recognized over the greater of the contract life or the life
of the estimated customer relationship. Thus, total VMI product revenue during
the eight months ended August 31, 2002 was only $0.9 million, recorded in
ratable product revenue on the Company's Consolidated Statements of Operations .
The Company has recorded an additional $3.6 million in deferred product revenue
associated with VMI product sales


                                       26
<PAGE>


reflected on the Company's balance sheet as of August 31, 2002. VMI sales did
not contribute significantly to the Company's total revenue during 2001.

         Service revenues for the eight months ended August 31, 2002 decreased
to $30.1 million from $32.8 million during the same period last year. The
decrease in service revenues is primarily attributable to a reduction in the
number of NSC Systems network services subscriber units from 31,738 at August
31, 2001 to 27,218 as of August 31, 2002 and a lower monthly average service
revenue per unit for the total installed base. The Company's total installed
base, including network subscribers, was 68,220 at August 31, 2002 down only
slightly from 69,199 at August 31, 2001; however, the proportion of service
vehicles relative to long-haul trucking has increased resulting in a lower
average revenue per mobile unit. Average revenue for service vehicles is
significantly less than that of long-haul trucking because of different product
functionality.

         Total gross profit of 39% for the eight months ended August 31, 2002
increased from 32% during the same period last year. During the first quarter of
2001, the Company received significant quantities of TrackWare finished goods
inventory, the carrying amount of which was written down by approximately $0.6
million to estimated market value. During the second quarter of 2001, the
Company reached an agreement in principle to settle the litigation with its
outsource manufacturer for reimbursement for excess and obsolete inventory. As a
result of this agreement in principle, the Company recorded a provision of $2.1
million during the first quarter of 2001 and an additional $0.1 million during
the eight months ended August 31, 2002 as its estimate of the cost to be
incurred to settle this litigation. Excluding the provision for legal settlement
and the inventory write-down, total gross profit for the eight months ended
August 2002 and 2001 would have been 40% and 37% respectively. The effective
increase in total gross profit was primarily due to improved margins on NSC
Systems product sales and maintenance services under the Service Vehicle
Contract.

         Total operating expenses were $26.1 million for both the eight months
ended August 31, 2002 and 2001. Sales and marketing costs for the eight months
ending August 31, 2002 increased to $8.6 million from $2.8 million during the
eight months ended August 31, 2001. This increase is primarily due to
expenditures related to the VMI product launch including the hiring of new sales
personnel and the opening of four VMI sales and operations offices in Dallas,
Houston, Atlanta, and Los Angeles. Expenditures of approximately $0.6 million
were also incurred for contracted sales, training and operational support
services associated with the VMI product launch during 2002. The increase in VMI
sales and marketing costs during the eight months ended August 31, 2002 was
offset by reductions in operating expenses across all other departments
including customer service, engineering, network services, and general and
administrative. These decreases were primarily associated with personnel
reductions made as a consequence of the cancellation of various technology
initiatives, as well as personnel reductions associated with the Sale to Aether
of certain assets and license rights to the Company's long haul trucking and
asset tracking businesses.

         Operating losses increased to $9.6 million during the eight months
ended August 31, 2002 from $9.4 million during the eight months ended August 31,
2001 primarily due to lower sales under the Service Vehicle Contract. The
Company's NSC Systems segment reported operating income of $7.7 million for the
eight months ended August 31, 2002, which was offset by the $17.3 million
operating loss from the VMI segment associated with the launch of the new VMI
product. During 2001, the Service Vehicle Contract was responsible for the
majority of product revenues. Product shipments under that contract are expected
to be minimal during the next fiscal year. The Company's financial condition and
results of operations are heavily dependent upon the Company's ability to market
and sell the VMI products.

         Interest expense decreased to $1.4 million during the eight months
ending August 31, 2002 from $6.6 million during the same period last year, due
to the $80.0 million reduction in Senior Notes payable as a result of the
Recapitalization. Thus, net loss before income taxes and extraordinary items
improved to $10.8 million for the eight months ending August 31, 2002 in
comparison to $15.6 million during the eight months ended August 31, 2001.

         The extraordinary gain in 2001 of $59.5 million, net of federal income
taxes, reflects the difference between the fair value of the common stock issued
in exchange for $80.0 million principal amount of Senior Notes retired, together
with accrued interest thereon, net of expenses associated with the Exchange
Offer.

                                       27
<PAGE>


YEAR ENDED DECEMBER 31, 2001, COMPARED TO YEAR ENDED DECEMBER 31, 2000

         Total revenues decreased 24.1% to $77.5 million in 2001, from $102.1
million in 2000. Product revenues decreased 45.5% to $29.5 million in 2001, from
$54.1 million in 2000, primarily due to a decrease in unit sales for the Service
Vehicle Contract. Ratable Product Revenues decreased 18.2% to $9.9 million in
2001, from $12.1 million in 2000. This decrease is due to the fact that Ratable
Product Revenues in 2000 include the recognition of all previously deferred
revenues related to a significant customer for whom service was terminated
during 2000. Service revenues were $47.9 million in 2001 compared to $48.1
million in 2000. While the average installed base of mobile units increased
17.0% from 2000 to 2001, the average monthly revenue per mobile unit decreased
17.5% to $57.80 in 2001 from $70.08 in 2000, primarily due to the increasing
proportion of service vehicles in the installed base. Average revenue for
service vehicles is significantly less than that of long-haul trucking because
of different product functionality. The installed base of mobile units increased
to 70,932 at December 31, 2001 from 67,336 at December 31, 2000. The increase in
the installed base is attributable to the Service Vehicle Contract.

         Gross profit margin decreased from $31.5 million in 2000 to $20.6
million in 2001. Service gross profit margin was 44.6% in 2001 compared to 36.3%
in 2000. The increase in service gross profit margin is primarily the result of
rate reductions obtained from cellular carriers and other telecommunications
providers and modifications to the Company's NSC.

         Product gross profit margin was 22.5% in 2001 compared to 28.4% in
2000. The decrease in product gross margin is primarily attributable to
inventory write-downs taken to reflect TrackWare finished goods inventory at its
estimated fair market value.

         For 2001, the Company recorded an inventory write-down of $4.7 million
for excess inventory associated with certain circuit boards used in the
manufacture of the TrackWare and 20/20V product lines. The TrackWare product
line is designed to more efficiently utilize trailer assets. Due to an economic
downturn, trucking companies currently have an excess of trailers in their
fleets; thus, utilization of these assets is not currently an issue for many
trucking companies, and management believes that significant demand for the
TrackWare product will not occur in the near term. In addition, the Company
announced the launch of 20/20V in March of 2001; however, by December of 2001,
the Company had not incurred any significant sales from this product. The
Company has settled the litigation with it's outsource manufacturer for
reimbursement for excess and obsolete inventory. The Company recorded a
provision of $2.1 million as its current estimate of the cost to be incurred as
a result of this settlement.

         Operating expenses increased 5.8% to $38.4 million in 2001 from $36.4
million in 2000. This increase is primarily due to additional amortization
expense of $1.4 million associated with the Minorplanet UK "License Rights,"
severance payments to terminated employees, and an increase in research and
development costs. Personnel reductions were made as a consequence of the
Recapitalization and the subsequent cancellation of various technology
initiatives. Operating expenses in 2001 include approximately $0.6 million of
severance payments to terminated employees as a result of these personnel
reductions. As part of the Recapitalization, the Company agreed to pay an annual
fee of $1.0 million to Minorplanet UK to aid in funding research and development
of future products. During 2001, operating expenses included $0.5 million for
these research and development charges.

         Operating loss increased $12.9 million from 2000 to 2001. This increase
is the combined effect of the $24.5 million decrease in ratable product revenue
and product revenue, the $4.7 million Trackware inventory write-down, the $2.1
million provision for settlement of litigation and the $2.0 million increase in
operating expenses discussed above. The Company's ability to generate operating
income is significantly influenced by the gross margin related to product
revenues. The decrease in the Service Vehicle Contract unit sales during 2001
significantly reduced gross profit margin. During 2001, the Service Vehicle
Contract was responsible for the majority of product revenues. The Company's
financial condition and results of operations are heavily dependent upon the
Company's ability to market and sell the VMI products. The Company introduced
the VMI product during the third quarter of 2001, thus, revenues and gross
margin from that product did not contribute significantly to 2001 results.

         Interest expense decreased to $7.4 million in 2001 from $13.4 million
in 2000, due to the $80.0 million reduction in Senior Notes payable as a result
of the Recapitalization.


                                       28
<PAGE>


         The extraordinary gain in 2001 of $59.5 million, net of Federal income
taxes, reflects the difference between the fair value of the common stock issued
in exchange for $80.0 million principal amount of Senior Notes retired, together
with accrued interest thereon, net of expenses associated with the Exchange
Offer.

YEAR ENDED DECEMBER 31, 2000, COMPARED TO YEAR ENDED DECEMBER 31, 1999

         Total revenues increased 6.7% to $102.1 million in 2000 from $95.7
million in 1999. Comparison of product revenues year over year is not meaningful
because of the accounting principle change discussed under "General" above.
Product revenues in 2000 include only Service Vehicle Contract revenues while
1999 includes all revenues from the sale of mobile units. "Ratable Product
Revenue" in 2000 reflects the current year recognition of revenues from units
shipped in prior years. In accordance with the new accounting principle for
product revenue mandated in 2000, such revenues are deferred upon product
shipment and recognized ratably over the greater of the term of the service
agreement or the estimated life of the customer relationship. Service revenues
decreased 8.7% from $52.7 million in 1999 to $48.1 million in 2000, due
primarily to lower average monthly revenue per mobile unit. While the average
installed base of mobile units increased 7.9% from 1999 to 2000, the average
monthly revenue per mobile unit decreased 15.1% to $70.08 in 2000 from $82.54 in
1999, primarily due to the increasing proportion of service vehicles in the
installed base and reduced personal calling revenue. Average revenue for service
vehicles is significantly less than that of long-haul trucking because of
different product functionality. The installed base of mobile units increased to
67,336 at December 31, 2000 from 50,825 at December 31, 1999. The increase in
the installed base reflects additional units installed under the Service Vehicle
Contract more than offsetting a reduction in the installed base for long-haul
trucking. The reduction in the installed base for long-haul trucking is
primarily due to one customer, with an aggregate installed based of
approximately 2,000 units, that was deinstalled due to its inability to pay
amounts owed to the Company.

         Service gross profit margin was 36.3% in 2000 compared to 49.2% in
1999. During 1999 the Company recorded $4.4 million of credits due from cellular
carriers related to prior years. Excluding the effect of these credits, the 1999
service gross profit margin would have been 40.9%. The decrease in service gross
profit margin from 40.9% in 1999 to 36.3% in 2000 is primarily the result of (i)
the significant increase during 2000 of repair and maintenance activity and (ii)
the negative impact in 2000 of a temporary increase in long-distance airtime
rates during the transition period to a new contract.

         Product gross profit margin, excluding Ratable Product was 28.4% in
2000, compared to 19.2% in 1999, which includes a $3.5 million warranty
provision that is discussed in more detail in Note 8 to the accompanying
consolidated financial statements. Excluding the effect of this $3.5 million
charge, 1999 margin would have been 27.4%.

         Operating expenses decreased 1.8% to $36.4 million in 2000 from $37.1
million in 1999. This decrease is primarily due to a $2.8 million decrease in
bad debt expense, offset by a $0.4 increase in advertising expense primarily
related to TrackWare, and increased research and development expenditures of
approximately $2.0 million. Bad debt expense in 1999 was unusually high as a
result of $1.2 million of bad debt provisions recorded for former customers. Bad
debt expense in 2000 was unusually low as a result of adjustments approximating
$1.1 million made to reduce the reserve for bad debts in recognition of the
improved credit profile of the customer base; included in this adjustment is the
reversal of approximately $0.5 million of reserve provided in 1999 for a
specific customer.

         Interest income was $1.4 million in 2000, compared to $2.0 million in
1999, reflecting the lower average outstanding balances during 2000 in cash,
short-term investments, and pledged securities.

         Other income in 2000 primarily consists of the proceeds from the
settlement of litigation, net of related expenses. Other income in 1999 reflects
the gain from the settlement of a customer contract, and the proceeds from
settlement of litigation, net of related expenses.

         Operating loss in 2000 was $4.9 million compared to $2.9 million in
1999. The 1999 operating loss includes the benefit of $4.4 million of
non-recurring credits. Absent the benefit of these credits, the 1999 operating
loss would have been $7.3 million.


                                       29
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

         The Company has incurred significant operating losses since inception
and has limited financial resources to support it until such time that it is
able to generate positive cash flow from operations. Net cash used for operating
activities was $10.2 million and $12.4 million for the eight months ended August
31, 2002 and the twelve months ended December 31, 2001 respectively. For the
eight months ended August 31, 2002, cash used for operating activities was
primarily attributable to the hiring and staffing of personnel for the expansion
of VMI sales to open market locations in Dallas, Houston, Atlanta and Los
Angeles.

         As of August 31, 2002, the Company had $18.1 million in cash and
short-term investments representing an increase from December 31, 2001 of $3.2
million. This increase is primarily attributable to $14.2 million in cash
received as consideration for the Sale to Aether of certain assets and licenses
related to the Company's long-haul trucking and asset-tracking businesses offset
by net cash used in operating and other investing activities.

         As a result of the Recapitalization in June 2001, the Company has
reduced its Senior Notes due in 2005 in the principal amount of $80 million and
its related annual cash outflow for interest service by $11 million. In
addition, the Company believes the acquisition of the License Rights will
provide the Company significant marketing potential of the licensed VMI
technology, enhancing future results of operations and reducing the need for
capital resources to develop similar technology. Also, as a result of the Sale
to Aether of certain assets and licenses related to the Company's long-haul
trucking and asset-tracking businesses, Aether is contractually obligated to
continue to reimburse the Company for the network and airtime service costs
related to providing the Series 5000 service (see Note 4 to the Consolidated
Financial Statements attached hereto).

         Critical success factors in Management's plans to achieve positive cash
flow from operations include:

     o   Significant market acceptance of the VMI product line in the U.S.
         Management believes the market for products such as VMI represents a
         total potential of approximately 21 million vehicles. Currently,
         management believes this market is approximately 5 percent penetrated
         with asset tracking and vehicle information management solutions.

     o   Maintain and expand the Company's direct sales channel. New
         salespersons will require training and time to become productive. In
         addition, there is significant competition for qualified salespersons,
         and the Company must continue to offer attractive compensation plans
         and opportunities to attract qualified salespersons.

     o   Renewal of the contract with SBC. At August 31, 2002, the Company had
         approximately 37,500 units in service with the SBC Companies that
         accounted for approximately 55% of the Company's installed base,
         including network services subscribers. The current contract with the
         SBC Companies expires on January 30, 2003 and may be renewed under the
         same terms for an additional one-year term at the option of the SBC
         Companies.

     o   Securing and maintaining adequate third party leasing sources for
         customers who purchase VMI.

         Based on projected operating results, the Company believes its existing
capital resources will be sufficient to fund its currently anticipated operating
needs and capital expenditure requirements for the next 12 months. If cash
generated from operations is not sufficient to meet its working capital
requirements, the Company may seek to sell additional equity or debt securities.
The sale of additional equity or convertible debt securities could result in
additional dilution to existing stockholders. If additional funds are raised
through debt securities, holders of these securities could obtain certain rights
and preferences senior to holders of the Company's common stock, as well as
restrict the Company's operations. If additional working capital is required,
there can be no assurance that additional financing will be available, which in
this case, the Company may be required to reduce the scope of its operations
which could negatively impact its financial condition and operating results.


                                       30
<PAGE>


ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company does not have any material exposure to market risk
associated with its cash and short-term investments. The Company's Senior Notes
payable are at a fixed rate and, thus, are not exposed to interest rate risk.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The Company's financial statements, Schedule II - Valuation and
Qualifying Accounts, and reports of independent auditors, are included on pages
F-1 through F-26 and pages S-1 through S-3.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

     The Company received a letter on August 2, 2002 from the SEC notifying the
Company that its independent auditor, Arthur Andersen, in connection with the
wind-down of Andersen's business, had notified the SEC that it would be unable
to perform future audit services for the Company effective immediately.

     Andersen's reports on the Company's consolidated financial statements for
the past two fiscal years ended December 31, 2001 and December 31, 2000 did not
contain an adverse opinion or disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope or accounting principles.

     During the Company's two most recent fiscal years ended December 31, 2001
and December 31, 2000 respectively, and the subsequent interim period through
August 14, 2002, there were no disagreements with Andersen on any matters of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure which, if not resolved to Andersen's satisfaction, would have
caused them to make reference to the subject matter in connection with their
report on the Company's consolidated financial statements for such years; and
there were no reportable events, as listed in Item 304(a)(1)(v) of Regulation
S-K.

     The letter from Andersen to the SEC required by Item 304 of Regulation S-K
has been omitted from the exhibit list to this Form 10-K pursuant to Item
304T(b)(2) of Regulation S-K as such letter could not be obtained after
reasonable efforts.

     As recommended by the audit committee of the Company's board of directors,
on August 12, 2002, the board of directors approved the engagement of, and the
Company engaged, Deloitte & Touche LLP ("Deloitte") to serve as the Company's
independent public accountants for 2002.

     During the Company's two most recent fiscal years ending December 31, 2001
and December 31, 2000 respectively, and the subsequent interim period through
August 11, 2002, the Company did not consult Deloitte with respect to the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the Company's consolidated financial statements, or any other matters or
reportable events listed in Items 304(a)(2)(i) and (ii) of Regulation S-K.


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Information regarding Directors and Executive Officers is incorporated
by reference to the section entitled "Election of Directors" in the Company's
definitive Proxy Statement to be filed with the Securities and Exchange
Commission within 120 days after August 31, 2002.

ITEM 11. EXECUTIVE COMPENSATION

         The information required by this item is incorporated by reference from
the Proxy Statement, to be filed within 120 days after August 31, 2002, under
the heading "Executive Compensation."


                                       31
<PAGE>


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information required by this item is incorporated by reference from
the Company's definitive Proxy Statement, to be filed with the Securities and
Exchange Commission within 120 days after August 31, 2002, under the heading
"Security Ownership of Certain Beneficial Owners and Management."

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required by this item is incorporated by reference from
the Proxy Statement, to be filed within 120 days after August 31, 2002, under
the heading "Certain Transactions."

ITEM 14. CONTROLS AND PROCEDURES

(a) EVALUATION OF CONTROLS AND PROCEDURES

         The Company maintains disclosure controls and procedures, which it has
designed to ensure that material information related to the Company, including
its consolidated subsidiaries, is made known to the Company's disclosure
committee on a regular basis. In response to recent legislation and proposed
regulations, the Company reviewed its internal control structure and its
disclosure controls and procedures. Although the Company believes its
pre-existing disclosure controls and procedures were adequate to enable the
Company to comply with its disclosure obligations, as a result of such review,
the Company implemented minor changes, primarily to formalize and document the
procedures already in place. The Company also established a disclosure
committee, which consists of certain members of the Company's senior management.

         After the formation of the disclosure committee and within 90 days
prior to the filing of this report, under the supervision and with the
participation of the Company's management, including the Company's Chief
Executive Officer ("CEO") and Chief Financial Officer ("CFO"), an evaluation of
the effectiveness of the Company's disclosure controls and procedures was
performed. Based on this evaluation, the CEO and CFO have concluded that the
Company's disclosure controls and procedures are effective to ensure that
material information is recorded, processed, summarized and reported by
management of the Company on a timely basis in order to comply with the
Company's public disclosure obligations under the relevant federal securities
laws and the SEC rules promulgated thereunder.

(b) CHANGES IN INTERNAL CONTROLS

         There were no significant changes in the Company's internal controls or
in other factors, including any corrective actions with regard to significant
deficiencies and material weaknesses, that could significantly affect these
controls subsequent to the date of the Company's evaluation.


                                       32
<PAGE>


                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

<Table>
<Caption>
                                                                                                     Page Number
<S>      <C>                                                                                         <C>
(a)      Documents filed as part of the report:

     (1) Report of Independent Auditors...................................................................F-1

         Report of Previous Independent Auditors..........................................................F-2

         Consolidated Balance Sheets as of August 31, 2002, December 31, 2001,
                  and December 31, 2000...................................................................F-3

         Consolidated Statements of Operations for the Eight Months Ended August 31, 2002
                  and the Twelve Months Ended December 31, 2001, 2000 and 1999............................F-4

         Consolidated Statements of Cash Flows for the Eight Months Ended August 31, 2002
                  and the Twelve Months Ended December 31, 2001, 2000 and 1999............................F-5

         Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the Eight Months
                  Ended August 31, 2002 and for the Years Ended December 31, 2001, 2000 and 1999 .........F-6

         Notes to Consolidated Financial Statements.......................................................F-7

     (2) Financial Statement Schedules

         Report of Independent Auditors on Financial Statement Schedule...................................S-1

         Report of Previous Independent Auditors on Financial Statement Schedule..........................S-2

         Schedule II-Valuation and Qualifying Accounts ...................................................S-3
</Table>

Financial statement schedules other than those listed above have been omitted
because they are either not required, not applicable or the information is
otherwise included.

                                INDEX TO EXHIBITS

<Table>
<Caption>
EXHIBIT
NUMBER         TITLE
-------        -----
<S>            <C>

  2.1    -     Stock Purchase and Exchange Agreement by and between the Company,
               Minorplanet Systems PLC and Mackay Shields LLC, dated February
               14, 2001.(21)
  2.2    -     Asset Purchase Agreement by and between the Company and Aether
               Systems, Inc. dated March 15, 2002.(22)
  3.1    -     Restated Certificate of Incorporation of the Company, as amended.
               (29)
  3.2    -     Second Amended and Restated By-Laws of the Company.(20)
  4.1    -     Specimen of certificate representing Common Stock, $.01 par
               value, of the Company.(1)
  4.2    -     Indenture dated September 23, 1997 by and among the Company,
               HighwayMaster Corporation and Texas Commerce Bank, National
               Association (the "Indenture").(8)
  4.3    -     First Supplemental Indenture, dated June 20, 2001, to the
               Indenture.(28)
  4.4    -     Pledge Agreement dated September 23, 1997, by and among the
               Company, Bear, Stearns & Co. Inc. and Smith Barney Inc.(8)
  4.5    -     Registration Rights Agreement dated September 23, 1997, by and
               among the Company, HighwayMaster Corporation, Bear, Stearns & Co.
               Inc. and Smith Barney Inc.(8)
</Table>



                                       33
<PAGE>


<Table>
<S>            <C>
  4.9    -     Warrant Registration Rights Agreement dated September 23, 1997,
               by and among the Company, Bear, Stearns & Co. Inc. and Smith
               Barney, Inc.(8)
 10.1    -     Registration Rights Agreement by and between the Company,
               Minorplanet Systems PLC and Mackay Shields LLC, dated as of June
               21, 2001.(23)
 10.2    -     Exclusive License and Distribution Agreement by and between
               Minorplanet Limited, (an @Track subsidiary) and Mislex (302)
               Limited, dated June 21, 2001.(20)
 10.3    -     Amended and Restated 1994 Stock Option Plan of the Company, dated
               February 4, 1994.(1)(4)(5)
 10.4    -     Amendment No. 1 to the Amended and Restated 1994 Stock Option
               Plan.(24)
 10.5    -     Amendment No. 2 to the Amended and Restated 1994 Stock Option
               Plan.(25)
 10.6    -     Amendment No. 3 to the Amended and Restated 1994 Stock Option
               Plan.(30)
 10.7    -     Stock Option Agreement, dated June 22, 1998, by and between the
               Company and John Stupka.(10)
 10.8    -     Product Development Agreement, dated December 21, 1995, between
               HighwayMaster Corporation and IEX Corporation.(2)(3)
 10.9    -     Software Transfer Agreement, dated April 25, 1997, between
               HighwayMaster Corporation and Burlington Motor Carriers,
               Inc.(6)(7)
10.10    -     Lease Agreement, dated March 20, 1998, between HighwayMaster
               Corporation and Cardinal Collins Tech Center, Inc.(9)
10.11    -     Stock Option Agreement dated November 24, 1998, by and between
               the Company and Michael Smith.(10)
10.12    -     Agreement No. 980427 between Southwestern Bell Telephone Company,
               Pacific Bell, Nevada Bell, Southern New England Telephone and
               HighwayMaster Corporation executed on January 13, 1999. (11)(12)
10.13    -     Administrative Carrier Agreement entered into between
               HighwayMaster Corporation and Southwestern Bell Mobile Systems,
               Inc. on March 30, 1999.(11)(12)
10.14    -     Addendum to Agreement entered into between HighwayMaster
               Corporation and International Telecommunications Data Systems,
               Inc. on February 4, 1999.(11)(12)
10.15    -     Second Addendum to Agreement entered into between HighwayMaster
               Corporation and International Telecommunications Data Systems,
               Inc. on February 4, 1999.(11)(12)
10.16    -     Stock Option Agreement dated June 24, 1999, by and between the
               Company and J. Raymond Bilbao.(13)
10.17    -     Fleet-on-Track Services Agreement entered into between GTE
               Telecommunications Services Incorporated and HighwayMaster
               Corporation on May 3, 1999.(13)(14)
10.18    -     Stock Option Agreement dated September 3, 1999, by and between
               the Company and J. Raymond Bilbao.(15)
10.19    -     Stock Option Agreement dated September 3, 1999, by and between
               the Company and W. Michael Smith.(15)
10.20    -     Limited Liability Company Agreement of HighwayMaster of Canada,
               LLC executed March 3, 2000.(16)
10.21    -     Monitoring Services Agreement dated May 25, 2000, by and between
               the Company and Criticom International Corporation.(17)(18)
10.22    -     Commercial Lease Agreement dated April 26, 2000 by and between
               the Company and 10th Street Business Park, Ltd.(18)
10.23    -     Stock Option Agreement dated July 18, 2001, by and between the
               Company and J. Raymond Bilbao.(19)
10.24    -     Stock Option Agreement dated June 21, 2001, by and between the
               Company and J. Raymond Bilbao.(19)
10.25    -     Stock Option Agreement dated July 18, 2001, by and between the
               Company and W. Michael Smith.(19)
10.26    -     Stock Option Agreement dated June 21, 2001, by and between the
               Company and W. Michael Smith.(19)
</Table>



                                       34
<PAGE>


<Table>
<S>            <C>
10.27    -     Employment Agreement, dated June 21, 2001, between J. Raymond
               Bilbao and the Company.(20)
10.28    -     Employment Agreement, dated June 21, 2001, between W. Michael
               Smith and the Company.(20)
10.29    -     Agreement No. 980427-03, dated January 31, 2002 between SBC
               Ameritech, SBC Pacific Bell, SBC Southern New England Telephone,
               SBC Southwestern Bell Telephone, L.P. and the Company.(27)(28)
10.30    -     Agreement and General Release Between the Company and Todd A.
               Felker dated October 8, 2002.(31)
10.31    -     Agreement and Mutual Release Between the Company and Jana A. Bell
               dated September 24, 2002.(31)
 11.0    -     Statement Regarding Computation of Per Share Earnings.(31)
 16.1    -     Letter from Arthur Andersen to the SEC (Omitted pursuant to Item
               304T of Regulation S-K)
 21.1    -     List of Subsidiaries of Registrant(31)
 23.1    -     Consent of Deloitte & Touche LLP(31)
 99.0    -     Receipt of representation from Arthur Andersen, LLP (26)
 99.1    -     Certification Pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by
               Andrew Tillman, Chief Executive Officer(31)
 99.2    -     Certification Pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by W.
               Michael Smith, Executive Vice President and Chief Financial
               Officer(31)
</Table>

----------

     (1)  Filed in connection with the Company's Registration Statement on Form
          S-1, as amended (No. 33-91486), effective June 22, 1995.

     (2)  Filed in connection with the Company's Annual Report on Form 10-K for
          the fiscal year ended December 31, 1995.

     (3)  Certain confidential portions deleted pursuant to Application for
          Confidential Treatment filed in connection with the Company's Annual
          Report on Form 10-K for the fiscal year ended December 31, 1995.

     (4)  Indicates management or compensatory plan or arrangement required to
          be identified pursuant to Item 14(a)(4).

     (5)  Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended June 30, 1996.

     (6)  Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended March 31, 1997.

     (7)  Certain confidential portions deleted pursuant to Order Granting
          Application for Confidential Treatment issued in connection with the
          Company's Form 10-Q Quarterly Report for the quarterly period ended
          March 31, 1997.

     (8)  Filed in connection with the Company's Registration Statement on Form
          S-4, as amended (No. 333-38361).

     (9)  Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended September 30, 1998.

     (10) Filed in connection with the Company's Form 10-K fiscal year ended
          December 31, 1998.

     (11) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended March 31, 1999.

     (12) Certain confidential portions deleted pursuant to Order Granting
          Application for Confidential Treatment issued June 22, 1999 in
          connection with the Company's Form 10-Q Quarterly Report for the
          quarterly period ended March 31, 1999.

     (13) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended June 30, 1999.

     (14) Certain confidential portions deleted pursuant to letter granting
          application for confidential treatment issued October 10, 1999 in
          connection with the Company's Form 10-Q Quarterly Report for the
          quarterly period ended June 30, 1999.


                                       35
<PAGE>


     (15) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended September 30, 1999.

     (16) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended March 31, 2000.

     (17) Certain confidential portions deleted pursuant to Order Granting
          Application for Confidential Treatment issued December 5, 2000 in
          connection with the Company's Form 10-Q Quarterly Report for the
          quarterly period ended June 30, 2000.

     (18) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended June 30, 2000.

     (19) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended September 30, 2001.

     (20) Filed in connection with the Company's Current Report on Form 8-K
          filed with the SEC on June 29, 2001.

     (21) Filed as Appendix A to the Company's Definitive Proxy Statement on
          Schedule 14A filed with the SEC on May 11, 2001.

     (22) Filed in connection with the Company's Current Report on Form 8-K
          filed with the SEC on March 27, 2002. Certain confidential portions
          deleted pursuant to Order Granting Application for Confidential
          Treatment issued in connection with the Company's Current Report on
          Form 8-K filed with the SEC on March 27, 2002.

     (23) Filed in connection with the Company's Form S-3 Registration Statement
          filed with the SEC on October 10, 2001 (File No. 333-71340).

     (24) Incorporated by reference to Exhibit A to the proxy statement
          contained in the Company's Definitive Schedule 14A with the SEC on
          April 25, 2000.

     (25) Incorporated by reference to Exhibit F to the proxy statement
          contained in the Company's Definitive Schedule 14A filed with the SEC
          on May 11, 2001.

     (26) Filed in connection with the Company's Annual Report on Form 10-K for
          the fiscal year ended December 31, 2001.

     (27) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ending March 31, 2002.

     (28) Certain confidential portions deleted pursuant to Order Granting
          Application for Confidential Treatment issued in connection with the
          Company's Quarterly Report on Form 10-Q for the quarterly period
          ending March 31, 2002.

     (29) Incorporated by reference to Exhibit A to the information statement
          contained in the Company's Definitive Schedule 14C filed with the SEC
          on June 27, 2002.

     (30) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ending June 30, 2002.

     (31) Filed herewith.

(b) Reports on Form 8-K. The following current reports on Form 8-K have been
    filed by the Company subsequent to June 30, 2002:

     (1)  On August 6, 2002, the Company reported under Item 4 the receipt of a
          letter from the SEC on August 2, 2002 advising the Company that Arthur
          Andersen LLP had made a blanket withdrawal of all audit representation
          of public companies, including the Company.

     (2)  On August 14, 2002, the Company reported under Item 4 the engagement
          of Deloitte & Touche LLP as its new independent auditors effective
          August 12, 2002.

     (3)  On September 9, 2002, the Company reported under Item 5 the
          resignation of Jana A. Bell as CEO and the appointment of Andrew
          Tillman as CEO on an interim basis effective August 25, 2002.


                                       36
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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.

November 22, 2002

                                      MINORPLANET SYSTEMS USA, INC.


                                      By: /s/ Andrew Tillman
                                          --------------------
                                          Andrew Tillman,
                                          Chief Executive Officer



                                       37
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Transition Report on Form 10-K for the transition period from January 1,
2002 to August 31, 2002, has been signed below by the following persons on
behalf of the Registrant in the capacities and on the dates indicated.

<Table>
<Caption>
Signature                            Title                                     Date
<S>                                  <C>                                      <C>

/s/Andrew Tillman                    Chief Executive Officer, (Principal
-------------------------------      Executive Officer)                        November 22, 2002
Andrew Tillman

/s/W. Michael Smith                  Executive Vice President and
-------------------------------      Chief Financial Officer
W. Michael Smith                     (Principal Financial and Accounting       November 22, 2002
                                     Officer)

/s/Michael Beverley
-------------------------------
Michael Beverley                     Director                                  November 22, 2002

/s/Robert Kelly
-------------------------------
Robert Kelly                         Director                                  November 22, 2002

/s/Gerry C. Quinn
-------------------------------
Gerry C. Quinn                       Director                                  November 22, 2002

/s/John T. Stupka
-------------------------------
John T. Stupka                       Director                                  November 22, 2002

/s/Michael Abrahams
-------------------------------
Michael Abrahams                     Director                                  November 22, 2002


/s/Sir James Douglas Spooner
-------------------------------
Sir James Douglas Spooner            Director                                  November 22, 2002


/s/Sir Martin Jacomb
-------------------------------
Sir Martin Jacomb                    Director                                  November 22, 2002
</Table>


                                       38
<PAGE>


                                  CERTIFICATION

I, Andrew Tillman, certify that:

     1.   I have reviewed this transition report of Form 10-K of Minorplanet
          Systems USA, Inc.;

     2.   Based upon my knowledge, this transition report does not contain any
          untrue statement of a material fact or omit to state a material fact
          necessary to make the statements made, in light of the circumstances
          under which such statements were made, not misleading with respect to
          the period covered by this transition report;

     3.   Based upon my knowledge, the financial statements, and other financial
          information included in this transition report, fairly present in all
          material respects the financial condition, results of operations and
          cash flows of the registrant as of, and for, the periods presented in
          this transition report;

     4.   The registrant's other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in the Exchange Act Rules 13a-14 and 15d-14), for the
          registrant and have:

               a.   Designed such disclosure controls and procedures to ensure
                    that material information relating to the registrant,
                    including its controlled subsidiaries, is made known to us
                    by others within those entities, particularly during the
                    period in which this transition report is being prepared;

               b.   Evaluated the effectiveness of the registrant's disclosure
                    controls and procedures as of a date within 90 days prior to
                    the filing date of this transition report (the "Evaluation
                    Report");

               c.   Presented in this transition report our conclusions about
                    the effectiveness of the disclosure controls and procedures
                    based upon our evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent evaluation, to the registrant's auditors and the
          audit committee of the registrant's board of directors (or persons
          performing the equivalent functions);

               a.   All significant deficiencies in the design or operation of
                    internal controls which could adversely affect the
                    registrant's ability to record, process, summarize and
                    report financial data and have identified for the
                    registrant's auditors any material weaknesses in internal
                    controls; and

               b.   Any fraud, whether or not material, that involves management
                    or other employees who have a significant role in the
                    registrant's internal controls; and

     6.   The registrant's other certifying officers and I have indicated in
          this transition report whether there were significant changes in
          internal controls or in other factors that could significantly affect
          internal controls subsequent to the date of our most recent
          evaluation, including any corrective actions with regard to
          significant deficiencies and material weaknesses.

Date   November 22, 2002

By  (x) Andrew Tillman
    ---------------------------------------
    Andrew Tillman, Chief Executive Officer



                                       39
<PAGE>


                                  CERTIFICATION

I, W. Michael Smith, certify that:

     1.   I have reviewed this transition report of Form 10-K of Minorplanet
          Systems USA, Inc.;

     2.   Based upon my knowledge, this transition report does not contain any
          untrue statement of a material fact or omit to state a material fact
          necessary to make the statements made, in light of the circumstances
          under which such statements were made, not misleading with respect to
          the period covered by this transition report;

     3.   Based upon my knowledge, the financial statements, and other financial
          information included in this transition report, fairly present in all
          material respects the financial condition, results of operations and
          cash flows of the registrant as of, and for, the periods presented in
          this transition report;

     4.   The registrant's other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in the Exchange Act Rules 13a-14 and 15d-14), for the
          registrant and have:

               a.   Designed such disclosure controls and procedures to ensure
                    that material information relating to the registrant,
                    including its controlled subsidiaries, is made known to us
                    by others within those entities, particularly during the
                    period in which this transition report is being prepared;

               b.   Evaluated the effectiveness of the registrant's disclosure
                    controls and procedures as of a date within 90 days prior to
                    the filing date of this transition report (the "Evaluation
                    Report");

               c.   Presented in this transition report our conclusions about
                    the effectiveness of the disclosure controls and procedures
                    based upon our evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent evaluation, to the registrant's auditors and the
          audit committee of the registrant's board of directors (or persons
          performing the equivalent functions);

               d.   All significant deficiencies in the design or operation of
                    internal controls which could adversely affect the
                    registrant's ability to record, process, summarize and
                    report financial data and have identified for the
                    registrant's auditors any material weaknesses in internal
                    controls; and

               e.   Any fraud, whether or not material, that involves management
                    or other employees who have a significant role in the
                    registrant's internal controls; and

     6.   The registrant's other certifying officers and I have indicated in
          this transition report whether there were significant changes in
          internal controls or in other factors that could significantly affect
          internal controls subsequent to the date of our most recent
          evaluation, including any corrective actions with regard to
          significant deficiencies and material weaknesses.

Date   November 22, 2002

By  (x) W. Michael Smith
    -------------------------------------------------------------
    W. Michael Smith,
    Executive Vice President, Chief Financial Officer & Treasurer


                                       40
<PAGE>


INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Minorplanet Systems USA, Inc.:

We have audited the accompanying consolidated balance sheet of Minorplanet
Systems USA, Inc. and subsidiaries (the "Company") as of August 31, 2002 and the
related consolidated statements of operations, cash flows, and changes in
stockholders' equity (deficit) for the eight month period ended August 31, 2002.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit. The consolidated balance sheets of Minorplanet Systems USA, Inc.
and subsidiaries as of December 31, 2001 and 2000 and the related consolidated
statements of operations, cash flows, and stockholders' equity (deficit) for the
years ended December 31, 2001, 2000 and 1999 were audited by other auditors who
have ceased operations. Those auditors expressed an unqualified opinion on those
financial statements in their report dated March 15, 2002.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the August 31, 2002 financial statements referred to above
present fairly, in all material respects, the financial position of Minorplanet
Systems USA, Inc. and subsidiaries as of August 31, 2002, and the results of
their operations and their cash flows for the eight month period then ended, in
conformity with accounting principles generally accepted in the United States.

As discussed above, the financial statements of Minorplanet Systems USA, Inc.
and subsidiaries as of December 31, 2001, and for the year then ended were
audited by other auditors who have ceased operations. As described in Note 21,
the Company changed the composition of its reportable segments in 2002, and the
amounts in the 2001 financial statements relating to reportable segments have
been restated to conform to the 2002 composition of reportable segments. We
audited the adjustments that were applied to restate the disclosures for
reportable segments reflected in the 2001 financial statements. Our procedures
included (i) agreeing the adjusted amounts of segment revenues, operating income
and assets to the Company's underlying records obtained from management, and
(ii) testing the mathematical accuracy of the reconciliations of segment amounts
to the consolidated financial statements. In our opinion, such adjustments are
appropriate and have been properly applied. However, we were not engaged to
audit, review, or apply any procedures to the 2001 financial statements of the
Company other than with respect to such adjustments and, accordingly, we do not
express an opinion or any other form of assurance on the 2001 financial
statements taken as a whole.


DELOITTE & TOUCHE LLP

Dallas, Texas
November 12, 2002


                                      F-1
<PAGE>


REPORT OF PREVIOUS INDEPENDENT AUDITORS

THE FOLLOWING REPORT OF ARTHUR ANDERSEN, LLP ("ANDERSEN") IS A COPY OF THE
REPORT PREVIOUSLY ISSUED BY ANDERSEN ON MARCH 15, 2002 AND SUCH REPORT HAS NOT
BEEN REISSUED BY ANDERSEN. THE REPORT OF ANDERSEN IS INCLUDED IN THIS TRANSITION
REPORT ON FORM 10-K PURSUANT TO RULE 2-02 (E) OF REGULATION S-X. AFTER
REASONABLE EFFORTS THE COMPANY HAS NOT BEEN ABLE TO OBTAIN A REISSUED REPORT
FROM ANDERSEN. ANDERSEN HAS NOT CONSENTED TO THE INCLUSION OF ITS REPORT IN THIS
TRANSITION REPORT ON FORM 10-K. BECAUSE ANDERSEN HAS NOT CONSENTED TO THE
INCLUSION OF ITS REPORT IN THIS TRANSITION REPORT, IT MAY BE DIFFICULT FOR
STOCKHOLDERS TO SEEK REMEDIES AGAINST ANDERSEN AND STOCKHOLDERS ABILITY TO SEEK
RELIEF AGAINST ANDERSEN MAY BE IMPAIRED OR UNAVAILABLE.


To the Board of Directors and Stockholders of
@Track Communications, Inc.:

We have audited the accompanying consolidated balance sheets of @Track
Communications, Inc. (a Delaware corporation) and subsidiaries (the "Company")
as of December 31, 2001 and 2000, and the related consolidated statements of
operations, cash flows, and stockholders' equity (deficit) for the years ended
2001, 2000 and 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of @Track Communications, Inc. and
subsidiaries as of December 31, 2001 and 2000, and the results of their
operations and their cash flows for the years ended 2001, 2000 and 1999, in
conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

Dallas, Texas,
March 15, 2002





                                      F-2
<PAGE>

                 MINORPLANET SYSTEMS USA, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                    (in thousands, except share information)

<Table>
<Caption>
                                                                                  August 31,     December 31,    December 31,
                                                                                     2002            2001            2000
                                                                                 ------------    ------------    ------------
<S>                                                                              <C>             <C>             <C>
                                                          ASSETS
Current assets:
  Cash and cash equivalents                                                      $     10,413    $     10,755    $     20,641
  Short term investments                                                                7,677           4,134              --
  Accounts receivable, net of allowance for doubtful accounts
     of $2,843, $3,554 and $7,305, respectively                                         7,699          11,470          12,738
  Inventories                                                                           1,581           2,913          13,216
  Deferred product costs - current portion                                              6,149           6,183           7,406
  Other current assets                                                                  2,779             592           1,759
                                                                                 ------------    ------------    ------------
     Total current assets                                                              36,298          36,047          55,760
Network, equipment and software, net of accumulated depreciation
     and amortization of $21,809, $20,240 and $19,295, respectively                     6,425           8,583          12,851
Deferred product costs - non-current portion                                            1,496           4,516           9,770
License rights, net of accumulated amortization of $3,116
     and $1,368 respectively                                                           36,100          37,848              --
Other assets, net of accumulated amortization
     of $338, $292 and $1,469 respectively                                              1,084             603           2,663
                                                                                 ------------    ------------    ------------
     Total assets                                                                $     81,403    $     87,597    $     81,044
                                                                                 ============    ============    ============

                                       LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
  Accounts payable                                                               $      2,875    $      2,517    $      7,992
  Telecommunications costs payable                                                      3,268           3,584           5,358
  Accrued interest payable                                                                903             575           3,784
  Deferred product revenues - current portion                                           8,054           7,588           8,975
  Deferred service revenues                                                             6,872              --              --
  Other current liabilities                                                             5,989           9,297           8,826
                                                                                 ------------    ------------    ------------
     Total current liabilities                                                         27,961          23,561          34,935
Deferred product revenues - non-current portion                                         2,791           5,748          11,966
Senior notes payable and other notes payable, net of unamortized
    discount of $185, $224 and $1,871 respectively                                     14,254          14,109          92,484
Other non-current liabilities                                                             979              --              --
                                                                                 ------------    ------------    ------------
     Total liabilities                                                                 45,985          43,418         139,385
                                                                                 ------------    ------------    ------------

Commitments and contingencies

Stockholders' equity (deficit):
  Common stock, $0.01 par value, 100,000,000 shares authorized; 48,424,960,
      48,118,253 and 5,127,756 shares issued; 48,349,161, 48,042,454, and
      5,065,357 shares outstanding at August 31, 2002, December 31, 2001, and
      December 31, 2000, respectively                                                     484             481              51
  Common stock - Class B, $0.01 par value, 0, 0, and 1,000 shares authorized,
      issued, and outstanding at August 31, 2002, December 31, 2001, and
      December 31, 2000, respectively                                                      --              --              --
  Preferred Stock - Series E, $0.01 par value, 20,000 shares authorized;
      1, 1, and 0 shares issued and outstanding at August 31, 2002,
      December 31, 2001, and December 31, 2000, respectively                               --              --              --
  Additional paid-in capital                                                          218,509         217,495         150,201
  Accumulated deficit                                                                (183,013)       (173,235)       (208,046)
  Treasury stock, 75,799, 75,799 and 62,399 shares at August 31, 2002,
     December 31, 2001, and December 31, 2000, respectively, at cost                     (562)           (562)           (547)
                                                                                 ------------    ------------    ------------
     Total stockholders' equity  (deficit)                                             35,418          44,179         (58,341)
                                                                                 ------------    ------------    ------------
     Total liabilities and stockholders' equity (deficit)                        $     81,403    $     87,597    $     81,044
                                                                                 ============    ============    ============
</Table>

                 See accompanying notes to financial statements.


                                      F-3
<PAGE>

                 MINORPLANET SYSTEMS USA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        (In thousands, except per share)

<Table>
<Caption>
                                                             Eight months
                                                            ended August 31,                Year ended December 31,
                                                            ----------------    ------------------------------------------------
                                                                  2002              2001              2000              1999
                                                            ----------------    ------------      ------------      ------------
<S>                                                         <C>                 <C>               <C>               <C>
Revenues
  Product                                                     $      5,074      $     19,658      $     41,971      $     43,018
  Ratable product                                                    6,780             9,864            12,093                --
  Service                                                           30,102            47,958            48,066            52,655
                                                              ------------      ------------      ------------      ------------
     Total revenues                                                 41,956            77,480           102,130            95,673
                                                              ------------      ------------      ------------      ------------

Cost of revenues
  Product                                                            3,996            15,239            30,031            34,752
  Ratable product                                                    5,213             8,236            10,006                --
  Service                                                           16,155            26,563            30,636            26,724
  Inventory write-down to net realizable value                          --             4,693                --                --
  Provision for settlement of litigation                               100             2,100                --                --
                                                              ------------      ------------      ------------      ------------
    Total cost of revenues                                          25,464            56,831            70,673            61,476
                                                              ------------      ------------      ------------      ------------

                                                              ------------      ------------      ------------      ------------
Gross profit                                                        16,492            20,649            31,457            34,197
                                                              ------------      ------------      ------------      ------------

Expenses:
  General and administrative                                         7,943            12,482            12,478            14,706
  Customer service                                                   3,411             7,036             7,146             7,770
  Sales and marketing                                                8,600             4,570             4,980             4,091
  Engineering                                                        1,374             5,166             4,345             2,685
  Network services center                                              461             1,753             1,512             1,437
  Severance and AutoLink(R)termination cost                             --                --                --              (189)
  Depreciation and amortization                                      4,322             7,438             5,907             6,551
                                                              ------------      ------------      ------------      ------------
                                                                    26,111            38,445            36,368            37,051
                                                              ------------      ------------      ------------      ------------

    Operating loss                                                  (9,619)          (17,796)           (4,911)           (2,854)

Interest income                                                        457               501             1,371             2,037
Interest expense                                                    (1,411)           (7,355)          (13,368)          (13,422)
Other (expense) income                                                (183)               --             1,569             2,715
                                                              ------------      ------------      ------------      ------------
    Loss before income taxes, extraordinary item and
       cumulative effect of accounting change                      (10,756)          (24,650)          (15,339)          (11,524)
Income tax benefit                                                     978                --                --                --
                                                              ------------      ------------      ------------      ------------
    Loss before extraordinary item and
       cumulative effect of accounting change                       (9,778)          (24,650)          (15,339)          (11,524)
Extraordinary item                                                      --            59,461                --                --
Cumulative effect of accounting change                                  --                --            (5,206)               --
                                                              ------------      ------------      ------------      ------------
    Net (loss) income                                         $     (9,778)     $     34,811      $    (20,545)     $    (11,524)
                                                              ============      ============      ============      ============

Basic and diluted income (loss) per share:
    Loss before extraordinary item and cumulative
       effect of accounting change                            $      (0.20)     $      (0.88)     $      (3.03)     $      (2.31)
    Extraordinary item                                                  --              2.13                --                --
    Cumulative effect of accounting change                              --                --             (1.03)               --
                                                              ------------      ------------      ------------      ------------
    Net (loss) income per share                               $      (0.20)     $       1.25      $      (4.06)     $      (2.31)
                                                              ============      ============      ============      ============

Weighted average number of shares outstanding
   Basic and diluted                                                48,233            27,928             5,058             4,995
                                                              ============      ============      ============      ============
</Table>


              See accompanying notes to financial statements.


                                      F-4
<PAGE>

                 MINORPLANET SYSTEMS USA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<Table>
<Caption>
                                                                Eight months
                                                               ended August 31,            Year ended December 31,
                                                               ----------------  --------------------------------------------
                                                                     2002            2001            2000            1999
                                                               ----------------  ------------    ------------    ------------
<S>                                                             <C>              <C>             <C>             <C>
Cash flows from operating activities:
  Net (loss) income                                             $     (9,778)    $     34,811    $    (20,545)   $    (11,524)
  Adjustments to reconcile net loss (income) to cash
   used in operating activities:
  Operating Activities:
     Depreciation and amortization                                     2,574            6,070           5,907           6,551
     Amortization of discount on notes payable                            39              219             394             393
     Amortization of license rights                                    1,748            1,368              --              --
     Extraordinary item - non-cash portion                                --          (56,682)             --              --
     Inventory write-down to net realizable value                         --            4,693              --              --
     Provision for bad debts                                             803            1,056           1,477           4,294
     Non-cash compensation                                               532               --              --              --
     Amortization of deferred service revenues                        (5,376)
   Changes in operating assets and liabilities:
     Decrease (increase) in accounts receivable                        3,615              212            (874)         (3,050)
     Decrease (increase) in inventory                                    477            5,610          (3,924)          3,629
     Decrease (increase) in deferred product costs                     3,054            6,477         (17,176)             --
     Increase (decrease) in accounts payable                             358           (5,475)          5,561          (8,931)
     (Decrease) increase in deferred product revenues                 (2,491)          (7,605)         20,941              --
     (Decrease) increase in accrued expenses and other
       current liabilities                                            (3,638)          (4,512)            365          (9,255)
     Net book value of equipment retired                                  --               --              --           1,950
     Other                                                            (2,153)           1,373             387          (1,702)
                                                                ------------     ------------    ------------    ------------
          Net cash used in operating activities                      (10,236)         (12,385)         (7,487)        (17,645)
                                                                ------------     ------------    ------------    ------------

Cash flows from investing activities:
     Additions to network, equipment, and software                    (1,251)          (1,587)         (2,600)         (3,103)
     Proceeds from sale of assets                                      2,740               --              --              --
     Liquidation of pledged securities                                    --               --          12,705          12,083
     (Increase) decrease in short-term investments                    (3,543)          (4,134)         12,601          (2,893)
     Purchase of license rights                                           --           (1,215)             --              --
                                                                ------------     ------------    ------------    ------------
          Net cash provided by (used in) investing activities         (2,054)          (6,936)         22,706           6,087
                                                                ------------     ------------    ------------    ------------

Cash flows from financing activities:
     Proceeds from sale of service contract                           11,510               --              --              --
     Proceeds from exercise of stock options                             485               --             255             264
     Proceeds from issuance of common stock                               --            9,450              --              --
     Payments on capital leases                                          (47)              --              --              --
     Common stock repurchased                                             --              (15)             --              --
                                                                ------------     ------------    ------------    ------------
          Net cash provided by financing activities                   11,948            9,435             255             264
                                                                ------------     ------------    ------------    ------------
Increase (decrease) in cash and cash equivalents                        (342)          (9,886)         15,474         (11,294)
Cash and cash equivalents, beginning of year                          10,755           20,641           5,167          16,461
                                                                ------------     ------------    ------------    ------------
Cash and cash equivalents, end of year                                10,413           10,755          20,641           5,167
                                                                ============     ============    ============    ============
Supplemental cash flow information:
     Interest paid                                              $        997     $      6,539    $     12,974    $     12,974
                                                                ============     ============    ============    ============
     Taxes paid                                                 $         --     $        995    $         --    $         --
                                                                ============     ============    ============    ============

Non-cash investing and financing activities:
     Note receivable received as proceeds from sale of
       assets and service contract                              $     12,000     $         --    $         --    $         --
                                                                ============     ============    ============    ============
     Receivable held in escrow received as proceeds from
       sale of assets and service contract                      $      1,000     $         --    $         --    $         --
                                                                ============     ============    ============    ============
     Purchases of assets through capital leases                 $        224     $         --    $         --    $         --
                                                                ============     ============    ============    ============
     Fair value of License Rights acquired in exchange for
       28,000,000 shares of common stock                        $         --     $     38,000    $         --    $         --
                                                                ============     ============    ============    ============
     Fair Value of Senior Notes exchanged for 12,670,497
       shares of common stock                                   $         --     $     20,273    $         --    $         --
                                                                ============     ============    ============    ============
</Table>

                 See accompanying notes to financial statements.

                                       F-5

<PAGE>

                  MINORPLANET SYSTEMS USA INC. AND SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                    (in thousands, except share information)

<Table>
<Caption>
                                                       Preferred Stock           Common Stock          Common Stock - Class B
                                                      -----------------    ----------------------    -------------------------
                                                      Shares     Amount       Shares       Amount      Shares        Amount
                                                      ------    -------    -----------    -------    -----------   -----------
<S>                                                   <C>       <C>        <C>            <C>        <C>           <C>

Stockholders' equity (deficit) at December 31, 1998    1,000    $    --      5,042,188    $    51             --   $        --
     Exercise of stock options                                                  44,245         --
     Net loss
                                                      ------    -------    -----------    -------    -----------   -----------
Stockholders' equity (deficit) at December 31, 1999    1,000         --      5,086,433         51             --            --
     Exercise of stock options                                                  41,323         --
     Conversion of Series D Preferred Stock to
            Class B Common Stock                      (1,000)        --                                    1,000            --
     Net loss
                                                      ------    -------    -----------    -------    -----------   -----------
Stockholders' equity (deficit) at December 31, 2000       --         --      5,127,756         51          1,000            --
     Conversion of Class B Common to Common                                    320,000          3         (1,000)
     Issuance of Series E Preferred Stock                  1         --                                                     --
     Common Stock issued to Minorplanet UK                                  30,000,000        300
     Common Stock issued in Note Exchange                                   12,670,497        127
     Common Stock repurchased
     Net income
                                                      ------    -------    -----------    -------    -----------   -----------
Stockholders' equity at December 31, 2001                  1         --     48,118,253        481             --            --
     Exercise of stock options                                                 306,707          3
     Acceleration of vesting on stock options
     Net loss
                                                      ------    -------    -----------    -------    -----------   -----------
Stockholders' equity at August 31, 2002                    1    $    --     48,424,960    $   484             --   $        --
                                                      ======    =======    ===========    =======    ===========   ===========

<Caption>

                                                       Additional        Treasury Stock
                                                        Paid-in     -------------------------    Accumulated
                                                        Capital       Shares        Amount         Deficit         Total
                                                      -----------   -----------   -----------    -----------    -----------
<S>                                                   <C>           <C>           <C>            <C>            <C>

Stockholders' equity (deficit) at December 31, 1998   $   149,682        62,399   $      (547)   $  (175,977)   $   (26,791)
     Exercise of stock options                                264                                                      264
     Net loss                                                                                        (11,524)       (11,524)
                                                      -----------   -----------   -----------    -----------    -----------
Stockholders' equity (deficit) at December 31, 1999       149,946        62,399          (547)      (187,501)       (38,051)
     Exercise of stock options                                255                                                       255
     Conversion of Series D Preferred Stock to                                                                           --
            Class B Common Stock                                                                                         --
     Net loss                                                                                        (20,545)       (20,545)
                                                      -----------   -----------   -----------    -----------    -----------
Stockholders' equity (deficit) at December 31, 2000       150,201        62,399          (547)      (208,046)       (58,341)
     Conversion of Class B Common to Common                    (3)                                                       --
     Issuance of Series E Preferred Stock                       1                                                         1
     Common Stock issued to Minorplanet UK                 47,625                                                    47,925
     Common Stock issued in Note Exchange                  19,671                                                    19,798
     Common Stock repurchased                                            13,400           (15)                          (15)
     Net income                                                                                       34,811         34,811
                                                      -----------   -----------   -----------    -----------    -----------
Stockholders' equity at December 31, 2001                 217,495        75,799          (562)      (173,235)        44,179
     Exercise of stock options                                482                                                       485
     Acceleration of vesting on stock options                 532                                                       532
     Net loss                                                                                         (9,778)        (9,778)
                                                      -----------   -----------   -----------    -----------    -----------
Stockholders' equity at August 31, 2002               $   218,509        75,799   $      (562)   $  (183,013)   $    35,418
                                                      ===========   ===========   ===========    ===========    ===========
</Table>


                 See accompanying notes to financial statements.


                                       F-6
<PAGE>
                 MINORPLANET SYSTEMS USA, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS

1. BUSINESS OVERVIEW

         Minorplanet Systems USA, Inc., a Delaware Corporation (the "Company")
develops and implements mobile communications solutions, including integrated
voice, data and position location services. The initial application for the
Company's wireless enhanced services has been developed for, and is marketed and
sold to, companies that operate in the long-haul trucking market. The Company
provides long-haul trucking companies with a comprehensive package of mobile
communications and management information services, thereby enabling its
trucking customers to effectively monitor the operations and improve the
performance of their fleets. The initial product application was customized and
has been sold to and installed in the service vehicle fleets of the member
companies of SBC Communications, Inc., pursuant to the service vehicle contract
(the "Service Vehicle Contract" or "Contract"). During the fourth quarter of
1999, the Company entered the mobile asset tracking market with the introduction
of its trailer-tracking product, TrackWare(R) . There were no significant
revenues from TrackWare(R) during 2000, 2001, or during the eight months ended
August 31, 2002. During the first quarter of 2001, the Company began marketing
and selling 20/20V(TM), a low-cost tracking product designed for small and
medium sized fleets in the transportation marketplace. There were no significant
revenues from 20/20V during 2001 or during the eight months ended August 31,
2002. During the third quarter of 2001, the Company commenced marketing the
Vehicle Management Information (TM) ("VMI") product licensed from Minorplanet
Limited into the automatic vehicle location ("AVL") market in the United States.

         On March 15, 2002, the Company completed the sale to Aether Systems,
Inc. ("Aether") of certain assets and licenses related to the Company's
long-haul trucking and asset-tracking businesses pursuant to the Asset Purchase
Agreement effective as of March 15, 2002, by and between the Company and Aether
(the "Sale"). Under the terms of the Asset Purchase Agreement, the Company sold
to Aether assets and related license rights to its Platinum Service software
solution, 20/20V(TM), and TrackWare(R) asset and trailer-tracking products. In
addition, the Company and Aether agreed to form a strategic relationship with
respect to the Company's long-haul customer products, pursuant to which the
Company assigned to Aether all service revenues generated post-closing from its
HighwayMaster Series 5000 ("Series 5000") customer base. Aether, in turn, agreed
to reimburse the Company for the network and airtime service costs related to
providing the Series 5000 service. The two companies also agreed to work jointly
in the adaptation of the VMI product technology for the potential distribution
of VMI by Aether to the long-haul-trucking market (See Note 4).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

         Effective April 10, 2000, HighwayMaster Communications, Inc. changed
its corporate name to @Track Communications, Inc. On July 22, 2002, after
approval from its majority shareholder, Minorplanet Systems PLC, the Company's
name was changed from @Track Communications Inc. to Minorplanet Systems USA,
Inc. The consolidated financial statements include those of Minorplanet Systems
USA Inc., its wholly-owned subsidiaries, HighwayMaster of Canada, LLC, Caren
(292) Limited and Minorplanet Systems USA Limited. All significant intercompany
accounts and transactions have been eliminated in consolidation.

Estimates Inherent in the Preparation of Financial Statements

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 revenues and
expenses during the reporting period. Actual results could differ from those
estimates.


                                      F-7
<PAGE>


Revenue Recognition

         The Company recognizes revenue from its long haul trucking Series 5000
mobile units, Trackware, and 20/20V products under the provisions of Staff
Accounting Bulletin No. 101 ("SAB 101"). Under SAB 101, initial sale proceeds
received under multiple-element sales arrangements which require the Company to
deliver products or services over a period of time and which are not determined
by the Company to meet certain criteria are deferred. These criteria include
requirements for a separate earnings process, fair value determinations, and
that the delivery of future products or services under the arrangement are not
required for the delivered items to serve their intended purpose. Sales proceeds
related to delivered products that are deferred are recognized over the greater
of the contract life or the life of the estimated customer relationship. The
Company has estimated such periods to range from three to ten years. The
Company's estimate of the life of a customer relationship is determined based
upon the Company's historical experience with its customers together with the
Company's estimate of the remaining life of the applicable product offering.
Sales proceeds recognized under this method are portrayed in the accompanying
Consolidated Statement of Operations as "Ratable Product Revenues." The related
deferred revenue is classified as a current and long term liability on the
balance sheet under the captions Deferred Product Revenue - Current Portion and
Deferred Product Revenue Non-current Portion. If the customer relationship is
terminated prior to the end of the estimated customer relationship period, such
deferred sales proceeds are recognized as revenue in the period of termination.
The Company will periodically review its estimates of the customer relationship
period as compared to historical results and adjust its estimates prospectively.
Prior to 2000, revenues from product sales and licensing of product software
were generally recognized at the time the products were shipped to customers
unless the sales arrangement required specific product acceptance by the
customer, in which case revenues were recognized upon the receipt by the Company
of such acceptance.

         Under sales arrangements which meet the three criteria described above,
revenues are recognized upon shipment of the products or upon customer
acceptance of the delivered products, if terms of the sales arrangement gives
the customer right of acceptance. Sales arrangements recognized under this
method relate primarily to products delivered under the Service Vehicle
Contract.

         The VMI product includes both hardware and software components. Due to
the interdependency of the functionality of the elements, revenue recognition is
governed by Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements" ("SAB 101") and Statement of Position 97-2, "Software Revenue
Recognition" ("SOP 97-2"). Currently, the Company resells cellular airtime to
customers of its VMI products. Therefore, in accordance with SAB 101, the
Company defers VMI product revenues and recognizes this revenue ratably over the
longer of the term of the customer contract or the estimated life of the
customer relationship. Such terms range from one to five years. In addition, the
Company has also deferred revenue consistent with the provisions of SOP 97-2.
The related deferred revenue is classified as a current and long term liability
on the balance sheet under the captions Deferred Product Revenue - Current
Portion and Deferred Product Revenue Non-current Portion.

         The Company provides lease financing to certain customers of its VMI
products. Leases under these arrangements are classified as sales-type leases or
operating leases. These leases typically have terms of one to five years, and
all sales type leases are discounted at interest rates ranging from 14% to 18%
depending on the customer's credit risk. The net present value of the lease
payments for sales-type leases is recognized as product revenue and deferred
under the Company's revenue recognition policy described above. Income from
operating leases is recognized ratably over the term of the leases.

         Service revenue generally commences upon product installation and is
recognized ratably over the period such services are provided.

Shipping and Handling Fees and Costs

         The Company records amounts billed to customers for shipping and
handling and related costs incurred for shipping and handling as components of
"Product Revenues" and "Cost of Product Revenues" respectively.

Deferred Product Costs

         The Company defers certain product costs (generally consisting of the
direct cost of product sold and installation costs) for its sales contracts
determined to require deferral accounting under the provisions of SAB 101 and
SOP 97-2. The related deferred costs are classified as a current and long term
asset on the balance sheet under the captions Deferred Product Costs - Current
Portion and Deferred Product Costs Non-current Portion. Such costs are
recognized over the longer of the term of the service contract or the estimated
life of the customer relationship and are portrayed in the accompanying
Consolidated Statements of Operations as "Ratable Product Costs." Such terms
range from one to ten years. If the customer relationship is terminated prior to
the end of the estimated customer relationship period, such costs are recognized
in the period of termination. The Company will periodically review its estimates
of the customer relationship period as compared to historical results and adjust
its estimates prospectively.


                                      F-8
<PAGE>


Financial Instruments

         The Company considers all liquid interest-bearing investments with a
maturity of ninety days or less at the date of purchase to be cash equivalents.
Short-term investments mature between ninety days and one year from the purchase
date. All cash and short-term investments are classified as available for sale.
Cost approximates market for all classifications of cash and short-term
investments; realized and unrealized gains and losses were not material during
the eight months ended August 31, 2002 and the years ended December 31, 2001,
2000, and 1999.

         The carrying amount of cash and short-term investments, accounts
receivable, accounts payable and accrued liabilities approximates fair value
because of their short-term maturity.

Business and Credit Concentrations

         Accounts receivable generated from equipment sales are generally
secured by the respective mobile units shipped to the customer. Allowances have
been provided for amounts that may eventually become uncollectible and to
provide for any disputed charges. During the eight months ended August 31, 2002,
one customer and Aether Systems (see Note 4), accounted for approximately 65% of
total revenues. During the twelve months ended December 31, 2001, 2000 and 1999,
one customer accounted for approximately 41%, 47%, and 38% respectively, of
total revenues.

         The Company's bad debt expense as a percent of total revenues was 1.9%
for the eight months ended August 31, 2002 and 1.4%, 1.4% and 4.5% for the
twelve months ended December 31, 2001, 2000, and 1999, respectively. The
reduction in bad debt expense since 1999 is primarily due to changes in the
Company's operating policies and the general improvement in the creditworthiness
of the customer base as a result of the significant sales to one customer noted
above.

Inventories

         Inventories consist primarily of component parts and finished products
that are valued at the lower of cost or market. Cost is determined using the
first-in, first-out (FIFO) method. The Company records a write-down for excess
and obsolete inventory based on a usage formula for component parts and specific
identification criteria for finished goods.

Valuation of Long-Lived Assets

         Management evaluates the recoverability of the Company's long-lived
assets under Statement of Financial Accounting Standards No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets" (" SFAS 144"). SFAS 144
requires management to review for impairment of its long-lived assets, whenever
events or changes in circumstances indicate that the carrying amount of an asset
might not be recoverable and exceeds its fair value. Impairment evaluations
involve management estimates of asset useful lives and future cash flows. When
such an event occurs, management estimates the future cash flows expected to
result from the use of the asset and its eventual disposition. If the
undiscounted expected future cash flows are less than the carrying amount of the
asset and the carrying amount of the asset exceeds its fair value, an impairment
loss is recognized. Management utilizes an expected present value technique, in
which multiple cash flow scenarios that reflect the range of possible outcomes
and a risk-free rate are used, to estimate fair value of the asset.

         Management assesses the impairment in value to its long-lived assets
whenever events or circumstances indicate that the carrying value may not be
recoverable. Significant factors, which would trigger an impairment review,
include the following:

         o  significant negative industry trends,

         o  significant changes in technology,

         o  significant underutilization of the asset, and

         o  significant changes in how the asset is used or is planned to be
            used.

Network, Equipment and Software

         Network, equipment and software are stated at cost and are depreciated
on a straight-line basis over the estimated useful lives of the various classes
of assets, which generally range from three to seven years. Maintenance and
repairs are charged to operations, while renewals or betterments are
capitalized.

Research and Development Costs

         The Company expenses research and development costs as incurred. During
the eight months ended August 31, 2002 the Company expensed $675,000, payable to
a related party, in research and development costs for new products that is
reflected in "Engineering Expenses" in the Consolidated Statements of
Operations. During the twelve months ended December 31, 2001, 2000 and 1999, the
Company expensed $3,091,000, $2,181,000 and $1,241,000, respectively, in
research and development costs for new products that is reflected in
"Engineering Expenses" in the Consolidated Statements of Operations. The 2001
amount included $525,000 paid to a related party.

Capitalized Software Costs

         In accordance with Statement of Position 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use", software
development costs that meet certain capitalization requirements are capitalized.
Such costs consist of software development costs for products to be sold or
leased, as well as the cost of software acquired for internal use. Additions to
capitalized software during 2001, 2000 and 1999 were $672,000, $1,019,000 and
$774,000, respectively. There were no additions to capitalized software during
the eight months ended August 31, 2002.

License Rights

         Management accounts for the License Rights in accordance with Statement
of Financial Accounting Standards No. 142, "Goodwill and Other Intangible
Assets" ("SFAS 142"). The License Rights acquired are valued in the accompanying
Consolidated Balance Sheet as an asset purchase at an amount which reflects the
fair value of the common stock issued by the Company based on the market price
of the Company's common stock on the date of consummation of the transaction
($1.60 per share on June 21, 2001), plus the incremental direct costs incurred
in effecting the transaction.

         Based on the Company's evaluation of the useful life of the existing
technology, probability of future developments to bring new products to market
and projected cash flows from these products, the License Rights are being
amortized over a 15-year life. SFAS 142 requires management to evaluate the
remaining useful life of the License Rights each reporting period to determine
whether events and circumstances warrant a revision to the remaining period of
amortization. If the estimate of the License Rights' remaining useful life
changes, the remaining carrying amount of the License Rights is amortized
prospectively over that revised remaining useful life.

         In accordance with SFAS 144, management also tests for impairment
losses on the License Rights consistent with the policies discussed above in
"Valuation of Long-Lived Assets".


                                      F-9
<PAGE>


Advertising Costs

         Advertising costs are expensed as incurred. During the eight months
ended August 31, 2002 and the years ended December 31, 2001, 2000 and 1999, the
Company expensed $362,000, $633,000, $962,000 and $554,000, respectively, in
advertising costs that are reflected in "Sales and Marketing Expenses" in the
Consolidated Statements of Operations.

Income Taxes

         The Company accounts for income taxes pursuant to SFAS No. 109,
"Accounting For Income Taxes." Deferred income taxes are calculated using an
asset and liability approach wherein deferred taxes are provided for the tax
effects of basis differences for assets and liabilities arising from differing
treatments for financial and income tax reporting purposes. A valuation
allowance is recognized if, based on the weight of available evidence, it is
more likely than not that some portion or all of the deferred tax asset will not
be realized.

Earnings Per Share

         The Company computes earnings per share in accordance SFAS No. 128,
"Earnings Per Share." Net income (loss) per basic share was computed by dividing
net income (loss) by the weighted average number of shares outstanding during
the respective periods. Diluted earnings per share is computed using the
"Treasury Stock Method." The Company's potentially dilutive securities have been
excluded from the weighted average number of shares outstanding, since their
effect would be anti-dilutive.

         Earnings per share amounts for all periods presented have been restated
to reflect the reverse stock split effected June 5, 2001, as described in Note
3.

Reporting Comprehensive Income

         The accompanying consolidated financial statements do not include any
items of other comprehensive income.

New Accounting Standards

         In April 2002, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB No. 13, and Technical
Corrections". Management believes this new accounting standard will have no
material impact on the financial position of the Company.

         In June 2002, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 146, "Accounting for Costs Associated with
Exit or Disposal Activities". Management believes this new accounting standard
will have no material impact on the financial position of the Company.

3. STOCK SPLIT AND RECAPITALIZATION

         On June 4, 2001, the 1,000 shares of Class B Common Stock were
converted into 320,000 shares of Common Stock at the option of the sole holder
of the shares. On June 5, 2001, the Company effected a reverse stock split in
the ratio of one (1) share of post-split common stock for every five (5) shares
of pre-split common stock and amended the Company's Certificate of Incorporation
to increase the number of authorized shares of common stock from 50,000,000
shares to 100,000,000 shares. All references to Common Stock and all per share
references for periods prior to the stock split have been restated to reflect
the one for five reverse stock split.

         In addition, the Company created a new class of Series E Preferred
Stock and on June 5, 2001 issued one (1) share of Series E Preferred Stock. The
Series E Preferred Stock has a liquidation preference of $1,000 per share and is
entitled to the payment of annual dividends at the rate of 7% per share. The
Series E Preferred Stock does not have any voting, conversion or preemptive
rights.

         On June 21, 2001, the Company consummated the stock issuance
transactions approved by the Company's stockholders at the annual meeting on
June 4, 2001. As a result of the closing of transactions contemplated by that
certain Stock Purchase and Exchange Agreement by and among the Company,
Minorplanet Systems PLC, a United


                                      F-10
<PAGE>


Kingdom public limited company ("Minorplanet UK"), and Mackay Shields LLC
("MacKay"), dated February 14, 2001 (the "Purchase Agreement"), the Company
issued 30,000,000 shares of its common stock in a change of control transaction
to Minorplanet UK, which is now the majority stockholder of the Company. In
exchange for this stock issuance, Minorplanet UK paid the Company $10,000,000 in
cash and transferred to the Company all of the shares of its wholly-owned
subsidiary, Minorplanet Limited, which holds an exclusive, royalty-free, 99-year
license to market, sell and operate Minorplanet UK's VMI technology in the
United States, Canada and Mexico. As a result of this transaction, Minorplanet
UK beneficially owns approximately 62% of the outstanding shares of the
Company's common stock (on a non-fully diluted basis), which is now the sole
voting security of the Company. The "License Rights" acquired are valued in the
accompanying Consolidated Balance Sheet as an asset purchase at an amount which
reflects the fair value of the common stock issued by the Company based on the
market price of the Company's common stock on the date of consummation of the
transaction ($1.60 per share on June 21, 2001), plus the incremental direct
costs incurred in effecting the transaction.

         Also, the Company issued 12,670,497 shares of its common stock (valued
at $1.60 per share) to holders of its Senior Notes due 2005 ("Senior Notes") in
exchange for the cancellation of Senior Notes with an aggregate principal amount
of $80,022,000 (the "Exchange Offer"). The total principal amount of Senior
Notes that remains outstanding is $14,333,000. As a result of this Exchange
Offer, the Company recognized a $59,461,000 gain, net of $995,000 of Federal
income taxes and $3,067,000 in the aggregate amount of unamortized debt discount
and issuance costs, and including $3,773,000 of waived accrued interest payable,
which is reflected as an extraordinary item in the accompanying Consolidated
Statements of Operations.

         The foregoing transactions are hereinafter collectively referred to as
the "Recapitalization." As a result of the Recapitalization, the Company
significantly reduced its indebtedness and related interest expense. In
addition, the Company acquired the VMI technology and commenced distribution of
Minorplanet UK's VMI product in the United States.

4. SALE OF ASSETS

         On March 15, 2002, the Company completed the Sale to Aether. As
consideration for the Sale, the Company received $3 million in cash, of which
$0.8 million is included on the Company's balance sheet as of August 31, 2002 in
other current assets and will be held in escrow and released to the Company
during the next fiscal year provided certain conditions are met by the Company.
The Company also received a note for $12 million payable, at the option of
Aether, in either cash or convertible preferred stock in three equal
installments of $4 million on April 14, May 14, and June 14, 2002 (the "Note").
The preferred stock could then be converted to common stock using a prescribed
formula that compensates for fluctuations in the stock price so that the Company
would be able to convert and sell in the open market Aether common stock equal
to $12 million. The consideration for the Sale was determined through arms
length negotiation between the Company and Aether.

         On April 12, 2002, Aether delivered an Amended and Restated Convertible
Promissory Note (the "Amended Note") to the Company. Under the Amended Note,
Aether irrevocably agreed to pay cash in lieu of preferred stock for the first
$4 million installment originally due on April 14, 2002 and extended the
installment due date by twenty business days to May 10, 2002. Additionally,
under the Amended Note, Aether had the option to irrevocably elect to pay the
May 14 and June 14, 2002 installments in cash in lieu of preferred stock upon
five days prior written notice, and upon the making of such election, the
installment due date was extended by twenty business days.

         On May 9, 2002, Aether notified the Company of its election to pay the
second $4 million installment under the Amended Note in cash extending the
installment due date under the Amended Note originally due on May 14, 2002 to
June 12, 2002. On May 10, 2002, the Company received the initial $4 million
installment under the Amended Note in cash from Aether. On June 12, 2002, the
Company received the second $4 million installment under the Amended Note in
cash from Aether. On June 9, 2002, Aether notified the Company of its election
to pay the third $4 million installment under the Amended Note in cash extending
the installment due date under the Amended Note originally due on June 14, 2002
to July 12, 2002. On July 12, 2002, the Company received the third $4 million
installment under the Amended Note in cash from Aether.

         Proceeds from the Sale to Aether totaled $15 million, of which $12.2
million was allocated to deferred service revenue and reflects the estimated
fair value of services to be provided to Aether net of cash reimbursements from
Aether under the terms of the agreement. The deferred service revenue is being
recognized over the term of the agreement with Aether that expires in September
of 2003. The remaining proceeds were allocated to consideration for assets sold,
net of transaction costs, and no gain or loss resulted from the sale.


                                      F-11
<PAGE>


5. LIQUIDITY AND CAPITAL RESOURCES

         The Company has incurred significant operating losses since inception
and has limited financial resources to support it until such time that it is
able to generate positive cash flow from operations. Net cash used for operating
activities was $10.2 million and $12.4 million for the eight months ended August
31, 2002 and the twelve months ended December 31, 2001 respectively. For the
eight months ended August 31, 2002, cash used for operating activities was
primarily attributable to the hiring and staffing of personnel for the expansion
of VMI sales to open market locations in Dallas, Houston, Atlanta and Los
Angeles.

         As of August 31, 2002, the Company had $18.1 million in cash and
short-term investments representing an increase from December 31, 2001 of $3.2
million. This increase is primarily attributable to $14.2 million in cash
received as consideration for the Sale to Aether of certain assets and licenses
related to the Company's long-haul trucking and asset-tracking businesses offset
by net cash used in operating and other investing activities. As a result of the
Recapitalization in June 2001, the Company has reduced its Senior Notes due in
2005 in the principal amount of $80 million and its related annual cash outflow
for interest service by $11 million. In addition, the Company believes the
acquisition of the License Rights will provide the Company significant marketing
potential of the licensed VMI technology, enhancing future results of operations
and reducing the need for capital resources to develop similar technology. Also,
as a result of the Sale to Aether of certain assets and licenses related to the
Company's long-haul trucking and asset-tracking businesses, Aether is
contractually obligated to continue to reimburse the Company for the network and
airtime service costs related to providing the Series 5000 service (see Note 4
to the Consolidated Financial Statements attached hereto).

Critical success factors in Management's plans to achieve positive cash flow
from operations include:

     o   Significant market acceptance of the VMI product line in the U.S.
         Management believes the market for products such as VMI represents a
         total potential of approximately 21 million vehicles. Currently,
         management believes this market is approximately 5 percent penetrated
         with asset tracking and vehicle information management solutions.

     o   Maintain and expand the Company's direct sales channel. New
         salespersons will require training and time to become productive. In
         addition, there is significant competition for qualified salespersons,
         and the Company must continue to offer attractive compensation plans
         and opportunities to attract qualified salespersons.

     o   Renewal of the contract with SBC. At August 31, 2002, the Company had
         approximately 37,500 units in service with the SBC Companies that
         accounted for approximately 55% of the Company's installed base,
         including network services subscribers. The current contract with the
         SBC Companies expires on January 30, 2003 and may be renewed under the
         same terms for an additional one-year term at the option of the SBC
         Companies.

     o   Securing and maintaining adequate third party leasing sources for
         customers who purchase VMI.

         Based on projected operating results, the Company believes its existing
capital resources will be sufficient to fund its currently anticipated operating
needs and capital expenditure requirements for the next 12 months. If cash
generated from operations is not sufficient to meet its working capital
requirements, the Company may seek to sell additional equity or debt securities.
The sale of additional equity or convertible debt securities could result in
additional dilution to existing stockholders. If additional funds are raised
through debt securities, holders of these securities could obtain certain rights
and preferences senior to holders of the Company's common stock, as well as
restrict the Company's operations. If additional working capital is required,
there can be no assurance that additional financing will be available, which in
this case, the Company may be required to reduce the scope of its operations
which could negatively impact its financial condition and operating results.


                                      F-12
<PAGE>


6. CHANGE IN FISCAL YEAR END

         On May 21, 2002, the Company's Board of Directors approved changing the
Company's fiscal year end to August 31st. Accordingly, the Company is presenting
audited financial statements for the eight-months ended August 31, 2002, the
"transition period", in this Form 10-K. The following table provides unaudited
condensed financial information for the same period of the prior year (in
thousands except per share).

<Table>
<Caption>
                                                            Eight months ended
                                                                August 31,
                                                      ----------------------------
                                                                        Unaudited
                                                          2002            2001
                                                      ------------    ------------
<S>                                                   <C>             <C>

Revenues                                              $     41,956    $     52,666

Cost of revenues                                            25,464          35,928
                                                      ------------    ------------
Gross profit                                                16,492          16,738
                                                      ------------    ------------
Expenses                                                    26,111          26,132

    Operating loss                                          (9,619)         (9,394)

Interest income                                                457             420
Interest expense                                            (1,411)         (6,642)
Other expense                                                 (183)
                                                      ------------    ------------
    Loss before income taxes and extraordinary item        (10,756)        (15,616)
Income tax benefit                                             978              --
                                                      ------------    ------------
    Loss before extraordinary item                          (9,778)        (15,616)
Extraordinary item (Note 2)                                     --          59,461
                                                      ------------    ------------
Net (loss) income                                     $     (9,778)   $     43,845
                                                      ============    ============

Basic and diluted income (loss) per share:
Loss before extraordinary item                        $      (0.20)   $      (0.88)
  Extraordinary item                                            --            3.36
                                                      ------------    ------------
Net income (loss) per share                           $      (0.20)   $       2.48
                                                      ============    ============
Weighted average number of shares outstanding:
   Basic and diluted                                        48,233          17,649
                                                      ============    ============
</Table>

7. CHANGE IN ACCOUNTING PRINCIPLE

         The Company earns revenues from service contracts, and from related
products sold to customers (for which title generally passes on shipment). Prior
to 2000, the Company recognized revenues from product sales at the time the
mobile units were shipped to customers, or upon customer acceptance of the
product if acceptance was required by the sales contract. During 2000, as a
result of new interpretations of generally accepted accounting principles by the
Securities and Exchange Commission (the "SEC"), through issuance of SEC Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB
101"), the Company was required to change its accounting policy for product
revenue recognition during the fourth quarter of 2000, effective January 1,
2000.

         The Company sells mobile communications systems and related enhanced
mobile communications and management information services that are provided
through the Company's proprietary network. With respect to the Series 5000
mobile units sold to the Company's long-haul trucking customers, these units
function only when used in conjunction with the Company's proprietary network.
Accordingly, in accordance with SAB 101, the Company changed its product revenue
recognition policy for sales to long-haul trucking customers, to defer product
revenue previously recognized upon shipment and instead recognize such revenue
ratably over the longer of the term of the service contract or the estimated
life of the customer relationship. Such terms range from three to ten years.
Product costs are also deferred and amortized over such period. The product
revenues and related costs are portrayed in the accompanying Consolidated
Statements of Operations as "Ratable Product Revenues" and "Ratable Product
Costs," respectively.


                                      F-13
<PAGE>


         The effect of the adoption of SAB 101 in 2000 was to increase income
before extraordinary item by approximately $1,441,000 or $0.30 per share. SAB
101 has been adopted as the cumulative effect of a change in accounting
principle, effective January 1, 2000. The cumulative effect of the change as of
such date resulted in an increase to the net loss recognized in 2000 of
approximately $5,206,000. This has been reported as "Cumulative effect of
accounting change" in the accompanying Consolidated Statement of Operations for
the year ended December 31, 2000. Pro forma amounts assuming the new revenue
recognition method is applied retroactively are as follows ( in thousands except
per share).

<Table>
<Caption>
                                                                         1999
                                                             ----------------------------
                                                              As Reported      Pro forma
                                                             ------------    ------------
<S>                                                          <C>             <C>
Loss before extraordinary item                               $    (11,524)   $    (12,293)
Basic and diluted loss per share before extraordinary item   $      (2.31)   $      (2.46)

Net loss                                                     $    (11,524)   $    (12,293)
Basic and diluted net loss per share                         $      (2.31)   $      (2.46)
</Table>

8. UNUSUAL ITEMS

         "Other Income" in 2000 primarily consists of the proceeds from the
settlement of litigation, net of related expenses.

         During 1999, the Company recorded the benefit of credits due from
cellular carriers related to 1997 and 1998 based on a settlement agreement
reached on May 3, 1999, with GTE Wireless, Inc. and GTE Telecommunications
Incorporated. These credits had not been previously recognized because of
significant uncertainty as to their ultimate collectibility, due to a dispute
among the parties as to who was responsible for securing the collection of the
credits. This uncertainty was resolved as a result of the settlement agreement.
The effect of these credits was to increase income by $4,533,000, of which
$4,389,000 is reflected as a reduction in "Cost of Service Revenue" in the
accompanying Consolidated Statements of Operations.

         During 1997, the Company entered into a contract with a customer for a
new generation of mobile unit. Pending delivery of the contracted units, the
customer installed current-generation mobile units. In 1999, the Company and the
customer negotiated a settlement agreement, the terms of which included
termination of the contract and the return of approximately 2,900 mobile units
to the Company that had been installed by the customer. Pending delivery of the
contracted units, the proceeds from the purchase price for these units had been
recorded as deferred revenue. "Other Income" in 1999 includes a gain of
approximately $800,000 related to this settlement, which amount represents the
sum of (1) the previously deferred purchase price, the fair value of the mobile
units returned, and cash received from the customer, reduced by (2) the net book
value of the mobile units that had been installed.

         The remaining balance of "Other Income" in 1999 primarily consists of
the proceeds from the settlement of litigation, net of related expenses.

         During 1999, the earning process was culminated and the Company
recognized product revenues of $29.7 million on the mobile units delivered under
the Service Vehicle Contract. Included in 1999 "Cost of Product Revenues" in the
accompanying Consolidated Statements of Operations is a warranty provision of
$3.5 million, that was the estimated cost to be incurred to repair a defective
subcomponent in the mobile units, which has since been fully utilized.

9. SEVERANCE AND AUTOLINK(R) TERMINATION COSTS

         During the third quarter of 1998, the Company announced that it was
halting the development of its AutoLink(R) service. As a consequence, the
Company recorded a charge of $2,431,000 to recognize asset impairments and
record estimated amounts to be incurred to extinguish contractual obligations
associated with the AutoLink(R) program.

         During 1998, the Company recorded $2,926,000 in severance costs related
to two reorganizations. Severance costs of $445,000 relate to a reduction in the
number of employees, announced in the second quarter of 1998, primarily
reflecting the elimination of redundancies that had been necessary as a result
of having customers


                                      F-14
<PAGE>


served by both the AT&T Complex and the NSC. During the third quarter of 1998,
the Company announced a number of key management and structural changes designed
to more closely align the Company's expenditures with its revenues. As a result
of this announcement and the AutoLink(R) announcement, the Company reduced its
workforce by approximately 25% and recorded charges of $2,481,000 for
obligations under employment contracts and severance payments to terminated
employees. The following is a summary of activity relating to Severance and
AutoLink(R) termination costs payable (in thousands).

<Table>
<S>                                                                <C>
Balance at December 31, 1997                                       $         --
    1998 Activity:
         Accrued Severance and AutoLink termination costs          $      5,357
         Cash payments for severance and contractual obligations         (2,895)
         Asset write-offs                                                  (434)
                                                                   ------------
Balance at December 31, 1998                                              2,028
    1999 Activity:
         Cash payments for severance and contractual obligations         (1,839)
         Restored to income                                                (189)
                                                                   ------------
Balance at December 31, 1999                                       $         --
                                                                   ============
</Table>

10. CASH AND SHORT-TERM INVESTMENTS

Cash and short-term investments consist of the following (in thousands):

<Table>
<Caption>
                                              August 31,    December 31,   December 31,
                                                 2002           2001           2000
                                             ------------   ------------   ------------
<S>                                          <C>            <C>            <C>

Cash and commercial paper                    $      2,381   $      4,854   $     11,196
Money market accounts                               8,032          5,901          9,445
                                             ------------   ------------   ------------
     Cash and cash equivalents                     10,413         10,755         20,641
                                             ============   ============   ============

U.S. Government and agency notes and bonds          5,786          1,295             --
Commercial paper                                    1,891          2,839             --
                                             ------------   ------------   ------------
     Short-term investments                         7,677          4,134             --
                                             ============   ============   ============
</Table>

11. INVENTORIES

Inventories consist of the following (in thousands):

<Table>
<Caption>
                                      August 31,    December 31,   December 31,
                                         2002           2001           2000
                                     ------------   ------------   ------------
<S>                                  <C>            <C>            <C>

Complete systems                     $        886   $      1,403   $      3,240
Component parts                               695          1,510          5,919
Equipment shipped not yet accepted             --             --          4,057
                                     ------------   ------------   ------------
                                     $      1,581   $      2,913   $     13,216
                                     ============   ============   ============
</Table>

         During 2001, the Company recorded an inventory write-down of $4.7
million for excess inventory associated with certain circuit boards used in the
manufacture of the Trackware and 20/20V product lines. The Trackware product
line was designed to more efficiently utilize trailer assets. Due to the
economic downturn, trucking companies had an excess of trailers in their fleets;
thus, utilization of these assets was not an issue for many trucking companies,
and management believed that significant demand for the Trackware product would
not increase in the


                                      F-15
<PAGE>


near term. In addition, the Company announced the launch of 20/20V in March of
2001; however, by December of 2001, the Company had not incurred any significant
sales from this product.

12. LICENSE RIGHTS

         As part of the Recapitalization, the Company received a 99-year
exclusive license right to market, sell and operate Minorplanet UK's VMI
technology in the United States, Canada and Mexico. The license covers rights to
existing technologies of Minorplanet UK as well as any future developments. In
addition, the Company agreed to pay an annual fee of $1,000,000 to aid in
funding research and development of future products covered by the license
rights. The fee is to be evaluated and may be increased based on actual research
and development costs incurred by Minorplanet UK. Based on the Company's
evaluation of the useful life of the existing technology, probability of future
developments to bring new products to market and projected cash flows from these
products, the license rights are being amortized over a 15-year life. As of
August 31, 2002, the unamortized value of the license rights was $36,100,000,
which is net of $3,116,000 accumulated amortization. Amortization of the license
rights charged to expense during the eight months ended August 31, 2002 and the
year ended December 31, 2001 was $1,748,000 and $1,368,000 respectively.

13. NETWORK, EQUIPMENT, AND SOFTWARE

Network, equipment and software consist of the following (in thousands):

<Table>
<Caption>
                                                   August 31,     December 31,    December 31,
                                                      2002            2001            2000
                                                  ------------    ------------    ------------
<S>                                               <C>             <C>             <C>

Network service center                            $     15,508    $     15,506    $     15,031
Computers and office equipment                           5,585           5,275           7,308
Machinery and equipment                                  1,811           2,016           3,123
Software                                                 5,330           6,026           6,684
                                                  ------------    ------------    ------------
                                                        28,234          28,823          32,146
Less: accumulated depreciation and amortization        (21,809)        (20,240)        (19,295)
                                                  ------------    ------------    ------------
                                                  $      6,425    $      8,583    $     12,851
                                                  ============    ============    ============
</Table>

         Total depreciation and amortization expense charged to operations
during the eight months ended August 31, 2002 and the years ended December 31,
2001, 2000 and 1999 was $2,574,000, $5,854,000, $5,455,000 and $6,099,000,
respectively.

         As of August 31, 2002, December 31, 2001 and December 31, 2000, the
unamortized portion of software costs was $835,000, $1,752,000 and $2,144,000,
respectively. Amortization of such costs charged to expense during the eight
months ended August 31, 2002 and the years ended December 31, 2001, 2000 and
1999 was $727,000, $1,568,000, $1,191,000 and $1,487,000, respectively.

14. OTHER ASSETS

         During February of 2002, the Company began providing lease financing to
certain customers of its VMI products. Leases under these arrangements are
classified as sales-type leases or operating leases. These leases typically have
terms of one to five years, and all sales type leases are discounted at interest
rates ranging from 14% to 18% depending on the customer's credit risk.

         The net present value of the lease payments for sales-type leases is
recognized as product revenue and deferred under the Company's revenue
recognition policy. The components of the net investment in sales-type leases,
contained within other assets on the Company's balance sheet, as of August 31,
2002 are as follows (in thousands):

<Table>
<S>                                        <C>
Minimum lease payments receivable          $      1,393
Less:  Allowance for uncollectibles                (189)
                                           ------------
                                                  1,204
                                           ------------

Less:  Unearned interest income                    (464)

                                           ------------
Net investment in sales-type leases        $        740
                                           ============
</Table>


                                      F-16
<PAGE>


         Total minimum lease payments receivable on sales-type leases as of
August 31, 2002 are as follows (in thousands):



<Table>
<Caption>
Fiscal Year Ending August 31,
<S>                                         <C>
2003                                        $        347
2004                                                 344
2005                                                 316
2006                                                 240
2007                                                 146
                                            ------------

  Total minimum lease payments receivable   $      1,393
                                            ============
</Table>


         Income from operating leases is recognized ratably over the term of the
leases. Total future minimum rental payments due under operating leases as of
August 31, 2002 are as follows (in thousands):

<Table>
<Caption>
Fiscal Year Ending August 31,
<S>                                         <C>
 2003                                       $        389
 2004                                                304
 2005                                                228
 2006                                                 74
 2007                                                 48
                                            ------------
  Total minimum rental payments             $      1,043
                                            ============
</Table>

         Equipment held under operating leases as of August 31, 2002 was
$554,000, net of $34,000 accumulated depreciation.

         Other assets on the Company's balance sheet also include prepaid
expenses, miscellaneous receivables, and debt issue costs related to the
issuance of the Senior Notes, net of accumulated amortization. Such costs are
amortized over the term of the related debt. As of August 31, 2002, other assets
also included a deferred asset associated with the Company's related party
liability under a consulting agreement with Minorplanet Limited (see Note 20 ).

15. OTHER CURRENT LIABILITIES

Other current liabilities consist of the following (in thousands):

<Table>
<Caption>
                                           August 31,   December 31,   December 31,
                                             2002           2001           2000
                                         ------------   ------------   ------------
<S>                                      <C>            <C>            <C>

Accrued warranty costs                   $        392   $        626   $      1,469
Unearned revenue                                   --          1,615             --
Provision for settlement of litigation          1,681          1,581             --
Other                                           3,916          5,475          7,357
                                         ------------   ------------   ------------
                                         $      5,989   $      9,297   $      8,826
                                         ============   ============   ============
</Table>

         During the first quarter of 2001, the outsource manufacturer (the
"Vendor") that supplies substantially all of the Company's finished goods
inventory asserted a claim for reimbursement for excess and obsolete inventory
purchased in its capacity for use in the manufacture of the Company's products.
This claim was disputed by the Company. As a result of this dispute, beginning
in April 2001, the vendor ceased to perform on its contract to provide finished
goods inventory and certain other services to the Company. The claims and
counterclaims


                                      F-17
<PAGE>


ultimately led to each of the parties filing litigation against the other. The
vendor and the Company executed a Compromise Settlement Agreement on October 9,
2001. The ultimate liability in connection with this settlement will not be
known until December 31, 2002. Based on information currently available, the
Company has recorded a provision of $2.2 million as its estimate of the cost to
be incurred to settle this litigation, of which $0.5 million had been paid as of
August 31, 2002. As part of the settlement, the Company will continue to use the
Vendor as a manufacturer.

16. SENIOR NOTES

         On September 23, 1997, the Company issued 125,000 Units comprised of
$125,000,000 of 13.75% Senior Notes due September 15, 2005 and warrants to
purchase 820,750 shares of common stock at $9.625 per share. Of the gross
proceeds, $120,814,000 was allocated to the Senior Notes and $4,186,000 was
allocated to the warrants. Interest is payable on the Senior Notes semi-annually
on March 15 and September 15. The Company used a portion of the proceeds from
the issuance of the Units to purchase a portfolio of U. S. Government securities
that provided funds sufficient to pay in full when due the scheduled interest
payments on the Senior Notes through September 15, 2000. The Indenture for the
Senior Notes contained certain covenants that, among other things, limited the
ability of the Company to incur additional indebtedness, pay dividends or make
other distributions, repurchase any capital stock or subordinated indebtedness,
make certain investments, create certain liens, enter into certain transactions
with affiliates, sell assets, enter into certain mergers and consolidations, or
enter into sale and leaseback transactions.

         The Senior Notes are redeemable by the Company at any time on or after
September 15, 2001 at redemption prices declining annually from 110.313% of
principal amount in 2001 to 100.000% of principal amount in 2004, plus accrued
and unpaid interest. Prior to September 15, 2001, the Company could redeem up to
35% in the aggregate principal amount of the Senior Notes at a redemption price
of 113.75% of the principal amount thereof, plus accrued and unpaid interest
with the net proceeds of a qualifying equity offering (as defined).

         As part of the Recapitalization, the Company closed an Exchange Offer
to the holders of the Senior Notes. The Company issued approximately 12,670,000
shares of its common stock to holders of its Senior Notes who accepted the
Exchange Offer, in exchange for the cancellation of Senior Notes with an
aggregate principal amount of $80,022,000. The total principal amount of Senior
Notes that remains outstanding is $14,333,000. Prior to the consummation of the
Exchange Offer, the majority holder consented to, and the Company entered into,
the First Supplemental Indenture to the Indenture dated September 23, 1997,
which eliminated many of the restrictive covenants contained in the Indenture.

         At August 31, 2002, the $14,333,000 of Senior Notes outstanding was
recorded at the accreted value of $14,148,000. The Senior Notes have an
effective interest rate of 14.1%.

         The fair value of the Senior Notes was less than their carrying amount
at August 31, 2002, December 31, 2001, and December 31, 2000. The principal
amount of the Senior Notes is $1,000 per individual Senior Note. The Senior
Notes are publicly traded but purchases and sales of the Senior Notes are
infrequent.

17. INCOME TAXES

The components of the income tax provision are as follows (in thousands).

<Table>
<Caption>
                              Eight months
                            ended August 31,         Year ended December 31,
                                  2002            2001         2000         1999
                            ----------------   ----------   ----------   ----------
<S>                         <C>                <C>          <C>          <C>
Current:
     Federal                   $     (978)     $       --   $       --   $       --
     State                             --              --           --           --
                               ----------      ----------   ----------   ----------
                                     (978)             --           --           --

Deferred:
     Federal                           --              --           --           --
     State                             --              --           --           --
                               ----------      ----------   ----------   ----------

Income Tax Expense (Benefit)   $     (978)     $       --   $       --   $       --
                               ==========      ==========   ==========   ==========
</Table>


                                      F-18
<PAGE>


         During the year ended December 31, 2001, the Company paid $978,000 to
the Internal Revenue Service for alternative minimum tax purposes. The $978,000
payment was reflected as an expense in 2001 and was netted against the
extraordinary gain (See Note 3). During the eight month period ended August 31,
2002, a new tax law was enacted that changed certain aspects of the alternative
minimum tax. As a result of a tax law change, the Company does not owe any
federal taxes to the Internal Revenue Service for the year ended December 31,
2001. As of August 31, 2002, the Company has recorded a receivable for these
taxes and has reflected the $978,000 as a current year income tax benefit on the
Company's Consolidated Statement of Operations.

         Deferred taxes are provided for those items reported in different
periods for income tax and financial reporting purposes. The net deferred tax
asset has been fully reserved because of uncertainty regarding the Company's
ability to recognize the benefit of the asset in future years. The tax effects
of the temporary differences that give rise to significant portions of the
deferred tax assets are as follows (in thousands).

<Table>
<Caption>
                                         August 31,             December 31,
                                            2002            2001            2000
                                        ------------    ------------    ------------
<S>                                     <C>             <C>             <C>
Deferred tax assets:
     Step-up of tax basis in assets     $         --    $         --    $      1,390
     Research and development credit              --              --             205
     Recapitalization costs                       --              --             167
     Deferred revenue                          3,425             897           1,280
     Allowance for doubtful accounts           1,031           1,208           2,484
     Accrued interest                             --              --             332
     Other accrued liabilities                 1,146           1,078           1,360
     Inventory write-downs                       102           3,317             408
     Intangible Assets                           958             952              --
     Net operating loss carryforwards         53,550          49,297          62,177
     Alternative minimum tax credit               --             839              --
                                        ------------    ------------    ------------
     Gross deferred tax assets                60,212          57,588          69,803
     Valuation allowance                     (58,706)        (55,910)        (67,256)
                                        ------------    ------------    ------------
     Net deferred tax assets                   1,506           1,678           2,547

Deferred tax liabilities:
     Depreciation                             (1,506)         (1,678)         (2,160)
      Other                                       --              --            (387)
                                        ------------    ------------    ------------
     Gross deferred tax liabilities           (1,506)         (1,678)         (2,547)
                                        ------------    ------------    ------------
Net deferred tax asset                  $         --    $         --    $         --
                                        ============    ============    ============
</Table>

         There was a net increase in the valuation allowance of $2,796,000
during the eight months ended August 31, 2002.

         The provision for income taxes is different than the amount computed
using the applicable statutory federal income tax rate with the difference
summarized below (in thousands).

<Table>
<Caption>
                                          Eight
                                       months ended
                                        August 31,            Fiscal year ended December 31,
                                           2002            2001            2000            1999
                                       ------------    ------------    ------------    ------------
<S>                                    <C>             <C>             <C>             <C>

Income tax at federal statutory rate   $     (3,657)   $     (8,381)   $     (6,985)   $     (3,918)
Valuation allowance                           2,796           8,458           6,851           3,904
Other                                          (117)            (77)            134              14
                                       ------------    ------------    ------------    ------------
      Provision for income taxes       $       (978)   $         --    $         --    $         --
                                       ============    ============    ============    ============
</Table>

         At August 31, 2002, the Company had net operating loss carryforwards
aggregating approximately $157.5 million, that expire in various years between
2008 and 2021. The utilization of these net operating losses will be limited
pursuant to Internal Revenue Code Section 382 and may cause some amount of the
carryforwards to expire unutilized.


                                      F-19
<PAGE>


18. STOCKHOLDERS' EQUITY INSTRUMENTS AND RELATED MATTERS

Common Stock

         On June 5, 2001, the Company effected a reverse stock split in the
ratio of one (1) share of post-split common stock for every five (5) shares of
pre-split common stock and amended the Company's Certificate of Incorporation to
increase the number of authorized shares of common stock from 50,000,000 shares
to 100,000,000 shares, par value $0.01. As of August 31, 2002, 48,424,960 and
48,349,161 shares of common stock were issued and outstanding respectively.

Series E Preferred Stock

         On June 5, 2001, the Company authorized the issuance of 20,000 shares
of Series E Preferred Stock, par value $0.01, and issued one share of Series E
Preferred Stock. The Series E Preferred Stock has a liquidation preference of
$1,000 per share and is entitled to the payment of annual dividends at the rate
of 7% per share. The Series E Preferred Stock does not have any voting,
conversion or preemptive rights. One share of Series E Preferred Stock was
issued and outstanding at August 31, 2002.

Conversion of Series D Preferred Stock to Series B Common Stock

         Southwestern Bell Wireless Holdings, Inc., now known as Cingular
Wireless, LLC, a joint venture in which SBC Communications Inc., ("SBC") is a
lead venturer, owned all of the outstanding shares of Series D Participating
Convertible Preferred Stock ("Series D Preferred Stock").

         Pursuant to the purchase agreement by and between the Company as Issuer
and SBC as Investor, dated September 27, 1996, certain events were triggered
with respect to the Company's Series D Preferred Stock owned by SBC upon the
occurrence of "Regulatory Relief." Effective July 11, 2000, SBC received final
approval from the Federal Communications Commission to provide long distance
service in the State of Texas, and, accordingly, "Regulatory Relief" occurred,
as confirmed by SBC on September 18, 2000. As a result of the occurrence of
"Regulatory Relief", the 1,000 shares of Series D Preferred Stock automatically
converted into 1,000 shares of Class B Common Stock.

         Each outstanding share of Class B Common Stock was convertible into 320
shares of Common Stock at the option of SBC. The Class B Common Stock was
entitled to receive dividends and liquidating distributions in an amount equal
to the dividends and liquidating distributions payable on or in respect of the
number of shares of Common Stock into which such shares of Class B Common Stock
are then convertible. The holders of Common Stock and Class B Common Stock
generally had identical voting rights, with the holders of Class B Common Stock
being entitled to a number of votes equal to the number of shares of Common
Stock into which the shares of Class B Common Stock held by them were then
convertible. In addition, the holders of Class B Common Stock were entitled to
elect one director of the Company (or two directors if SBC and its affiliates
beneficially own at least 20% of the outstanding shares of Common Stock on a
fully diluted basis) and would have the right to approve certain actions on the
part of the Company. On June 4, 2001, SBC converted its Class B Common Stock to
320,000 shares of common stock. In connection with the consummation of the June
21, 2001 Purchase Agreement, the Company restated its Certificate of
Incorporation eliminating the Class B Common Stock.

         SBC held warrants that entitled SBC to purchase (i) 600,000 shares of
Common Stock at an exercise price of $70.00 per share and (ii) 400,000 shares of
Common Stock at an exercise price of $90.00 per share. The warrants expired
unexercised on September 27, 2001.


                                      F-20
<PAGE>


Equity Compensation Plan and Other

         The following table summarizes information about the company's equity
compensation plan at August 31, 2002:

<Table>
<Caption>

                                              (a)                       (b)                          (c)
                                                                                             Number of securities
                                                                                           remaining available for
                                   Number of securities to be     Weighted average       future issuance under equity
                                    issued upon exercise of      exercise price of            compensation plans
                                      outstanding options,      outstanding options,        (excluding securities
Plan Category                         warrants and rights       warrants, and rights       reflected in column(a))
-------------                      --------------------------   --------------------     ----------------------------
<S>                                <C>                          <C>                      <C>

Equity compensation plans
approved by security holders                 2,577,664             $         1.59                    3,700,282

Equity compensation plans
not approved by security holders                    --                         --                           --
                                        --------------             --------------               --------------
                                             2,577,664             $         1.59                    3,700,282
                                        ==============             ==============               ==============

</Table>

         Pursuant to a 1994 Stock Option Plan, as amended (the "Plan"), options
may be granted to employees for the purchase of an aggregate of up to 7,208,000
shares of the Company's common stock. The Plan requires that the exercise price
for each stock option be not less than 100% of the fair market value of common
stock at the time the option is granted. Both nonqualified stock options and
incentive stock options, as defined by the Internal Revenue Code, may be granted
under the Plan. Generally, options granted under the Plan vest 20% on the date
of grant and 20% on each of the following four anniversary dates of the date of
grants and expire six years from the date of grant.

         The Company applies APB Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations in accounting for the Plan. Accordingly,
no compensation cost has been recognized for options issued under the Plan. Had
compensation cost been determined based on the fair value of the options as of
the grant dates for awards under the Plan consistent with the method provided by
SFAS No 123, "Accounting for Stock-Based Compensation," the Company's net income
(loss) and net income (loss) per share would have been adjusted to the pro forma
amounts indicated below (in thousands except per share).

<Table>
<Caption>
                                               For the Eight Months
                                                 Ended August 31,                 For the Year Ended December 31,
                                               --------------------    -----------------------------------------------------
                                                      2002                 2001                2000                 1999
                                               --------------------    ------------        ------------         ------------
<S>                                            <C>                     <C>                 <C>                  <C>
Net income (loss)              As Reported        $     (9,778)        $     34,811        $    (20,545)        $    (11,524)
                               Pro Forma          $    (10,576)        $     32,093        $    (21,188)        $    (12,222)

Net income (loss) per share -
basic and diluted              As reported        $      (0.20)        $       1.25        $      (4.06)        $      (2.31)
                               Pro-forma          $      (0.22)        $       1.15        $      (4.20)        $      (2.45)
</Table>

         The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option-pricing model with the following weighted average
assumptions used for grants during the years as follows.

<Table>
<Caption>
                                 For the Year Ended December 31,
                           --------------------------------------------
                               2001            2000            1999
                           ------------    ------------    ------------
<S>                        <C>             <C>             <C>
Dividend                             --              --              --
Expected volatility               97.31%          92.31%          83.83%
Risk free rate of return           5.20%           5.89%           6.05%
Expected life in years              6.0             6.0             6.0
</Table>


                                      F-21
<PAGE>


         A summary of the changes in the Company's Plan for the eight months
 ended August 31, 2002 and the twelve months ended December 31, 2001, 2000, and
 1999 is presented below:

<Table>
<Caption>
                                                  2002                       2001                       2000
                                        ------------------------   ------------------------   ------------------------
                                                       Weighted                   Weighted                   Weighted
                                                        Average                    Average                    Average
                                                       Exercise                   Exercise                   Exercise
                                           Shares       Price        Shares         Price       Shares         Price
                                        ----------    ----------   ----------    ----------   ----------    ----------
<S>                                     <C>           <C>          <C>           <C>          <C>           <C>

Outstanding at beginning of period       3,805,829    $     1.59      330,924    $     1.38      341,464    $     1.36
Granted                                         --            --    3,670,316          1.61       63,900          1.51
Exercised                                 (306,707)         1.58           --            --      (41,323)         1.23
Forfeited                                 (921,458)         1.60     (195,411)         1.48      (33,117)         1.58
                                        ----------    ----------   ----------    ----------   ----------    ----------
Outstanding at end of period             2,577,664    $     1.59    3,805,829    $     1.59      330,924    $     1.38
                                        ==========    ==========   ==========    ==========   ==========    ==========
Options exercisable at end of period       923,034    $     1.57      283,212    $     1.46      153,189    $     1.32
                                        ==========    ==========   ==========    ==========   ==========    ==========
Weighted average fair value of
    options granted during the period           --    $       --           --    $     1.28           --    $     1.18
                                        ==========    ==========   ==========    ==========   ==========    ==========

<Caption>

                                                  1999
                                        ------------------------
                                                       Weighted
                                                        Average
                                                       Exercise
                                          Shares         Price
                                        ----------    ----------
<S>                                     <C>           <C>

Outstanding at beginning of period         389,318    $     3.50
Granted                                    158,048          1.60
Exercised                                  (44,245)         1.19
Forfeited                                 (161,657)         6.82
                                        ----------    ----------
Outstanding at end of period               341,464    $     1.36
                                        ==========    ==========
Options exercisable at end of period       112,075    $     1.29
                                        ==========    ==========
Weighted average fair value of
    options granted during the period           --    $     1.60
                                        ==========    ==========
</Table>

The following table summarizes information about stock options outstanding under
the Plan at August 31, 2002:

<Table>
<Caption>
                                         Options Outstanding                        Options Exercisable
                         -------------------------------------------------    ------------------------------
                         Number of    Weighted Average    Weighted Average    Number of     Weighted Average
Range of Option Price     Options      Remaining Life      Exercise Price      Options       Exercise Price
---------------------    ---------    ----------------    ----------------    ---------     ----------------
<S>                      <C>          <C>                 <C>                 <C>           <C>

   $1.00 to $1.19           67,666          1.9                $   1.06         67,342           $ 1.06
   $1.41 to $1.78        2,498,198          4.8                    1.60        845,252             1.60
   $2.03 to $2.19           11,800          2.7                    2.14         10,440             2.16
                         ---------          ---                --------        -------           ------
                         2,577,664          4.7                $   1.59        923,034           $ 1.57
                         =========          ===                ========        =======           ======
</Table>

         Effective March 15, 2002, two of the Company's executives resigned
 their employment with the Company in connection with the Sale to Aether
 consummated on March 15, 2002 (see Note 4). As part of their separation
 agreements, vesting was accelerated on a portion of previously unvested stock
 options resulting in a new measurement date. The stock options no longer
 qualified for treatment under APB Opinion No. 25; therefore, in accordance with
 SFAS No. 123, compensation expense in the amount of $0.5 million was recorded
 and is reflected in the Company's financial statements.

         A director of the Company holds options granted on June 22, 1998
outside of the Plan to purchase 760 shares of common stock of the Company at a
price of $2.50 per share. All of these options are exercisable at August 31,
2002. The Company applied APB Opinion No. 25 in accounting for these options and
therefore no compensation cost associated with the issuance of these options has
been recognized. The options expire six years from the date of grant.

         The Company granted warrants for the purchase of 1,600 shares of common
stock at a price of $5.63 per share on March 31, 2000. The Company applied SFAS
No 123 in accounting for these warrants. All of these warrants are exercisable
at August 31, 2002 and the warrants have no expiration date.

Retirement Plan

         The Company sponsors a 401(k) Retirement Investment Profit-Sharing Plan
(the "Retirement Plan") covering substantially all employees. In order to
attract and retain employees, during 2000, the Company amended the Retirement
Plan to include a mandatory employer matching. Matching contributions during the
eight months ended August 31, 2002 and the twelve months ended December 31, 2001
and 2000 were $114,100, $236,000 and $220,000 respectively. The Company did not
make matching contributions to the Retirement Plan in 1999.



                                      F-22
<PAGE>


19. COMMITMENTS AND CONTINGENCIES

Lease Commitments

         The Company leases certain office facilities and furniture and
equipment under non-cancelable operating leases, with expirations through 2008.
The future minimum lease payments associated with such leases for the fiscal
years ending August 31 are as follows (in thousands).

<Table>
<S>             <C>
2003            $     2,800
2004                  1,922
2005                  1,520
2006                  1,083
2007                  1,083
2008                    902
                -----------
                $     9,310
                ===========
</Table>

         During the eight months ended August 31, 2002 and the twelve months
ended December 31, 2001, 2000 and 1999, total rent expense charged to operating
expenses was approximately $1,362,000, $1,423,000, $1,322,000 and $1,413,000,
respectively.

20. RELATED PARTY TRANSACTIONS

         Minorplanet UK owns 62 percent of the Company's outstanding common
stock and thus controls the Company. Transactions with Minorplanet UK and its
operating subsidiaries are summarized below (in thousands).

<Table>
<Caption>
                                  For the Eight Months         For the Year
                                    Ended August 31,        Ended December 31,
                                         2002                      2001
                                  --------------------      ------------------
<S>                               <C>                       <C>

Research and development costs        $        667             $        525
Contract service expenses             $        641             $         --
                                      ------------             ------------
                                      $      1,308             $        525
                                      ============             ============
</Table>

<Table>
<Caption>
                                         As of August 31,   As of December 31,
                                               2002                2001
                                         ----------------   ------------------
<S>                                      <C>                <C>
Other current assets                       $        794        $         --
Other current liabilities                  $        248        $        511
Other non-current liabilities              $        880        $         --
</Table>

         The Company currently pays Minorplanet Limited, the operating
subsidiary of Minorplanet UK, an annual fee of $1.0 million to aid in funding
research and development of future products covered by the license rights. The
fee is to be evaluated and may be increased based on actual research and
development costs incurred by Minorplanet UK. The research and development costs
in the above table represent the annual $1.0 million fee pro-rated for the eight
months ended August 31, 2002 and the six months, after the Recapitalization,
ended December 31, 2001 respectively.

         On September 26, 2002, the Company entered into a letter addendum to
the exclusive license and distribution agreement with Minorplanet Limited to
provide executive sales and marketing consulting services for the three-month
period from August 23, 2002 to November 22, 2002. Under terms of the agreement,
the Company is not required to pay the initial consulting fees totaling $880,000
unless and until the Company has filed a Form 10K reporting net income and
positive cash flow for the previous 12-month period. As of August 31, 2002 a
contingent liability for $880,000 payable to Minorplanet Limited was included on
the Company's consolidated balance sheet under other non-current liabilities.
The associated deferred asset in the amount of $794,000, which is net of $86,000
current year amortization, is reflected in other current assets on the Company's
consolidated balance sheet.

         Other current liabilities in the above table primarily include the
unpaid portion of the contract services and research and development costs as of
August 31, 2002 and December 31, 2001.

         Prior to the consummation of the Recapitalization, SBC Wireless LLC was
considered a related party by virtue of the control provisions afforded by the
shareholder agreement executed upon its purchase of the Company's common stock.
As a result of the Recapitalization, such control provisions were eliminated,
and SBC Wireless LLC is no longer a related party.

                                      F-23
<PAGE>

         Certain affiliates of SBC Wireless LLC, which are wholly owned by
Cingular Wireless, LLC, a joint venture in which SBC Communications, Inc.
("SBC") is a lead venturer, serve as customers of and vendors to the Company.
The Company sells mobile communication units and provides services pursuant to
the Service Vehicle Contract. Additionally, one affiliated company serves as
"administrative carrier" and provides clearinghouse services, and other
affiliated companies of SBC are among the cellular carriers with whom the
Company purchases airtime in connection with the Company's provision of its
services. Sales to these affiliated companies of SBC for the twelve months ended
December 31, 1999, the twelve months ending December 31, 2000, and the six
months ended June 30, 2001, the periods when it was a related party, are
summarized below (in thousands).

<Table>
<Caption>
                                       2001           2000           1999
                                   ------------   ------------   ------------
<S>                                <C>            <C>            <C>
Revenues                           $     15,331   $     47,713   $     35,878
</Table>

21. SEGMENT REPORTING

         In June 1997, the Financial Accounting Standards Board issued Statement
No. 131, "Disclosures about Segments of an Enterprise and Related Information"
("SFAS 131"). SFAS 131 establishes accounting standards for the way that public
business enterprises report information about operating segments in annual
financial statements. It also establishes standards for related disclosures
about products and services, geographic areas and major customers. The Company
adopted SFAS 131 beginning with the effective date of January 1, 1998.

         During the third quarter of 2001, the Company commenced marketing the
VMI product licensed from Minorplanet Limited into the automatic vehicle
location ("AVL") marketplace in the United States. During 2001, the Company
focused its efforts on development of a business plan and staffing and training
of personnel to execute the business plan beginning in January 2002. During this
development period, the Company did not produce discrete VMI income statement or
balance sheet information. Therefore, one segment was presented in 2001. For the
eight-month transition period ended August 31, 2002, the Company began executing
the business plan and producing discrete income statement and balance sheet
financial information for review by management. As a result, two segments are
disclosed below, and the Company has restated the corresponding items of segment
financial information for 2001.

         The Company's reportable segments offer different products and/or
services. Each segment also requires different technology and marketing
strategies. The Company's two reportable segments are VMI and Network Service
Center Systems ("NSC Systems").

         VMI is designed to maximize the productivity of a mobile workforce as
well as reduce vehicle mileage and fuel related expenses. The VMI technology
consists of: (i) a data control unit ("DCU") that continually monitors and
records a vehicle's position, speed and distance traveled; (ii) a command and
control center ("CCC") which receives and stores in a database information
downloaded from the DCU's; and (iii) software used for communication, messaging
and detailed reporting. VMI uses the satellite-based global positioning system
("GPS") to acquire a vehicle location on a minute-by-minute basis and a global
system for mobile communications ("GSM") based cellular network to transmit data
between the DCU's and the CCC. The VMI application is targeted to small and
medium-sized fleets in the metro marketplace, which the Company believes
represents a total U.S. market of approximately 21 million vehicles.

         Through its NSC Systems segment, the Company provides long-haul
trucking companies with a comprehensive package of mobile communications and
management information services, thereby enabling its trucking customers to
effectively monitor the operations and improve the performance of their fleets.
The initial product application was customized and has been sold to and
installed in the service vehicle fleets of the member companies of SBC
Communications, Inc., pursuant to the service vehicle contract. The Company also
provides mobile asset tracking solutions with its trailer-tracking products,
TrackWare(R) and 20/20V(TM). These products use the Company's Network Service
Center to relay voice and messages between the mobile units and the customer's
dispatchers.

         On March 15, 2002, the Company completed the Sale to Aether of certain
assets and licenses related to the Company's long-haul trucking and
asset-tracking businesses pursuant to an Asset Purchase Agreement effective as
of March 15, 2002, by and between the Company and Aether (see Note 4).

         The accounting policies of the segments are the same as those described
in the summary of significant accounting policies. Operating expenses are
allocated to each segment based on management's estimate of the utilization of
resources by each segment.


                                      F-24
<PAGE>


The following tables set forth segment financial information (in thousands).

<Table>
<Caption>
                                                            Eight Months Ended August 31, 2002
                                                         NSC Systems       VMI         Consolidated
                                                        ------------   ------------    ------------
<S>                                                     <C>            <C>             <C>
Revenues                                                $     40,786   $      1,170    $     41,956
Operating income (loss)                                        7,657        (17,276)         (9,619)
Interest expense                                               1,411             --           1,411
Interest income                                                  347            110             457
Depreciation and amortization                                  2,503          1,819           4,322
Income tax benefit                                               978             --             978
Net income (loss)                                              7,388        (17,166)         (9,778)
Total assets                                                  38,665         42,738          81,403
Capital expenditures                                             966            285           1,251
Other significant non-cash items:
  Note receivable received as proceeds from
    sale of assets and service contract                       12,000             --          12,000
  Receivable held in escrow received as
    proceeds from sale of assets and service contract          1,000             --           1,000
  Purchases of assets through capital leases                     224             --             224
</Table>

<Table>
<Caption>
                                                          Twelve Months Ended December 31, 2001
                                                      NSC Systems         VMI         Consolidated
                                                      ------------    ------------    ------------
<S>                                                   <C>             <C>             <C>
Revenues                                              $     77,349    $        131    $     77,480
Operating loss                                             (12,549)         (5,247)        (17,796)
Interest expense                                             6,157           1,198           7,355
Interest income                                                501              --             501
Depreciation and amortization                                6,068           1,370           7,438
Extraordinary item, net                                     59,461                          59,461
Net income (loss)                                           40,058          (5,247)         34,811
Total assets                                                48,255          39,342          87,597
Capital expenditures                                         1,478             109           1,587
Other significant non-cash items:
  Fair Value of License Rights acquired in exchange
    for 28,000,000 shares of common stock                       --          38,000          38,000
  Principal amount of Senior Notes exchanged for
    12,670,497 shares of common stock                       20,273              --          20,273
</Table>

         During the eight months ended August 31, 2002, Aether Systems (see Note
4) and one customer within the NSC Systems segment, accounted for $27.4 million
or approximately 65% the Company's total revenues. During the twelve months
ended December 31, 2001, one customer within the NSC Systems segment accounted
for $32.1 million, or approximately 41% of total revenues.


                                      F-25
<PAGE>


22. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

         Unaudited, condensed quarterly results of operations for 2002, 2001 and
2000 are as follows (in thousands, except per share amounts). Due to the change
in fiscal year end (see Note 6), results for the short two-month period ending
August 31, 2002 are also presented below:

<Table>
<Caption>
                                                                                      Two Months
                                                         First          Second          Ending
2002                                                    Quarter        Quarter        August 31,
----                                                 ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>

Total revenues                                       $     14,982    $     15,621    $     11,353
Gross profit                                                6,520           6,093           3,879
Operating loss                                             (3,991)         (3,098)         (2,530)
Loss before income tax benefit                             (4,425)         (3,515)         (2,816)
Income tax benefit                                             --              --             978
Net loss                                                   (4,425)         (3,515)         (1,838)

Basic and diluted loss per share                     $      (0.09)   $      (0.07)   $      (0.04)
Weighted average shares outstanding:
      Basic and diluted                                    48,057          48,328          48,349
</Table>

<Table>
<Caption>
                                                         First          Second          Third          Fourth
2001                                                    Quarter        Quarter         Quarter         Quarter
----                                                 ------------    ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>             <C>

Total revenues                                       $     22,436    $     17,212    $     19,472    $     18,360
Gross profit                                                7,640           4,475           6,646           1,888
Operating income (loss)                                    (2,423)         (5,874)         (1,996)         (7,503)
Loss before extraordinary item                             (5,582)         (8,699)         (2,406)         (7,963)
Extraordinary item                                             --          59,461              --              --
Net income (loss)                                          (5,582)         50,762          (2,406)         (7,963)
Basic and diluted income (loss) per share:
      Before extraordinary item                      $      (1.10)   $      (0.88)   $      (0.05)   $      (0.17)
      Extraordinary item                             $         --    $       6.03    $         --    $         --
      Basic and diluted income (loss)                $      (1.10)   $       5.15    $      (0.05)   $      (0.17)

Weighted average shares outstanding:
      Basic and diluted                                     5,065           9,849          48,056          48,047
</Table>

<Table>
<Caption>
                                                         First           Second          Third           Fourth
2000                                                    Quarter         Quarter         Quarter         Quarter
----                                                 ------------    ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>             <C>

Total revenues                                       $     16,312    $     26,257    $     29,780    $     29,781
Gross profit                                                5,944           8,955           9,461           7,097
Operating income (loss)                                    (1,793)            (27)            492          (3,583)
Loss before cumulative effect of accounting change         (4,466)         (3,003)         (2,588)         (5,282)
Cumulative effect of accounting change                     (5,206)             --              --              --
Net loss                                                   (9,672)         (3,003)         (2,588)         (5,282)
Basic and diluted loss per share:
      Before cumulative effect                       $      (0.89)   $      (0.59)   $      (0.51)   $      (1.04)
      Cumulative effect of accounting change         $      (1.03)             --              --              --
      Basic and diluted loss per share               $      (1.92)   $      (0.59)   $      (0.51)   $      (1.04)
Weighted average shares outstanding                         5,038           5,064           5,065           5,065
</Table>


                                      F-26
<PAGE>


INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTAL SCHEDULE,
VALUATION AND QUALIFYING ACCOUNTS


To the Board of Directors and Stockholders of
Minorplanet Systems USA, Inc.
Dallas, Texas


Our audit was conducted for the purpose of forming an opinion on the basic
consolidated financial statements, as of and for the eight month period ended
August 31, 2002, taken as a whole. The supplemental schedule, listed in the
table of contents on page 33, is presented for the purpose of additional
analysis and is not a required part of the basic consolidated financial
statements. This schedule is the responsibility of the Company's management.
Such schedule, as of and for the eight month period ended August 31, 2002, has
been subjected to the auditing procedures applied in our audit of the basic
consolidated financial statements, as of and for the eight month period ended
August 31, 2002, and, in our opinion, is fairly stated in all material respects
when considered in relation to the basic consolidated financial statements, as
of and for the eight month period ended August 31, 2002, taken as a whole. The
2001, 2000 and 1999 schedules were subjected to auditing procedures by other
auditors who have ceased operations. Those auditors, referred to above, stated
that such information was fairly stated in all material respects when considered
in relation to the basic 2001, 2000 and 1999 financial statements taken as a
whole in their report dated March 15, 2002.


DELOITTE & TOUCHE LLP

Dallas, Texas
November 12, 2002


                                      S-1
<PAGE>


REPORT OF PREVIOUS INDEPENDENT AUDITORS ON FINANCIAL STATEMENT SCHEDULE


THE FOLLOWING REPORT OF ARTHUR ANDERSEN, LLP ("ANDERSEN") IS A COPY OF THE
REPORT PREVIOUSLY ISSUED BY ANDERSEN ON MARCH 15, 2002 AND SUCH REPORT HAS NOT
BEEN REISSUED BY ANDERSEN. THE REPORT OF ANDERSEN IS INCLUDED IN THIS TRANSITION
REPORT ON FORM 10-K PURSUANT TO RULE 2-02 (E) OF REGULATION S-X. AFTER
REASONABLE EFFORTS THE COMPANY HAS NOT BEEN ABLE TO OBTAIN A REISSUED REPORT
FROM ANDERSEN. ANDERSEN HAS NOT CONSENTED TO THE INCLUSION OF ITS REPORT IN THIS
TRANSITION REPORT ON FORM 10-K. BECAUSE ANDERSEN HAS NOT CONSENTED TO THE
INCLUSION OF ITS REPORT IN THIS TRANSITION REPORT, IT MAY BE DIFFICULT FOR
STOCKHOLDERS TO SEEK REMEDIES AGAINST ANDERSEN AND STOCKHOLDERS ABILITY TO SEEK
RELIEF AGAINST ANDERSEN MAY BE IMPAIRED OR UNAVAILABLE.

To the Board of Directors and Stockholders of
@Track Communications, Inc.


We have audited in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements included in @Track
Communication's annual report to stockholders in this Form 10-K and have issued
our report thereon dated March 15, 2002. Our audit was made for the purpose of
forming an opinion on those statements taken as a whole. The schedule of
Valuation and Qualifying Accounts is the responsibility of the Company's
management and is presented for the purpose of complying with the Securities and
Exchange Commission's rules and is not part of the basic financial statements.
This schedule has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.


ARTHUR ANDERSEN LLP


Dallas, Texas
March 15, 2002


                                      S-2
<PAGE>


                                   SCHEDULE II

                 MINORPLANET SYSTEMS USA, INC. AND SUBSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS

                                ($ IN THOUSANDS)

<Table>
<Caption>
                                                                Additions
                                                 Balance at    Charged to
                                                Beginning of    Costs and                                     Balance at
              Description                          Period        Expenses       Deductions        Other      End of Period
              -----------                       ------------   ------------    ------------    ------------  -------------
<S>                                             <C>            <C>             <C>             <C>           <C>

Year ended December 31,1999
       Allowance for doubtful accounts
              Accounts receivable                      9,528          4,294          (6,374)                         7,448
       Warranty reserve                                  384          3,914            (365)             --          3,933
       Severance and AutoLink
               termination costs payable               2,028           (189)         (1,839)             --             --
       Valuation allowance against
              deferred tax asset                      56,501          3,904               0              --         60,405

Year ended December 31, 2000
       Allowance for doubtful accounts
              Accounts receivable                      7,448          1,477          (1,620)                         7,305
       Warranty reserve                                3,933          1,208          (3,672)             --          1,469
       Valuation allowance against
              deferred tax asset                      60,405          6,851               0              --         67,256

Year ended December 31, 2001
       Allowance for doubtful accounts
              Accounts receivable                      7,305          1,056          (4,807)             --          3,554
       Warranty reserve                                1,469          1,406          (2,249)                           626
       Provision for settlement of litigation             --          2,100            (519)             --          1,581
       Valuation allowance against
              deferred tax asset                      67,256          8,458         (19,804)                        55,910

Eight months ended August 31, 2002
       Allowance for doubtful accounts
              Accounts receivable                      3,554            155            (866)             --          2,843
       Warranty reserve                                  626            660            (795)                           491
       Provision for settlement of litigation          1,581            100                              --          1,681
       Valuation allowance against
              deferred tax asset                      55,910          3,635            (839)                        58,706
</Table>


                                      S-3
<PAGE>
                                INDEX TO EXHIBITS

<Table>
<Caption>
EXHIBIT
NUMBER         TITLE
-------        -----
<S>            <C>

  2.1    -     Stock Purchase and Exchange Agreement by and between the Company,
               Minorplanet Systems PLC and Mackay Shields LLC, dated February
               14, 2001.(21)
  2.2    -     Asset Purchase Agreement by and between the Company and Aether
               Systems, Inc. dated March 15, 2002.(22)
  3.1    -     Restated Certificate of Incorporation of the Company, as amended.
               (29)
  3.2    -     Second Amended and Restated By-Laws of the Company.(20)
  4.1    -     Specimen of certificate representing Common Stock, $.01 par
               value, of the Company.(1)
  4.2    -     Indenture dated September 23, 1997 by and among the Company,
               HighwayMaster Corporation and Texas Commerce Bank, National
               Association (the "Indenture").(8)
  4.3    -     First Supplemental Indenture, dated June 20, 2001, to the
               Indenture.(28)
  4.4    -     Pledge Agreement dated September 23, 1997, by and among the
               Company, Bear, Stearns & Co. Inc. and Smith Barney Inc.(8)
  4.5    -     Registration Rights Agreement dated September 23, 1997, by and
               among the Company, HighwayMaster Corporation, Bear, Stearns & Co.
               Inc. and Smith Barney Inc.(8)
</Table>

<PAGE>


<Table>
<S>            <C>
  4.9    -     Warrant Registration Rights Agreement dated September 23, 1997,
               by and among the Company, Bear, Stearns & Co. Inc. and Smith
               Barney, Inc.(8)
 10.1    -     Registration Rights Agreement by and between the Company,
               Minorplanet Systems PLC and Mackay Shields LLC, dated as of June
               21, 2001.(23)
 10.2    -     Exclusive License and Distribution Agreement by and between
               Minorplanet Limited, (an @Track subsidiary) and Mislex (302)
               Limited, dated June 21, 2001.(20)
 10.3    -     Amended and Restated 1994 Stock Option Plan of the Company, dated
               February 4, 1994.(1)(4)(5)
 10.4    -     Amendment No. 1 to the Amended and Restated 1994 Stock Option
               Plan.(24)
 10.5    -     Amendment No. 2 to the Amended and Restated 1994 Stock Option
               Plan.(25)
 10.6    -     Amendment No. 3 to the Amended and Restated 1994 Stock Option
               Plan.(30)
 10.7    -     Stock Option Agreement, dated June 22, 1998, by and between the
               Company and John Stupka.(10)
 10.8    -     Product Development Agreement, dated December 21, 1995, between
               HighwayMaster Corporation and IEX Corporation.(2)(3)
 10.9    -     Software Transfer Agreement, dated April 25, 1997, between
               HighwayMaster Corporation and Burlington Motor Carriers,
               Inc.(6)(7)
10.10    -     Lease Agreement, dated March 20, 1998, between HighwayMaster
               Corporation and Cardinal Collins Tech Center, Inc.(9)
10.11    -     Stock Option Agreement dated November 24, 1998, by and between
               the Company and Michael Smith.(10)
10.12    -     Agreement No. 980427 between Southwestern Bell Telephone Company,
               Pacific Bell, Nevada Bell, Southern New England Telephone and
               HighwayMaster Corporation executed on January 13, 1999. (11)(12)
10.13    -     Administrative Carrier Agreement entered into between
               HighwayMaster Corporation and Southwestern Bell Mobile Systems,
               Inc. on March 30, 1999.(11)(12)
10.14    -     Addendum to Agreement entered into between HighwayMaster
               Corporation and International Telecommunications Data Systems,
               Inc. on February 4, 1999.(11)(12)
10.15    -     Second Addendum to Agreement entered into between HighwayMaster
               Corporation and International Telecommunications Data Systems,
               Inc. on February 4, 1999.(11)(12)
10.16    -     Stock Option Agreement dated June 24, 1999, by and between the
               Company and J. Raymond Bilbao.(13)
10.17    -     Fleet-on-Track Services Agreement entered into between GTE
               Telecommunications Services Incorporated and HighwayMaster
               Corporation on May 3, 1999.(13)(14)
10.18    -     Stock Option Agreement dated September 3, 1999, by and between
               the Company and J. Raymond Bilbao.(15)
10.19    -     Stock Option Agreement dated September 3, 1999, by and between
               the Company and W. Michael Smith.(15)
10.20    -     Limited Liability Company Agreement of HighwayMaster of Canada,
               LLC executed March 3, 2000.(16)
10.21    -     Monitoring Services Agreement dated May 25, 2000, by and between
               the Company and Criticom International Corporation.(17)(18)
10.22    -     Commercial Lease Agreement dated April 26, 2000 by and between
               the Company and 10th Street Business Park, Ltd.(18)
10.23    -     Stock Option Agreement dated July 18, 2001, by and between the
               Company and J. Raymond Bilbao.(19)
10.24    -     Stock Option Agreement dated June 21, 2001, by and between the
               Company and J. Raymond Bilbao.(19)
10.25    -     Stock Option Agreement dated July 18, 2001, by and between the
               Company and W. Michael Smith.(19)
10.26    -     Stock Option Agreement dated June 21, 2001, by and between the
               Company and W. Michael Smith.(19)
</Table>

<PAGE>


<Table>
<S>            <C>
10.27    -     Employment Agreement, dated June 21, 2001, between J. Raymond
               Bilbao and the Company.(20)
10.28    -     Employment Agreement, dated June 21, 2001, between W. Michael
               Smith and the Company.(20)
10.29    -     Agreement No. 980427-03, dated January 31, 2002 between SBC
               Ameritech, SBC Pacific Bell, SBC Southern New England Telephone,
               SBC Southwestern Bell Telephone, L.P. and the Company.(27)(28)
10.30    -     Agreement and General Release Between the Company and Todd A.
               Felker dated October 8, 2002.(31)
10.31    -     Agreement and Mutual Release Between the Company and Jana A. Bell
               dated September 24, 2002.(31)
 11.0    -     Statement Regarding Computation of Per Share Earnings.(31)
 16.1    -     Letter from Arthur Andersen to the SEC (Omitted pursuant to Item
               304T of Regulation S-K)
 21.1    -     List of Subsidiaries of Registrant(31)
 23.1    -     Consent of Deloitte & Touche LLP(31)
 99.0    -     Receipt of representation from Arthur Andersen, LLP (26)
 99.1    -     Certification Pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by
               Andrew Tillman, Chief Executive Officer(31)
 99.2    -     Certification Pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by W.
               Michael Smith, Executive Vice President and Chief Financial
               Officer(31)
</Table>

----------

     (1)  Filed in connection with the Company's Registration Statement on Form
          S-1, as amended (No. 33-91486), effective June 22, 1995.

     (2)  Filed in connection with the Company's Annual Report on Form 10-K for
          the fiscal year ended December 31, 1995.

     (3)  Certain confidential portions deleted pursuant to Application for
          Confidential Treatment filed in connection with the Company's Annual
          Report on Form 10-K for the fiscal year ended December 31, 1995.

     (4)  Indicates management or compensatory plan or arrangement required to
          be identified pursuant to Item 14(a)(4).

     (5)  Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended June 30, 1996.

     (6)  Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended March 31, 1997.

     (7)  Certain confidential portions deleted pursuant to Order Granting
          Application for Confidential Treatment issued in connection with the
          Company's Form 10-Q Quarterly Report for the quarterly period ended
          March 31, 1997.

     (8)  Filed in connection with the Company's Registration Statement on Form
          S-4, as amended (No. 333-38361).

     (9)  Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended September 30, 1998.

     (10) Filed in connection with the Company's Form 10-K fiscal year ended
          December 31, 1998.

     (11) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended March 31, 1999.

     (12) Certain confidential portions deleted pursuant to Order Granting
          Application for Confidential Treatment issued June 22, 1999 in
          connection with the Company's Form 10-Q Quarterly Report for the
          quarterly period ended March 31, 1999.

     (13) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended June 30, 1999.

     (14) Certain confidential portions deleted pursuant to letter granting
          application for confidential treatment issued October 10, 1999 in
          connection with the Company's Form 10-Q Quarterly Report for the
          quarterly period ended June 30, 1999.
<PAGE>


     (15) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended September 30, 1999.

     (16) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended March 31, 2000.

     (17) Certain confidential portions deleted pursuant to Order Granting
          Application for Confidential Treatment issued December 5, 2000 in
          connection with the Company's Form 10-Q Quarterly Report for the
          quarterly period ended June 30, 2000.

     (18) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended June 30, 2000.

     (19) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ended September 30, 2001.

     (20) Filed in connection with the Company's Current Report on Form 8-K
          filed with the SEC on June 29, 2001.

     (21) Filed as Appendix A to the Company's Definitive Proxy Statement on
          Schedule 14A filed with the SEC on May 11, 2001.

     (22) Filed in connection with the Company's Current Report on Form 8-K
          filed with the SEC on March 27, 2002. Certain confidential portions
          deleted pursuant to Order Granting Application for Confidential
          Treatment issued in connection with the Company's Current Report on
          Form 8-K filed with the SEC on March 27, 2002.

     (23) Filed in connection with the Company's Form S-3 Registration Statement
          filed with the SEC on October 10, 2001 (File No. 333-71340).

     (24) Incorporated by reference to Exhibit A to the proxy statement
          contained in the Company's Definitive Schedule 14A with the SEC on
          April 25, 2000.

     (25) Incorporated by reference to Exhibit F to the proxy statement
          contained in the Company's Definitive Schedule 14A filed with the SEC
          on May 11, 2001.

     (26) Filed in connection with the Company's Annual Report on Form 10-K for
          the fiscal year ended December 31, 2001.

     (27) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ending March 31, 2002.

     (28) Certain confidential portions deleted pursuant to Order Granting
          Application for Confidential Treatment issued in connection with the
          Company's Quarterly Report on Form 10-Q for the quarterly period
          ending March 31, 2002.

     (29) Incorporated by reference to Exhibit A to the information statement
          contained in the Company's Definitive Schedule 14C filed with the SEC
          on June 27, 2002.

     (30) Filed in connection with the Company's Form 10-Q Quarterly Report for
          the quarterly period ending June 30, 2002.

     (31) Filed herewith.