<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                  Form 10-K/A

(Mark One)

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

                  For the fiscal year ended December 31, 2000

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

          For the transition period from   to

                        Commission File Number 0-26140

                          @Track Communications, Inc.
            (Exact name of Registrant as specified in its charter)

<TABLE>
<S>                                                                        <C>
                      Delaware                                                           51-0352879
(State or other jurisdiction of incorporation or organization)             (I.R.S. Employer Identification Number)
</TABLE>

                                1155 Kas Drive
                            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. __

     The aggregate market value of the common equity held by non-affiliates of
the Registrant as of May 9, 2001 was $5,788,743.*

     The number of shares outstanding of Registrant's Common Stock was
25,326,829 as of May 9, 2001.
<PAGE>

                      DOCUMENTS INCORPORATED BY REFERENCE

     Certain exhibits filed with the Registrant's Registration Statement on Form
S-1 (Registration No. 33-91486), as amended, the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, the Registrant's Form 10-
Q Quarterly Report for the quarterly period ended June 30, 1996, the
Registrant's Current Report on Form 8-K filed on October 7, 1996, the
Registrant's Annual Report on Form 10-K for the fiscal year ended December 31,
1996, the Registrant's Form 10-Q Quarterly Report for the quarterly period ended
March 31, 1997, the Registrant's Form 10-Q Quarterly Report for the quarterly
period ended June 30, 1997, the Registrant's Registration Statement on S-3
(Registration No. 333-57281), as amended, the Registrant's Registration
Statement on Form S-4 (Registration No. 333-38361), as amended, the Registrant's
Form 10-Q Quarterly Report for the quarterly period ended September 30, 1997,
the Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1997, the Registrant's Form 10-Q Quarterly Report for the quarterly period
ended March 31, 1998, the Registrant's Form 10-Q Quarterly Report for the
quarterly period ended June 30, 1998, the Registrant's Form 10-Q Quarterly
Report for the quarterly period ended September 30, 1998, the Registrant's
Current Report on Form 8-K on September 4, 1998, the Registrant's Current Report
on Form 8-K on September 17, 1998, the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1998, the Registrant's Form 10-Q
Quarterly Report for the quarterly period ended March 31, 1999, the Registrant's
Form 10-Q Quarterly Report for the quarterly period ended June 30, 1999, the
Registrant's Form 10-Q Quarterly Report for the quarterly period ended September
30, 1999, and the Registrant's Current Report on Form 8-K on October 20, 1999,
the Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1999, the Registrant's Form 10-Q Quarterly Report for the quarterly period
ended March 30, 2000, the Registrant's Form 10-Q Quarterly Report for the
quarterly period ended June 30, 2000, the Registrant's Form 10-Q Quarterly
Report for the quarterly period ended September 30, 2000, and the Registrant's
Current Report on Form 8-K on January 16, 2001 are incorporated herein by
reference into Part IV of this Report.

__________________

*Excludes the Common Stock held by executive officers, directors and by
stockholders whose ownership exceeds 5% of the Common Stock outstanding at May
9, 2001. 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>

                          @Track Communications, Inc.

                                   FORM 10-K
                  For the Fiscal Year Ended December 31, 2000

                                     INDEX
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PART I
     ITEM 1.     BUSINESS..................................................  1
     ITEM 2.     PROPERTIES................................................  20
     ITEM 3.     LEGAL PROCEEDINGS.........................................  20
     ITEM 4.     SUBMISSIONS OF MATTERS TO VOTE OF SECURITY HOLDERS........  20

PART II
     ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
                 STOCKHOLDER MATTERS.......................................  21
     ITEM 6.     SELECTED FINANCIAL DATA...................................  22
     ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS.......................  24
     ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  28
     ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...............  28
     ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                 ACCOUNTING AND FINANCIAL DISCLOSURE.......................  28

PART III
     ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT........  28
     ITEM 11.    EXECUTIVE COMPENSATION....................................  32
     ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                 and management............................................  41
     ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............  42

PART IV
     ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
                 ON FORM 8-K...............................................  45
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                                       i
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                                    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 Annual Report on Form 10-K. Stockholders should carefully
consider the information presented under "Risk Factors" below.

HISTORICAL BACKGROUND

     @Track Communications, Inc., a Delaware Corporation, (the "Company" or
"@Track") develops and implements mobile communications solutions for long-haul
truck fleets, service vehicle fleets and other mobile-asset fleets, including
integrated voice, data and position location services. The Company provides
mobile communications services 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 66 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 "Wireless
Infrastructure" on page 6 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 35
United States and 7 foreign patents that cover certain key features of its
network that are used in locating and communicating with vehicles using the
existing cellular infrastructure.

     The Company was organized on April 24, 1992 as By-Word Joint Venture L.P.,
a Delaware limited partnership with one general partner, By-Word Technologies,
Inc. and one limited partner, the FBR Eighteen Corporation ("FBR"). FBR was
wholly owned by the Eighteen Wheeler Corporation ("Eighteen Wheeler"). On April
27, 1992, By-Word Joint Venture L. P. changed its name to HighwayMaster, L. P.

     On February 4, 1994, HighwayMaster, L. P. was recapitalized, resulting in
the creation of HM Holding Corporation with Eighteen Wheeler becoming a wholly
owned subsidiary of HM Holding Corporation. FBR and HighwayMaster, L. P. were
merged with and into Eighteen Wheeler, and the name of the surviving corporation
was changed to HighwayMaster Corporation. By virtue of the merger, HighwayMaster
Corporation became the successor in interest to HighwayMaster, L. P. In February
1995, HM Holding Corporation changed its name to HighwayMaster Communications,
Inc.

     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.

PRODUCTS AND SERVICES

     The Company's products and services can be classified into three major
categories: truck fleet mobile communications, service-vehicle management and
mobile asset tracking. Approximately 53% and 47% of the Company's total revenues
were derived from the truck fleet mobile communications and service-vehicle
                                       1
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management categories, respectively, during the year ended December 31, 2000.
Revenues from the mobile asset tracking category were insignificant during 2000.

Truck Fleet Mobile Communications

     The initial application for the Company's wireless enhanced services
network has been developed for, and is currently being 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 (HighwayMaster(R) 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 HighwayMaster Series 5000 mobile communications and information system
from @Track 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
communications 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.

     @Track also maintains value-added assembly line installation programs with
seven major heavy truck Original Equipment Manufacturers for the HighwayMaster
Series 5000 mobile communications and information system. Prewire programs,
designed to preinstall system cabling and mounting brackets at the factory,
exist with Freightliner, International, Kenworth, Mack, Peterbilt, Sterling and
Volvo. Full system installations are also available through Freightliner, Mack
and Sterling. Each of these programs enables 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, @Track also
operates a national network of service and repair centers. The home office in
Richardson, Texas also houses over 35 customer service representatives providing
Level I and II technical support to its customers 24X7.

     @Track also offers a complete end-to-end service bureau solution for long-
haul trucking customers with its Platinum Service. The data center, located in
Joplin, Missouri, integrates mobile platform data with business functions
including general ledger, accounts payable, EDI, customer service, driver
management, route optimization, and fuel processing. Benefits of the platform
include, providing all of the aforementioned services on a single database,
ability to support multiple business units, and extensive reporting
capabilities.

     @Track also possesses the capability to support the largest premier
companies in this market such as Wal-Mart and Contract Freighters, Inc., with a
solution implementation capability that allows for necessary customization that
large customers require.

Service Vehicle Management

     @Track'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. 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 features alarm-monitoring functionality. This
product feature provides the driver the ability to summon 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

                                       2
<PAGE>

@Track 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.

     @Track has developed an extensive multi-state installation and service
network to support the SBC product offering. The Company provides 48-hour turn-
around time on service requests entered into the @Track automated case tracking
system.

     As of December 31, 2000, the SBC Companies have purchased and installed
approximately 34,000 Series 5005S mobile units. The Company currently
anticipates installation of approximately 6,000 to 9,000 units during 2001. It
is anticipated that approximately 39,000 to 43,000 HM5005S units will be
activated on @Track's network following completion of the installation of the
additional 6,000 to 9,000 HM5005S units for the SBC Companies.

Mobile Asset Tracking

     The Company entered the mobile-asset-tracking market in October 1999 with
the introduction of its trailer-tracking product, TrackWare(TM). The new
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-enabled cellular transceiver, microprocessor,
antenna, battery and cables. It is pre-configured to report the data requested
by the specific fleet customer and shipped ready for an approximately 30-minute
installation. The term Cellemetry-enabled receiver refers to the analog wireless
transceiver utilized by the Company's TrackWareTM 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.

     We believe 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 trucking companies now have a powerful tool
available to them that we expect may 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 of art
referring to a type of trailer pulled by Class 8 over-the-road tractor (commonly
referred to as 18-Wheelers) in which only dry goods are transported as opposed
to perishable goods which require refrigeration. Refrigerated trailers are
commonly referred to as Refers.

     TrackWare is being marketed to trucking companies, which the Company
believes represent a potential market of approximately 2.5 million dry-van
trailers currently operating in the U.S. This translates into approximately
three trailers for every tractor. At any point in time, the Company believes the
location of 10-15 percent of these trailers is unknown to the companies who own
them. As a result, the Company believes that between $5.0-$7.5 billion in dry-
van assets are idle, delivering no value to their owners. The Company expects
TrackWare to provide the visibility to trucking company asset managers that will
enable them to better utilize their trailer fleets.

Competition

Truck mobile communications -

     Qualcomm, Inc. ranks number one in the truck mobile communications market
with substantially greater than 50% of the market share. We believe that @Track
and Aether Systems rank second and third in the marketplace with a market share
of approximately 10% and 5%, respectively. Both Qualcomm and Aether Systems have
significantly greater financial and other resources than the Company.

 .    Qualcomm - As Qualcomm launched its mobile communications product several
     years before @Track, Qualcomm was able to capture the number one position
     in the marketplace. Today, Qualcomm equipment is

                                       3
<PAGE>

     installed in 37 of the top 40 truckload carriers. Qualcomm continues to
     aggressively target and market to the transportation marketplace.

 .    Motient/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.

 .    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. As a very late entrant to this market, @Track believes Terion
     has several thousand units in operation.

 .    PeopleNet Communications, Inc.- PeopleNet offers an analog cellular-based
     solution that includes positioning, messaging and voice. Since PeopleNet
     has only recently entered this market, the Company believes that PeopleNet
     has added few long-haul customers to date.

Service Vehicle Management

     @Track believes that it possesses the largest single customer in the
service vehicle category with the SBC Companies. The Company estimates that it
will have approximately 39,000 to 43,000 units in service by mid 2001. The
initial three year term of the service contract with the SBC Companies will
expire on December 31, 2001. The Company anticipates that SBC will agree to
execute a contract term extension to the SBC contract. The service vehicle
marketplace is made up of a significant number of small competitors. @Track
believes that it is uniquely positioned to become the dominant player in the
industry given its national presence. However, there are other companies vying
for leadership in this market that may possess the size and scalability
necessary to present significant competition to @Track.

     @Track believes that its primary competitors include:

 .    Teletrac- Teletrac is currently managing the transition of customers from
     their private radio network to AT&T Wireless' proprietary Compact Digital
     Packet Data ("CDPD") network. The Company believes that Teletrac currently
     has approximately 3,200 customers representing 70,000 vehicles in trucking
     and service vehicles.

 .    @Road -@Road currently sells an Internet-based solution using AT&T
     Wireless' proprietary CDPD network. The Company believes that @Road has
     been aggressively marketing its product to the low end of the Automatic
     Vehicle Location ("AVL") segment. The Company believes that @Road has
     approximately 35,000 customers as of the end of 2000.

 .    Other Regional Competitors - There are numerous smaller regional companies
     vying for a local presence.

     A third party study of the service vehicle market conducted by the
Strategis Group noted that this market consists of over 26 million vehicles and
is currently less than 3% penetrated. The Company believes that this market is
highly fragmented. Based on a market size of 26 million vehicles, Teletrac,
@Track and @Road would each have less than one-half of one percent of the market
share.

Mobile Asset Tracking

     Dry-van trailers are the first target market for @Track and several other
competitors. The Company believes that this market is in its infancy with very
few units installed by any competitor to-date. There are many trucking companies
currently testing @Track's product as well as the other competitive products, to
prove both the functionality of the product and the payback of the solution.

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     @Track believes that its primary competitors include:

 .    Qualcomm, Inc. - Qualcomm announced commercial launch into this market in
     January 2001. Qualcomm is currently testing an untethered tracking product
     with several of their current customers and recently announced the signing
     of its first contract with a large customer. We believe that the Qualcomm
     tracking product works with their in-cab product when the trailer is
     connected to the tractor and utilizes the Aeris.net terrestrial network
     when not connected. @Track believes that Qualcomm is aggressively targeting
     its existing customer base for sale of its tracking product in this market
     segment. Qualcomm has significantly greater financial resources than
     @Track.

 .    Terion - Terion is aggressively pursuing this marketplace. In January of
     2000, Terion introduced a mobile unit which utilizes the existing analog
     network to send data over a voice channel. @Track believes that using an
     analog cellular voice channel to send small amounts of data is more costly
     than alternative overhead control channel networks, such as Cellemetry.

 .    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 satellite product to a TMI satellite product. Airinc has
     recently expanded its focus to target the dry-van market segment.

 .    Vistar/Datacom - Vistar/Datacom, a subsidiary of Bell Mobility, utilizes
     the Motient satellite, which provides ubiquitous coverage across North
     America. Vistar/Datacom currently has a strong sensor suite which also
     supports the refrigerated van market.

INDUSTRY SEGMENTS

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

EMPLOYEES

     At December 31, 2000, the Company had 282 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.

     Series 5000 Mobile Units. These units use circuit-switched analog cellular
technology for transmitting location, as well as information, to the Company's
Network Services Center ("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 global system for
mobile communications ("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 by far the most widely used digital standard in the
world. Since service vehicles primarily operate in urban areas, these digital
networks provide appropriate coverage.

                                       5
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     TrackWare Product. The TrackWare Remote Unit uses 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 @Track'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, 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 GTE-TSI. Pursuant to a
contract with the Company, GTE-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. Global Positioning System 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. @Track 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 a Mobile Unit or TrackWare Unit, to record routes traveled relative to
mapped roadways or to transmit position reports to a central dispatcher.

     @Track 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 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 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.
@Track'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.

                                       6
<PAGE>

     Increased demand for wireless service is driving investment in wireless
networks and improving service coverage. According to a report issued by the
Cellular Telephone Industry Association ("CTIA"), cumulative capital investment
within the wireless industry has reached $76.6 billion as of June 2000, up from
approximately $66.8 billion in June 1999. The CTIA report further indicated that
the total number of cellular tower sites increased to 95,733 in June 2000, up
from 74,157 in June 1999 and that total wireless customers reached more than 97
million in June 2000.

     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. See the "Risk Factors" on page 12.

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. See "Risk Factor" on page 15.

     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.

     GTE-TSI. GTE-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 GTE-TSI
covers certain functions that are critical to the Company's ability to instantly
deliver calls nationwide. It covers an initial term of three years that began on
May 3, 1999. The Company is guaranteed the right to renew the contract for up to
10 one-year periods beyond the initial term, at a reasonable rate to be
determined by GTE-TSI. See "Risk Factor" on page 13.

     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 customers.
The Company currently has a three-year software maintenance and support
agreement with Tekelec that expires on December 31, 2003. See Risk Factor" on
page 11.

     Southwestern Bell Mobile Systems, Inc. On March 30, 1999, the Company and
Southwestern Bell Mobile Systems, Inc. ("SBMS") executed an Administrative
Carrier Agreement with an initial term of three years that automatically renews
for five additional consecutive one-year terms under which SBMS provides to the
Company clearinghouse services and cellular service previously provided by GTE
Wireless.

     Alarm Monitoring Services. On May 25, 2000, the Company and Criticom
International Corporation entered into a Monitoring Services Agreement with an
initial term of three years that automatically renews for

                                       7
<PAGE>

successive two-year terms pursuant to which CIC provides certain panic alarm
monitoring services for the Company in connection with the Company's obligations
to the SBC Companies. See "Risk Factor" on page 11.

     Key Suppliers. The Company does not manufacture or assemble its products.
The Company has an agreement with K-Tec Electronics Corporation ("K-Tec") for
the assembly of the Mobile Units and TrackWare(TM) Units. Because the Company is
dependent on a single supplier to manufacture and assemble the Mobile Units and
the TrackWare(TM) Units, the possibility exists that problems experienced by the
supplier could adversely affect the Company. Additionally, the Company
subcontracts for the manufacture of various components for the Mobile Units from
various suppliers. All transceivers for the Mobile Units are manufactured by
Motorola, and the Company believes that there is a limited number of suppliers
who are capable of manufacturing transceivers that meet the Company's
requirements. See "Risk Factor" on page 13.

PATENTS AND PROPRIETARY TECHNOLOGY

     The Company has obtained 35 United States Patents and 7 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 "Risk Factor" on page 19.

REGULATION

     The Company's products and services are subject to various regulations
promulgated by the Federal Communications Commission that apply to the wireless
communications industry generally. The Company's Mobile Units and its
TrackWare(TM) 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 and the TrackWare(TM)
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 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, Congress has preempted state regulation of CMRS
entry and rates. FCC decisions thus far have enhanced the development of CMRS,
including requiring local telephone companies to offer interconnection and
access to their networks to CMRS

                                       8
<PAGE>

providers and to establish reciprocal compensation arrangements with CMRS
providers for the transportation and termination of calls at prices that are
cost-based and just 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 requirement to
contribute to state and federal universal service mechanisms. See "Risk Factor"
on page 16.

     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.

MERGER

     Effective 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.

CORPORATE NAME CHANGE

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

Risk Factors

Forward-Looking Statements.

     This Annual Report on Form 10-K ("Form 10-K") contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, 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 we
anticipate that such losses will continue in the near future.

     The Company has incurred significant operating losses since inception and
has a stockholders' deficit of approximately $58.3 million at December 31, 2000.
Beginning March 15, 2001, the Company is obligated to begin

                                       9
<PAGE>

paying substantial semi-annual cash interest payments on its 13.75% Senior Notes
due 2005 (the "Senior Notes") which were issued in September 1997. We expect
such losses to continue for the foreseeable future, and we may not ever achieve
profitability. Interest payments due on the Senior Notes through September 15,
2000, had previously been funded through an escrow arrangement created upon
closing of the Senior Notes. While the Company currently believes it will have
the cash resources available to make the March 15, 2001 interest payment, the
Company predicts that it may not be able to meet the following interest payment
which is due on September 15, 2001 unless the contemplated transactions with
Minorplanet Systems and the holders of the Company's Senior Notes as described
in Note 2 to the Consolidated Financial Statements are completed prior to that
date.

The Company's independent auditors, Arthur Andersen, have raised substantial
doubt concerning the Company's ability to continue as a going concern, which
could inhibit the Company's ability to raise additional, needed funding.

     In its report on the Company's financial statements for the year ended
December 31, 2000, Arthur Andersen, the Company's independent auditor, raised
substantial doubt concerning the ability of the Company to continue as a going
concern. The Company has limited financial resources available to support its
ongoing operations, fund its product development program to develop and market
new competitive tracking technology, and pay its obligations as they become due,
including the maturities of the Senior Notes and associated interest payments.
If the Company fails to successfully alleviate the factors causing the issuance
of the going concern opinion, the opinion and the factors underlying the opinion
will make it more difficult to obtain additional, needed financing, which might
result in a material adverse effect on our business, financial condition and the
results of operations. Additionally, the going concern opinion could deter
suppliers from entering into agreements with the Company due to the Company's
financial uncertainty relating to the going concern opinion. The financial
statements do not include any adjustments relating to the recoverability and
classification of asset carrying amounts or the amount and classification of
liabilities that might result should the Company be unable to continue as a
going concern. The ability of the Company to continue as a going concern is
dependent upon:

 .    the ongoing support of its stockholders, creditors and certain key
     customers;

 .    the completion of the contemplated equity and debt transactions with
     Minorplanet Systems and the Company's Senior Noteholders (or the closing of
     similar debt or equity transactions); and/or

 .    its ability to successfully develop and market its tracking products and
     technology at a reasonable cost in the highly competitive and rapidly
     changing telecommunications industry.

There is no assurance that the Company will be able to successfully complete the
pending equity and debt transactions or take the other actions that may be
necessary for the Company to continue as a going concern.

The Indenture restrictions place many burdens on the Company's ability to take
certain actions, including the ability to issue new debt.

     The Indenture imposes significant operating and financial limitations on
the Company. Such limitations will affect, and in many respects significantly
restrict or prohibit, among other things, the ability of the Company to pay
dividends, make investments and incur additional indebtedness. These
restrictions, in combination with the Company's substantial leverage, could
limit the ability of the Company to effect future financings or otherwise
restrict the nature and scope of its activities. The degree to which the Company
is leveraged could have important consequences to Company's stockholders and to
the holders of the Senior Notes, including:

 .    the impairment of the Company's ability to obtain additional financing in
     the future;

 .    the reduction of funds available to the Company for its operations or for
     capital expenditures as a result of the dedication of a substantial portion
     of the Company's net cash flow from operations to the payment of principal
     and interest on the Senior Notes;

 .    the possibility of an event of default under covenants contained in the
     Indenture, which could have a material adverse effect on the business,
     financial condition and results of operations of the Company;

 .    the placement of the Company at a relative competitive disadvantage as
     compared to competitors who are not as highly leveraged as the Company; and

                                       10
<PAGE>

 .    vulnerability in the event of a downturn in general economic conditions or
     its business because of the Company's reduced financial flexibility.

     In addition, to the extent that the Company enters into a bank credit
agreement in the future as permitted by and defined in the Indenture, such
agreement is likely to impose additional operating and financial restrictions on
the Company, which may be more restrictive than those provided for in the
Indenture. See "Selected Financial Data," and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

A natural disaster 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 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. Although the Company
has successfully hired the former Tekelec switch technicians, such former
Tekelec switch technicians have since left the employment of the Company. Thus,
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 - Infrastructure
and Operations."

If the SBC Companies fail to provide purchase orders for additional units in
2001, the Company's revenues could significantly decrease.

     In August 1998, the SBC Companies entered into a one-year agreement for the
purchase of Series 5005S mobile units and accompanying support and network
management services that was extended to a three-year term in January 1999 (the
"SBC Contract"). The SBC Contract's minimum three-year term expires on December
31, 2001. As of December 31, 2000, the SBC Companies have purchased and
installed approximately 34,000 Series 5005S Mobile Units pursuant to the SBC
Contract. In February 2000, the Company announced that Ameritech and other SBC
Companies had selected the Company to provide an additional 28,000 HighwayMaster
Series 5005S mobile units pursuant to the SBC Contract. The Company expects to
install approximately 6,000 to 9,000 additional Series 5005S mobile units to
complete implementation of the SBC Contract in 2001. Upon completion of this
installation, the Company will have installed approximately 39,000 to 43,000
Series 5005S mobile units for the SBC Companies. However, until the Company
receives purchase orders from SBC for these additional 6,000 to 9,000 units,
there can be no assurances that SBC will actually place such orders in 2001. The
failure of SBC to place orders for the additional 6,000 to 9,000 units in 2001
could cause revenues to significantly decrease and have a material adverse
effect on the Company's business, financial condition and results of operations.

                                       11
<PAGE>

If the Company's provider of alarm-monitoring services becomes unable to provide
such services in support of the Company's SBC Contract, 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 to provide 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 cellular 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 cellular telephone infrastructure, with
certain enhancements, as the wireless segment of the @Track network. In most
cases, current terms of contracts between the Company and each of its cellular
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 cellular 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 cellular carriers. If the
Company is unable to renew or replace its contracts with cellular carriers at
competitive rates, the Company may be forced to absorb the costs of increased
cellular air time rates, or increase rates to customers where allowed by
individual contracts. In general, a failure on the part of the Company to renew
or replace its contracts with cellular 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.

Changes in the infrastructure of cellular technology could force the Company to
expend significant sums of money to maintain the compatibility of the @Track
network.

     The @Track network relies on continued technical compatibility among its
cellular service providers. Currently, cellular carriers utilize analog
technology, with digital technology offered in addition to analog in various
service areas. If, in the future, cellular carriers discontinue all service to
analog telephones, the Company would be required to dedicate financial resources
and engineering staff to integrate a digital cellular telephone transceiver into
its products. Although cellular providers have historically cooperated to
maintain technical compatibility between markets, if substantial changes to the
methods of interconnection utilized by cellular carriers occur, such as a
discontinuance of the existing out-of-area call clearing system or a decision by
cellular carriers to eliminate analog service and employ several diverse digital
technologies rather than a common digital technology, the Company may be
required to undertake costly system redesign or may encounter difficulty in
providing nationwide coverage. Also, as the Company does not have the same level
of financial resources as its competitors it may face greater difficulty than
its competitors in implementing required changes. Also, since the Company relies
more heavily on the analog wireless network than its primary competitor who
utilizes satellite technology, the Company would be materially affected by
degradation in the analog wireless system or sharp increases in wholesale analog
rates while such competitor would remain unaffected by such changes. See
"Business-Infrastructure and Operations."

                                       12
<PAGE>

Increases in the wholesale rates for analog wireless minutes could reduce or
eliminate the Company's service margin.

     Currently, the national wireless carriers are increasingly converting their
networks to support more digital subscribers versus analog subscribers resulting
in degradation of analog services. As the customer bases of the wireless
carriers convert to mostly digital subscribers, such carriers will expend less
resources to maintain their analog networks converting the majority of the
available channels in their switches from analog to digital. Currently, wireless
carriers no longer allow new subscriptions for analog customers and the majority
of their customer bases are digital service subscribers. In an effort to
encourage existing subscribers to convert to digital services, wireless carriers
continue to maintain and/or increase prices for analog services while digital
rates continue to decline due to competition. With the digital rates continuing
to decline, the Company's customers expect to be charged lower wireless rates
for the Company's services. However, it is probable that the rates at which the
Company purchases analog wireless minutes for sale to its customers will not
decrease but will increase. Thus, based upon the customer's expectation of lower
retail rates, the Company will not be able to increase the retail rates it
charges to its customers for analog wireless service while the wholesale rates
at which the Company purchases the analog wireless service for provision to its
customers may increase, reducing the Company service margin. This potential
reduction in the Company's service margin could have a material effect on its
business, financial condition and results of operations.

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

     GTE-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 GTE-TSI covers
certain functions that are critical to the Company's ability to instantly
deliver calls nationwide. It covers an initial term of three years that began on
May 3, 1999. The Company is guaranteed the right to renew the contract for up to
10 one-year periods beyond the initial term, at a reasonable rate to be
determined by GTE-TSI. However, GTE-TSI retains the right to increase the rates
at time of renewal.

     If the Company is unable to renew its agreements with GTE-TSI upon
reasonable commercial rates, the Company's service margins may be substantially
reduced by higher wholesale rates paid for the GTE-TSI services. Also, if the
new rates charged by GTE-TSI are not commercially reasonable, the Company may be
required to make substantial and costly design changes to the @Track network in
order to ensure continued availability of the Company's services. Because of the
unique position of GTE-TSI as industry-wide clearinghouses and the difficulty
associated with their replacement, there can be no assurance that full
functionality of the @Track system could be maintained if such a redesign were
necessary.

As the Company relies on Southwestern Bell Mobile Systems, Inc. (SBMS) for
various cellular clearinghouse services, its inability to renew its agreement
with SBMS could significantly increase the Company's cost of obtaining this
necessary service.

     On March 30, 1999, the Company and SBMS executed an Administrative Carrier
Agreement whereby SBMS 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 SBMS
will not renew the Agreement, it is possible that SBMS 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. SBMS 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
three year term with automatic renewal for successive one year

                                       13
<PAGE>

terms unless either party provides a minimum of 90 days written notice of intent
to terminate. See "Business -- Infrastructure and Operations."

The Company relies on a single supplier for several of its key products, and
problems with this supplier could significantly increase the Company's costs in
delivering its products and services.

     The Company does not manufacture or assemble its products. Because the
Company is dependent on a single supplier to manufacture and assemble each of
the Mobile Units and the TrackWare Units, the possibility exists that problems
experienced by such suppliers could adversely affect the Company. The Company
has an agreement with K-TEC for the assembly of the Mobile Units and TrackWare
Units. Additionally, the Company subcontracts for the manufacture of various
components for the Mobile Units from various suppliers. All transceivers for the
Mobile Units are manufactured by Motorola, and the Company believes that there
is a limited number of suppliers who are capable of manufacturing transceivers
that meet the Company's requirements. In general, the failure to maintain or
establish satisfactory arrangements for the production and assembly of Mobile
Units or the TrackWare Units could have a material adverse effect on the
Company's business, financial condition and results of operations.

The Company is effectively controlled by several stockholders who influence most
major decisions of the Company.

     The Company, Southwestern Bell Wireless Holdings, Inc. now known as
Cingular Wireless ("CW"), the Erin Mills Stockholders, the Carlyle Stockholders,
the By-Word Stockholders and certain other persons are parties to an Amended and
Restated Stockholders' Agreement, dated as of September 27, 1996 (the "Amended
Stockholders' Agreement") which amends and restates in its entirety the
Stockholders' Agreement dated February 4, 1994. The parties to the Amended
Stockholders' Agreement, which have not waived the right to designate directors
under the Amended Stockholder's Agreement, own an aggregate of 10,214,885 shares
of common stock, representing approximately 40% of the voting shares outstanding
as of December 31, 2000.

     The Amended Stockholders' Agreement contains provisions relating to, among
other things, the election of members of the Company's Board of Directors. In
particular, this agreement provides that the parties will take all action
(including the voting of shares of Common Stock owned by them) necessary to
ensure that the Board of Directors of the Company consists of: (i) two directors
designated by the Erin Mills Stockholders; (ii) one director designated by
Cingular Wireless; and (iii) two independent directors. At this time, the Erin
Mills Stockholders have designated Gerry C. Quinn and Stephen L. Greaves to
serve as directors. Cingular Wireless has informed the Company that it will not
exercise its right to designate a director at this time.

     If the pending debt and equity transactions with Minorplanet Systems and
the Senior Noteholders are completed, these stockholders will be substantially
diluted and will no longer control the Company. The completion of these
transactions will result in a change in control of the Company, with Minorplanet
Systems becoming the majority stockholder of the Company. Minorplanet Systems
will then control the election of all of the Company's directors and other
matters submitted to a vote of the Company's stockholders, including mergers and
other extraordinary corporate transactions, if it chooses to do so.

The right of the Company's Senior Noteholders to have their Senior Notes
repurchased in the event of a change of control may discourage potentially
beneficial mergers, tender offers or takeovers.

     Under the terms of the Senior Notes, upon the occurrence of a change of
control, the Company will be required to offer to repurchase all of the
outstanding Senior Notes at a price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest and liquidated damages, if any, to the
repurchase date. There can be no assurance that the Company would have
sufficient resources to repurchase the Senior Notes upon the occurrence of a
change of control. The failure to repurchase all of the Senior Notes tendered to
the Company would constitute an event of default under the Indenture.
Furthermore, the repurchase of the Senior Notes by the Company upon a change of
control might result in a default on the part of the Company in respect of other
future indebtedness of the Company, as a result of the financial effect of such
repurchase on the Company or otherwise. The change of control repurchase feature
of the Senior Notes may have anti-takeover effects and may delay, defer or
prevent a merger, tender offer or other takeover attempt.

                                       14
<PAGE>

The Company faces intense competition in the mobile-asset tracking industry.

     The Company faces intense competition from numerous other suppliers of
mobile communications services. Currently, the Company's primary competitors in
the long-haul trucking market offer data-only, two-way communications via
satellite. Other companies that compete, or are planning to compete, with the
Company in its target markets also offer or plan to offer satellite-based voice
and data communication systems. The primary advantage of satellite-based
communication over the Company's cellular-based system is that satellite
coverage is available in certain remote areas and foreign countries that have
not developed cellular networks, enabling data transmissions in areas not served
by cellular systems. In addition, satellite-based communication systems
generally utilize a less complicated infrastructure than the Company's network
and may be able to make updates and changes to their system more quickly than
the Company.

     Certain of the Company's competitors, including Qualcomm and Aether
Systems, have significantly greater name recognition, financial and other
resources than the Company. Among other things, it appears that certain of these
resources have been or are being used by Qualcomm and other competitors of the
Company to subsidize initial hardware purchases and provide extended periods of
free services in an attempt to achieve rapid penetration of certain of the
Company's target markets. See "Business -- Competition." In addition, the
passage of the Telecommunications Act of 1996 relaxes certain regulatory
barriers and encourages competition in virtually every arena of communications.
While the exact effect of the new regulations promulgated under this law is
unknown at this time due to the relative freshness of these rules, the relaxing
of these barriers may make competition even most intense for the Company and its
suppliers.

The technology in the wireless communications industry is constantly and rapidly
changing, and the Company's failure to adapt to these changes may have a
material adverse effect on the Company.

     In general, technology in the wireless communications industry is in a
rapid and continuing state of change as new technologies and enhancements to
existing technologies continue to be introduced. The Company believes that its
future success will depend upon its ability to develop and market products and
services that meet changing customer needs and that anticipate or respond to
technological changes on a timely and cost-effective basis. There can be no
assurance that the Company will be able to keep pace with technological
developments. The failure of the Company to develop and market products and
services that meet changing customer needs and that anticipate or respond to
technological changes on a timely and cost-effective basis could have a material
adverse effect on the Company's business, financial condition and results of
operations.

     The wireless industry has developed a uniform standard for incoming call
delivery at a reduced cost. This inexpensive autonomous-registration incoming
call delivery system for cellular roamers reduces the competitive advantages of
the Company's system. Moreover, if cellular carriers were to develop additional
standard protocol and hardware for inexpensive data transmission and fraud
control, or if the cost of roaming services were to decline further, other
competitive advantages of the Company's system would be significantly reduced or
lost.

Changes in industry-specific government regulations could require the Company to
materially increase its expenses to pay fees.

     The Company believes that the nature of its services does not require the
Company to be classified as a common carrier for either wireless or long-
distance regulatory purposes. This conclusion is based on several alternative
regulatory interpretations. Specifically, the FCC 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.
Basically, providers of enhanced services are not subject to regulation by the
FCC or the various state regulatory agencies. Generally, 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 cellular or long-distance services.

                                       15
<PAGE>

     The Company believes that the services it provides to its customers in
connection with the Mobile Units 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 a specific group of users, which
also exempts the Company from FCC and state regulation. The Company relies on
its long-distance providers and wireless providers to comply with any regulatory
requirements. The reclassification of the Company's services as
telecommunications services could force the Company to expend substantial time,
money and resources to come into compliance with these regulations, and could
thereby have a material adverse effect on the Company's business, financial
condition and results of operations. In addition, many of the Company's
competitors already comply with the regulatory requirements, and would therefore
be less effected by regulatory changes that would force the Company to comply
with regulations it is now exempt from.

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:

 .    Jana Bell, President and Chief Executive Officer;

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

 .    Todd Felker, Senior Vice President - Sales & Marketing;

 .    Marshall Lamm, Senior Vice President - Operations;

 .    Robert LaMere, Senior Vice President Transportation Systems;

 .    J. Raymond Bilbao, General Counsel and Secretary; and

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

     The Company had one year term employment agreements with Ms. Bell, and
Messrs. Smith, Felker, Lamm, LaMere and Bilbao. The initial one year term of
these employment agreements expired on December 31, 2000. These employment
agreements are currently on a month-to-month basis and can be terminated by
either the Company or the employee upon 30 days written notice. 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.

                                       16
<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.

Most of the Company's sales are derived from a few customers, the loss of one or
more of which could significantly reduce the Company's sales and revenue.

     The SBC Companies, Wal-Mart Stores East, Inc. and its affiliated companies,
and Contract Freighters, Inc. collectively account for approximately 63% of the
Company's installed base of mobile units as of December 31, 2000. The initial
term of the Company's contract with the SBC Companies expires on December 31,
2001 while the initial term of the Company's contract with Wal-Mart expired on
April 6, 2001. The initial term of the Company's contract with Contract
Freighters, Inc. expires on December 31, 2001. While the Company expects to
renew such contracts, 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
any of these customers, or any event, occurrence or development which adversely
affects the relationship between the Company and any of these customers, could
have a material adverse effect upon the Company's business, financial condition
and results of operations.

     The Company's ability to generate positive cash flow from operations is
dependent upon the continued retention of certain key customers. The Company's
ability to retain key long-haul trucking customers is dependent upon its ability
to develop next-generation products and services with lower transmission costs
and additional features and functionality. The loss of any such customer would
reduce the Company's ability to generate sufficient cash flow to fund the
interest payments on the Senior Notes beginning March 15, 2001. See "Selected
Financial Data," and "Management's Discussion and Analysis of 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 Mobile Units 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.

You should not expect to receive dividends from the Company in the near 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.

                                       17
<PAGE>

If more shares of the Company's Common Stock become freely tradable, the
Company's stock price could be suppressed for a substantial period of time.

     At December 31, 2000, the Company had 25,326,829 shares of Common Stock
outstanding, of which approximately 15,111,994 shares of Common Stock are freely
tradable without restrictions or further registration under the Securities Act.
The remaining shares are deemed "control securities" within the meaning of the
Securities Act as a result of the issuance thereof in private transactions prior
to the Company's initial public offering in June 1995 and pursuant to the
Recapitalization Agreement entered into at the time of the CW transaction. These
"restricted securities" may be publicly sold only if registered under the
Securities Act or sold in accordance with an applicable exemption from
registration, such as those provided by Rules 144 and 144A promulgated under the
Securities Act.

     The Erin Mills Stockholders received registration rights under the Amended
Stockholders' Agreement to register 1,818,018 shares of Common Stock issued to
them pursuant to the 1996 Recapitalization Agreement. The Erin Mills
Stockholders have waived the right to cause the Company to register such shares,
although they have reserved the right to revoke such waiver at any time. The
Carlyle Stockholders received similar registration rights and subsequently
offered all 2,723,468 shares beneficially owned by them to the public under the
warrant registration statement filed on September 18, 1998. During 2000, none of
the Company's Common Stock held by the Carlyle Stockholders' was purchased
pursuant to the offering. See "Part II, Item 5. Market for Registrant's Common
Equity and Related Stockholder Matters."

     If the pending debt and equity transactions with Minorplanet Systems and
the Senior Noteholders are consummated, then Minorplanet Systems and the Senior
Noteholders will acquire large amounts of stock that will be registered for
resale after the closing of that transaction. While the Senior Noteholders will
be subject to some contractual lock-up restrictions that lapse over time, these
shares will generally be freely tradable once the registration statement
relating to the resale of these shares becomes effective. The sale of a
substantial number of shares of Common Stock or the availability of a
substantial number of shares for sale may adversely affect the market price of
the Common Stock and could also impair the Company's ability to raise additional
capital through the sale of its equity securities.

The Company's Common Stock is at risk of being delisted from the Nasdaq SmallCap
Market, and such delisting could make it difficult for the Company to raise
additional capital and to attract and retain customers and suppliers.

     On December 6, 2000, The Nasdaq Stock Market, Inc. ("Nasdaq") informed the
Company that it was no longer in compliance with the net tangible asset/market
capitalization/net income requirement for continued listing on the Nasdaq
SmallCap Market as set forth in Marketplace Rule 4310(c)(2)(B).

     The Company received a written determination from the Nasdaq Listing
Qualifications Hearings Panel (the "Panel") determining that the Company's
securities shall be allowed to remain listed on The Nasdaq SmallCap Market
provided that the Company satisfy the following conditions:

     (a)  On or before February 23, 2001, the Company must:

          (1)  provide documentation to Nasdaq evidencing that it has executed
               Definitive Documents with Minorplanet and Mackay Shields;

          (2)  file a Preliminary Proxy Statement with the SEC and Nasdaq
               including proposals to obtain shareholder approval for: (i) the
               Minorplanet transaction; (ii) the conversion of the Senior Notes
               held by Mackay Shields; and (iii) a reverse stock split;

     (b)  On or before April 23, 2001, the Company must:

          (1)  provide documentation to Nasdaq that the Minorplanet and Mackay
               Shields transactions have been consummated; and

                                       18
<PAGE>

          (2)  make a public filing with the SEC and Nasdaq evidencing net
               tangible assets of at least $12 million. The filing must contain
               a balance sheet no older than 45 days, with proforma adjustments
               for any significant events or transactions occurring on or before
               the filing date.

     Nasdaq subsequently extended the February 23 deadlines until February 27.
We have met the February 27, 2001 deadline requirements. In issuing this letter,
Nasdaq also informed us that our trading symbol changed from ATRK to ATRKC to
evidence our conditional listing. On March 5, 2001, Nasdaq sent us another
letter which added the additional condition that the closing bid price of our
common stock must be over $1.00 for a period of 10 consecutive days by May 29,
2001. We believe that the pending equity and debt transactions will allow us to
satisfy all of the conditions imposed by Nasdaq to maintain our listing.
However, because these transactions are still subject to certain closing
conditions, we can not assure you that these transactions will be completed. On
April 4, 2001, the Company filed a request for extension of the April 23, 2001
deadlines and the May 29, 2001 deadlines. The April 23, 2001 and May 29, 2001
deadlines have been extended until July 2, 2001. If the Company's common stock
is delisted, it is probable that the pending equity and debt transactions with
Minorplanet Systems and the Senior Noteholders will not occur. The failure to
close these transactions will make it difficult to obtain additional needed
capital to fund the Company's business and technology plans, as the Company
currently has no alternative financing plans under consideration. Further, the
Company believes that it will become significantly more difficult to attract and
retain customers. However, there can be no guarantee that these transactions
will be closed, or that the above requirements will be met, by the July 2, 2001
deadline.

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 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

                                       19
<PAGE>

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.

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 18,600 square feet is sub-leased to
another company. In addition, the Company leases approximately 25,000 square
feet of warehouse and office space in Plano, Texas.

ITEM 3.   LEGAL PROCEEDINGS

Legal Proceedings

     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 fourth
quarter of the year 2000 covered by this report through the solicitation of
proxies or otherwise.

                                       20
<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
securities were originally listed under the symbol "ATRK," but currently trade
under the symbol "ATRKC," reflecting the Company's conditional listing status.
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>
          1999
          First Quarter                             $ 2.19        $1.22
          Second Quarter                            $ 1.88        $1.25
          Third Quarter                             $ 1.66        $1.06
          Fourth Quarter                            $ 2.94        $1.31

          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
</TABLE>

     There were 120 registered holders of common stock and 3600 broker/dealers
who beneficially hold common stock on behalf of shareholders as of May 9, 2001.
The last sales price for the Company's Common Stock as reported on May 9, 2001
was $0.43. The Company did not pay dividends on its Common Stock for the year
ended December 31, 2000 and has no plans to do so in the foreseeable future.

     On September 18, 1998, under the Securities Act of 1933, as amended, the
Securities and Exchange Commission ("SEC") declared effective the Company's
registration statement on Form S-3, as amended (the "Registration Statement").
The Company registered 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 2000,
no warrants were sold and no warrant shares were exercised.

     Additionally, the Company registered shares required pursuant to the
Amended Stockholders' Agreement (the "Stockholders' Agreement"). The
Stockholders' Agreement grants piggyback registration rights to certain
stockholders who are parties thereto. Accordingly, whenever the Company proposes
to register any shares of Common Stock (or securities convertible into or
exchangeable for, or options, warrants or other rights to acquire Common Stock)
under the Securities Act of 1933 (other than registrations on Form S-4 or Form
S-8), the eligible parties to the Stockholders' Agreement have the right to
include shares of Common Stock held by them in any such registration. However,
if the inclusion of shares of Common Stock pursuant to the piggyback
registration provisions is reasonably determined by the managing underwriter or
underwriters to materially adversely affect the success of the proposed
offering, the Company may exclude certain shares from the offering. All eligible
parties under the

                                       21
<PAGE>

Stockholders' Agreement were given notice of their opportunity to piggyback the
offering of their Company Common Stock holdings on the Registration Statement.
The Carlyle Stockholders were the only eligible parties who exercised their
piggyback rights in connection with the registration of warrants and warrant
shares under the Registration Statement. The Carlyle Shareholders offered all
2,723,468 shares beneficially owned by them to the public under the Registration
Statement. During 2000, none of the Carlyle Stockholders' Company Common Stock
was purchased pursuant to the offering.

ITEM 6.   SELECTED FINANCIAL DATA

Selected Financial Data

     The selected financial data set forth for each of the years 1996, 1997,
1998, 1999 and 2000 have been derived from audited financial statements,
including the balance sheets at December 31, 2000 and 1999 and the related
statements of operations, of cash flows and of changes in stockholders' equity
(deficit) for each of the three years in the period ended December 31, 2000 and
notes thereto appearing elsewhere herein. 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 are not comparable to prior years.

                                       22
<PAGE>

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

Year ended December 31,                                   2000           1999           1998           1997           1996
                                                       ----------     ----------     ----------     ----------     ----------
                                                                 (In thousands, except per share and operating data)
Statement of Operations Data

Revenue:
  Product                                              $   41,971     $   43,018     $   16,950     $   27,187     $   14,645
  Ratable product                                          12,093              -              -              -              -
  Service                                                  48,066         52,655         46,463         27,445         16,056
                                                       ----------     ----------     ----------     ----------     ----------
     Total revenues                                       102,130         95,673         63,413         54,632         30,701
                                                       ----------     ----------     ----------     ----------     ----------
Cost of revenues:
  Product                                                  30,031         34,752         13,222         22,133         15,099
  Ratable product                                          10,006              -              -              -              -
  Service                                                  30,636         26,724         32,419         21,397         11,489
  Writedown of inventory                                        -              -              -              -          1,943
                                                       ----------     ----------     ----------     ----------     ----------
     Total cost of revenues                                70,673         61,476         45,641         43,530         28,531
                                                       ----------     ----------     ----------     ----------     ----------
Gross profit                                               31,457         34,197         17,772         11,102          2,170
                                                       ----------     ----------     ----------     ----------     ----------
Expenses:
  General and administrative                               12,478         14,706         22,875         11,872          7,997
  Customer service                                          7,146          7,770         10,604         11,493          8,089
  Sales and marketing                                       4,980          4,091          7,372          7,723          9,139
  Engineering                                               4,345          2,685          5,399          4,604          3,487
  Network services center                                   1,512          1,437          1,992          1,416            607
  Severance and AutoLink termination costs                      -           (189)         5,357              -              -
  Depreciation and amortization                             5,907          6,551          5,829          2,684          1,482
                                                       ----------     ----------     ----------     ----------     ----------
                                                           36,368         37,051         59,428         39,792         30,801
                                                       ----------     ----------     ----------     ----------     ----------

     Operating loss                                        (4,911)        (2,854)       (41,656)       (28,690)       (28,631)

Interest income                                             1,371          2,037          4,827          2,500            809
Interest expense                                          (13,368)       (13,422)       (17,099)        (4,857)        (1,691)
Other income (expense)                                      1,569          2,715              -              -           (230)
                                                       ----------     ----------     ----------     ----------     ----------
     Loss before income taxes, extraordinary item
       and cumulative effect of accounting change         (15,339)       (11,524)       (53,928)       (31,047)       (29,743)
Income tax provision                                            -              -              -              -              -
                                                       ----------     ----------     ----------     ----------     ----------
     Loss before extraordinary item and
       cumulative effect of accounting change             (15,339)       (11,524)       (53,928)       (31,047)       (29,743)
Extraordinary item                                              -              -         18,867              -           (317)
Cumulative effect of accounting change                     (5,206)             -              -              -              -
                                                       ----------     ----------     ----------     ----------     ----------
     Net loss                                          $  (20,545)    $  (11,524)    $  (35,061)    $  (31,047)    $  (30,060)
                                                       ==========     ==========     ==========     ==========     ==========
Basic and diluted loss per share:
     Loss before extraordinary item and cumulative
       effect of accounting change                     $    (0.61)    $    (0.46)    $    (2.17)    $    (1.25)    $    (1.39)
     Extraordinary item                                         -              -           0.76              -          (0.01)
     Cumulative effect of accounting change                 (0.20)             -              -              -              -
                                                       ----------     ----------     ----------     ----------     ----------
     Net loss                                          $    (0.81)    $    (0.46)    $    (1.41)    $    (1.25)    $    (1.40)
                                                       ==========     ==========     ==========     ==========     ==========
Weighted average number of shares outstanding              25,291         24,974         24,899         24,864         22,763
                                                       ==========     ==========     ==========     ==========     ==========

Other Financial and Operating Data (unaudited)
Units installed at December 31,                            67,336         50,825         47,657         33,122         20,354
Average monthly service revenue per unit ("ARPU")      $    70.08     $    82.54     $    99.56     $    85.54     $    76.23


</TABLE>

                                      23

<PAGE>

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

December 31,                                              2000            1999            1998           1997            1996
                                                        --------        ---------       --------       --------       ---------
Balance Sheet Data

Cash and short-term investments                         $ 20,641        $ 17,768        $ 26,169       $ 46,486        $ 19,725
Working capital                                           20,825          35,660          29,143         64,729          24,605
Network, equipment and software, net                      12,851          15,703          20,649         15,482           8,629
Total assets                                              81,044          74,073         103,126        146,473          42,929
Notes payable                                             92,484          92,090          91,697        120,956               -
Stockholders' equity (deficit)                           (58,341)        (38,051)        (26,791)         8,270          34,664

Capital expenditures                                    $  2,600        $  3,103        $ 10,520       $  9,499        $  5,139

</TABLE>

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

General

     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.  Trackware is
currently being tested by prospective customers.  There were no significant
revenues from Trackware during 2000.

     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 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.

     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 these new interpretations, the Company has 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
Vehicle Contract", 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.

     As a result of the change in accounting principle described above, for
which restatement of prior years is not permitted, the Company's 2000 revenues
and cost of revenues are not directly comparable to prior years.

                                       24
<PAGE>

     During the third quarter of 1998 the Company announced that it was: (i)
halting the development of its AutoLink(R) service, and (ii) implementing a
number of key management and structural changes designed to more closely align
the Company's expenditures with its revenues.  As a result of these
announcements, 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, and $2,431,000 to recognize asset
impairments and record estimated amounts to be incurred to extinguish
contractual obligations associated with the AutoLink(R) program.

Results of Operations

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.
As more fully described in Note 7 to the accompanying consolidated financial
statements, 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 7 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 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.

                                       25
<PAGE>

     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.  The Company's ability to generate operating income is
significantly influenced by the gross margin related to product revenues.  The
Service Vehicle Contract is responsible for the majority of such revenues and
product shipments under that contract  are expected to be completed during 2001.
The Company's financial condition and results of operations are heavily
dependent upon the Company's ability to develop and market new products and
services.  Therefore, the Company believes that its 2001 revenues will likely
not increase relative to 2000.  Further, if the Company is unable to replace the
2000 product revenues from the Service Vehicle Contract, with sales to that
customer or others, the Company's 2001 revenues may be less than 2000.  As
discussed in Note 2 to the Consolidated Financial Statements, the Company has
pending equity and debt transactions which the Company believes, if consummated,
will provide adequate financial resources to support the Company until it is
able to achieve a successful level of operations.

Year Ended December 31, 1999, Compared to Year Ended December 31, 1998

     Total revenues increased 50.9% to $95.7 million in 1999 from $63.4 million
in 1998.  Product revenues increased 153.8% to $43.0 million in 1999 from $16.9
million in 1998.  The increase in product revenues is a result of recognizing
$29.7 million of revenues on the service vehicle contract entered into during
1998 that required delivery of mobile units coupled with development and
delivery of additional features over the term of the installation period.
Service revenues increased 13.3% to $52.7 million in 1999 from $46.5 million in
1998 due to the increased installed base of mobile units. The average installed
base of mobile units during 1999 increased 35.4% from the 1998 average installed
base.  Average monthly revenue per mobile unit decreased 17.1% to $82.54 in 1999
from $99.56 in 1998.  The decrease was attributable to: (i) the decision in the
second quarter of 1998 to cancel the personal calling accounts promotion and
strengthen credit policies related to personal calling accounts, thereby
reducing personal calling revenues; and (ii) the increasing proportion of
service vehicles in the installed base.  Average revenue for service vehicles is
less than that of long-haul trucking because of different product functionality.

     Product gross profit margin was 19.2% in 1999, compared to 22.0% in 1998
because of the $3.5 million warranty provision that is discussed in more detail
in Note 7 to the Consolidated Financial Statements. Excluding the effect of this
$3.5 million charge, 1999 product gross profit margin would have been 27.4%.

     Service gross profit margin was 49.2% in 1999, compared to 30.2% in 1998.
As more fully described in Note 7 to the accompanying financial statements,
during 1999 the Company recorded $4.4 million of credits related to a contract
settlement.  Excluding the effect of these credits, service gross profit margin
would have been 40.9%.  The increase in service margin from 30.2% to 40.9% is
primarily a result of: (i) the additional access fees generated by the 35.4%
increase in the average installed base of mobile units; (ii) the effect of a
new, lower-cost contract with one of the Company's major vendors; and (iii) the
effect of technical adjustments and modifications implemented to reduce the
amount of airtime costs incurred that are not billable to customers.

     Operating expenses decreased 37.7% to $37.1 million in 1999 from $59.4
million in 1998.  This decrease is primarily as a result of: (i) the
restructuring of operations implemented in the second and third quarters of
1998; and (ii) 1998 expenses being unusually high as the result of charges
aggregating $11.0 million for bad debt expense, sales tax liability, and
severance and AutoLink(R) termination costs.  Excluding these charges from 1998,
the decrease in operating expenses from 1998 would have been 23.5%.  The average
number of employees decreased 25.0% in 1999 from 1998.  Sales and marketing
expense and engineering expense decreased significantly because 1998 included
significant advertising and development costs associated with products that were
discontinued in the third quarter of 1998.

     Interest income was $2.0 million in 1999 compared to $4.8 million in 1998.
Interest expense was $13.4 million in 1999 compared to $17.1 million in 1998.
The change in these relationships reflects the lower average outstanding
balances during 1999 in cash and short-term investments, pledged securities and
Senior Notes payable.

                                       26
<PAGE>

     Other income in 1999 reflects the gain from the settlement of a customer
contract, and the proceeds from the settlement of litigation, net of related
expenses, as more fully described in Note 7 to the accompanying Consolidated
Financial Statements.

     Operating loss in 1999 was $2.9 million compared to $41.7 million in 1998.
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.  The improvement from 1998 to 1999 is due to an increase
in gross profit of $16.4 million coupled with a decrease in operating expenses
of $22.4 million.  The increase in gross margin is primarily the result of the
significant increase in product and service revenues as a result of mobile units
installed for the "Service Vehicle Contract" and the $4.4 million of non-
recurring credits.  The decrease in operating expenses is a combination of
numerous factors as described in detail above.

Liquidity and Capital Resources

     The Company has incurred significant operating losses since inception and
has a stockholders' deficit of approximately $58.3 million at December 31, 2000.
Beginning March 15, 2001, the Company is obligated to begin paying substantial
semi-annual cash interest payments on its 13.75% Senior Notes which were issued
in September 1997.  Interest payments due on the Senior Notes through September
15, 2000, had previously been funded through an escrow arrangement created upon
closing of the Senior Notes.  The Company currently believes it will have the
cash resources available to make the March 15, 2001 interest payment, but absent
the pending equity and debt transactions described in Note 2 to the Consolidated
Financial Statements (which are contingent upon a number of factors also
described in Note 2), the Company has limited financial resources available to
support its ongoing operations, fund its product development program to develop
and market new competitive tracking technology, and pay its obligations as they
become due, including the maturities of the Senior Notes and associated interest
payments.  The $94,355,000 principal amount of Senior Notes is due in September
2005 and requires cash interest payments of approximately $13.0 million per
year.

     The factors noted in the above paragraph raise substantial doubt concerning
the ability of the Company to continue as a going concern.  The financial
statements do not include any adjustments relating to the recoverability and
classification of asset carrying amounts or the amount and classification of
liabilities that might result should the Company be unable to continue as a
going concern.  The ability of the Company to continue as a going concern is
dependent upon the ongoing support of its stockholders, creditors, and certain
key customers, the consummation of the pending equity and debt transactions (or
the closing of similar debt or equity transactions), and its ability to
successfully develop and market its tracking products and technology at
economically feasible levels in the highly competitive and rapidly changing
telecommunications industry.

     In early 2000, the Company completed the development of its preliminary
strategic business plan and technology direction.  At this time, management
recognized that in order to implement the technology plan and also fund
projected operating losses which would most probably be incurred during the
development and initial sales phases, additional capital resources of
approximately $35 to $50 million would be required.  Management also recognized
that it would be possible to implement the technology plan with less capital in
the event the Senior Notes could be restructured to eliminate or reduce the
existing debt service payments.  The Company believes that the pending debt and
equity transactions described in Note 2 to the Consolidated Financial Statements
are an alternative to the $35 to $50 million of additional capital resources.
These transactions, if consummated, will convert a substantial amount of long-
term debt to equity and will substantially reduce the Company's debt service
requirements.

     The Company believes that the pending debt and equity transactions, if
consummated, will provide adequate financial resources to support the Company
until it is able to achieve a successful level of operations.  The Company also
believes acquisition of the licensing rights associated with the pending equity
transaction will provide the Company significant marketing potential of the
licensed tracking technology, enhancing future results of operations and
reducing the need for capital resources to develop similar tracking technology.
There is no assurance, however, that the Company will be able to close the
pending debt and equity transactions or that such financial resources provided
by the pending transactions, if closed, will be sufficient to support the
Company until it reaches a successful level of operations.  There is also no
assurance that the Company would be able to successfully develop a market for
the acquired licensed tracking technology to achieve a successful level of
future operations.  If

                                       27
<PAGE>

the Company is unable to close the pending equity and debt transactions, it is
likely that it will be unable to maintain its current NASDAQ listing (see Note 3
to the Consolidated Financial Statements). If the Company cannot maintain its
NASDAQ listing, its ability to obtain the required levels of equity or debt
financing from other sources to support its operations and fund payments of its
obligations as they become due will be significantly reduced and it may have a
material adverse effect on the business, financial condition and results of
operations of the Company. In the event the Company is unable to support its
operations and fund payments of its obligations as they become due, it may be
necessary for the Company to seek protection under Chapter 11 of the United
States Bankruptcy Code.

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 public accountants, are included on pages
F-1 through F-20 and pages S-1 through S-2.

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

None.

                                   PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors

     The following individuals are current directors of the Company.

     JANA A. BELL - President, Chief Executive Officer and Director since
September 1998

     Ms. Bell, age 37, was initially employed by the Company in June 1998 as its
Executive Vice President and Chief Financial Officer.  In September 1998, Ms.
Bell was promoted to President and Chief Executive Officer and she continued to
act in the Chief Financial Officer capacity until November 1998.  From March
1992 to June 1998, Ms. Bell was employed in a variety of capacities by AT&T
Wireless Services and by its predecessors, LIN Broadcasting and McCaw Cellular
Communications, Inc.  She was initially employed as Director of Financial
Planning and Control in March 1992 for LIN Broadcasting.  In May 1994, she
became Director of Finance for McCaw Properties.  From January 1996 to June 1998
she served in various executive positions over the Southwest region of AT&T
Wireless including Vice President and Chief Financial Officer since 1997.  She
last served as AT&T Wireless' Central United States Vice President of Operations
from March 1998 until she left to join the Company. Prior to her employment at
AT&T Wireless, Ms. Bell practiced public accounting for Ernst & Young LLP, last
serving as an audit manager.

     STEPHEN L. GREAVES - Director since June 1994

     Mr. Greaves, age 42, has served as President of Erin Mills International
Investment Corporation, a private venture capital fund and stockholder of the
Company, since February 1997 and also served as General Manager from April 1993
to February 1997. From January 1992 until March 1993, Mr. Greaves worked as a
private marketing consultant, and from January 1989 to December 1991, he served
as Marketing Planner for Esso Standard Petroleum Oil.  Mr. Greaves also serves
as a director of Erin Mills International Investment Corporation, MotorVac
Technologies, Inc., NewMed Corporation and several other privately held
companies.

     GERRY C. QUINN - Director since 1992

     Mr. Quinn, age 52, served as President of The Eighteen Wheeler Corporation
and The F.B.R. Eighteen Corporation, both of which were affiliates of the
Company, from April 1992 until February 1994.  Mr. Quinn has

                                       28
<PAGE>

served as President of The Erin Mills Investment Corporation, since July 1989,
and as Executive Vice President of The Erin Mills Development Corporation, a
real estate development company and stockholder of the Company, since September
1989. Prior to joining Erin Mills, Mr. Quinn served as a senior officer in Magna
International Inc. and Barrincorp, both publicly traded companies, and he served
as a partner in the public accounting firm of Ernst & Young. Currently Mr. Quinn
is also a director of MotorVac Technologies, Inc.

     JOHN T. STUPKA - Director since June 1998

     Mr. Stupka, age 51, currently serves as President -Wireless Solutions of
MCI Worldcom Wireless  Solutions, a position he has held since November 1999.
From August 1996 until October 1999 Mr. Stupka served as President, Chief
Executive Officer and as a director of SkyTel Communications, Inc., formerly
known as Mobile Telecommunication Technologies Corp.  Prior to joining SkyTel,
Mr. Stupka served as Senior Vice President - Strategic Planning of SBC
Communications, Inc. from August 1995 to August 1996 and as President and Chief
Executive Officer of Southwestern Bell Mobile Systems, Inc. from November 1985
to August 1995.

     DR. WILLIAM P. OSBORNE - Director since July 2000

     Dr. Osborne, age 57, is the Dean of the Erik Jonsson School of Engineering
and Computer Science at the University of Texas at Dallas.  Prior to Joining UT-
Dallas in August 1995, Dr. Osborne was Director of the Center for Space
Telemetering and Telecommunications Systems at New Mexico State University.  He
joined NMSU in November 1990, and while there, was holder of NMSU's Endowed
Chair in Telemetry and studied space communications systems for NASA.  The 30-
year telecommunications veteran has also served in operating management
capacities for a number of telecommunications companies between 1970 and 1990.
Dr. Osborne holds a Ph.D. in Electrical Engineering from NMSU and M.S.E.E. and
B.S.E.E. degrees from the University of Kentucky.

Executive Officers

     DAVID H. BAGLEY - Vice President of Network Operations of the Company since
December 1999

     Mr. Bagley, age 47, joined the Company in October 1992 as Director of Field
Services and has since held several director-level positions which utilized his
27 years of telecommunications experience.  Before joining the Company, Mr.
Bagley served as Vice President, South Central Division at Comstock
Communications from 1987 to 1992.  From 1973 to 1987, Mr. Bagley held various
operational and technical management positions at Southwestern Bell Telecom,
United Technologies Communications Company and General Dynamics Communications
Company.

     JANA A. BELL - President, Chief Executive Officer and Director for the
Company since September 1998

     Please refer to page 28 for information regarding Ms. Bell.

     J. RAYMOND BILBAO - General Counsel and Secretary for the Company since
February 1999

     Mr. Bilbao, age 34, was initially employed by the Company in June 1997 as
Associate General Counsel. He served in that position until February 1999, when
he was promoted to General Counsel and Secretary.  From September 1996 to June
1997, Mr. Bilbao was a Senior Associate Attorney at Neligan & Averch, LLP, a
Dallas-based law firm, where he represented technology clients in corporate and
litigation matters.  From September 1995 to September 1996, Mr. Bilbao was
employed by Value-Added Communications, Inc., a Dallas-based telecommunications
company, last serving as its Vice President and General Counsel.  Mr. Bilbao
also previously served as an associate attorney at the law firms of Haney &
Tickner, P.C. and Renfro, Mack & Hudman, P.C. In 1992, Mr. Bilbao earned his
Juris Doctor degree from St. Mary's University in San Antonio, Texas, where he
served as a writer for the St. Mary's Law Journal.  Mr. Bilbao is licensed to
practice law in Texas and is admitted to practice before the United States
District Court for the Northern District of Texas.

     TODD A. FELKER - Senior Vice President, Sales and Marketing for the Company
since June 1998

     Mr. Felker, age 40, joined the Company in June 1998 as Senior Vice
President, Sales and Marketing and served in this position until he assumed his
current role as Senior Vice President, Sales, Marketing & Account Management,
where he is primarily responsible for the sales and marketing departments of the
Company as well as management of customer accounts.  From May 1994 to June 1998,
he was employed in several marketing management and product planning positions
of increasing responsibility for AT&T Wireless, last serving as its Vice
President of Marketing, Central Area which encompassed 15 states, 1.6 million
customers and over $1 billion in

                                       29
<PAGE>

annual revenue. From May 1989 to May 1994, Mr. Felker held Manager of Marketing
Development and Director of Marketing positions at Crown Media, Inc. and a
predecessor, Cencom Cablevision. From June 1982 to May 1989, Mr. Felker worked
with D'Arcy Masius Benton & Bowles, an advertising firm, where he last served as
a Manager of Media Planning and Research developing and implementing media plans
for Southwestern Bell Telephone and Banquet Frozen Foods.

     ROBERT J. LAMBERT, JR. - Vice President of Information Technology for the
     Company since December 1999

     Mr. Lambert, age 42, was originally employed by the Company as Director of
Information Systems in September 1997.  Mr. Lambert transitioned into the role
of director of Revenue Assurance and Billing, using his 20 years of information
systems and operations experience to successfully manage the billing and
collection operations for the Company's entire customer base.  From 1995 to
1997, Mr. Lambert served as director of Retail Operations for CellStar, where he
was responsible for the financial and operational focus of the $100+ million
organization.  From 1986 to 1995, he was employed at KPMG Peat Marwick as a
Senior Consulting Manager.

     ROBERT W. LaMERE - Senior Vice President of Transportation Systems for the
     Company since March 1997

     Mr. LaMere, age 48, has over 14 years of experience in information systems.
He joined the Company in March 1997 as Senior Vice President of Transportation
Systems and has primary responsibility for management of the Company's Joplin,
Missouri facility which provides information management services to the
Company's trucking company customers.  From 1993 to March 1997, he served as the
General Manager of Spirit Systems, the division of Burlington Motor Carriers
responsible for all of its data and telecommunications needs and a support and
services provider to other transportation companies.  From 1990 to 1993, Mr.
LaMere served as the Vice President of Information Systems at Burlington.

     C. MARSHALL LAMM - Senior Vice President of Operations of the Company since
December 1999

     Mr. Lamm, age 50, joined the Company in March 1999 as Director of
Operations Planning.  He served as Vice President of Manufacturing Operations
from June 1999 to December 1999 when he became Senior Vice President of
Operations.  Mr. Lamm came to the Company from TPN, Inc., a provider of
satellite television programming, where he served as Vice President of
Operations.  From 1993 to 1998, Mr. Lamm served as Director of Product
Distribution for AT&T Wireless Services.  Prior to 1993, Mr. Lamm compiled over
22 years of high-tech electronics manufacturing experience that spans the
defense, personal computing, healthcare and telecommunications industries.  Mr.
Lamm is a Quality Award recipient at AT&T Wireless Services for managing the
team that developed and implemented the national distribution operation.

     LOUIS McANALLY - Vice President of Account Management of the Company since
December 1999

     Mr. McAnally, age 52, has served the Company in a variety of management and
executive positions since joining the Company in June 1994.  These positions
include Manager of National Accounts from June 1994 to May 1995, Vice President
of National Accounts from June 1995 to October 1996, and Vice President of
Customer Service from November 1996 to December 1999, when he was appointed to
his current position.  He is currently responsible for the account management in
the field, which includes customer implementation as well as ongoing support for
key customers.  Prior to joining the Company, Mr. McAnally was Director of SLW
Response Group, a subsidiary of Saunders, Lubinski & White and owner of Graphic
Response, a full service marketing and advertising firm.

     PIERRE  H. PARENT - Senior Vice President and Chief Technology Officer of
     the Company since July 1999

     Mr. Parent, age 38, joined the Company with 15 years of wireless
telecommunications experience in July 1999 as Senior Vice President of
Technology and Business Development.  Mr. Parent came to the Company from AT&T
Business Services in Dallas where he most recently served as Sales Director-
Advanced Services.  From 1995 through 1998, Mr. Parent was Director of Advanced
Products and New Technology and guided the development and implementation of
mobile and fixed telecommunications solutions based on customers' specific
application requirements.  In addition to his sales and telecommunications
solutions experience, Mr. Parent has held various engineering positions at AT&T
Wireless Services and US West New Vector Group.

                                       30
<PAGE>

     W. MICHAEL SMITH - Executive Vice President, Chief Financial Officer and
     Treasurer for the Company since November 1998

     Mr. Smith, age 36, joined the Company after serving from 1997 to 1998 as
Vice President of Finance and Chief Financial Officer for TPN, Inc., a provider
of digital satellite programming.  Mr. Smith was employed by AT&T Wireless
Services from 1994 to 1997, where he served as Director of Financial Planning
and Control from 1994 to 1996 and as Director of Finance and Controller from
1996 to 1997.  Prior to his employment at AT&T Wireless, Mr. Smith practiced
public accounting for Arthur Anderson & Co., last serving as a financial
consultant and audit manager primarily representing high technology clients.
Mr. Smith earned a Masters in Accounting at the University of North Texas and is
a Certified Public Accountant.

     STEPHEN P. TACKE - Vice President and Controller for the Company since
August 1995

     Mr. Tacke, age 54, has served as Vice President and Controller since August
1995, where he is responsible for developing the Company's accounting practices,
and developing and implementing internal accounting controls and financial
reporting systems.  From August 1996 to August 1997, he also served as acting
Chief Financial Officer of the Company.  From July 1991 through August 1995, Mr.
Tacke, a Certified Public Accountant, was an independent financial consultant.
Prior to July 1991, Mr. Tacke practiced public accounting for 22 years with
Price Waterhouse, last serving as an audit partner.

     KEN VANDAGRIFF - Vice President of Network Operations and Product Support
     of the Company since June 1998

     Since January 1995, Mr. Vandagriff, age 44, has served the Company in
several positions of increasing responsibility including Director of Customer
Care, Director of Technical Services, Director of Information Technology and
Director of System Architecture.  From 1989 to 1993, Mr. Vandagriff was employed
at Ventura Software, holding management positions in product support, quality
assurance and information technology.  From 1978 to 1988, Mr. Vandagriff served
Xerox Corporation in various management and technology positions.

     JONATHAN L. WIENER- Vice President of Strategic Development of the Company
since December 1996

     Mr. Wiener, age 41 comes to the Company with over 17 years of experience
directing sales efforts specifically targeting technology products and services.
Mr. Wiener initially joined the Company as Vice President of Sales for the
Eastern Region in 1996.  His expertise in serving Fortune 500 Information
Technology environments and their initiatives has intimately involved him with
the issues associated with linking technology life cycle planning with strategic
business process directives.  Previously, Mr. Wiener was at Penton, Inc., a
developer of vertical market application software, for statistical process
control, preventive maintenance, and warehousing and distribution.  Mr. Wiener
also served at Ziff Davis Communications Company, a developer and provider of
information services for the technology community.

     There are no family relationships among the directors and executive
officers of the Company.

Indemnification of Directors and Officers

     The Company indemnifies each person who is or was a director, officer,
employee or agent of the Company, or serves at the Company's request as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, judgments, fines and
amounts incurred in that capacity.

     The Company will indemnify only for actions taken:

     .    in good faith in a manner the indemnified person reasonably believed
          to be in or not opposed to the best interests of @Track; or
     .    with respect to criminal proceedings, not unlawful.

     The Company will also advance to the indemnified person payments incurred
in defending a proceeding to which indemnification might apply provided the
recipient agrees to repay all such advanced amounts if it is ultimately
determined that such person is not entitled to be indemnified. The Company's
bylaws specifically provide that the indemnification rights granted thereunder
are nonexclusive.  In accordance with the Company's bylaws and

                                       31
<PAGE>

the amended and restated stockholders' agreement between the Company and certain
of its stockholders, the Company has purchased insurance on behalf of its
directors and officers in amounts it believes to be reasonable.

Compliance with Section 16(a) of the Securities Exchange Act

     Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities to file with the SEC initial statements
of beneficial ownership of securities and subsequent changes in beneficial
ownership of the Company Officers, directors and greater-than-ten-percent
stockholders are required by the SEC's regulations to furnish the Company with
copies of all Section 16(a) forms they file.

     To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 2000, its
officers, directors and greater-than-ten-percent beneficial owners timely
complied with all section 16(a) filing requirements applicable to them. However,
one director failed to file his Form 3 within ten days of his appointment as a
director on July 3, 2000, and he filed the Form 3 on December 1, 2000.


ITEM 11.  EXECUTIVE COMPENSATION

Compensation of Directors

     The board of directors has the authority to fix the compensation of
directors. The Company's bylaws and the amended and restated stockholders'
agreement provide that directors may be reimbursed for reasonable expenses for
their services to the Company, and may be paid either a fixed sum for attendance
at each board of directors meeting or a stated annual director fee. The Company
currently reimburses its directors for travel expenses. The Company provides
non-employee directors with an annual director's fee of $25,000. The Company has
granted John Stupka non-qualified options to purchase 3,798 shares of common
stock at exercise prices of $2.50 per share.  These options were not granted
under the Company's 1994 stock option plan, and therefore, unlike options
granted under the 1994 stock option plan, such options have not been registered
under the Securities Act of 1933.

                                       32
<PAGE>

Compensation of Certain Executive Officers

       Summary Compensation Table

     The following is a table describing compensation awarded, paid to or earned
by the Company's Chief Executive Officer and the other four most highly
compensated executive officers, for each of the last three fiscal years.  Some
of the persons named below are employed by the Company under an employment
agreement.  Those agreements are described on page 35.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                                                         Long Term
                                                                           Annual      Compensation
                                                                        Compensation      Awards
                                                                        -------------  -------------
Name and                                               Year   Salary        Bonus       Securities       All Other
Principal Position                                     ----  (Dollars)    (Dollars)     Underlying      Compensation
-----------------------------------------------------        ---------  -------------    Options/       (Dollars)(1)
                                                                                       SARs (shares)  --------------
                                                                                       -------------
<S>                                                    <C>   <C>        <C>            <C>            <C>
Jana A. Bell                                           2000   300,000        120,000              -         83,916
President and Chief Executive Officer                  1999   300,000        187,500              -              -
for @Track Communications, Inc.                        1998   159,753         80,000        500,000              -
------------------------------------------------------------------------------------------------------------------
William H. McCausland                                  2000    32,836              -              -        267,863
Former Senior Vice President, Operations               1999   150,000         65,777         51,000              -
for @Track Communications, Inc.                        1998   147,396         45,000         20,000              -
------------------------------------------------------------------------------------------------------------------
J. Raymond Bilbao                                      2000   130,000         35,490         20,000         42,324
Secretary and General Counsel                          1999   120,000         29,777         68,000              -
For @Track Communications, Inc.                        1998    84,000         10,500              -              -
------------------------------------------------------------------------------------------------------------------
Todd A. Felker                                         2000   165,000         42,660         20,000              -
Senior Vice President Sales, Marketing and Account     1999   150,000         82,087         68,000              -
Management for @Track Communications, Inc.             1998    79,038         50,000         30,000              -
------------------------------------------------------------------------------------------------------------------
W. Michael Smith                                       2000   162,961         43,011         20,000              -
Executive Vice President and Chief Financial           1999   150,000         33,000          1,000              -
Officer for @Track Communications, Inc.                1998     7,403         30,000        125,000              -
------------------------------------------------------------------------------------------------------------------
C. Marshall Lamm                                       2000   148,750         42,480         40,000              -
Senior Vice President Operations for                   1999    93,333         26,000         75,000              -
@Track Communications, Inc.                            1998         -              -              -              -
------------------------------------------------------------------------------------------------------------------
</TABLE>

     (1) The components of All Other Compensation are:

      .  Ms. Bell received compensation as the result of her exercise of 65,833
         stock options and sale of shares of common stock of the Company
         acquired through her stock option exercise.
      .  Mr. McCausland resigned his employment with the Company effective
         January 31, 2000. Mr. McCausland received compensation as the result of
         his exercise of 42,200 stock options and sale of shares of common stock
         of the Company acquired through his stock option exercises.
      .  Mr. Bilbao received compensation as a result of his exercise of 11,000
         stock options and sale of shares of common stock of the Company
         acquired through his stock option exercise.

      Stock Options.  The Company grants stock options to certain of its
executive officers and employees under the 1994 stock option plan.  During 2000,
the Company granted options to purchase a total of 319,500 shares. As of
December 31, 2000, options representing 1,654,621 shares remained outstanding
under the 1994 stock option plan, and options to purchase 196,695 shares
remained available for grant thereunder.  Also, options representing 3,798
shares were granted to a director  in 1998 and are not governed by a formal
plan.

                                       33
<PAGE>

       Option Grants in Last Fiscal Year

     The following table describes the number of options granted to the
Company's Chief Executive Officer and the Company's other four most highly
compensated executive officers during the year ended December 31, 2000 and
certain other information relating to such options.

<TABLE>
<CAPTION>
                                                     Individual Grants                                      Potential Realizable
                                                                                                              Value at Assumed
                                                                                                              Annual Rates of
                                                                                                           Stock Price Apprecia-
                                                                                                           tion for Option Term
-----------------------------------------------------------------------------------------------------------------------------------
           Name                        Number of       Percent of       Exercise or    Expiration            5%           10%
           ----                       Securities      Total Options     Base Price       Date               ---           ---
                                      Underlying       Granted to      ($ per share)     ----
                                       Options         Employees in    -------------
                                       Granted         Fiscal Year
                                     ------------      ------------
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>               <C>             <C>               <C>           <C>          <C>
Jana A. Bell                                  -                0%             -                 -            -             -
-----------------------------------------------------------------------------------------------------------------------------------
William McCausland                            -                0%             -                 -            -             -
-----------------------------------------------------------------------------------------------------------------------------------
J. Raymond Bilbao                        20,000             6.26%         $1.50        10/11/2006            0%            0%
-----------------------------------------------------------------------------------------------------------------------------------
Todd Felker                              20,000             6.26%         $1.50        10/11/2006            0%            0%
-----------------------------------------------------------------------------------------------------------------------------------
W. Michael Smith                         20,000             6.26%         $1.50        10/11/2006            0%            0%
-----------------------------------------------------------------------------------------------------------------------------------
C. Marshall Lamm                         40,000            12.52%         $1.50        10/11/2006            0%            0%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     As of December 31, 2000, the exercise price of the options granted to
Messr. Bilbao, Felker, Smith and Lamm significantly exceeded the market price of
the Company's common stock resulting in a potential realizable value of zero.
In the event an optionee's position as an employee of the Company terminates for
any reason, unless otherwise provided in the applicable stock option agreement
or applicable employment agreement, the optionee may exercise the options during
the 60-day period following such termination, to the extent that the option was
exercisable on the date of termination of the optionee's employment.  All
options that were not exercisable on the date of termination are forfeited.

Aggregated Option Exercises and Year End Option Values

     The following table sets forth:

     .   the number of options exercised by the Chief Executive Officer and the
         Company's four additional most highly compensation executive officers;

     .   the number of options held by them as of December 31, 2000; and

     .   the value of unexercised and exercised options held by them as of
         December 31, 2000, calculated as the closing price per share of the
         common stock on the last trading day of the fiscal year, which was
         $0.75, less the option exercise price, multiplied by the number of
         shares.

<TABLE>
<CAPTION>
                 Name                                                              Number of
                 ----                                                        Securities Underlying  Value of Unexercised
                                                 Option Exercises             Unexercised Options   In-the-Money Options
                                                    During 2000              at December 31, 2000   at December 31, 2000
                                        -----------------------------------  ---------------------  --------------------
                                         Number of Shares       Value        Exercisable   Unexer-  Exercisable  Unexer-
                                           Acquired on         Realized      ------------  -------  -----------  -------
                                             Exercise          --------                    cisable               Cisable
                                             --------                                      -------               -------
------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                  <C>             <C>           <C>      <C>          <C>
Jana A. Bell                                         65,833        $ 83,916       267,499  166,668            0        0
------------------------------------------------------------------------------------------------------------------------
William McCausland                                   42,200        $267,863             0        0            0        0
------------------------------------------------------------------------------------------------------------------------
J. Raymond Bilbao                                    11,000        $ 42,324        25,800   58,200            0        0
------------------------------------------------------------------------------------------------------------------------
Todd A. Felker                                            -               -        50,400   70,600            0        0
------------------------------------------------------------------------------------------------------------------------
W. Michael Smith                                          -               -        79,400   66,600            0        0
------------------------------------------------------------------------------------------------------------------------
C. Marshall Lamm                                          -               -        38,000   77,000            0        0
------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       34
<PAGE>

     The Company's board of directors and its compensation committee intend to
further the interests of the Company's stockholders by tying a substantial
portion of executive compensation to the market value of our common stock.
Toward this end, the Company has designed its 1994 stock option plan to support
our ability to attract and retain qualified management and other personnel
necessary for our success and progress.

     Savings Plan. The Company has a 401(k) Retirement Investment Profit-Sharing
Plan that covers all of its employees once they become eligible to participate.
As permitted under the 401(k) Plan, employees may contribute up to 20% of their
pre-tax earnings. The maximum amount of contributions by any employee each year
is $10,500, the maximum amount permitted under the Internal Revenue Code. The
Company matches 0.5% of an employee's contribution to the 401(k) Plan up to the
legally permitted maximum matching of 3% of the employee's contribution.

Employment Agreements

     The Company has entered into employment agreements with:

     .    Jana A. Bell;

     .    Todd A. Felker;

     .    W. Michael Smith;

     .    C. Marshall Lamm;

     .    Robert LaMere;

     .    Pierre H. Parent; and

     .    J. Raymond Bilbao.

     The terms of these employment agreements generally provide that such
officers are eligible to receive stock options in the Company and to participate
in the incentive bonus plan for executive officers.  In addition, the agreements
prohibit the officers from competing with the Company during the term of their
employment and for eighteen months after their employment is terminated.  In the
event of termination without cause, the employment agreements provide for
severance payments equal to the remaining amount of salary payable under the
contract and for continued vesting of all stock options that were granted during
employment and that had not expired at the time of the termination.

     If the employee is terminated within the six months prior to or within two
years following a change in control, other than for cause or death, the
employment agreements provide for payment of severance payments equal to the sum
of:

     .    the highest annual salary paid to the employee during the prior two
          years; and

     .    the highest annual discretionary bonus paid to the employee during the
          prior two years.

     The employment agreements also provide for a gross-up payment equal to the
amount of excise tax assessed on the lump severance payments.  The employment
agreements further provide the same severance benefits which would be received
upon a change in control if the employee terminates the employment agreement
because of:

     .    the reduction of the employee's job title, position or
          responsibilities without the employee's prior written consent;

     .    the change of the location where the employee is based to a location
          which is more than fifty (50) miles from his present location without
          the employee's prior written consent; or

     .    the reduction of the employee's annual salary and bonus by more than
          10% from the sum of the higher rate of the employee's actual annual
          salary and bonus in effect within two years immediately preceding the
          change of control.

                                       35
<PAGE>

     Additionally upon a change in control, all stock options granted to the
employee immediately vest.  For purposes of the employment agreements, a change
in control is defined as:

     .    the subsequent acquisition by any person or group of 35% or more of
          the Company's securities;

     .    during any two year period, the members of the board of directors at
          the beginning of the period cease to constitute a majority of the
          board of directors unless the election or nomination of new directors
          by the stockholders was approved by 2/3 of directors still in office
          who were either directors at the beginning of the period or whose
          election or nomination for election was previously so approved;

     .    a merger of the Company other than a merger in which the stockholders
          of the Company maintain more than 80% of the voting control in the
          surviving entity or a merger effected as part of a recapitalization of
          the Company in which no person acquires more than 30% of the voting
          securities then outstanding; and/or

     .    the approval by the stockholders of the complete liquidation of the
          Company or the sale of substantially all of the assets of the Company.

     The initial terms of these employment agreements expired on December 31,
2000, and these agreements now continue on a month to month basis.  If the
pending debt and equity transactions are completed, these employees will be
entering into new employment agreements with the Company.

     The following paragraphs present additional details of the above employment
agreements.

     Jana A. Bell.  The agreement with Ms. Bell, as amended, provides for Ms.
Bell's employment as President and Chief Executive Officer through December 31,
2000.  In addition to the severance benefits described above, Ms. Bell is also
entitled to severance benefits of twelve months salary upon termination of her
employment contract by the Company even if not terminated in connection with a
change in control.  Under the terms of this agreement, Ms. Bell is paid an
annual salary of $300,000 and is eligible for an annual discretionary bonus of
fifty percent of her base salary based on her achievement of goals as determined
by the Board of Directors of the Company. For more information regarding the
incentive bonus plan, please refer to page 38.

     Todd A. Felker. The agreement with Mr. Felker provides for Mr. Felker's
employment as Senior Vice President, Sales, Marketing and Account Management of
the Company through December 31, 2000.  Under the terms of the agreement, Mr.
Felker is paid an annual salary of $165,000 and is eligible for an annual
discretionary bonus of thirty percent of his base salary pursuant to the
incentive bonus plan of executive officers.  Mr. Felker's annual base
compensation was increased to $171,600 in a meeting of the compensation
committee of the board of directors held on February 6, 2001.  For more
information regarding the incentive bonus plan, please refer to page 38.

     Pierre H. Parent.  The agreement with Mr. Parent provides for Mr. Parent's
employment as Senior Vice President and Chief Technical Officer of the Company
through December 31, 2000.  Under the terms of the agreement, Mr. Parent is paid
an annual salary of $157,500 and is eligible for an annual discretionary bonus
of thirty percent of his base salary pursuant to the incentive bonus plan of
executive officers.  For more information regarding the incentive bonus plan,
please refer to page 38.

     W. Michael Smith. The agreement with Mr. Smith provides for Mr. Smith's
employment as Executive Vice President, Chief Financial Officer and Treasurer of
the Company through December 31, 2000.  Under the terms of the agreement, Mr.
Smith is paid an annual salary of $162,000 and is eligible for an annual
discretionary bonus of thirty percent of his base salary pursuant to the
incentive bonus plan of executive officers.   Mr. Smith's annual base
compensation was increased to $168,480 in a meeting of the compensation
committee of the board of directors held on February 6, 2001.  For more
information regarding the incentive bonus plan, please refer to page 38.

     C. Marshall Lamm.  The agreement with Mr. Lamm provides for Mr. Lamm's
employment as Senior Vice President, Operations of the Company through December
31, 2000.  Under the terms of the agreement, Mr. Lamm is paid an annual salary
of $145,000 and is eligible for an annual discretionary bonus of thirty percent
of his base salary pursuant to the incentive bonus plan of executive officers.
Mr. Lamm's annual base compensation was

                                       36
<PAGE>

increased to $160,000 in a meeting of the compensation committee of the board of
directors held on October 1, 2000. Mr. Lamm's annual base compensation was
further increased to $170,000 in a meeting of the compensation committee of the
board of directors held on April 26, 2001. For more information regarding the
incentive bonus plan, please refer to page 38.

     J. Raymond Bilbao. The agreement with Mr. Bilbao provides for Mr. Bilbao's
employment as General Counsel and Secretary of the Company through December 31,
2000.  Under the terms of the agreement, Mr. Bilbao is paid an annual salary of
$130,000 and is eligible for an annual discretionary bonus of thirty percent of
his base salary pursuant to the incentive bonus plan of executive officers.  Mr.
Bilbao's annual base compensation was increased to $156,000 in a meeting of the
compensation committee of the board of directors held on February 6, 2001. For
more information regarding the incentive bonus plan, please refer to page 38.

     Robert W. LaMere.  The agreement with Mr. LaMere provides for Mr. LaMere's
employment as Senior Vice President of Transportation Systems through December
31, 2000.  Under the terms of the agreement, Mr. LaMere is paid an annual salary
of $147,870 and is eligible for an annual discretionary bonus of thirty percent
of his base salary pursuant to the incentive bonus plan of executive officers.
Mr. LaMere's annual base compensation was increased to $153,785 in a meeting of
the compensation committee of the board of directors held on February 6, 2001.
For more information regarding the incentive bonus plan, please refer to page
38.

          COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

          Jana A. Bell, our President and Chief Executive Officer and member of
our board of directors, annually reviews and adjusts the salary structures of
executive officers who are not subject to employment agreements.  Such decisions
are subject to review by our board of directors.  Our board of directors
annually reviews Ms. Bell's compensation package.

        REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

     Our compensation committee has prepared its report on 2000 executive
compensation as required by rules of the SEC.  This report provides specific
information regarding compensation of the Company's President and Chief
Executive Officer and its executive officers as a group.

Compensation Policies

     The Company structures compensation of its executives in a manner that is
intended to be competitive in the marketplace and to link compensation to the
long-term business objectives of the Company and the enhancement of stockholder
value. The Company has retained certain executives pursuant to term employment
contracts which govern their compensation and others are evaluated on an ongoing
basis.  However, the initial term of these agreements expired on December 31,
2000, and these agreements are on a month-to-month basis. See "Directors and
Executive Officers -- Employment Agreements."  In determining an executive's
total compensation package, the compensation committee considers several
factors, including improvements in overall corporate or business unit
performance; increases in installed customer base; development efforts that
result in greater efficiency or competitive advantages to the Company; and the
level of responsibility, prior experience, satisfaction of individual
performance goals and comparable industry compensation levels for an equivalent
position.

     Decisions concerning compensation of executive officers with employment
contracts have been made by the compensation committee with the approval of the
board of directors.  Those executives whose salaries are not established by
employment contract are set by the Chief Executive Officer or the Chief
Financial Officer and are subject to review by the compensation committee and
the board of directors.  The board of directors has delegated to the
compensation committee, which currently consists of Gerry C. Quinn, John Stupka
and Stephen L. Greaves, the task of discussing strategy and policy matters
related to the 1994 stock option plan, although it also reviews other forms of
compensation from time to time.  None of the members of the compensation
committee is an officer or employee of the Company or holds options granted
under the 1994 stock option plan.

Compensation Objectives

     The Company compensates its executives in a manner that is intended to:

     .    be competitive in the marketplace;

     .    link compensation to long-term business objectives; and

                                       37
<PAGE>

     .    link compensation to the enhancement of stockholder value.

     Certain executives have been retained pursuant to term employment contracts
which govern their compensation and others are evaluated on an ongoing basis.
The Company considers both objective and subjective criteria in determining an
executive's compensation package.  These factors include:

     .    improvements in overall corporate performance;

     .    improvements in business unit performance;

     .    increases in installed customer base;

     .    development efforts that result in greater efficiency or competitive
          advantage;

     .    level of responsibility;

     .    prior experience;

     .    satisfaction of individual performance goals; and

     .    comparable industry compensation for an equivalent position.

Components of Compensation

     The Company offers compensation to executive officers that includes base
salary, short-term cash incentive compensation in the form of a bonus, if
appropriate, and long-term incentive compensation in the form of stock option
grants.  These elements are addressed separately.

     Base Salaries.  Those executives whose salary structures are not
established by employment agreements are subject to annual adjustment by the
Chief Executive Officer or the Chief Financial Officer.  These adjustments and
are subject to review by the compensation committee and the board of directors,
based on the compensation policies described above.  The compensation committee
and the board of directors may also consider such other factors in executive
salary decisions as market competition, inflation and other equity
considerations.  Salary increases reflect job changes, promotions, market
adjustment reviews and ordinary increases.  Executive salary increases in 2000
ranged from 0% to 10%.

     2000 Short-term Incentives - Cash Bonuses and Commissions. The Company has
implemented an incentive bonus plan for the members of the senior business team
who report directly to the Chief Executive Officer.  Under the incentive bonus
plan in 2000, the Company may pay each such person a bonus of up to 30% of his
or her base salary if he or she achieves certain defined goals and objectives.
The bonus is calculated as follows:

     .    70% of the available bonus is tied directly to the achievement of the
          Company's overall business and financial goals;

     .    20% of such bonus is tied to the satisfactory achievement of each
          executive's individual functional area business goals; and

     .    10% of such bonus is payable at the chief executive officer's
          discretion.

     The Company's Chief Executive Officer retains the ability to recommend to
the compensation committee whether any executive achieved his or her goals and
is entitled to receive the bonus.  While Ms. Bell does participate in the
incentive bonus plan, her bonus is directly determined by the compensation
committee.  For additional information regarding Ms. Bell's prospective bonus,
please refer to page 36.  As reflected in the Summary Compensation Table on page
33, Ms. Bell and Messrs. Bilbao, Felker, McCausland, Smith and Lamm received
bonuses in 2000.  See "Directors and Executive Officers -- Employment
Agreements" and "Compensation of Certain Executive Officers - Summary
Compensation Table."

     Long-term Incentives - Stock Option Grants.  The compensation committee
selects certain executive officers of the Company to receive stock options to
purchase shares of common stock, which include both incentive stock options and
nonqualified stock options pursuant to the terms of the Stock Option Plan.  The
compensation committee administers the Stock Option Plan, determines those
officers or other employees to whom options will be granted and prescribes the
terms and conditions of such options, which need not be identical even for
similarly situated employees.

                                       38
<PAGE>

     The board of directors and its compensation committee intend to further the
interests of the Company's stockholders by tying a substantial portion of
executive compensation to the market value of our common stock. The Company
granted new options representing a total of 165,000 shares to executive officers
during 2000.

     Policy with Respect to the $1 Million Deduction Limit

     Section 162(m) of the Internal Revenue Code generally limits the U.S.
corporate income tax deduction for compensation paid to each executive officer
named in the summary compensation table in the proxy statement of a public
company to $1 million for each year, unless certain requirements are met.  For
fiscal 2000, the limitation imposed by Section 162(m) did not apply to the
compensation paid to any executive officers.  Therefore, the board of directors
has taken no action in response to Section 162(m).  The board of directors will
consider actions to qualify compensation for deduction should it appear that the
limits of Section 162(m) will be exceeded, but will retain the discretion to pay
non-deductible compensation if that would be in the best interests of the
Company and their stockholders under the circumstances.

Summary

     The compensation committee believes that the Company's executive
compensation policies and actions provide the Company's executive officers with
the appropriate incentives to achieve the Company's short and long-term goals
and to enhance stockholder value.

                                        COMPENSATION COMMITTEE

                                        Stephen L. Greaves
                                        Gerry C. Quinn
                                        John T. Stupka

                                       39
<PAGE>

PERFORMANCE GRAPH

     The following graph compares total stockholder returns of the Company since
its initial public offering of common stock on June 22, 1995 to two indices:

     .    the NASDAQ CRSP Total Return Index for the NASDAQ Stock Market,
          Composite; and

     .    the NASDAQ CRSP Total Return Index for Telecommunications Stocks.

     Comparison of Cumulative Total Return on Investment Since the Company's
Initial Public Offering on June 22, 1995


                              [PERFORMANCE GRAPH]


                         Nasdaq US        Nasdaq Telecomm
                           Index               Index              ATRK
                         ---------        ---------------        -------
           6/22/95        100.000             100.000            100.000
          12/31/95        112.609             114.867             52.532
          12/31/96        138.550             117.453             91.772
          12/31/97        169.694             171.449             28.800
          12/31/98        239.305             283.750              5.696
          12/31/99        444.718             503.438             11.392
          12/31/00        267.580             216.392              3.797


     The total return for the Company's stock and for each index assumes $100
invested on June 22, 1995 in the Company's common stock, the NASDAQ Composite
Index and the NASDAQ Telecommunications Index, including the reinvestment of
dividends, although cash dividends have never been declared on the Company's
stock. The Company's common stock is traded on the NASDAQ SmallCap Market and is
a component of both the NASDAQ-US Index and the NASDAQ Telecommunications Index.

     The closing price of the common stock on the last trading day of the 2000
fiscal year was $0.75 per share.  Historical stock price performance is not
necessarily indicative of future price performance.

                                       40
<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information, as of May 9, 2001,
regarding beneficial ownership of the common stock and the percentage of total
voting power held by:

     .    each stockholder who is known by the Company to own more than five
          percent (5%) of the outstanding common stock;

     .    each director;

     .    each executive officer; and

     .    all directors and executive officers as a group.

     Unless otherwise noted, the persons named below have sole voting and
investment power with respect to such shares.  The beneficial ownership
information is based on the most recent Schedule 13D or 13G filed with the SEC
by the named stockholders.

                                           Number of Shares
                                           of Common Stock     Percent of Class
                                             Beneficially        Beneficially
Name of Holder                                  Owned               Owned
--------------                                  -----               -----
--------------------------------------------------------------------------------
Erin Mills Stockholders (1)                   9,088,326             35.9%
7501 Keele Street
Suite 500
Concord, Ontario L4K1YZ, Canada
--------------------------------------------------------------------------------
Cingular Wireless Holdings, Inc. (2)          6,600,000             20.7%
17330 Preston Road
Suite 100A
Dallas, Texas 75252
--------------------------------------------------------------------------------
Carlyle Stockholders (3)                      2,723,468             10.8%
1001 Pennsylvania Avenue, N.W.
Suite 220 South
Washington, D.C. 20004-2505
-------------------------------------------------------------------------------
Jana A. Bell (6)                                336,666              1.3%
-------------------------------------------------------------------------------
Stephen L. Greaves (4)                                -                -
-------------------------------------------------------------------------------
Gerry C. Quinn (4) (5)                          272,650              1.1%
-------------------------------------------------------------------------------
John T. Stupka (7)                                3,798                *
-------------------------------------------------------------------------------
William P. Osborne (7)                                -                *
-------------------------------------------------------------------------------
David H. Bagley (7)                               6,002                *
-------------------------------------------------------------------------------
J. Raymond Bilbao (7)                            30,800                *
-------------------------------------------------------------------------------
Todd A. Felker (7)                               56,400                *
-------------------------------------------------------------------------------
Robert J. Lambert, Jr. (7)                       10,300                *
-------------------------------------------------------------------------------
Robert W. LaMere (8)                             42,410                *
-------------------------------------------------------------------------------
C. Marshall Lamm (7)                             48,000                *
-------------------------------------------------------------------------------
Louis W. McAnally (7)                            14,002                *
-------------------------------------------------------------------------------
Pierre H. Parent (7)                             64,400                *
-------------------------------------------------------------------------------
W. Michael Smith (7)                             79,400                *
-------------------------------------------------------------------------------
Stephen P. Tacke (7)                              2,200                *
-------------------------------------------------------------------------------
Ken D. Vandagriff (7)                            15,000                *
-------------------------------------------------------------------------------
Jonathan L. Wiener (7)                           11,600                *
-------------------------------------------------------------------------------
All directors and executive officers            993,628              3.9%
 as a group  (17 persons) (9)
-------------------------------------------------------------------------------

_________________
*    Less than 1%

                                       41
<PAGE>

(1)  This includes 9,061,310 shares of common stock owned of record by Erin
     Mills International Investment Corporation and 27,016 shares owned of
     record by The Erin Mills Investment Corporation.
(2)  This includes 1,600,000 shares of common stock issuable to Cingular
     Wireless upon the conversion of shares of 1,000 shares of Class B Common
     Stock and 5,000,000 shares of common stock issuable to Cingular Wireless
     upon the exercise of warrants.
(3)  This includes 2,222,799 shares owned of record by Carlyle-HighwayMaster
     Investors, L.P.; 209,354 shares owned of record by Carlyle-HighwayMaster
     Investors II, L.P.; and 291,315 shares of record owned by TC Group, L.L.C.
     All of these entities are deemed to have beneficial ownership of the shares
     owned of record by each such other entity.
(4)  Messrs. Quinn and Greaves are affiliated with the Erin Mills Stockholders,
     and they both disclaim beneficial ownership of the shares owned by the Erin
     Mills Stockholders.
(5)  Pursuant to an agreement with the Erin Mills Stockholders, Mr. Quinn has a
     right to acquire up to 272,650 of the shares of the Company held by the
     Erin Mills Stockholders, which right is currently exercisable.
(6)  Ms. Bell owns 45,833 shares of common stock. Additionally, Ms. Bell
     beneficially owns 267,499 shares of common stock issuable upon the exercise
     of stock options granted under the Company's 1994 stock option plan and
     exercisable within 60 days of May 9, 2001.
(7)  This individual does not actually own any shares of common stock.  This
     number represents the number of shares that this individual may acquire
     upon the exercise of stock options that are exercisable within 60 days of
     May 9, 2001.
(8)  Mr. LaMere owns 2,010 shares of common stock. Additionally, Mr. LaMere
     beneficially owns 34,400 shares of common stock issuable upon the exercise
     of stock options granted under the Company's 1994 stock option plan and
     exercisable within 60 days of  May 9, 2001.
(9)  All directors and executive officers (17 persons) collectively own 325,493
     shares of common stock and beneficially own 600,101 share of common stock
     issuable upon the exercise of stock options that are exercisable within 60
     days of May 9, 2001.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Amended and Restated Stockholders' Agreement

     General.  The Company and certain of its stockholders are parties to an
amended and restated stockholders' agreement, dated September 27, 1996, which
contains provisions relating to, among other things:

     .    the transfer of shares of common stock by the stockholders who are
          parties thereto;

     .    the grant of registration rights by the Company to the stockholders
          who are parties thereto; and

     .    the election of members of the Company's board of directors; and

     .    the prohibition of the Company taking certain actions unless approved
          by certain groups of stockholders.

     As used in the following summary of the amended and restated stockholders'
agreement, the following terms have the following definitions:

     .    "Erin Mills Stockholders" means Erin Mills International Investment
          Corporation and The Erin Mills Investment Corporation;

     .    "Carlyle Stockholders" means Carlyle-HighwayMaster Investors, L.P.,
          Carlyle-HighwayMaster Investors II, L.P., TC Group, L.L.C. and Mark D.
          Ein; and

     .    "By-Word Stockholders" means William C. Kennedy, Jr., Donald M.
          Kennedy, William C. Saunders, Robert Folsom and Robert T. Hayes.

     Right of First Refusal. Under the terms of the amended and restated
stockholders' agreement, the Erin Mills Stockholders, the Carlyle Stockholders,
William C. Kennedy, Jr. and William C. Saunders granted a right of first refusal
to Cingular Wireless with respect to all shares of common stock owned by them.
Subject to certain exceptions, the right of first refusal requires that, prior
to selling any shares of common stock, these stockholders must offer such shares
for sale to Cingular Wireless in accordance with the terms of the amended and
restated

                                       42
<PAGE>

stockholders' agreement. In addition, any person who receives common stock from
must one of these stockholders execute an agreement making him or her subject to
the right of first refusal provisions of the amended and restated stockholders'
agreement.

     Election of Directors. The amended and restated stockholders' agreement
provides that the parties will take all action necessary to ensure that the
board of directors of the Company consists of:

     .    two directors designated by the Erin Mills Stockholders;

     .    one director designated by the Carlyle Stockholders;

     .    two directors designated by the By-Word Stockholders;

     .    two independent directors; and

     .    upon the occurrence of certain events discussed below, one director
          designated by Cingular Wireless.

     The Erin Mills Stockholders have designated Gerry C. Quinn and Stephen L.
Greaves to serve as directors.  The Carlyle Stockholders and the By-Word
Stockholders have either irrevocably waived their rights to designate directors,
or sold all of their shares.  John T. Stupka  and William P. Osborne serve as
independent directors.

     In general, no stockholder or group of stockholders will be entitled to
designate any director if the percentage of the outstanding common stock
beneficially owned by such stockholder or group of stockholders falls below 5%.
Erin Mills Stockholders must own at least 20% of the outstanding common stock to
retain the right to designate two directors, and at least 5% to retain its right
to designate one director.  In calculating share ownership for purposes of this
minimum ownership requirement, the agreement provides that certain shares
issuable upon conversion of convertible securities or upon the exercise of
outstanding options, warrants or rights will be included as owned.

     Most of the stockholders have either sold all of their shares or waived all
of their existing rights under the amended and restated stockholders' agreement.
It is anticipated that the remaining stockholders, subject to the amended and
restated stockholders' agreement, including Cingular Wireless, will waive all of
such rights before the annual meeting.  As a result, the Company has sent an
acknowledgement to each of the stockholders who have entered into the amended
and restated stockholders' agreement requesting their agreement that the amended
and restated stockholders' agreement is no longer effective and is terminated.

Transactions with SBC Communications, Inc.

     Sale of Series D Preferred Stock and Warrants. On September 27, 1996, the
Company and Southwestern Bell Wireless Holdings, Inc., now known as SBC
Wireless, Inc., entered into a purchase agreement, pursuant to which the Company
sold 1,000 shares of series D participating convertible preferred stock to SBC
Wireless for $20 million.  In connection with the sale of series D preferred
stock to SBC, the Company issued warrants to SBC, which allow it to purchase
3,000,000 shares of common stock from the Company at an exercise price of $14.00
per share and 2,000,000 shares of common stock at an exercise price of $18.00
per share, in each case subject to adjustment to prevent dilution.  SBC was
prohibited from providing landline, interLATA long distance service until it
received all necessary federal and state regulatory approvals as required by the
Telecommunications Act of 1996.  On July 11, 2000, SBC obtained the final
approval to provide long distance service in Texas from the Federal
Communications Commission.  On September 18, 2000, as required by this purchase
agreement, the Company received written notice from SBC acknowledging that it
had obtained regulatory relief, which relief triggered the automatic conversion
of all its shares of series D preferred stock into 1,000 shares of our class B
common stock.

     Prior to the receipt of regulatory approval, SBC formed a joint venture
with Bell South Corporation called Cingular Wireless LLC, and SBC contributed
its shares of the Company stock and the warrants to this new joint venture.
Prior to the completion of the proposed stock issuance transactions, Cingular
Wireless has agreed to convert its 1,000 shares of class B common stock into
1,600,000 shares of the Company's common stock and forever waive its special
voting rights.

     Other Agreements. On June 7, 1993, SBC Wireless, and the Company entered
into a cellular service agreement, which was last amended on May 7, 1997 and
which provides the Company's customers with analog cellular airtime in the SBC-
owned markets and affiliated markets.

                                       43
<PAGE>

     Under the terms of the purchase agreement with SBC, because SBC and its
affiliates obtained regulatory relief as discussed above, the Company was
required to enter into a voice and data services agreement with an affiliate of
SBC. The voice and data services agreement, if entered into by the parties,
would have provided that the Company will purchase long distance and other voice
and data services from this SBC affiliate.

     On September 21, 2000, SBC agreed to waive the requirement that the Company
immediately execute the voice and data agreement following SBC's receipt of
regulatory relief on September 18, 2000 based upon its inability to provide the
specialized long distance services required by the Company.  In connection with
such waiver, SBC consented to the Company's execution on September 29, 2000 of a
long distance agreement with MCI Long Distance for a 15-month term.  In exchange
for this consent, SBC and the Company also executed a letter of intent for the
purchase of long distance services by the Company from SBC following the
expiration of the MCI Long Distance contract subject to SBC's, or its
affiliates', demonstration of the required technical capability.

     In August 1998, the Company entered into an agreement with member companies
of SBC whereby such member companies purchased 11,500 mobile units, customized
proprietary software and accompanying services from the Company for an initial
term of one year.  In the first quarter of 1999, the Company entered into a
second agreement with these SBC companies that extended the initial one-year
term to three years.  Subsequently, the SBC companies ordered an additional
3,140 mobile units.  In January of 2000, SBC notified the Company that it had
chosen the Company to provide an additional 28,000 mobile units.  In the
aggregate, these agreements represent the largest purchase and service contract
that the Company has entered into to date.

     In March 1999, the Company entered into an agreement with Southwestern Bell
Mobile Systems, Inc., a subsidiary of SBC.  Under this agreement, Southwestern
Bell Mobile Systems will provide certain administrative and billing services to
the Company in connection with the Company's provision of enhanced services to
its end users.

Registration Statement on Form S-3

     On September 18, 1998, the Company completed a registration of certain
warrants and warrant shares under the Securities Act of 1933, when the SEC
declared its registration statement on Form S-3 to be effective. The Company was
required to register these warrants and warrant shares under a warrant
registration rights agreement it entered into as part of a debt offering
completed in 1997.  Under the terms of the warrant registration rights
agreement, @Track is required to use its best efforts to keep the registration
statement continuously effective until either the warrants expire or they all
have been exercised, whichever occurs first.  However, during any consecutive
365-day period, @Track may temporarily halt the effectiveness of the
registration statement on up to two occasions for no more than 45 consecutive
days if certain conditions are met.  The temporary halt must be in connection
with a proposed acquisition, business combination or other development affecting
@Track, and the board of directors must determine that disclosure of the
proposed development would not be in the best interests of @Track. The Company
will not receive any income from the sale of the warrants by the selling warrant
holders.  However, if or when any warrants are exercised, the Company will
receive the exercise price for the warrant shares.  During 2000, no warrant
shares were exercised.

     The Company provided all eligible parties under the amended and restated
stockholders' agreement notice of their opportunity to piggyback the
registration of their the Company common stock in connection with the
Registration Statement on Form S-3.  The Carlyle Stockholders were the only
eligible parties who exercised such piggyback rights, and the Carlyle
Shareholders registered all 2,723,468 shares beneficially owned by them under
this registration statement.   The Carlyle Stockholders have informed us that
they did not sell any common stock in this offering in 2000.

                                       44
<PAGE>

                                    PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

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


   (1)  Reports of Independent Public Accountants............................................      F-1-2

        Consolidated Balance Sheets as of December 31, 2000 and 1999.........................      F-3

        Consolidated Statements of Operations for the Years Ended
          December 31, 2000, 1999 and 1998...................................................      F-4

        Consolidated Statements of Cash Flows for the Years Ended
          December 31, 2000, 1999 and 1998...................................................      F-5

        Consolidated Statements of Changes in Stockholders' Equity (Deficit)
          for the Years Ended December 31, 2000, 1999 and 1998...............................      F-6

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

   (2)  Financial Statement Schedules

        Reports of Independent Public Accountants on Financial Statement Schedules...........      S-1

        Schedule II-Valuation and Qualifying Accounts........................................      S-2

</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.

   (3)  Exhibits

                               INDEX TO EXHIBITS

          EXHIBIT
          NUMBER                             TITLE
          ------                             -----

           3.1   -  Certificate of Incorporation of the Company, as
                    amended.(1)(9)
           3.2   -  Amended and Restated By-Laws of the Company.(13)
           4.1   -  Specimen of certificate representing Common Stock, $.01 par
                    value, of the Company.(1)
           4.2   -  Warrant Certificate, dated September 27, 1996, issued to
                    SBW.(7)
           4.3   -  Recapitalization Agreement, dated September 27, 1996, by and
                    among the Company, the Erin Mills Stockholders, the Carlyle
                    Stockholders and the other persons named therein.(7)
           4.4   -  Amended and Restated Stockholders Agreement, dated September
                    27, 1996, by and among the Company, SBW, the Erin Mills
                    Stockholders, the Carlyle Stockholders, the By-Word
                    Stockholders and the other persons named therein.(7)
           4.5   -  Indenture dated September 23, 1997 by and among the Company,
                    HighwayMaster Corporation and Texas Commerce Bank, National
                    Association.(12)
           4.6   -  Pledge Agreement dated September 23, 1997, by and among the
                    Company, Bear, Stearns & Co. Inc. and Smith Barney Inc.(12)
           4.7   -  Registration Rights Agreement dated September 23, 1997, by
                    and among the

                                       45
<PAGE>

                    Company, HighwayMaster Corporation, Bear, Stearns & Co. Inc.
                    and Smith Barney Inc.(12)
           4.8   -  Warrant Agreement dated September 23, 1997, by and among the
                    Company, Bear, Stearns & Co. Inc. and Smith Barney Inc.(12)
           4.9   -  Warrant Registration Rights Agreement dated September 23,
                    1997, by and among the Company, Bear, Stearns & Co. Inc. and
                    Smith Barney, Inc.(12)
          10.1   -  License Agreement, dated April 23, 1992, by and between
                    Voice Control Systems and the Company (as successor to By-
                    Word Technologies, Inc.)(1)
          10.2   -  Second Amendment to Employment Agreement, dated September 1,
                    1998, by and between HighwayMaster Corporation and William
                    C. Saunders. (16)
          10.3   -  Agreement and General Release, dated September 30, 1998, by
                    and between HighwayMaster Corporation and William C.
                    Kennedy, Jr.(15)
          10.4   -  Release of HighwayMaster Communications, Inc. and
                    HighwayMaster Corporation by William C. Saunders, dated
                    December 15, 1998. (16)
          10.5   -  Release of William C. Saunders by HighwayMaster
                    Communications, Inc. and HighwayMaster Corporation, dated
                    December 15, 1998. (16)
          10.6   -  Amended and Restated 1994 Stock Option Plan of the Company,
                    dated February 4, 1994, as amended.(1)(5)(6)
          10.7   -  Purchase Agreement, dated September 27, 1996, between the
                    Company and SBW.(7)
          10.8   -  Mobile Communications (Voice and Data) Services Agreement,
                    dated as of July 15, 1993, between the Company and EDS
                    Personal Communications Corporation.(1)(2)
          10.9   -  Stock Option Agreement, dated June 22, 1998, by and between
                    the Company and John Stupka. (16)
         10.10   -  Services Agreement, dated March 20, 1996, between the
                    Company and GTE-Mobile Communications Service
                    Corporation.(3)(4)
         10.11   -  Acknowledgment by William C. Saunders dated December 15,
                    1998. (16)
         10.12   -  Amendment dated November 16, 1995 to that certain Mobile
                    Communications (Voice and Data) Services Agreement, dated as
                    of July 15, 1993, between the Company and EDS Personal
                    Communications Corporation.(3)(4)
         10.13   -  Mutual Separation and Release, dated December 22, 1998, by
                    and between HighwayMaster Corporation and Gordon D. Quick.
                    (16)
         10.14   -  Product Development Agreement, dated December 21, 1995,
                    between HighwayMaster Corporation and IEX Corporation.(3)(4)
         10.15   -  Technical Services Agreement, dated September 27, 1996,
                    between HighwayMaster Corporation and Southwestern Bell
                    Wireless Holdings, Inc.(7)
         10.16   -  Letter Agreement, dated February 19, 1996, between
                    HighwayMaster Corporation and IEX Corporation.(3)
         10.17   -  Form of Adoption Agreement, Regional Prototype Cash or
                    Deferred Profit-Sharing Plan and Trust Sponsored by McKay
                    Hochman Co., Inc., relating to the HighwayMaster Corporation
                    401(k) Plan. (1)
         10.18   -  February 27, 1997 Addendum to Original Employment Letter,
                    dated September 19, 1997 by and between the HighwayMaster
                    Corporation and Robert LaMere. (16)
         10.19   -  Software Transfer Agreement, dated April 25, 1997, between
                    HighwayMaster Corporation and Burlington Motor Carriers,
                    Inc.(9)(10)
         10.20   -  Employment Agreement, dated June 3, 1998, by and between
                    HighwayMaster Corporation and Todd A. Felker. (16)
         10.21   -  Employment Agreement, dated June 3, 1998, by and between
                    HighwayMaster Corporation and William McCausland.(16)
         10.22   -  Employment Agreement, dated May 29, 1998, by and between
                    HighwayMaster Corporation and Jana Ahlfinger Bell. (14)
         10.23   -  Lease Agreement, dated March 20, 1998, between HighwayMaster
                    Corporation and Cardinal Collins Tech Center, Inc.(15)
         10.24   -  First Amendment to Employment Agreement, dated September 15,
                    1998, by and

                                       46
<PAGE>

                    between HighwayMaster Corporation and Jana A. Bell. (16)
         10.25   -  Employment Agreement, dated November 24, 1998, by and
                    between HighwayMaster Corporation and Michael Smith. (16)
         10.26   -  September 18, 1998 Amended and Restated Stock Option
                    Agreement of May 29, 1998 by and between the Company and
                    Jana Ahlfinger Bell. (16)
         10.27   -  Stock Option Agreement, dated August 12, 1998, by and
                    between the Company and Jana Ahlfinger Bell. (16)
         10.28   -  Stock Option Agreement, dated September 18, 1998, by and
                    between the Company and Jana Ahlfinger Bell. (16)
         10.29   -  September 18, 1998 Amended and Restated Stock Option
                    Agreement of February 29, 1996, by and between the Company
                    and William H. McCausland. (16)
         10.30   -  Stock Option Agreement, dated September 18, 1998, by and
                    between the Company and William H. McCausland. (16)
         10.31   -  September 18, 1998 Amended and Restated Stock Option
                    Agreement of April 25, 1997, by and between the Company and
                    Robert LaMere. (16)
         10.32   -  September 18, 1998 Amended and Restated Stock Option
                    Agreement of June 3, 1998, by and between the Company and
                    Todd A. Felker (16)
         10.33   -  Stock Option Agreement dated November 24, 1998, by and
                    between the Company and Michael Smith. (16)
         10.34   -  Stock Option Agreement, dated April 4, 1995, by and between
                    the Company and Terry Parker. (16)
         10.35   -  Agreement No. 980427 between Southwestern Bell Telephone
                    Company, Pacific Bell, Nevada Bell, Southern New England
                    Telephone and HighwayMaster Corporation executed on January
                    13, 1999. (17)(18)
         10.36   -  Administrative Carrier Agreement entered into between
                    HighwayMaster Corporation and Southwestern Bell Mobile
                    Systems, Inc. on March 30, 1999. (17)(18)
         10.37   -  Addendum to Agreement entered into between HighwayMaster
                    Corporation and International Telecommunications Data
                    Systems, Inc. on February 4, 1999. (17)(18)
         10.38   -  Second Addendum to Agreement entered into between
                    HighwayMaster Corporation and International
                    Telecommunications Data Systems, Inc. on February 4, 1999.
                    (17)(18)
         10.39   -  Manufacturing and Equipment Purchase Agreement entered into
                    between HighwayMaster Corporation and Wireless Link
                    Corporation on March 9, 1999. (17)(18)
         10.40   -  Agreement entered into between HighwayMaster Corporation and
                    Cellemetry LLC on January 19, 1999. (17)(18)
         10.41   -  Agreement entered into between HighwayMaster Corporation and
                    Cellemetry LLC on January 19, 1999. (17)(18)
         10.42   -  Agreement entered into between HighwayMaster Corporation and
                    Cellemetry LLC on January 19, 1999. (17)(18)
         10.43   -  Agreement entered into between HighwayMaster Corporation and
                    Cellemetry LLC on January 7, 1999. (17)(18)
         10.44   -  Stock Option Agreement dated June 24, 1999, by and between
                    the Company and J. Raymond Bilbao. (19)
         10.45   -  Stock Option Agreement dated June 24, 1999, by and between
                    the Company and Marshall Lamm. (19)
         10.46   -  Stock Option Agreement dated June 14, 1999, by and between
                    the Company and Marc A. Bringman. (19)
         10.47   -  Transition Agreement entered into between GTE Wireless
                    Services Corporation and HighwayMaster Corporation on April
                    30, 1999. (19)(20)
         10.48   -  Fleet-on-Track Services Agreement entered into between GTE
                    Telecommunications Services Incorporated and HighwayMaster
                    Corporation on May 3, 1999. (19)(20)

                                       47
<PAGE>

         10.49   -  Confidential Memorandum of Understanding entered into
                    between Criticom International Corp. and HighwayMaster
                    Corporation on April 16, 1999. (19)(20)
         10.50   -  Stock Option Agreement dated September 3, 1999, by and
                    between the Company and J. Raymond Bilbao. (21)
         10.51   -  Stock Option Agreement dated September 3, 1999, by and
                    between the Company and Todd Felker. (21)
         10.52   -  Stock Option Agreement dated September 3, 1999, by and
                    between the Company and C. Marshall Lamm. (21)
         10.53   -  Stock Option Agreement dated September 3, 1999, by and
                    between the Company and William H. McCausland. (21)
         10.54   -  Stock Option Agreement dated September 3, 1999, by and
                    between the Company and Pierre H. Parent. (21)
         10.55   -  Stock Option Agreement dated September 3, 1999, by and
                    between the Company and W. Michael Smith. (21)
         10.56   -  Stock Option Agreement dated September 3, 1999, by and
                    between the Company and Robert W. LaMere. (21)
         10.57   -  Stock Option Agreement dated September 3, 1999 by and
                    between the Company and Stephen P. Tacke. (21)
         10.58   -  Employment Agreement, dated March 13, 2000, by and between
                    the Company and W. Michael Smith. (22)
         10.59   -  Employment Agreement, dated March 13, 2000, by and between
                    the Company and J. Raymond Bilbao. (22)
         10.60   -  Employment Agreement, dated March 13, 2000, by and between
                    the Company and Todd A. Felker. (22)
         10.61   -  Employment Agreement, dated March 13, 2000, by and between
                    the Company and Marshall Lamm. (22)
         10.62   -  Employment Agreement, dated March 13, 2000, by and between
                    the Company and Pierre Parent. (22)
         10.63   -  Limited Liability Company Agreement of HighwayMaster of
                    Canada, LLC executed March 3, 2000. (22)
         10.64   -  Investor Relations Services Agreement, dated March 31, 2000,
                    by and between the Company and N.D. Hamilton Associates,
                    Inc. (22)
         10.65   -  Employment Agreement, dated May 31, 2000, by and between the
                    Company and Jana A. Bell. (24)
         10.66   -  Employment Agreement, dated June 6, 2000, by and between the
                    Company and Robert W. LaMere. (24)
         10.67   -  Monitoring Services Agreement dated May 25, 2000, by and
                    between the Company and Criticom International Corporation.
                    (23) (24)
         10.68   -  Commercial Lease Agreement dated April 26, 2000 by and
                    between the Company and 10th Street Business Park, Ltd. (24)
         10.69   -  Special Customer Arrangement for MCI WORLDCOM On-Net
                    Services dated October 23, 2000 by and between the Company
                    and MCI WORLDCOM. (25)
         23.1    -  Consent of Arthur Andersen LLP. (26)
         23.2    -  Consent of PricewaterhouseCoopers LLP. (26)
     _______
     (1)  Filed in connection with the Company's Registration Statement on
          Form S-1, as amended (No. 33-91486), effective June 22, 1995.
     (2)  Certain confidential portions deleted pursuant to Order Granting
          Application for Confidential Treatment issued in connection with
          Registration Statement on Form S-1 (No. 33-91486) effective June 22,
          1995.

                                       48
<PAGE>

     (3)  Filed in connection with the Company's Annual Report on Form 10-K
          for the fiscal year ended December 31, 1995.
     (4)  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.
     (5)  Indicates management or compensatory plan or arrangement required to
          be identified pursuant to Item 14(a)(4).
     (6)  Filed in connection with the Company's Form 10-Q Quarterly Report
          for the quarterly period ended June 30, 1996.
     (7)  Filed in connection with the Company's Current Report on Form 8-K
          filed on October 7, 1996.
     (8)  Filed in connection with the Company's Annual Report on Form 10-K
          for the fiscal year ended December 31, 1996.
     (9)  Filed in connection with the Company's Form 10-Q Quarterly Report
          for the quarterly period ended March 31, 1997.
     (10) 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.
     (11) Filed in connection with the Company's Form 10-Q Quarterly Report
          for the quarterly period ended June 30, 1997.
     (12) Filed in connection with the Company's Registration Statement on
          Form S-4, as amended (No. 333-38361).
     (13) Filed in connection with the Company's Annual Report on Form 10-K
          for the fiscal year ended December 31, 1997.
     (14) Filed in connection with the Company's Form 10-Q Quarterly Report
          for the quarterly period ended June 30, 1998.
     (15) Filed in connection with the Company's Form 10-Q Quarterly Report
          for the quarterly period ended September 30, 1998.
     (16) Filed in connection with the Company's Form 10-K fiscal year ended
          December 31, 1998.
     (17) Filed in connection with the Company's Form 10-Q Quarterly Report
          for the quarterly period ended March 31, 1999.
     (18) 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.
     (19) Filed in connection with the Company's Form 10-Q Quarterly Report
          for the quarterly period ended June 30, 1999.
     (20) 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.
     (21) Filed in connection with the Company's Form 10-Q Quarterly Report
          for the quarterly period ended September 30, 1999.
     (22) Filed in connection with the Company's Form 10-Q Quarterly Report
          for the quarterly period ended March 31, 2000.
     (23) 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.
     (24) Filed in connection with the Company's Form 10-Q Quarterly Report
          for the quarterly period ended June 30, 2000.
     (25) Certain confidential portions deleted pursuant to Application for
          Confidential Treatment filed on February 27, 2001. Filed in connection
          with the Company's Form 10-K for the year ended December 31, 2000
          filed on February 27, 2001.
     (26) Filed herewith.

                                       49
<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.

May 11, 2001

                                   @TRACK COMMUNICATIONS, INC.

                                   By: /s/ Jana Ahlfinger Bell
                                       -----------------------------------------
                                           Jana Ahlfinger Bell,
                                           President and Chief Executive Officer

                                       50
<PAGE>

                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual
Report on Form 10-K/A for the fiscal year ended December 31, 2000, has been
signed below by the following persons on behalf of the Registrant in the
capacities and on the dates indicated.

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

Signature                          Title                                        Date

/s/ Jana Ahlfinger Bell            President, Chief Executive Officer, and      May 11, 2001
--------------------------         Director (Principal Executive Officer)
    Jana Ahlfinger Bell


/s/ W. Michael Smith               Executive Vice President and                 May 11, 2001
--------------------------         Chief Financial Officer
    W. Michael Smith               (Principal Financial Officer)


/s/ Stephen P. Tacke               Vice President and Controller                May 11, 2001
--------------------------         (Principal Accounting Officer)
    Stephen P. Tacke


/s/ Stephen L. Greaves             Director                                     May 11, 2001
--------------------------
    Stephen L. Greaves


/s/ Gerry C. Quinn                 Director                                     May 11, 2001
--------------------------
    Gerry C. Quinn


/s/ John T. Stupka                 Director                                     May 11, 2001
--------------------------
    John T. Stupka


/s/ Dr. William P. Osborne         Director                                     May 11, 2001
--------------------------
    Dr. William P. Osborne



</TABLE>

                                       51
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

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

We have audited the accompanying consolidated balance sheets of @Track
Communications, Inc. (formerly HighwayMaster Communications, Inc.) and its
subsidiary (a Delaware corporation, the "Company") as of December 31, 2000 and
1999, and the related consolidated statements of operations, cash flows, and
stockholders' equity (deficit) for the years then ended. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of @Track
Communications, Inc. and its subsidiary as of December 31, 2000 and 1999, and
the results of their operations and cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States.

Effective January 1, 2000, the Company adopted Staff Accounting Bulletin No.
101, "Revenue Recognition in Financial Statements," as described in Note 5.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern.  As reflected in the
accompanying consolidated financial statements, the Company has incurred net
losses for the years ended December 31, 2000, 1999, and 1998, has a
stockholders' deficit of $58.3 million at December 31, 2000, and has substantial
semi-annual cash interest payments due beginning March 15, 2001.  These factors,
among others, as discussed in Note 4, raise substantial doubt concerning the
ability of the Company to continue as a going concern.  Management's plans in
regard to these matters, including a description of certain pending equity and
debt transactions, are described in Note 2.  The consolidated financial
statements do not include any adjustments relating to the recoverability and
classification of asset carrying amounts or the amount and classification of
liabilities that might result should the Company be unable to continue as a
going concern.

                                                  ARTHUR ANDERSEN LLP

Dallas, Texas
February 22, 2001
(except for the matters discussed
in Notes 2, 3, and 17 as to which the date is
May 1, 2001)

                                      F-1
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

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

In our opinion, the accompanying consolidated statements of operations, cash
flows and changes in stockholders' equity (deficit) for the year ended December
31, 1998 present fairly, in all material respects, the results of operations and
cash flows of @Track Communications, Inc. (formerly HighwayMaster
Communications, Inc.) and its subsidiary (the "Company") for the year ended
December 31, 1998, in conformity with accounting principles generally accepted
in the United States of America. 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. We conducted our audit
of these statements in accordance with auditing standards generally accepted in
the United States of America which 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, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above. We have not
audited the consolidated financial statements of @Track Communications, Inc. for
any period subsequent to December 31, 1998.


PRICEWATERHOUSECOOPERS LLP
Dallas, Texas
February 16, 1999

                                      F-2
<PAGE>

                  @TRACK COMMUNICATIONS, INC. AND SUBSIDIARY
                          CONSOLIDATED BALANCE SHEETS
                   (in thousands, except share information)

<TABLE>
<CAPTION>
                                                                                    December 31,    December 31,
                                                                                        2000            1999
                                                                                    ------------    ------------
<S>                                                                                 <C>             <C>

                                                    ASSETS
Current assets:
   Cash and short-term investments                                                   $   20,641      $   17,768
   Accounts receivable, net of allowance for doubtful accounts
      of $7,305 and $7,448, respectively                                                 12,738          13,341
   Inventories                                                                           13,216           9,292
   Pledged securities                                                                         -          12,705
   Deferred product costs - current portion                                               7,406               -
   Other current assets                                                                   1,759           2,588
                                                                                    -----------     -----------
      Total current assets                                                               55,760          55,694
   Network, equipment and software, net of accumulated depreciation
      and amortization of $19,295 and $13,842, respectively                              12,851          15,703
   Deferred product costs - non-current portion                                           9,770               -
   Other assets, net of accumulated amortization
      of $1,469 and $1,017, respectively                                                  2,663           2,676
                                                                                    -----------     -----------
      Total assets                                                                   $   81,044      $   74,073
                                                                                    ===========     ===========

                                  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
   Accounts payable                                                                  $    7,992      $    2,431
   Telecommunications costs payable                                                       5,358           4,462
   Accrued interest payable                                                               3,784           3,784
   Deferred product revenues - current portion                                            8,975               -
   Other current liabilities                                                              8,826           9,357
                                                                                    -----------     -----------
      Total current liabilities                                                          34,935          20,034
   Deferred product revenues - non-current portion                                       11,966               -
Senior notes payable                                                                     92,484          92,090
                                                                                    -----------     -----------
   Total liabilities                                                                    139,385         112,124
                                                                                    -----------     -----------

Commitments and contingencies (Note 17)

Stockholders' equity (deficit):
   Series D preferred stock, $0.01 par value, 1,000 shares authorized; 1,000
      shares issued and outstanding at December 31, 1999                                      -               -
   Common stock, $0.01 par value, 50,000,000 shares authorized;
      25,638,826 and 25,432,210 shares issued; 25,326,829 and 25,120,213
         shares outstanding at December 31, 2000 and 1999, respectively                     256             255
   Common stock - Class B, $0.01 par value, 1,000 shares authorized;
   1,000 shares issued and outstanding at December 31, 2000                                   -               -
   Additional paid-in capital                                                           149,996         149,742
   Accumulated deficit                                                                 (208,046)       (187,501)
   Treasury stock, 311,997 shares, at cost                                                 (547)           (547)
                                                                                    -----------     -----------
      Total stockholders' equity (deficit)                                              (58,341)        (38,051)
                                                                                    -----------     -----------
      Total liabilities and stockholders' equity (deficit)                           $   81,044      $   74,073
                                                                                    ===========     ===========
</TABLE>

                See accompanying notes to financial statements.

                                      F-3
<PAGE>

                  @TRACK COMMUNICATIONS, INC. AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                       (In thousands, except per share)

<TABLE>
<CAPTION>
                                                                     Year ended December 31,
                                                           ------------------------------------------
                                                              2000            1999            1998
                                                           ----------      ----------      ----------
<S>                                                        <C>             <C>             <C>
Revenues (Note 5):
  Product                                                  $   41,971      $   43,018      $   16,950
  Ratable product                                              12,093               -               -
  Service                                                      48,066          52,655          46,463
                                                           ----------      ----------      ----------
    Total revenues                                            102,130          95,673          63,413
                                                           ----------      ----------      ----------

Cost of revenues (Notes 5 and 7):
  Product                                                      30,031          34,752          13,222
  Ratable product                                              10,006               -               -
  Service                                                      30,636          26,724          32,419
                                                           ----------      ----------      ----------
    Total cost of revenues                                     70,673          61,476          45,641
                                                           ----------      ----------      ----------

Gross profit                                                   31,457          34,197          17,772
                                                           ----------      ----------      ----------

Expenses:
  General and administrative                                   12,478          14,706          22,875
  Customer service                                              7,146           7,770          10,604
  Sales and marketing                                           4,980           4,091           7,372
  Engineering                                                   4,345           2,685           5,399
  Network services center                                       1,512           1,437           1,992
  Severance and AutoLink(R) termination cost                        -            (189)          5,357
  Depreciation and amortization                                 5,907           6,551           5,829
                                                           ----------      ----------      ----------
                                                               36,368          37,051          59,428
                                                           ----------      ----------      ----------

    Operating loss                                             (4,911)         (2,854)        (41,656)

Interest income                                                 1,371           2,037           4,827
Interest expense                                              (13,368)        (13,422)        (17,099)
Other income (Note 7)                                           1,569           2,715               -
                                                           ----------      ----------      ----------
  Loss before income taxes, extraordinary item and
    cumulative effect of accounting change                    (15,339)        (11,524)        (53,928)
Income tax provision                                                -               -               -
                                                           ----------      ----------      ----------
  Loss before extraordinary item and
    cumulative effect of accounting change                    (15,339)        (11,524)        (53,928)
Extraordinary item                                                  -               -          18,867
Cumulative effect of accounting change                         (5,206)              -               -
                                                           ----------      ----------      ----------
  Net loss                                                 $  (20,545)     $  (11,524)     $  (35,061)
                                                           ==========      ==========      ==========

Basic and diluted loss per share:
  Loss before extraordinary item and cumulative
    effect of accounting change                            $    (0.61)     $    (0.46)     $    (2.17)
  Extraordinary item                                              -               -              0.76
  Cumulative effect of accounting change                        (0.20)            -               -
                                                           ----------      ----------      ----------
  Net loss                                                 $    (0.81)     $    (0.46)     $    (1.41)
                                                           ==========      ==========      ==========

Weighted average number of shares outstanding
  Basic                                                        25,291          24,974          24,899
                                                           ==========      ==========      ==========
  Diluted                                                      25,291          24,974          24,899
                                                           ==========      ==========      ==========
</TABLE>

                See accompanying notes to financial statements.

                                      F-4
<PAGE>

                  @TRACK COMMUNICATIONS, INC. AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)

<TABLE>
<CAPTION>
                                                                                        Year ended December 31,
                                                                               ------------------------------------------
                                                                                  2000            1999            1998
                                                                               ----------      ----------      ----------
<S>                                                                            <C>             <C>             <C>
Cash flows from operating activities:
  Net loss                                                                     $  (20,545)     $  (11,524)     $  (35,061)
  Adjustments to reconcile net loss to cash used in
    operating activities:
      Depreciation and amortization                                                 5,907           6,551           5,829
      Amortization of discount on notes payable                                       394             393             503
      Extraordinary item                                                                -               -         (18,867)
      Provision for bad debts                                                       1,477           4,294           6,650
      (Increase) in accounts receivable                                              (874)         (3,050)         (7,272)
      (Increase) decrease in inventory                                             (3,924)          3,629          (9,776)
      (Increase) decrease in deferred product costs                               (17,176)              -               -
      Increase (decrease) in accounts payable                                       5,561          (8,931)          5,100
      Increase (decrease) in deferred product revenues                             20,941               -               -
      Increase (decrease) in accrued expenses and other current liabilities           365          (9,255)         15,873
      Net book value of equipment retired                                               -           1,950               -
      Other                                                                           387          (1,702)          1,409
                                                                               ----------      ----------      ----------
        Net cash used in operating activities                                      (7,487)        (17,645)        (35,612)
                                                                               ----------      ----------      ----------

Cash flows from investing activities:
      Additions to network and equipment                                           (1,581)         (2,329)         (9,202)
      Additions to capitalized software                                            (1,019)           (774)         (1,318)
      Liquidation of pledged securities                                            12,705          12,083          14,553
      Decrease in temporary investments                                                 -               -          13,626
      (Increase) decrease in short-term investments                                12,601          (2,893)         10,001
                                                                               ----------      ----------      ----------
        Net cash provided by investing activities                                  22,706           6,087          27,660
                                                                               ----------      ----------      ----------

Cash flows from financing activities:
      Purchase of senior notes                                                          -               -         (10,427)
      Release of pledged securities allocable to retired senior notes                   -               -           8,063)
      Proceeds from exercise of stock options                                         255             264               -
                                                                               ----------      ----------      ----------
        Net cash provided by (used in) financing activities                           255             264          (2,364)
                                                                               ----------      ----------      ----------
Increase (decrease) in cash and cash equivalents                                   15,474         (11,294)        (10,316)
Cash and cash equivalents, beginning of year                                        5,167          16,461          26,777
                                                                               ----------      ----------      ----------
Cash and cash equivalents, end of year                                             20,641           5,167          16,461
Short-term investments                                                                  -          12,601           9,708
                                                                               ----------      ----------      ----------
Cash and short-term investments                                                $   20,641      $   17,768      $   26,169
                                                                               ==========      ==========      ==========

Supplemental cash flow information:
      Interest paid                                                            $   12,974      $   12,974      $   16,806
                                                                               ==========      ==========      ==========
</TABLE>

                See accompanying notes to financial statements.

                                      F-5
<PAGE>

                  @TRACK COMMUNICATIONS, INC. AND SUBSIDIARY
     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>
Stockholder's equity (deficit) at December 31, 1997      1,000    $        -    25,210,983    $      252             -    $        -
  Net loss for year
                                                        --------------------    ------------------------    ------------------------
Stockholders' equity (deficit) at December 31, 1998      1,000             -    25,210,983           252             -             -
  Exercise of stock options                                                        221,227             3
  Net loss for year
                                                        --------------------    ------------------------    ------------------------
Stockholders' equity (deficit) at December 31, 1999      1,000             -    25,432,210           255             -             -
  Exercise of stock options                                                        206,616             1
  Conversion of Series D Preferred Stock to
      Class B Common Stock                              (1,000)            -                                     1,000             -
  Net loss for year
                                                        --------------------    ------------------------    ------------------------
Stockholders' equity (deficit) at December 31, 2000          -    $        -    25,638,826    $      256         1,000    $        -
                                                        ====================    ========================    ========================

<CAPTION>
                                                            Additional          Treasury Stock
                                                             Paid-in        -----------------------      Accumulated
                                                             Capital         Shares       Amount          Deficit         Total
                                                            ----------      -----------------------      ----------      ----------
<S>                                                         <C>             <C>          <C>             <C>             <C>
Stockholder's equity (deficit) at December 31, 1997         $  149,481        311,997    $     (547)     $ (140,916)     $    8,270
  Net loss for year                                                                                         (35,061)        (35,061)
                                                            ----------      -----------------------      ----------      ----------
Stockholders' equity (deficit) at December 31, 1998            149,481        311,997          (547)       (175,977)        (26,791)
  Exercise of stock options                                        261                                                          264
  Net loss for year                                                                                         (11,524)        (11,524)
                                                            ----------      -----------------------      ----------      ----------
Stockholders' equity (deficit) at December 31, 1999            149,742        311,997          (547)       (187,501)        (38,051)
  Exercise of stock options                                        254                                                          255
  Conversion of Series D Preferred Stock to
      Class B Common Stock
  Net loss for year                                                                                         (20,545)        (20,545)
                                                            ----------      -----------------------      ----------      ----------
Stockholders' equity (deficit) at December 31, 2000         $  149,996        311,997    $     (547)     $ (208,046)     $  (58,341)
                                                            ==========      =======================      ==========      ==========
</TABLE>

                                      F-6
<PAGE>

@TRACK COMMUNICATIONS, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS

1.     BUSINESS OVERVIEW

     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.  Trackware is
currently being tested by prospective customers.  There were no significant
revenues from Trackware during 2000.

2.     PENDING DEBT AND EQUITY TRANSACTIONS

     On February 14, 2001, the Company executed a stock purchase and exchange
agreement (the "Agreement") with Minorplanet Systems PLC ("Minorplanet"), a
leading worldwide producer and distributor of telemetric-based vehicle
management information systems (VMI), and with the majority holder of the
Company's Senior Notes.

     Under the terms of the Agreement, Minorplanet is to acquire 10 million
shares of the Company's common stock for $10 million and receive an additional
140 million shares of the Company's common stock in exchange for an exclusive
ninety-nine year license to market, distribute and operate Minorplanet's VMI
technologies in the United States, Canada and Mexico.  Additionally, a majority
in interest of the Company's 13  3/4% Senior Notes due 2005, which parties in
the aggregate hold approximately 75 percent of the Senior Notes, have agreed to
(i) exchange their Senior Notes for approximately 56.2 million shares of the
Company's common stock, (ii) accept payment of all interest on the Senior Notes
accrued through December 15, 2000, and (iii) waive payment of the balance of any
interest accrued from December 16, 2000 through April 30, 2001.  Under the terms
of the Agreement, the majority in interest of the Company's 13  3/4% Senior
Notes accrue interest at the coupon rate for the period from May 1, 2001 through
the closing date of the contemplated transactions.

     As contemplated by the Agreement, the  Company also intends to begin an
exchange offer to the remaining holders of the Senior Notes, offering to
exchange Senior Notes for the Company's common stock on substantially the same
terms as that agreed to by the majority noteholder.  Assuming conversion of all
of the Senior Notes to common stock, the holders thereof would hold common stock
representing approximately 29 percent of the Company, and Minorplanet would hold
approximately 58 percent.

     Consummation of the transaction is subject to a number of conditions
including, but not limited to, approval by Company's common stockholders,
approval by the Company's Class B common stockholder which was obtained on April
10, 2001, the Company's continued listing on The Nasdaq Small Cap Market, and
other contractual, governmental and regulatory approvals.

     In the event these transactions are consummated as contemplated, the
Company will have significantly reduced its indebtedness and related interest
expense.  In addition, the Company will shortly thereafter commence distribution
of the Minorplanet product in the United States.  The Company currently believes
that consummation of these transactions will substantially mitigate the
uncertainties described in Note 4 to the consolidated financial statements.
Consummation of this transaction is also a condition of the Company maintaining
its listing on the Nasdaq Small Cap Market.  See Note 3.

                                      F-7
<PAGE>

3.     NON-COMPLIANCE WITH NASDAQ LISTING REQUIREMENTS

     In December 2000, the Company was notified by letter from the Nasdaq Stock
Market, Inc. ("Nasdaq"), that it was no longer in compliance with the (i) net
tangible asset, (ii) market capitalization, and (iii) net income requirement for
continued listing on the Nasdaq Small Cap Market.

     Subsequent to an oral hearing before the Nasdaq Listings Qualification
Panel (the "Panel") the Company received written determination from the Panel on
February 12, 2001 that it would be allowed to remain listed provided that by
February 23, 2001 (deadline subsequently extended to February 27, 2001), it
satisfied certain conditions, including the provision to the Panel of executed
definitive documents for the transactions with Minorplanet and the majority
noteholder (see Note 2) and the filing of a Preliminary Proxy Statement with the
SEC and Nasdaq including a proposal to obtain shareholder approval for the (i)
Minorplanet transaction , (ii) the conversion of the Senior Notes held by the
majority noteholder, and (iii) a reverse stock split; and by April 23, 2001,
that the Company provide documentation to Nasdaq that (i) the Minorplanet and
majority noteholder transactions have been consummated, and (2) make a public
filing with the SEC and Nasdaq evidencing net tangible assets of at least
$12,000,000.

     On March 5, 2001, Nasdaq informed the Company that the closing bid price
for its common stock had fallen below the $1.00 per share minimum required for
continued listing on the Nasdaq SmallCap Market, and added the additional
condition to the Company's continued listing that the closing price of our
common stock must be over $1.00 for a period of 10 consecutive days by May 29,
2001.  On April 4, 2001, the Company filed a request for extension of the April
23, 2001 deadlines and the May 29, 2001 deadlines.  By letter dated April 30,
2001, Nasdaq extended these deadlines to July 2, 2001.

     There are a number of minimum requirements for continued listing on the
Nasdaq Small Cap Market which  include both quantitative and qualitative
requirements. The Company currently expects to meet these continued listing
requirements and the conditional listing requirements set forth in the February
12, 2001 written determination by the Panel. However, there can be no assurances
that the Company will be able to maintain its listing on the Nasdaq SmallCap
Market and the failure of the Company to maintain its listing on the Nasdaq
SmallCap Market may have a material adverse effect on the business, financial
conditions and results of operations of the Company.

     If the Company's securities are delisted from the Nasdaq SmallCap, the
Company may subsequently apply for inclusion in the Nasdaq SmallCap Market if it
satisfies the initial inclusion requirements. If the Company's securities are
delisted from the Nasdaq SmallCap Market, there can be no assurances that the
Company will be able to satisfy the initial inclusion requirements for listing
on the Nasdaq SmallCap Market and its failure to do so may have a material
adverse effect on the business, financial condition and results of operations of
the Company.  The Company currently believes that the Company's securities will
be delisted from the Nasdaq SmallCap Market if the Company fails to finally
consummate the transactions with Minorplanet and majority noteholder on or
before July 2, 2001, and otherwise comply with the other conditions contained in
the February 12, 2001 and March 5, 2001 Nasdaq determination letters. There can
be no assurances that the Company will be able to finally consummate the
transactions with Minorplanet and the majority noteholder and satisfy the other
conditions to continued listing imposed upon the Company by Nasdaq on or before
July 2, 2001, and the Company believes that its failure to do so, may have a
material adverse effect on the business, financial conditions and results of
operations of the Company.

4.     FUTURE OPERATIONS AND GOING CONCERN UNCERTAINTY

     The consolidated financial statements of the Company have been prepared on
the basis of accounting principles applicable to a going concern, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business.  At December 31, 2000, the Company had a
stockholders' deficit of $58.3 million, and had incurred net losses of
approximately $20.5 million, $11.5 million, and $35.1 million for the years
ended December 31, 2000, 1999, and 1998, respectively.  Beginning March 15,
2001, the Company is obligated to begin paying substantial semi-annual cash
interest payments on its 13.75% Senior Notes which were issued in September
1997.  Interest payments due on the Senior Notes through September 15, 2000, had
previously been funded through an escrow arrangement created upon closing of the
Senior Notes.  Absent the pending equity and debt transactions described in Note
2 (which are contingent upon a number of factors also described in Note 2), the
Company has limited financial resources available to support its ongoing
operations, fund its product

                                      F-8
<PAGE>

development program to develop and market new competitive tracking technology,
and pay its obligations as they become due, including the maturities of the
Senior Notes and associated interest payments.

     The factors noted in the above paragraph raise substantial doubt concerning
the ability of the Company to continue as a going concern.  The consolidated
financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might result should the Company be unable to
continue as a going concern.  The ability of the Company to continue as a going
concern is dependent upon the ongoing support of its stockholders, creditors,
and certain key customers, the consummation of the pending equity and debt
transactions (or the closing of similar debt or equity transactions), and/or its
ability to successfully develop and market its tracking products and technology
at economically feasible levels in the highly competitive and rapidly changing
telecommunications industry.

     As discussed in Note 2, the Company has pending equity and debt
transactions which the Company believes, if consummated, will provide adequate
financial resources to support the Company until it is able to achieve a
successful level of operations.  The Company also believes acquisition of the
licensing rights associated with the pending equity transaction will provide the
Company significant marketing potential of the licensed tracking technology,
enhancing future results of operations and reducing the need for capital
resources to develop similar tracking technology.  There is no assurance,
however, that the Company will be able to close the pending debt and equity
transactions or that such financial resources provided by the pending
transactions, if closed, will be sufficient to support the Company until it
reaches a successful level of operations.  There is also no assurance that the
Company would be able to successfully develop a market for the acquired licensed
tracking technology to achieve a successful level of future operations.  If the
Company is unable to close the pending equity and debt transactions, it is
likely that it will be unable to maintain its current Nasdaq listing (see Note
3).  If the Company cannot maintain its Nasdaq listing, its ability to obtain
the required levels of equity or debt financing from other sources to support
its operations and fund payments of its obligations as they become due will be
significantly reduced and it may have a material adverse effect on the business,
financial condition and results of operations of the Company.

5.     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). In
accordance with previously existing generally accepted accounting principles,
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 has 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.

     The effect of the adoption of SAB 101 in 2000 was to increase income before
extraordinary item by approximately $1,441,000 or $0.06 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.

                                      F-9
<PAGE>

Pro forma amounts assuming the new revenue recognition method is applied
retroactively are as follows:

<TABLE>
<CAPTION>
                                                                                        1999                         1998
                                                                             -------------------------   --------------------------
                                                                             As Reported     Pro Forma   As Reported      Pro Forma
                                                                             -------------------------   --------------------------
<S>                                                                          <C>            <C>          <C>             <C>
Loss before extraordinary item                                               $  (11,524)    $  (12,293)  $  (53,928)      $ (55,180)
Basic and diluted loss per share before extraordinary item                   $    (0.46)    $    (0.49)  $    (2.17)      $   (2.22)

Net loss                                                                     $  (11,524)    $  (12,293)  $  (35,061)      $ (36,313)
Basic and diluted net loss per share                                         $    (0.46)    $    (0.49)  $    (1.41)      $   (1.46)
</TABLE>

6.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

     Effective April 10, 2000, HighwayMaster Communications, Inc. changed its
corporate name to @Track Communications, Inc.  The consolidated financial
statements include those of @Track Communications, Inc. and its wholly owned
subsidiary, HighwayMaster of Canada, LLC.  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 generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those estimates.

Revenue Recognition

     The Company recognizes revenue under the provisions of 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."  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.  Sales
arrangements for which revenues are deferred pursuant to SAB 101 relate
primarily to the Company's sales of its mobile units to long-haul trucking
customers.

     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.  Pending acceptance, mobile units shipped under the Contract are
reflected in inventory as "equipment shipped not yet accepted."

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

                                      F-10
<PAGE>

     Prior to 2000, revenues from product sales and licensing of product
software were generally recognized at the time the mobile units 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.  During 1998, the Company entered into the initial
Service Vehicle Contract for delivery of mobile units coupled with development
and delivery of additional features over the term of the installation period.
The earning process on the Contract was not complete until all of the additional
features had been delivered and accepted by the customer, since the customer had
the right of return until acceptance.  Accordingly, revenue was not recognized
for the mobile units shipped in connection with the Contract during 1998.  The
earning process on the initial Service Vehicle Contract was completed during
1999 upon the acceptance of the delivered mobile units by the customer, and
revenue was recognized.

Deferred Product Costs

     The Company defers certain product costs (generally consisting of the
direct cost of product sold, installation, activation and warranty) for its
sales contracts determined to require deferral accounting under the provisions
of SAB 101.  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 three 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.

Financial Instruments

     The Company considers all liquid interest-bearing investments with a
maturity of three months or less at the date of purchase to be cash equivalents.
Short-term investments generally mature between three months and two years 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.

     Pledged securities consisted of a portfolio of U. S. Government securities,
including interest earned thereon, which provided funds sufficient to pay in
full when due the interest payments on the Senior Notes through September 15,
2000.  These securities were classified as held to maturity.  Amortized cost of
pledged securities approximated market; realized and unrealized gains and losses
were not material.

     The carrying amount of cash and short-term investments, pledged securities,
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 2000 and 1999, one customer accounted for
approximately 47% and 38%, respectively, of total revenues.  During 1998, no
customer accounted for more than 10% of total revenues.

     The Company's bad debt expense as a percent of total revenues was 1.4%,
4.5% and 10.5% in 2000, 1999, and 1998, respectively.  This trend is primarily
due to changes in the Company's operating policies since 1998 and the general
improvement in the creditworthiness of the customer base as a result of the
significant sales to one customer noted above.  The Company's allowance for
doubtful accounts as a percentage of total accounts receivable was approximately
36% at both December 31, 2000 and 1999, reflecting that the majority of the
accounts reserved in prior years have not yet been charged off.

                                      F-11
<PAGE>

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 provision for excess and
obsolete inventory based on a usage formula for component parts and specific
identification criteria for finished goods.

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 five 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
2000, 1999 and 1998, the Company expensed $2,181,000, $1,241,000 and $2,286,000,
respectively, in research and development costs for new products that is
reflected in "Engineering Expenses" in the Consolidated Statements of
Operations.  The 1998 amount is net of $324,000 of research and development
expenditures reimbursed by a third party.

Capitalized Software Costs

     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 2000, 1999 and 1998 were $1,019,000,
774,000 and 1,318,000, respectively.

Advertising Costs

     Advertising costs are expensed as incurred.  During 2000, 1999 and 1998,
the Company expensed $962,000, $554,000 and $1,692,000, 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. Valuation allowances against
deferred tax assets are provided where appropriate.

Earnings Per Share

     The Company computes earnings per share in accordance SFAS No. 128,
"Earnings Per Share."  Net loss per share was computed by dividing the net loss
by the weighted average number of shares outstanding during the year.  The
Company's potentially dilutive securities, consisting of the Class B Common
Stock, options and warrants, have been excluded from the weighted average number
of shares outstanding since their effect would be anti-dilutive.

Reporting Comprehensive Income

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

                                      F-12
<PAGE>

New Accounting Standards

     SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities", is required to be adopted effective January 1, 2001.  Adoption of
this Standard will have no effect on the Company as it currently operates.

Reclassifications

     The Company provides repair and maintenance activities on the installed
base of mobile units.  Historically, revenues and cost of revenues related to
support and maintenance activities have been reported as a component of "product
revenues" and "cost of product revenues," respectively. The Company believes
this activity directly relates to the realization of the recurring stream of
"service revenue."  Accordingly, in 2000, the Company has classified the
revenues and cost of revenues related to repair and maintenance activities with
"service revenues" and "cost of service revenues," respectively.  Amounts for
prior years have been reclassified for consistent presentation.

     During the fourth quarter of 2000, the Company adopted Emerging Issues Task
Force - Issue 00-10, "Accounting for Shipping and Handling Fees and Costs" which
requires the presentation of amounts billed to customers for shipping and
handling, and the related costs incurred for shipping and handling to be
recognized as components of "Product Revenues" and "Cost of Product Revenues,"
respectively.  Previously these amounts had been reflected "net" in "Operating
Expenses."  Amounts for prior years have been reclassified for consistent
presentation.

7.     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 is the estimated cost to be incurred to repair a defective
subcomponent in the mobile units.  The related warranty liability is included in
"Other Current Liabilities" in the accompanying Consolidated Balance Sheet at
December 31, 1999.

                                      F-13
<PAGE>

8.     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 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:

<TABLE>
<S>                                                                                     <C>
Balance at December 31, 1997                                                            $         -
        1998 Activity:
                    Accrued Severance and AutoLink termination costs                    $ 5,357,000
                    Cash payments for severance and contractual obligations              (2,895,000)
                    Asset write-offs                                                       (434,000)
                                                                                        -----------
Balance at December 31, 1998                                                              2,028,000
        1999 Activity:
                    Cash payments for severance and contractual obligations              (1,839,000)
                    Restored to income                                                     (189,000)
                                                                                        -----------
Balance at December 31, 1999                                                            $         -
                                                                                        -----------
</TABLE>

9.     CASH AND SHORT-TERM INVESTMENTS

     Cash and short-term investments consist of the following:
<TABLE>
<CAPTION>
December 31,                                                                    2000            1999
                                                                           -------------    -------------
<S>                                                                        <C>              <C>
Cash and commercial paper                                                  $  11,196,000    $  2,533,000
Money market accounts                                                          9,445,000       2,634,000
                                                                           -------------    -------------
        Cash and cash equivalents                                             20,641,000       5,167,000
                                                                           -------------    -------------

Corporate notes and bonds                                                              -       3,065,000
State, Municipal and Agency securities                                                 -       1,015,000
Commercial paper                                                                       -       8,521,000
                                                                           -------------    -------------
        Short-term investments                                                         -      12,601,000
                                                                           -------------    -------------
Total cash and short-term investments                                      $  20,641,000    $ 17,768,000
                                                                           -------------    -------------
</TABLE>

10.    INVENTORIES

     Inventories consist of the following:

<TABLE>
<CAPTION>
December 31,                                                                    2000            1999
                                                                           -------------    -------------
<S>                                                                        <C>              <C>
Complete systems                                                           $  3,240,000     $  6,576,000
Component parts                                                               5,919,000        2,302,000
Equipment shipped not yet accepted                                            4,057,000          414,000
                                                                           -------------    -------------
                                                                           $ 13,216,000     $  9,292,000
                                                                           -------------    -------------
</TABLE>

                                      F-14
<PAGE>

11.  NETWORK, EQUIPMENT AND SOFTWARE

Network, equipment and software consist of the following:

December 31,                                           2000            1999
                                                   ------------    ------------

Network service center                             $ 15,031,000    $ 14,945,000
Computers and office equipment                        7,308,000       6,026,000
Machinery and equipment                               3,123,000       2,909,000
Software                                              6,684,000       5,665,000
                                                   ------------    ------------
                                                     32,146,000      29,545,000
Less: accumulated depreciation and amortization     (19,295,000)    (13,842,000)
                                                   ------------    ------------
                                                   $ 12,851,000    $ 15,703,000
                                                   ------------    ------------


     Total depreciation and amortization expense charged to operations during
2000, 1999 and 1998 was $5,455,000, $6,099,000 and $4,753,000, respectively.

     As of December 31, 2000 and 1999, the unamortized portion of software costs
was $2,144,000 and $2,314,000, respectively. Amortization of such costs charged
to expense during 2000, 1999 and 1998 was $1,191,000, $1,487,000 and $584,000,
respectively.

12.  OTHER ASSETS

     Other assets consist primarily of 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.

13.  OTHER CURRENT LIABILITIES

December 31,                                           2000            1999
                                                   ------------    ------------

Accrued warranty costs                             $  1,469,000    $  3,933,000
Other                                                 7,357,000       5,424,000
                                                   ------------    ------------
                                                   $  8,826,000    $  9,357,000
                                                   ------------    ------------

14.  SENIOR NOTES PAYABLE

     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. This amount, including
interest earned thereon, is reflected in the accompanying Consolidated Balance
Sheets under the caption "Pledged Securities."

     The Indenture for the Senior Notes contains certain covenants that, among
other things, limit 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
Company was in compliance with all covenants at December 31, 2000. The Indenture
does allow the Company to incur additional indebtedness in the event certain
conditions are satisfied.

     The Senior Notes are redeemable 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 may redeem up to 35% in the aggregate
principal

                                      F-15
<PAGE>

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).

     In 1998, the Company purchased and subsequently retired $30,645,000
principal amount of its Senior Notes on the open market for $9,885,000 plus
accrued interest thereon, resulting in a gain on extinguishment of debt of
$18,867,000 after the write-off of associated debt discount and debt issuance
costs. The gain is reported as an "Extraordinary Item" in the accompanying
Consolidated Statements of Operations. Upon the retirement of the Senior Notes,
the allocable portion of the Pledged Securities related thereto, in the amount
of $8,063,000, was released to the Company.

     At December 31, 2000, the $94,355,000 of Senior Notes outstanding was
recorded at the accreted value of $92,484,000. The Senior Notes have an
effective interest rate of 14.1%.

     The fair value of the Senior Notes is less than their carrying amount at
December 31, 2000 and 1999. 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. At December 31, 2000, the market
value per individual Senior Note approximated $400.

15.  INCOME TAXES

The components of the Company's net deferred tax asset are as follows:

December 31,                                           2000            1999
                                                   ------------    ------------

Deferred tax assets
     Step-up of tax basis in assets                $  1,390,000    $  1,390,000
     Research and development credit                    205,000         206,000
     Recapitalization costs                             167,000         158,000
     Deferred Revenue                                 1,280,000               -
     Allowance for doubtful accounts                  2,484,000       2,576,000
     Accrued interest                                   332,000         332,000
     Other accrued liabilities                        1,360,000       1,827,000
     Inventory                                          408,000         283,000
     Net operating loss carryforwards                62,177,000      55,312,000
                                                   ------------    ------------
     Gross deferred tax assets                       69,803,000      62,084,000
     Valuation allowance                            (67,256,000)    (60,405,000)
                                                   ------------    ------------
     Net deferred tax assets                          2,547,000       1,679,000
Deferred tax liability
     Depreciation                                    (2,160,000)     (1,100,000)
Other                                                  (387,000)       (579,000)
                                                   ------------    ------------
Net deferred tax asset                             $          -    $          -
                                                   ------------    ------------

     The following is a reconciliation of the provision for income taxes at the
U.S. federal income tax rate to the income taxes reflected in the Consolidated
Statements of Operations:

<TABLE>
<CAPTION>
December 31,                                        2000          1999            1998
                                                ------------   ------------   ------------

<S>                                             <C>            <C>            <C>
Income tax at Federal statutory rate            $ (6,985,000)  $ (3,918,000)  $(11,921,000)
Net operating losses not benefited                 6,851,000      3,904,000     11,860,000
Other                                                134,000         14,000         61,000
                                                ------------   ------------   ------------
     Income tax benefit                         $          -   $          -   $          -
                                                ------------   ------------   ------------
</TABLE>

     At December 31, 2000, the Company had net operating loss carryforwards
aggregating approximately $182.9 million that expire in various years between
2007 and 2020. Due to the issuance of certain notes payable during 1994, there
was a change in ownership under the Internal Revenue Code, which limits the
annual utilization

                                      F-16
<PAGE>

of approximately $18.0 million of these carryforwards and will cause some amount
of the carryforwards to expire unutilized. Any additional changes in ownership,
including the pending equity and debt transactions, could also result in
additional limitations of loss carryforwards.

16.  STOCKHOLDERS' EQUITY INSTRUMENTS AND RELATED MATTERS

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 are 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 is convertible into 1,600
shares of Common Stock at the option of SBC. The Class B Common Stock is
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 have 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 are then
convertible. In addition, the holders of Class B Common Stock will be 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 will have the right to approve certain actions on the
part of the Company.

     SBC holds warrants that entitle SBC to purchase (i) 3,000,000 shares of
Common Stock at an exercise price of $14.00 per share and (ii) 2,000,000 shares
of Common Stock at an exercise price of $18.00 per share. The warrants will
expire on September 27, 2001.

Incentive Plan and Other

     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 2,474,463
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 loss
and net loss per share would have been increased to the pro forma amounts
indicated below:

                                      F-17
<PAGE>

<TABLE>
<CAPTION>
                                                    For the Year Ended December 31,
                                        -------------------------------------------------------
                                               2000               1999               1998
                                        -------------------------------------------------------
<S>                                     <C>                  <C>                 <C>
Net loss             As Reported        $   (20,545,000)     $  (11,524,000)     $  (35,061,000)
                     Pro Forma          $   (21,188,000)     $  (12,222,000)     $  (36,007,000)

Net loss per share   As Reported        $         (0.81)     $        (0.46)     $        (1.41)
                     Pro Forma          $         (0.84)     $        (0.49)     $        (1.45)

</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:

                                      For the Year Ended December 31,
                                   -------------------------------------
                                      2000          1999         1998
                                   -------------------------------------
Dividend                                 -             -            -
Expected volatility                  92.31%        83.83%       59.83%
Risk free rate of return              5.89%         6.05%        4.96%
Expected life in years                  6.0           6.0          4.9


     A summary of the status of the Company's Plan as of December 31, 2000, 1999
and 1998, and changes during the years ended on those dates, is presented below:

<TABLE>
<CAPTION>
                                                   2000                      1999                     1998
                                        ------------------------------------------------------------------------------
                                                        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 year          1,707,319     $  1.36     1,946,590     $    3.50     2,157,309    $  7.82
Granted                                     319,500        1.51       790,242          1.60     1,481,490       1.34
Exercised                                  (206,616)       1.23      (221,227)         1.19             -          -
Forfeited                                  (165,582)       1.58      (808,286)         6.82    (1,692,209)      7.12
                                        ------------------------------------------------------------------------------
Outstanding at end of year                1,654,621     $  1.38     1,707,319     $    1.36     1,946,590    $  3.50
                                        ------------------------------------------------------------------------------
Options exercisable at end of year          765,945     $  1.32       560,376     $    1.29     1,056,676    $  5.12
                                        ------------------------------------------------------------------------------
Weighted average fair value of
  options granted during the year                       $  1.18                   $    1.60                  $  0.74
                                        ------------------------------------------------------------------------------
</TABLE>


     The following table summarizes information about stock options outstanding
under the Plan at December 31, 2000:

<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              599,067             3.3                  $   1.07             383,359             $   1.07
  $1.41 to $1.78              963,554             4.9                      1.50             345,786                 1.50
  $2.03 to $2.19               92,000             4.3                      2.15              36,800                 2.15
                          --------------------------------------------------------------------------------------------------
                            1,654,621             4.3                  $   1.38             765,945             $   1.32
                          --------------------------------------------------------------------------------------------------

</TABLE>


     A director of the Company holds options granted outside of the Plan to
purchase 3,798 shares of common stock of the Company at a price of $2.50 per
share. All of these options are exercisable at December 31, 2000.

     Warrants for the purchase of 8,000 shares of common stock at a price of
$5.63 per share were granted during 2000. All of these warrants are exercisable
at December 31, 2000.

                                     F-18
<PAGE>

Retirement Plan

     The Company sponsors a 401(k) Retirement Investment Profit-Sharing Plan
covering substantially all employees. In order to attract and retain employees,
during 2000, the Company amended the Plan to include a mandatory employer
matching and made a matching contribution of $220,000. The Company did not make
matching contributions to the Plan in either 1999 or 1998.


17.  COMMITMENTS AND CONTINGENCIES

Litigation

     The Company is involved in litigation matters that arise in the normal
course of conducting its business. These matters are not considered to be of a
material nature, nor are they expected to have a material effect on the
financial position or results of operations of the Company.

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 were as follows as of
December 31, 2000:

               2001           $  1,422,000
               2002              1,376,000
               2003              1,279,000
               2004              1,297,000
               2005              1,186,000
               Thereafter        2,977,000
                              ------------
                              $  9,537,000
                              ------------


     During 2000, 1999 and 1998, total rent expense charged to operating
expenses was approximately $1,322,000, $1,413,000 and $1,606,000, respectively.

Contingencies

     The outsource manufacturer (the "vendor") that supplies substantially all
of the Company's finished goods inventory has asserted a claim of approximately
$4.0 million for reimbursement for excess and obsolete inventory. The Company
believes that it has meritorious defenses to this alleged claim and is
vigorously denying liability. The evaluation of this alleged claim is in its
early stages and, accordingly, it is currently not possible to assess whether
the likelihood of an unfavorable outcome to the Company is possible, probable or
remote. Therefore, no provision has been made in the consolidated financial
statements for this claim. 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 Company is currently is
discussion with alternative manufacturers to resume production. The Company
currently believes that any delay in production as a result of this dispute will
be minimal and will not have a material effect on its results of operations or
financial condition.

18.  RELATED PARTY TRANSACTIONS

     Certain affiliates of one of the Company's shareholders, Cingular Wireless,
LLC, a joint venture in which SBC Communications, Inc. ("SBC") is a lead
venturer, are both customers and vendors. 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

                                      F-19
<PAGE>

SBC are among the cellular carriers with whom the Company purchases airtime in
connection with the Company's provision of its services.

     Transactions with these affiliated companies of SBC during the three years
ended December 31, 2000 are summarized below.


Year ended December 31,                2000            1999          1998
                                   ------------    ------------   ----------
          Revenues                 $ 47,713,000    $ 35,878,000   $  547,000


As of December 31,                     2000            1999
                                   ------------    ------------
          Accounts receivable      $  5,858,000    $  3,332,000
          Accounts payable         $    403,000    $    366,000


     During 1998, the Company paid $1,105,000 for advertising services pursuant
to an "Agency Agreement." The Agency Agreement was terminated effective December
31, 1998. A former officer of the Company was a principal stockholder and
officer of the Agency until January 1, 1997, at which time his equity interest
was sold. The former officer continued to participate in the revenues of the
Agency until certain contractual obligations from the sale of the officer's
equity interest in the Agency were discharged. The former officer resigned from
the Company in December 1998.

     The Company leased office space from an affiliate of a stockholder until
September 30, 1998. Total rent paid under this agreement during 1998 was
approximately $729,000.

     The Company had a management consulting arrangement with a member of its
Board of Directors. During 1998, the Company paid approximately $69,000 under
this consulting arrangement, which amount includes reimbursed expenses.

                                      F-20
<PAGE>

19.  QUARTERLY RESULTS OF OPERATIONS (Unaudited)

Unaudited quarterly results of operations for 2000 and 1999 are as follows (in
thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                                   First     Second      Third     Fourth
                                                                  Quarter    Quarter    Quarter    Quarter
                                                                  -------    -------    -------    -------
<S>                                                               <C>        <C>        <C>        <C>
2000
----

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)
Loss per share:
     Before cumulative effect                                     $ (0.18)   $ (0.12)   $ (0.10)   $ (0.21)
     Cumulative effect of accounting change                       $ (0.20)         -          -          -
     Basic and diluted loss                                       $ (0.38)   $ (0.12)   $ (0.10)   $ (0.21)
Weighted average shares outstanding                                25,189     25,322     25,327     25,327

1999
----

Total revenues                                                    $17,081    $33,198    $29,104    $16,290
Gross profit                                                       10,660     11,945      5,467      6,125
Operating income (loss)                                             1,849      2,349     (3,991)    (3,061)
Net income (loss)                                                     390        188     (6,156)    (5,946)
Income (loss) per share:
     Basic and diluted loss                                       $  0.02    $  0.01    $ (0.25)   $ (0.24)
Weighted average shares outstanding
     Basic                                                         24,993     24,981     24,987    $25,015
     Diluted                                                       25,444     25,308     24,987     25,015
</TABLE>

                                     F-21
<PAGE>

REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS ON FINANCIAL STATEMENTS SCHEDULES

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 balance sheets of @Track Communications, Inc.
(formerly HighwayMaster Communications, Inc.) and its subsidiary (the "Company")
as of December 31, 2000 and 1999, and the related consolidated statements of
operations, cash flows, and stockholder's equity (deficit), for the years then
ended, included in the Annual Report on Form 10-K/A, and have issued our report
thereon dated February 22, 2001 (except for the matters discussed in Notes 2, 3
and 17, as to which the date is May 1, 2001), which contains an explanatory
paragraph with respect to the Company's ability to continue as a going concern.
These consolidated financial statements and the schedule referred to below are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements and schedule based on our
audits.

Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. Schedule II - Valuation and
Qualifying Accounts for years ended December 31, 2000 and 1999, is not a
required part of the basic consolidated financial statements but is
supplementary information required by the Securities and Exchange Commission.
This information has been subjected to the auditing procedures applied in our
audits of the basic consolidated financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic consolidated
financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Dallas, Texas
May 1, 2001



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

Our audits of the consolidated financial statements referred to in our report
dated February 16, 1999 appearing on page F-2 of this Annual Report on Form 10-K
also included an audit of the financial statement schedule for the year ended
December 31, 1998. In our opinion, the financial statement schedule presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.

PRICEWATERHOUSECOOPERS LLP
Dallas, Texas
February 16, 1999

                                      S-1
<PAGE>

                                                                     SCHEDULE II

                          @TRACK COMMUNICATIONS, INC.
                       VALUATION AND QUALIFYING ACCOUNTS

<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, 1998
   Allowance for doubtful accounts
      Accounts receivable                     2,148,000       6,650,000         (38,000)        768,000       9,528,000
      Other receivable                          900,000               -        (900,000)              -               -
   Inventory reserves                         1,209,000         332,000        (234,000)              -       1,307,000
   Warranty reserve                             493,000           1,000        (110,000)              -         384,000
   Severance and AutoLink
      termination costs payable                       -       5,357,000      (3,329,000)              -       2,028,000
   Valuation allowance against
      deferred tax asset                     45,304,000      11,197,000               -               -      56,501,000

Year ended December 31, 1999
   Allowance for doubtful accounts
      Accounts receivable                     9,528,000       4,294,000      (6,374,000)              -       7,448,000
   Inventory reserves                         1,307,000         245,000        (719,000)              -         833,000
   Warranty reserve                             384,000       3,914,000        (365,000)              -       3,933,000
   Severance and AutoLink
      termination costs payable               2,028,000        (189,000)     (1,839,000)              -               -
   Valuation allowance against
      deferred tax asset                     56,501,000       3,904,000               -               -      60,405,000

Year ended December 31, 2000
   Allowance for doubtful accounts
      Accounts receivable                     7,448,000       1,477,000      (1,620,000)              -       7,305,000
   Inventory reserves                           833,000         749,000        (383,000)              -       1,199,000
   Warranty reserve                           3,933,000       1,208,000      (3,672,000)              -       1,469,000
   Valuation allowance against
      deferred tax asset                     60,405,000       6,851,000               -               -      67,256,000
</TABLE>

                                      S-2