<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002.

                                       OR

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

                  Commission File Numbers: 333-47682, 333-47688

                                   iPCS, Inc.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                             <C>
                      Delaware                                             36-4350876
                      --------                                             ----------
(State or other jurisdiction of incorporation or organization)  (I.R.S. Employer Identification Number)

   Harris Tower, 233 Peachtree St. NE, Suite 1700,
                  Atlanta, Georgia                                           30303
                  -----------------                                          -----
      (Address of principal executive offices)                             (Zip code)
</TABLE>

        Registrant's telephone number, including area code (404) 525-7272

     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 and 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 [ ]

     All outstanding shares of the registrant's common stock are owned by
AirGate PCS, Inc.

     The registrant meets the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced
disclosure format that omits the following Part II Items: Item 2, Changes in
Securities; Item 3, Defaults Upon Senior Securities; and Item 4, Submission of
Matters to a Vote of Security Holders. The reduced disclosure format also omits
Item 3 of Part I, Quantitative and Qualitative Disclosures About Market Risk. In
addition, Item 2 of Part I, Management's Discussion and Analysis of Financial
Condition and Results of Operations has reduced disclosure that omits
comparative analysis of operating results for the interim comparative three
month periods.

<PAGE>

                                   iPCS, INC.
                              SECOND QUARTER REPORT

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>       <C>                                                                                                       <C>
PART I    Financial Information

Item 1.   Financial Statements..................................................................................    3

          Consolidated Balance Sheets at March 31, 2002 and September 30, 2001 (unaudited)......................    3

          Consolidated Statements of Operations for the three months and
          six months ended March 31, 2002 and 2001 (unaudited)..................................................    4

          Consolidated Statements of Cash Flows for the six months ended March 31, 2002 and 2001 (unaudited)....    5

          Notes to the Consolidated Financial Statements (unaudited)............................................    6

Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations.................   14

PART II   Other Information ....................................................................................   24

Item 1.   Legal Proceedings ....................................................................................   24

Item 5.   Other Information ....................................................................................   24

Item 6.   Exhibits and Reports on Form 8-K .....................................................................   33
</TABLE>

                                       -2-

<PAGE>

                          PART I. FINANCIAL INFORMATION
                         Item 1. -- FINANCIAL STATEMENTS
                           iPCS, INC. AND SUBSIDIARIES
                (A Wholly Owned Subsidiary of AirGate PCS, Inc.)
                           CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
                  (dollars in thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                                                      March 31,    September 30,
                                                                                                        2002           2001
                                                                                                      ---------    -------------
<S>                                                                                                   <C>            <C>
Assets
Current assets:
   Cash and cash equivalents ......................................................................   $   7,160      $  54,579
   Accounts receivable, net of allowance for doubtful accounts of $5,324 and $2,713 respectively         11,979         11,752
   Receivable from Sprint PCS .....................................................................       3,305          4,816
   Inventories, net ...............................................................................       1,670          3,379
   Prepaid expenses ...............................................................................       2,799          3,007
   Direct customer activation costs ...............................................................       2,267          1,720
   Other current assets ...........................................................................         103             72
                                                                                                      ---------      ---------

      Total current assets ........................................................................      29,283         79,325
Property and equipment, net of accumulated depreciation of $36,263 and $22,067, respectively ......     233,649        198,161
Financing costs ...................................................................................       9,275          9,558
Intangible assets, net of accumulated amortization of $2,934 and $1,778, respectively (note 9) ....      29,657         39,934
Goodwill (note 9) .................................................................................       8,060             --
Other assets ......................................................................................       1,556          1,778
                                                                                                      ---------      ---------
                                                                                                      $ 311,480      $ 328,756
                                                                                                      =========      =========

Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
   Accounts payable and accrued expenses ..........................................................   $  29,348      $  25,629
   Payable to Sprint PCS ..........................................................................      12,467         10,306
   Payable to AirGate PCS, Inc. ...................................................................         560             --
   Deferred revenue ...............................................................................       6,662          4,742
   Current maturities of long-term debt and capital lease obligations (note 4) ....................           2              7
                                                                                                      ---------      ---------
      Total current liabilities ...................................................................      49,039         40,684
Other long-term liabilities .......................................................................      13,977         11,694
Long-term debt and capital lease obligations, excluding current maturities (note 4) ...............     247,049        208,709
                                                                                                      ---------      ---------
      Total liabilities ...........................................................................     310,065        261,087
                                                                                                      ---------      ---------

Redeemable preferred stock $0.01 par value; 75,000,000 shares authorized; no
   shares and 23,090,909 shares issued and outstanding at March 31, 2002 and at
   September 30, 2001, respectively                                                                          --        121,548
                                                                                                      ---------      ---------

Stockholders' equity (deficit):
Common stock, $0.01 par value; 1000 shares and 300,000,000 shares authorized, 1000 shares
and 44,869,643 shares issued and outstanding at March 31, 2002 and September 30, 2001,
respectively ......................................................................................          --            449
   Additional paid-in-capital .....................................................................     192,850         70,853
   Unearned stock compensation ....................................................................          --         (3,985)
   Accumulated deficit ............................................................................    (191,435)      (121,196)
                                                                                                      ---------      ---------
      Total stockholders' equity (deficit) ........................................................       1,415        (53,879)
         Commitments and contingencies ............................................................          --             --
                                                                                                      ---------      ---------
                                                                                                      $ 311,480      $ 328,756
                                                                                                      =========      =========
</TABLE>

   See accompanying notes to the unaudited consolidated financial statements.

                                       -3-

<PAGE>

                           iPCS, INC. AND SUBSIDIARIES
                (A Wholly Owned Subsidiary of AirGate PCS, Inc.)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)
           (dollars in thousands, except share and per share amounts)

<TABLE>
<CAPTION>
                                                                          Three Months Ended       Six Months Ended
                                                                              March 31,                March 31,
                                                                          -------------------    ---------------------
                                                                            2002       2001        2002         2001
                                                                          -------------------    ---------------------
<S>                                                                       <C>        <C>         <C>          <C>
Revenues:
   Service revenue                                                        $ 28,929   $  9,375    $  52,863    $ 14,794
   Roaming revenue                                                           7,781      5,168       21,846       8,728
   Equipment revenue                                                         1,748      1,539        4,116       2,535
                                                                          -------------------    ---------------------
                                                                            38,458     16,442       78,825      26,057
                                                                          -------------------    ---------------------
Operating Expenses:
   Cost of services and roaming (exclusive
      of depreciation, as shown separately below)                          (29,872)   (12,248)     (61,129)    (19,222)
   Cost of equipment                                                        (3,847)    (3,164)      (6,956)     (6,158)
   Selling and marketing                                                    (9,393)    (8,577)     (25,689)    (16,482)
   General and administrative expenses                                      (6,283)    (2,048)     (23,006)     (6,673)
   Non-cash stock compensation expense                                          --       (513)      (3,985)     (1,039)
   Depreciation                                                             (7,811)    (3,157)     (14,242)     (6,046)
   Amortization of intangible assets                                          (711)      (306)      (1,157)       (477)
   Asset impairments (note 10)                                              (2,894)        --       (6,395)         --
                                                                          -------------------    ---------------------
      Total operating expenses                                             (60,811)   (30,013)    (142,559)    (56,097)
                                                                          -------------------    ---------------------
      Operating loss                                                       (22,353)   (13,571)     (63,734)    (30,040)
                                                                          -------------------    ---------------------

Interest income                                                                 56      1,972          259       3,466
Interest expense                                                            (6,075)    (5,900)     (11,174)    (11,382)
Other income (expense), net                                                     75        534           75         836
                                                                          -------------------    ---------------------
      Loss before cumulative effect of a change in accounting principle    (28,297)   (16,965)     (74,574)    (37,120)
                                                                          -------------------    ---------------------
      Cumulative effect of a change in accounting principle                     --         --        4,335          --
                                                                          -------------------    ---------------------
      Net loss                                                            $(28,297)  $(16,965)   $(70,239)    $(37,120)
                                                                          -------------------    ---------------------

                                                                          -------------------    ---------------------
      Loss before cumulative effect of a change in accounting principle   $(28,297)  $(16,965)     (74,574)    (37,120)
                                                                          -------------------    ---------------------
      Dividends and accretion on redeemable preferred stock                     --     (2,458)     (47,624)     (3,540)
      Loss before cumulative effect of a change in accounting principle
          available to common stockholder's                                (28,297)   (19,423)    (122,198)    (40,660)
      Cumulative effect of a change in accounting principle                     --         --        4,335          --
                                                                          -------------------    ---------------------
      Net loss available to common stockholders'                          $(28,297)  $(19,423)   $(117,863)   $(40,660)
                                                                          ===================    =====================
</TABLE>

   See accompanying notes to the unaudited consolidated financial statements.

                                       -4-

<PAGE>

                           iPCS, INC. AND SUBSIDIARIES
                (A Wholly Owned Subsidiary of AirGate PCS, Inc.)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                                   Six Months Ended
                                                                                      March 31,
                                                                                   2002        2001
                                                                                 --------    --------
<S>                                                                              <C>         <C>
Cash flows from operating activities:
   Net loss ..................................................................   $(70,239)   $(37,120)
   Adjustments to reconcile net loss to net cash used in operating activities:
   Asset impairments .........................................................      6,395          --
   Depreciation ..............................................................     14,242       6,046
   Amortization of intangible assets .........................................      1,157         477
   (Gain) on tower sales .....................................................         --        (831)
   Amortization of financing costs ...........................................        409         616
   Provision for doubtful accounts ...........................................      4,558         908
   Interest expense associated with accretion of discount ....................      9,153       5,695
   Non-cash stock option compensation ........................................      3,985       1,039
   Cumulative effect of accounting change ....................................     (4,335)         --
    Changes in assets and liabilities:
      Accounts receivable ....................................................     (5,971)     (1,070)
      Receivable from Sprint PCS .............................................      1,857      (4,238)
      Inventories, net .......................................................      1,709      (1,310)
      Prepaid expenses, other current and long term assets ...................       (133)     (1,171)
      Accounts payable, accrued expenses and other long term liabilities .....      4,932      12,222
      Payable to Sprint PCS ..................................................       (389)      1,630
      Deferred revenue .......................................................      2,342       2,900
                                                                                 --------    --------
                 Net cash used in operating activities .......................    (30,328)    (14,207)
                                                                                 --------    --------
Cash flows from investing activities:
   Capital expenditures ......................................................    (47,918)    (56,252)
   Acquisition of the Iowa City/Cedar Rapids, Iowa markets ...................         --     (31,823)
   Proceeds from tower sales .................................................         --       6,940
   Other .....................................................................        955         724
                                                                                 --------    --------
                  Net cash used in investing activities ......................    (46,963)    (80,411)
                                                                                 --------    --------

Cash flows from financing activities:
   Proceeds from borrowings under senior credit facilities ...................     30,000      25,000
   Payments made under capital lease obligations .............................         (3)        (16)
   Debt financing costs ......................................................       (125)       (840)
   Proceeds from sale of preferred stock .....................................         --      65,730
   Other .....................................................................         --         (46)
                                                                                 --------    --------
                  Net cash provided by financing activities ..................     29,872      89,828
                                                                                 --------    --------
                  Net decrease in cash and cash equivalents ..................    (47,419)     (4,790)
Cash and cash equivalents at beginning of period .............................     54,579     108,233
                                                                                 --------    --------
Cash and cash equivalents at end of period ...................................   $  7,160    $103,433
                                                                                 ========    ========
Supplemental disclosure of cash flow information - cash paid for interest ....   $  1,545    $    616
                                                                                 ========    ========
Supplemental disclosure for non-cash investing activities:
   Capitalized interest ......................................................   $  4,851    $  3,300
   Capital lease obligation ..................................................   $    191    $     --
   Accrued dividends on preferred stock ......................................   $ 40,426    $     --
   Accretion to redemption of preferred stock ................................   $  7,198    $     --
</TABLE>

   See accompanying notes to the unaudited consolidated financial statements.

                                       -5-

<PAGE>

                           iPCS, INC. AND SUBSIDIARIES
                (A Wholly Owned Subsidiary of AirGate PCS, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2002
                                   (unaudited)

(1)  Business, Basis of Presentation and Summary of Significant Accounting
     Policies

     (a) Business and Basis of Presentation

iPCS, Inc. and subsidiaries (collectively, the "Company" or "iPCS") were created
for the purpose of becoming a leading provider of wireless Personal
Communication Services ("PCS"). On January 22, 1999, we entered into a
management and related agreements with Sprint whereby we became the Sprint PCS
network partner with the exclusive right to market 100% digital PCS wireless
products and services under the Sprint and Sprint PCS brand names in fifteen
markets in Illinois and Iowa. The Sprint agreements were amended in March 2000
to add twenty additional markets. On February 28, 2001, the Sprint agreements
were amended to add the Iowa City and Cedar Rapids, Iowa markets to our
territory. With these two amendments, the size of our territory was increased
from a total population of 2.8 million residents to a total population of 7.4
million residents. The unaudited consolidated financial statements included
herein includes the accounts of iPCS, Inc. and its subsidiaries, iPCS Wireless,
Inc. and iPCS Equipment, Inc. In the opinion of management, these consolidated
financial statements contain all of the adjustments, consisting of normal
recurring adjustments, necessary to present fairly, in summarized form, the
financial position and the results of operations of iPCS. The results of
operations for the three months and six months ended March 31, 2002, are not
indicative of the results that may be expected for the full fiscal year of 2002.
The financial information presented herein should be read in conjunction with
the Company's Form 10-K for the year ended September 30, 2001 which includes
information and disclosures not included herein. All significant intercompany
accounts and transactions have been eliminated in consolidation. Certain
reclassifications have been made to prior year balances to conform to the
current year presentation.

The PCS market is characterized by significant risks as a result of rapid
changes in technology, increasing competition and the cost associated with the
build-out of a PCS network. The Company's continuing operations are dependent
upon Sprint's ability to perform its obligations under the various agreements
between the Company and Sprint under which the Company has agreed to construct
and manage its networks (the "Sprint Agreements"). Additionally, the Company's
ability to attract and maintain a sufficient customer base is critical to
achieving breakeven cash flow. Changes in technology, increased competition,
economic conditions or inability to achieve breakeven cash flow, among other
factors, could have an adverse effect on the Company's financial position and
results of operations.

     (b) Revenue Recognition

The Company sells wireless handsets and accessories, which are recorded at the
time of the sale as equipment revenue. The Company also sells to customers a
wireless service package, which is recognized monthly as service is provided and
is included as service revenue. Roaming revenue is recorded when Sprint PCS
subscribers from outside our territory and non-Sprint PCS subscribers roam onto
the Company's network. A customer may purchase a wireless handset separately
from the purchase of wireless services. The Company believes the sale of
wireless handsets and accessories and the related costs of wireless handsets and
accessories is a separate earnings process from the sale of wireless services to
customers. The Company participates in the Sprint PCS national and regional
distribution program in which national retailers such as Radio Shack sell Sprint
PCS products and services. In order to facilitate the sale of Sprint PCS
products and services, national retailers purchase wireless handsets from Sprint
PCS for resale and receive compensation from Sprint PCS for products and
services sold. For industry competitive reasons, Sprint PCS subsidizes the price
of these handsets by selling the handsets at a price below cost. Under our
management agreement with Sprint PCS, when a national retailer sells a handset
purchased from Sprint PCS to a subscriber in the Company's territory, the
Company is obligated to reimburse Sprint PCS for the handset subsidy that Sprint
PCS originally incurred. The national retailers sell Sprint PCS wireless
services under the Sprint PCS brands and marks. The Company does not receive any
revenues from the sale of wireless handsets by national retailers. The Company
classifies these Sprint PCS subsidy charges as a selling and marketing expense.

Sprint retains 8% of collected service revenues from Sprint PCS customers based
in the Company's markets and from non-Sprint PCS subscribers who roam onto the
Company's network. The amount retained by Sprint is recorded as cost of service
and roaming. Revenues generated from the sale of handsets and accessories and
from roaming services provided to Sprint PCS customers who are not based in the
Company's markets are not subject to the 8% affiliation fee for Sprint.

The accounting policy for the recognition of activation fee revenue is to record
the revenue over the periods such revenue is

                                       -6-

<PAGE>

earned in accordance with the current interpretations of Staff Accounting
Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial Statements." The
Company does not recognize revenue from subscribers for which the likelihood of
collecting such revenue is not reasonably assured.

Activation fee revenue and direct customer activation costs have been deferred
and are recorded over the average life for those customers (30 months). For the
three months ended March 31, 2002 and 2001, the Company recognized approximately
$0.7 million and $0.1 million of activation fee revenue, respectively. For the
six months ended March 31, 2002 and 2001, the Company recognized approximately
$1.2 million and $0.3 million of activation fee revenue, respectively. For the
three months ended March 31, 2002 and 2001, the Company recognized approximately
$0.3 million and $0.2 million, respectively of direct customer activation costs.
For the six months ended March 31, 2002 and 2001, the Company recognized
approximately $0.5 million and $0.5 million, respectively of direct customer
activation costs. As of March 31, 2002, the Company has deferred $5.0 million of
activation fee revenue and $3.8 million of direct customer activation costs to
future periods.

     (c) Recently Issued Accounting Pronouncements:

In November 2001, the Emerging Issues Task Force ("EITF") of the Financial
Accounting Standards Board ("FASB") issued EITF 01-9 "Accounting for
Consideration Given by a Vendor to a Customer (Including a Reseller of the
Vendor's Products)". EITF 01-9 provides guidance on when a sales incentive or
other consideration given should be a reduction of revenue or an expense and the
timing of such recognition. The guidance provided in EITF 01-9 is effective for
financial statements for interim or annual periods beginning after December 15,
2001. The Company occasionally offers rebates to customers that purchase
wireless handsets in its stores. The Company's historical policy regarding the
recognition of these rebates in the statement of operations is a reduction in
the revenue recognized on the sale of the wireless handset by the amount of the
rebate given. The Company's historically policy is in accordance with the
guidance set forth in EITF 01-9. Therefore, the adoption of EITF 01-9 did not
have a material impact on the Company's financial statements.

In August 2001, the FASB issued Statement of Financial Accounting Standard
("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets." SFAS No. 144 provides new guidance on the recognition of impairment
losses on long-lived assets with definite lives to be held and used or to be
disposed of and also broadens the definition of what constitutes a discontinued
operation and how the results of a discontinued operation are to be measured and
presented. SFAS No.144 is effective for fiscal years beginning after December
15, 2001. Early adoption of this statement is permitted. The Company has elected
early adoption as of the beginning of its fiscal year on October 1, 2001. The
adoption by the Company did not materially change the methods used by the
Company to measure impairment losses on long-lived assets.

In June, 2001, the FASB issued SFAS No. 141, "Business Combinations", which is
effective for all business combinations initiated after June 30, 2001. SFAS No.
141 requires companies to account for all business combinations using the
purchase method of accounting, recognize intangible assets if certain criteria
are met, as well as provide additional disclosures regarding business
combinations and allocation of purchase price. The Company has adopted SFAS No.
141 as of July 1, 2001, and the impact of such adoption did not have a material
adverse impact on the Company's financial statements.

In June, 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets", which provides for non-amortization of goodwill and intangible assets
that have indefinite useful lives and annual tests of impairments of those
assets. The statement also provides specific guidance about how to determine and
measure goodwill and intangible asset impairments, and requires additional
disclosure of information about goodwill and other intangible assets. The
provisions of this statement are required to be applied starting with fiscal
years beginning after December 15, 2001 and applied to all goodwill and other
intangible assets recognized in its financial statements at that date. Goodwill
and intangible assets acquired after June 30, 2001 will be subject to the
non-amortization provisions of the statement. The Company adopted SFAS No. 142
as of October 1, 2001, and the impact of such adoption did not have a material
adverse impact on the Company's financial statements.

(2)  Change in Accounting Principle

In connection with the merger of the Company with AirGate (as discussed in Note
8), the Company changed its method of amortizing interest expense on its senior
discount notes effective as of October 1, 2001. While the Company's previous
method of accounting was in accordance with accounting principles generally
accepted in the United States of America, the Company believes it is preferable
to use the same methodology as its parent, AirGate. AirGate's method of
amortizing interest expense is also in accordance with accounting principles
generally accepted in the United States of America.

The cumulative effect of this change in accounting for the periods through
September 30, 2001, was a reduction in the carrying value of the senior notes by
$4.3 million along with a corresponding decrease in the Company's accumulated
deficit. In accordance with Accounting Principles Board Opinion No. 20,
"Accounting Changes", the change in accounting has been reflected as a
cumulative change in accounting effective as of October 1, 2001. The effect of
the change for the six-month period

                                       -7-

<PAGE>

ended March 31, 2002 was a reduction to interest expense of approximately $0.5
million.

(3)  Sprint Agreements

The Company records various transactions under the Sprint Agreements. These
transactions occur in the cost of service and roaming, cost of equipment and
selling and marketing captions in the statement of operations. Cost of service
and roaming transactions relate to the 8% affiliation fee, long distance,
roaming expenses, billing support and customer care support. Cost of equipment
transactions relate to sold inventory purchased under the Sprint agreements.
Selling and marketing transactions relate to subsidized costs on wireless
handsets and commissions under Sprint's national distribution program. Amounts
relating to the Sprint Agreements for the three and six months ended March 31,
2002 and 2001, are as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                                     Three Months Ended
                                                                    ---------------------
                                                                    March 31,   March 31,
                                                                      2002        2001
                                                                    ---------   ---------
<S>                                                                  <C>          <C>
Amounts included in the Consolidated Statement of Operations:
   Cost of service and roaming...................................    $17,422      $8,325
   Cost of equipment.............................................      3,671       3,164
   Selling and marketing.........................................        748       2,792
</TABLE>

<TABLE>
<CAPTION>
                                                                      Six Months Ended
                                                                    ---------------------
                                                                    March 31,   March 31,
                                                                       2002        2001
                                                                    ---------   ---------
<S>                                                                  <C>          <C>
Amounts included in the Consolidated Statement of Operations:
   Cost of service and roaming...................................    $37,194     $12,403
   Cost of equipment.............................................      6,956       6,158
   Selling and marketing.........................................      8,260       5,378
</TABLE>

(4)  Long-Term Debt

Long-term debt consists of the following at March 31, 2002 and September 30,
2001 (dollars in thousands):

<TABLE>
<CAPTION>
                                                                             March 31,   September 30,
                                                                               2002          2001
                                                                             ---------   -------------
<S>                                                                           <C>          <C>
Senior credit facility...................................................       80,000       50,000
Senior subordinated discount notes.......................................      166,481      158,336
Capital lease obligations................................................          570          380
                                                                              --------     --------
   Total long-term debt and capital lease obligations....................      247,051      208,716
   Current maturities of long-term debt and capital lease obligations....            2            7
                                                                              --------     --------
   Long-term debt and capital lease obligations..........................     $247,049     $208,709
                                                                              ========     ========
</TABLE>

As of March 31, 2002, $60.0 million remained available for borrowing under the
senior credit facility.

On January 12, 2001, as required under the terms of the Company's senior secured
credit facility, the Company entered into an interest rate cap agreement  The
agreement expires in three years and caps the three-month LIBOR interest rate at
7.25%.

On February 23, 2001, the Company entered into an amendment to the senior
secured credit facility which included a consent to the expansion of its
territory to include the Iowa City and Cedar Rapids, Iowa markets which amended
certain covenant definitions and requirements.

On September 28, 2001, the Company entered into an amendment to the senior
secured credit facility which included a consent to the merger with AirGate as
discussed in Note 8, and which amended certain covenant definitions and
requirements.

On December 20, 2001, the Company entered into an amendment to the senior
secured credit facility that changed its fiscal year end from a calendar year
ending December 31 to a fiscal year ending September 30. This became effective
with our new fiscal year starting October 1, 2001.

Following our merger with AirGate, we proposed a new business plan for fiscal
year 2002 which would have violated the EBITDA loss covenants of the senior
secured credit facility in the second half of the fiscal year. On February 14,
2002, the

                                      -8-

<PAGE>

Company entered into an amendment which provided relief under this EBITDA loss
covenant and modified other requirements. At March 31, 2002, the Company was in
compliance with the covenants

(5)  Reorganization

On July 12, 2000, Illinois PCS, LLC (the "Predecessor Company") reorganized its
business into a C Corporation in which members of the Predecessor Company
received 44,869,643 shares of common stock of iPCS, Inc. in exchange for their
ownership interests in the Predecessor Company. As of July 12, 2000, the
Predecessor Company merged with and into iPCS Wireless, Inc., a wholly-owned
subsidiary of iPCS, Inc. iPCS Equipment, Inc. was also formed and is a
wholly-owned subsidiary of iPCS Wireless, Inc. iPCS Wireless, Inc. will continue
the activities of the Predecessor Company and, for accounting purposes, this
transaction was accounted for as a reorganization of the Predecessor Company
into a C Corporation. iPCS, Inc. and its subsidiaries, including the Predecessor
Company, are collectively referred to as the "Company."

(6)  Income Taxes

Prior to July 12, 2000, the Predecessor Company operated as a limited liability
company ("LLC") and, as a result, its losses were included in the income tax
returns of its members. Therefore, the accompanying consolidated financial
statements do not include any income tax amounts prior to July 12, 2000.
Subsequent to July 12, 2000, the date of reorganization as discussed in Note 5,
the Company became a C Corporation and began accounting for income taxes in
accordance with SFAS No. 109, "Accounting for Income Taxes." The Company's
effective income tax rate for the interim periods presented is based on
management's estimate of the Company's effective tax rate for the applicable
year and differs from the federal statutory income tax rate primarily due to
nondeductible permanent differences, state income taxes and changes in the
valuation allowance for deferred income tax assets. Deferred income tax assets
and liabilities are recognized for differences between the financial statement
carrying amounts and the tax basis of assets and liabilities which result in
future deductible or taxable amounts and for net operating loss and tax credit
carryforwards. In assessing the valuation of deferred income tax assets,
management considers whether it is more likely than not that some portion of the
deferred income tax assets will be realized. The ultimate realization of
deferred income tax assets is dependent upon the generation of future taxable
income during the periods in which those temporary differences become
deductible. No benefit for federal income taxes has been recorded for the three
and six months ended March 31, 2002, as the net deferred tax asset generated,
primarily from temporary differences related to the net operating loss carry
forwards, is offset by a full valuation allowance due to the Company's limited
operating history.

(7) Condensed Consolidating Financial Information

The senior discount notes are fully, unconditionally, and jointly and severally
guaranteed by iPCS Wireless, Inc. and iPCS Equipment, Inc., which are
wholly-owned restricted subsidiaries of iPCS, Inc. iPCS Wireless holds the
operating assets of the Company and is the obligor under the Company's senior
secured credit facility. IPCS Equipment holds certain tower equipment. The
following unaudited condensed consolidating financial information as of March
31, 2002 and September 30, 2001 and for the six months ended March 31, 2002 and
2001 is presented for iPCS, Inc., iPCS Wireless, Inc., and iPCS Equipment, Inc.
(in thousands):

                      Condensed Consolidating Balance Sheet

                                 March 31, 2002

<TABLE>
<CAPTION>
                              iPCS Inc   iPCS Wireless Inc   iPCS Equipment Inc   Eliminations   Consolidated
                              --------   -----------------   ------------------   ------------   ------------
<S>                           <C>            <C>                   <C>             <C>             <C>
Cash and cash equivalents     $    309       $  6,333              $   518         $      --       $  7,160

Property and equipment, net         --        196,596               37,112               (59)       233,649

Investment in subsidiaries      37,717             --                   --                --         37,717

Other assets                   325,742        109,445               11,257          (413,490)        32,954
                              --------       --------              -------         ---------       --------
    Total assets              $363,768       $312,374              $48,887         $(413,549)      $311,480
                              ========       ========              =======         =========       ========

Current liabilities           $    (16)      $149,932              $ 1,813         $(102,690)      $ 49,039

Other long-term                     --        271,781               52,996          (310,800)        13,977

Long-term debt                 166,482         80,567                   --                --        247,049
                              --------       --------              -------         ---------       --------
    Total liabilities          166,466        502,280               54,809          (413,490)       310,065

Common stock                        --             --                   --                --             --

Additional paid-in capital     192,850             --                   --                --        192,850
</TABLE>

                                       -9-

<PAGE>

<TABLE>
<S>                           <C>            <C>                   <C>             <C>             <C>
Accumulated deficit              4,452       (189,906)             (5,922)               (59)      (191,435)
Unearned stock option
compensation                        --             --                   --                --             --
                              --------       --------              -------         ---------       --------
   Total liabilities and
   stockholders'
   equity(deficit)            $363,768        312,374               48,887         $(413,549)       311,480
                              ========       ========              =======         =========       ========

                              $     --       $     --              $    --         $      --       $    --
</TABLE>

                 Condensed Consolidating Statement of Operations

                    For the three months ended March 31, 2002

<TABLE>
<CAPTION>
                                iPCS Inc   iPCS Wireless Inc   iPCS Equipment Inc   Eliminations   Consolidated
                                --------   -----------------   ------------------   ------------   ------------
<S>                              <C>            <C>                  <C>               <C>          <C>
Total revenues                   $   --         $ 38,458             $ 3,767           $(3,767)     $ 38,458

Cost of revenues                     --          (34,365)             (3,105)            3,751       (33,719)

Selling and marketing                --           (9,393)                 --                --        (9,393)

General and administrative          (52)          (6,226)                 (5)               --        (6,283)

Other                             2,723          (10,348)             (1,213)               --        (8,838)

Depreciation and amortization     (124)           (7,679)               (719)               --        (8,522)
                                 ------         --------             -------           -------      --------

Total expenses                    2,547          (68,011)             (5,042)            3,751       (66,755)
                                 ------         --------             -------           -------      --------

    Net loss                      2,547          (29,553)             (1,275)              (16)      (28,297)
                                 ------         --------             -------           -------      --------
</TABLE>

                      Condensed Consolidating Balance Sheet

                               September 30, 2001

<TABLE>
<CAPTION>
                                      iPCS Inc   iPCS Wireless Inc   iPCS Equipment Inc   Eliminations   Consolidated
                                      --------   -----------------   ------------------   ------------   ------------
<S>                                   <C>            <C>                  <C>              <C>             <C>
Cash and cash equivalents             $    306       $  53,890            $   383          $      --       $  54,579

Property and equipment, net                 --         160,546             37,651                (36)        198,161

Intangible assets                           --              --                 --                 --              --

Other assets                           349,169         106,414              7,692           (387,259)         76,016
                                      --------       ---------            -------          ---------       ---------
    Total assets                      $349,475       $ 320,850            $45,726          $(387,295)      $ 328,756
                                      ========       =========            =======          =========       =========

Current liabilities                   $    739       $ 138,163            $ 3,836          $(102,054)      $  40,684

Other long-term                             --         252,031             45,241           (285,205)         12,067

Long-term debt                         158,336          50,000                 --                 --         208,336
                                      --------       ---------            -------          ---------       ---------
    Total liabilities                  159,075         440,194             49,077           (387,259)        261,087
                                      --------       ---------            -------          ---------       ---------

Redeemable preferred stock             121,548                                                               121,548
                                      --------       ---------            -------          ---------       ---------

Common stock                               449              --                 --                 --             449

Additional paid-in capital              70,853              --                 --                 --          70,853

Accumulated deficit                      1,535        (119,344)            (3,351)               (36)       (121,196)
Unearned stock option compensation      (3,985)             --                 --                 --          (3,985)
                                      --------       ---------            -------          ---------       ---------
    Total liabilities and
       stockholders'
       equity(deficit)                $349,475       $ 320,850            $45,726          $(387,295)      $ 328,756
                                      ========       =========            =======          =========       =========
</TABLE>

                 Condensed Consolidating Statement of Operations

                     For the six months ended March 31, 2002

<TABLE>
<CAPTION>
                                     iPCS Inc   iPCS Wireless Inc   iPCS Equipment Inc   Eliminations   Consolidated
                                     --------   -----------------   ------------------   ------------   ------------
<S>                                   <C>           <C>                   <C>              <C>            <C>
Total revenues                        $    --       $  78,825             $ 5,206          $(5,206)       $ 78,825
</TABLE>

                                      -10-

<PAGE>

<TABLE>
<S>                                   <C>           <C>                   <C>              <C>            <C>
Cost of revenues                           --         (69,138)             (4,131)           5,184         (68,085)

Selling and marketing                      --         (25,689)                 --               --         (25,689)

General and administrative             (7,213)        (15,788)                 (5)              --         (23,006)

Other                                   6,043         (24,785)             (2,478)              --         (21,220)

Depreciation and amortization            (247)        (13,989)             (1,163)              --         (15,399)
                                      -------       ---------             -------          -------        --------

Total expenses                         (1,417)       (149,389)             (7,777)           5,184         153,399)
                                      -------       ---------             -------          -------        --------

Loss before cumulative effect of a
change in accounting principle         (1,417)        (70,564)             (2,571)             (22)        (74,574)

Cumulative effect of a change in
accounting principle                    4,335              --                  --               --           4,335
                                      -------       ---------             -------          -------        --------

    Net loss                          $ 2,918       $ (70,564)            $(2,571)         $   (22)       $(70,239)
                                      =======       =========             =======          =======        ========
</TABLE>

                 Condensed Consolidated Statement of Cash Flows

                     For the six months ended March 31, 2002

<TABLE>
<CAPTION>
                                   iPCS Inc   iPCS Wireless Inc   iPCS Equipment Inc   Eliminations   Consolidated
                                   --------   -----------------   ------------------   ------------   ------------
<S>                                <C>              <C>                <C>                <C>           <C>
Operating activities, net          $ 10,928         (39,797)            (1,436)            (23)          (30,328)

Investing activities, net                --         (44,367)            (2,619)             23           (46,963)

Financing activities, net           (10,925)         36,607              4,190              --            29,872
                                   --------        --------            -------            ----          --------
(Decrease) increase in cash
    and cash equivalents                  3         (47,557)               135              --           (47,419)

Cash and cash equivalents at
     beginning of period                306          53,890                383              --            54,579
                                   --------        --------            -------            ----          --------
Cash and cash equivalents at end
of period                          $    309        $  6,333            $   518            $ --          $  7,160
                                   ========        ========            =======            ====          ========
</TABLE>

                 Condensed Consolidating Statement of Operations

                     For the six months Ended March 31, 2001

<TABLE>
<CAPTION>
                                     iPCS Inc   iPCS Wireless Inc   iPCS Equipment Inc   Eliminations   Consolidated
                                     --------   -----------------   ------------------   ------------   ------------
<S>                                  <C>             <C>                 <C>               <C>            <C>
Total revenues                       $    --         $ 26,057            $ 1,127           $(1,127)       $ 26,057

Cost of revenues                          --          (29,702)            (1,080)            1,122         (29,660)

Selling and marketing                     --          (12,202)                --                --         (12,202)

General and administrative            (3,164)          (3,481)               (28)               --          (6,673)

Other                                  6,735          (13,664)            (1,190)                           (8,119)
Depreciation and amortization           (248)          (6,229)               (46)               --          (6,523)
                                     -------         --------            -------           -------        --------

Total expenses                         3,323          (65,278)            (2,344)            1,122         (63,177)
                                     -------         --------            -------           -------        --------

Loss before cumulative effect of a
   change in accounting principle      3,323          (39,221)            (1,217)               (5)        (37,120)

Cumulative effect of a change in
   accounting principle                   --               --                 --                --              --
                                     -------         --------            -------           -------        --------

Net loss                             $ 3,323         $(39,221)           $(1,217)          $    (5)       $(37,120)
                                     =======         ========            =======           =======        ========
</TABLE>

                                      -11-

<PAGE>

                 Condensed Consolidating Statement of Operations

                    For the three months Ended March 31, 2001

<TABLE>
<CAPTION>
                                iPCS Inc   iPCS Wireless Inc   iPCS Equipment Inc   Eliminations   Consolidated
                                --------   -----------------   ------------------   ------------   ------------
<S>                              <C>           <C>                  <C>               <C>            <C>
Total revenues                   $   --        $ 16,442             $ 1,127           $(1,127)       $ 16,442

Cost of revenues                     --         (15,454)             (1,080)            1,122         (15,412)

Selling and marketing                --          (8,577)                 --                --          (8,577)

General and administrative         (137)         (1,911)                 --                --          (2,048)

Other                             2,294          (5,528)               (673)               --          (3,907)

Depreciation and amortization      (124)         (3,293)                (46)               --          (3,463)
                                 ------        --------             -------           -------        --------

Total expenses                    2,033         (34,763)             (1,799)            1,122         (33,407)
                                 ------        --------             -------           -------        --------

    Net loss                     $2,033        $(18,321)            $  (672)          $    (5)       $(16,965)
                                 ------        --------             -------           -------        --------
</TABLE>

(8)  Merger

On August 28, 2001, the Company signed an agreement and plan of merger with
AirGate, a Sprint PCS network partner, pursuant to which AirGate and the Company
combined in a tax-free stock for stock transaction on November 30, 2001. In
connection with the merger, AirGate issued to the former stockholders of iPCS
approximately 12.4 million shares of AirGate common stock and assumed options
and warrants to purchase approximately 1.1 million shares of AirGate common
stock. At the effective time of the merger, each issued and outstanding share of
the Company's common stock was converted into the right to receive approximately
0.1594 of a share of AirGate common stock, referred to as the exchange ratio.
All shares of the Company's preferred stock were converted into the Company's
common stock immediately prior to the effective time of the merger. At the
effective time of the merger, AirGate assumed each un-expired and unexercised
option and warrant to purchase shares of the Company's common stock and
converted it into an option or warrant to purchase AirGate common stock based on
one share of the Company's common stock equal to the exchange ratio of AirGate's
common stock. In addition, the exercise price per share of AirGate common stock
issuable under each converted option or converted warrant is equal to the per
share exercise price of the Company option or warrant divided by the exchange
ratio. The options became fully vested at the time of the merger and the
warrants will remain subject to the terms and conditions set forth in the
applicable warrant agreement.

(9)  Goodwill and intangible assets

On January 10, 2001, the Company exercised its option to purchase from Sprint
certain telecommunications equipment and retail store assets and inventory
located in the Iowa City and Cedar Rapids, Iowa markets. Concurrently with the
closing, the Sprint management agreement which set forth the terms of the
Company's long-term affiliation with Sprint was amended to reflect the expansion
of the Company's territory to include these two additional Iowa markets. The
Company closed on this transaction on February 28, 2001 and paid approximately
$31.7 million for these two markets. The Company has accounted for this business
combination using the purchase method. The Company made a preliminary allocation
of the purchase price based on the fair values of the assets and liabilities
acquired and allocated any excess amount over fair value to the intangible asset
representing the right to provide service in the Iowa City and Cedar Rapids,
Iowa markets under the Sprint agreements. During the three months ended March
31, 2002, the Company obtained the services of a nationally recognized appraisal
firm to provide a final purchase price allocation. The final purchase price
allocation assigned, approximately $14.1 million to the right to provide service
under the Sprint agreements, $5.8 million to customer base, $8.1 million to
goodwill, $2.9 million to property, plant and equipment and $0.8 million to
trade receivables.

     The changes in the carrying amount of goodwill since September 30, 2001 are
     as follows (dollars in thousands):

     Balance as of September 30, 2001                    $    -
       Goodwill (from final purchase price allocation)    8,060
                                                         ------
     Balance as of March 31, 2002                        $8,060
                                                         ======

                                      -12-

<PAGE>

The carrying amount, accumulated amortization and estimated future amortization
expense of acquired definite life intangibles at March 31, 2002, are as follows
(dollars in thousands):

                                                         Gross
                                                       Carrying   Accumulated
                                                        Amount    Amortization
                                                       --------   ------------
Amortized intangible assets
---------------------------
Right to provide service under the Sprint agreements    $17,644      (2,090)
Right to provide service under the Sprint agreements
   -  warrants issued                                     9,147        (844)
Acquired customer base - Iowa markets                     5,800          --
                                                        -------     -------
    Total                                               $32,591     $(2,934)
                                                        =======     =======

Estimated amortization expense for the fiscal years ended September 30,

2002       $5,571
2003       $3,183
2004       $1,477
2005       $1,477
2006       $1,477

(10) Asset impairments

As a result of our merger with AirGate, management proposed new business plans
with respect to our network build-out and organizational structure. Accordingly,
the carrying value of property and equipment associated with identified
locations affected by the proposed business plans were adjusted to their fair
value. These adjustments to fair value resulted in impairments of approximately
$6.4 million for the six months ended March 31, 2002. For the six months ended
March 31, 2002, approximately $3.1 million of lease obligations costs were
accrued in general and administrative costs, which represent the lease
obligations associated with the exit of these locations.

(11) Tower sales

On May 28, 1999, the Company signed a tower sale and leaseback agreement with
American Tower Corporation ("American Tower"). Under the agreement, the Company
was to locate sites for, develop and construct between sixty and eighty wireless
communications towers and then sell the towers to American Tower. The term of
this agreement, which was set to expire at the earlier of the date of the final
tower sale or December 31, 2000, was amended in November 2000 to extend the
expiration date to February 28, 2001.

During the six months ended March 31, 2001 thirty towers were sold to American
Tower for approximately $6.9 million, resulting in a gain of approximately $3.3
million of which approximately $0.8 million was recognized at the time of the
sale and the remainder was deferred and is being amortized as a reduction to
rental expense over the initial lease term of ten years.

                                      -13-

<PAGE>

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

FORWARD-LOOKING STATEMENTS

Statements contained herein regarding expected financial results and other
planned events, including but not limited to, anticipated liquidity, churn
rates, ARPU (as defined in the Results of Operations), decreases in roaming
rates, EBITDA (as defined in the Critical Accounting Policies), capital
expenditures and other statements that include words such as "anticipate,"
"believe," "estimate," "expect," "intend," "plan," "seek", "project" and similar
expressions are forward-looking statements that involve risk and uncertainties.
Actual future events or results may differ materially from these statements.
Readers are referred to the documents filed by AirGate and iPCS with the
Securities and Exchange Commission, specifically the most recent filings which
identify important risk factors that could cause actual results to differ from
those contained in the forward-looking statements, including:

     .    the ability to successfully integrate the businesses of AirGate and
          iPCS;
     .    the competitiveness and impact of Sprint PCS' pricing plans, products
          and services;
     .    customer quality;
     .    the ability of Sprint to provide back office, customer care and other
          services;
     .    rates of penetration in the wireless industry;
     .    our significant level of indebtedness;
     .    adequacy of bad debt and other reserves;
     .    the potential to experience a high rate of customer turnover:
     .    the potential need for additional sources of liquidity;
     .    anticipated future losses;
     .    customer purchasing patterns;
     .    potential fluctuations in quarterly results;
     .    an adequate supply of infrastructure and subscriber equipment;
     .    risks related to future growth and expansion; and
     .    the volatility of the market price of our common stock.

These and other applicable risks are summarized under the captions "Factors That
May Affect Operating Results and Liquidity" and "Future Trends Analysis", both
included in this Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations" of this Form 10-Q and "Investment
Considerations" included under Item 5 - Other Information of this Form 10-Q and
elsewhere in this report.

OVERVIEW

On January 22, 1999, we entered into a management and related agreements with
Sprint whereby we became the Sprint PCS network partner with the exclusive right
to market 100% digital PCS wireless products and services under the Sprint and
Sprint PCS brand names in fifteen markets in Illinois and Iowa. The Sprint
agreements were amended in March 2000 to add twenty additional markets. On
February 28, 2001, the Sprint agreements were amended to add the Iowa City and
Cedar Rapids, Iowa markets to our territory. With these two amendments, the size
of our territory was increased from a total population of 2.8 million residents
to a total population of 7.4 million residents.

We are a wholly-owned subsidiary of AirGate PCS, Inc., which acquired us on
November 30, 2001. As required by the terms of our and AirGate's outstanding
indebtedness, we conduct our business as a separate entity from AirGate.

Under the Sprint agreements, we manage our network on Sprint PCS' licensed
spectrum as well as use the Sprint and Sprint PCS brand names royalty free
during our PCS affiliation with Sprint. We also have access to Sprint PCS'
national marketing support and distribution programs and are generally entitled
to buy network and customer equipment and handsets at the same discounted rates
offered by vendors to Sprint PCS based on its large volume purchases. In
exchange for these and other benefits, we are entitled to receive 92% and Sprint
is entitled to retain 8% of collected service revenues from customers in our
territories. We are entitled to 100% of revenues collected from the sale of
handsets and accessories and on roaming revenues received when Sprint PCS
customers from a different territory make a wireless call on our PCS network.

At March 31, 2002, our Sprint PCS network covered 5.6 million of the 7.4 million
residents in our Sprint PCS territory based on 2000 estimates compiled by
Kagan's Wireless Telecom Atlas & Databook, 2001 Edition.

                                      -14-

<PAGE>

CRITICAL ACCOUNTING POLICIES

We rely on the use of estimates and make assumptions that impact our financial
condition and results. These estimates and assumptions are based on historical
results and trends as well as our forecasts as to how these might change in the
future. Some of the most critical accounting policies that might materially
impact our results include:

Reserve for Doubtful Accounts

Estimates are used in determining our allowance for bad debt and are based both
on our historical collection experience, current trends, credit policy and on a
percentage of our accounts receivables by aging category. In determining these
percentages, we look at historical write-offs of our receivables. Bad debt
expense as a percentage of service revenues for the three and six months ended
March 31, 2002 was 6.7% and 9.1%, respectively. Bad debt expense as a percentage
of service revenues for the three and six months ended March 31, 2001, was 5.9%
and 6.1%, respectively. Our allowance for doubtful accounts as of March 31, 2002
and September 30, 2001 was $5.3 million and $2.7 million, respectively. We also
look at current trends in the credit quality of our customer base and changes in
the credit policies. Under the Sprint PCS service plans, customers who do not
meet certain credit criteria can nevertheless select any plan offered subject to
an account-spending limit, referred to as ASL, to control credit exposure.
Account spending limits range from $125 to $200 depending on the credit quality
of the customer. Prior to May 2001, all of these customers were required to make
a deposit of $125 that could be credited against future billings. In May 2001,
the deposit requirement was eliminated on all credit classes ("NDASL"). As a
result, a significant amount of our new customer additions (approximately 50%
since May 2001) have been under the NDASL program. On November 15, 2001, the
NDASL program has been replaced, in our territories, by the "Clear Pay program"
which requires a $125 deposit requirement for the lowest credit class and
featured increased back-office controls with respect to credit collection
efforts. On February 24, 2002, the Clear Pay program was superceded in our
territories by the "Clear Pay II program", which expanded the deposit
requirement across all new sub-prime credit quality customers and not just the
lowest credit class. We believe this new policy will reduce our future bad debt
exposure.

Reserve for First Payment Default Customers

We reserve a portion of our new customers and related revenues from those
customers that we anticipate will never pay a bill. Using historical information
of the percentage of customers whose service was cancelled for non-payment
without ever making a payment, we estimate the number of customers activated in
the current period that will never pay a bill. For these customers, we record a
reserve for 100% of their monthly revenues that we anticipate will never be
collected and as a result these customers are not included in the churn
statistics. At March 31, 2002 and September 30, 2001, we had in reserve
approximately 2,000 and 4,000 customers, respectively. We anticipate that the
requirement of a deposit for sub-prime customers activating on the Clear Pay II
program will reduce the number of first payment default customers for which we
will need to record a reserve and will reduce customer churn. If the estimate
for first payment default customers is inadequate, our operating income, EBITDA
and available cash would be reduced.

Reserve for Obsolete Excess Inventory

We currently record a reserve for obsolete or excess handset inventory for
models that are no longer manufactured. With the migration to a 1XRTT network,
we will need to continue to monitor the depletion of our current inventory
levels. If we do not deplete the inventory that is not capable of providing
1XRTT services prior to our complete rollout of 1XRTT, we may have to record a
reserve for any remaining obsolete inventory due to lower realizable retail
prices on those handsets. If the estimate of obsolete or excess inventory is
understated operating income and EBITDA would be reduced.

Revenue Recognition

The Company recognizes revenues when persuasive evidence of an arrangement
exists, services have been rendered, the price to the buyer is fixed or
determinable, and collectibility is reasonably assured. The Company's revenue
recognition polices are consistent with the guidance in Staff Accounting
Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements," as
amended by SAB No. 101A and 101B. We record equipment revenue for the sale of
handsets and accessories to customers in our retail stores and to local
resellers in our territories. We do not record equipment revenue on handsets and
accessories purchased by our customers from national third party resellers such
as Radio Shack, Best Buy and Circuit City, or directly from Sprint. The Company
believes the equipment revenue and related cost of equipment associated with the
sale of wireless handsets and accessories is a separate earnings process from
the sale of wireless services to customers. Our customers pay an activation fee
when they initiate service. We defer activation fee revenue over the average
life of our customers, which we estimate to be 30 months. We recognize service
revenue from our customers as they use the service. The Company provides a
reduction of

                                      -15-

<PAGE>

recorded revenue for billing adjustments and billing corrections. The Company
participates in the Sprint PCS national and regional distribution program in
which national retailers such as Radio Shack sell Sprint PCS products and
services. In order to facilitate the sale of Sprint PCS products and services,
national retailers purchase wireless handsets from Sprint PCS for resale and
receive compensation from Sprint PCS for products and services sold. For
industry competitive reasons, Sprint PCS subsidizes the price of these handsets
by selling the handsets at a price below cost. Under our management agreement
with Sprint PCS, when a national retailer sells a handset purchased from Sprint
PCS to a subscriber in the Company's territory, the Company is obligated to
reimburse Sprint PCS for the handset subsidy that Sprint PCS originally
incurred. The national retailers sell Sprint PCS wireless services under the
Sprint PCS brands and marks. The Company does not receive any revenues from the
sale of wireless handsets by national retailers. The Company classifies these
Sprint PCS subsidy charges as a selling and marketing expense.

Goodwill and Intangible Assets

Purchase price accounting requires extensive use of accounting estimates and
judgments to allocate the purchase price to the fair market value of the assets
and liabilities purchased. In our recording of the purchase of the Iowa City and
Cedar Rapids, Iowa markets, we engaged a nationally recognized valuation expert
to assist us in determining the fair value of these assets and liabilities.
Included in the asset valuation for this purchase was the valuation of three
intangible assets: the Iowa City and Cedar Rapids, Iowa customer base, the right
to be the exclusive provider of Sprint PCS services in the Iowa City and Cedar
Rapids territories and goodwill. For the customer base and the right to provide
service under the Sprint Agreements, finite useful lives of thirty months and
205 months, respectively, have been assigned to these intangible assets and they
will each be amortized over these respective useful lives. The Company evaluates
acquired businesses for potential impairment indicators whenever events or
changes in circumstances indicate that the carrying value may not be
recoverable. Factors that management considers important which could trigger an
impairment review include the following:

     .    Significant decrease in the market value of an asset;
     .    Significant changes in the manner of use of the acquired assets or the
          strategy for the overall business;
     .    Significant adverse change in legal factors or negative industry or
          economic trends; and
     .    Significant underperformance relative to current period and/or
          projected future operating profits or cash flows associated with an
          asset;

The Company engaged a nationally recognized appraisal firm to perform the
required transitional goodwill impairment testing under SFAS 142. The Company
did not recognize any goodwill impairment as the appraised fair value of iPCS
exceeded the carrying value at March 31, 2002.

Future events could cause us to conclude that impairment indicators exist and
that goodwill or intangibles associated with our acquired business is impaired.
Any resulting impairment loss could have a material adverse impact on our
financial condition and results of operations.

Income Taxes

As part of the process of preparing the Company's consolidated financial
statements the Company is required to estimate its taxes in each of the
jurisdictions of operation. This process involves management estimating the
actual current tax exposure together with assessing temporary differences
resulting from differing treatment of items for tax and accounting purposes.
These differences result in deferred tax assets and liabilities, which are
included within the consolidated balance sheets. The Company must then assess
the likelihood that the deferred tax assets will be recovered from future
taxable income and to the extent we believe that recovery is not likely, the
Company must establish a valuation allowance. Future taxable income depends on
our ability to generate income in excess of allowable deductions. To the extent
the Company establishes a valuation allowance or increases this allowance in a
period, an expense is recorded within the tax provision in the consolidated
statement of operations. Significant management judgment is required in
determining the Company's provision for income taxes, its deferred tax assets
and liabilities and any valuation allowance recorded against our net deferred
tax assets. In the event that actual results differ from these estimates or the
Company adjusts these estimates in future periods, the Company may need to
establish an additional valuation allowance that could materially impact the
Company's financial condition and results of operations.

EBITDA

The Company defines EBITDA as earnings before interest, taxes, non-cash stock
option compensation expense, depreciation, amortization of intangibles and asset
impairment losses. EBITDA as defined by the Company may not be comparable to
similarly titled measures by other companies.

                                      -16-

<PAGE>

NEW ACCOUNTING PRONOUNCEMENTS

In November 2001, the Emerging Issues Task Force ("EITF") of the Financial
Accounting Standards Board ("FASB") issued EITF 01-9 "Accounting for
Consideration Given by a Vendor to a Customer (Including a Reseller of the
Vendor's Products)". EITF 01-9 provides guidance on when a sales incentive or
other consideration given should be a reduction of revenue or an expense and the
timing of such recognition. The guidance provided in EITF 01-9 is effective for
financial statements for interim or annual periods beginning after December 15,
2001. The Company occasionally offers rebates to customers that purchase
wireless handsets in its stores. The Company's historical policy regarding the
recognition of these rebates in the statement of operations is a reduction in
the revenue recognized on the sale of the wireless handset by the amount of the
rebate given. The Company's historical policy is in accordance with the guidance
set forth in EITF 01-9. Therefore, the adoption of EITF 01-9 did not have a
material impact on the Company's financial statements.

In August 2001, the FASB issued Statement of Financial Accounting Standard
("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets." SFAS No. 144 provides new guidance on the recognition of impairment
losses on long-lived assets with definite lives to be held and used or to be
disposed of and also broadens the definition of what constitutes a discontinued
operation and how the results of a discontinued operation are to be measured and
presented. SFAS No. 144 is effective for fiscal years beginning after December
15, 2001. Early adoption of this statement is permitted. The Company has elected
early adoption as of the beginning of its fiscal year on October 1, 2001. The
adoption by the Company is not expected to materially change the methods used by
the Company to measure impairment losses on long-lived assets.

In June, 2001, the FASB issued SFAS No. 141, "Business Combinations", which is
effective for all business combinations initiated after June 30, 2001. SFAS No.
141 requires companies to account for all business combinations using the
purchase method of accounting, recognize intangible assets if certain criteria
are met, as well as provide additional disclosures regarding business
combinations and allocation of purchase price. The Company has adopted SFAS No.
141 as of July 1, 2001, and the impact of such adoption did not have a material
adverse impact on the Company's financial statements.

In June, 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets", which requires non-amortization of goodwill and intangible assets that
have indefinite useful lives and annual tests of impairments of those assets.
The statement also provides specific guidance about how to determine and measure
goodwill and intangible asset impairments, and requires additional disclosure of
information about goodwill and other intangible assets. The provisions of this
statement are required to be applied starting with fiscal years beginning after
December 15, 2001 and applied to all goodwill and other intangible assets
recognized in its financial statements at that date. Goodwill and intangible
assets acquired after June 30, 2001 will be subject to the non-amortization
provisions of the statement. The Company adopted SFAS No. 142 as of October 1,
2001, and the impact of such adoption did not have a material adverse impact on
the Company's financial statements.

RESULTS OF OPERATIONS

For the six months ended March 31, 2002, compared to the six months ended March
31, 2001:

Terms such as customer additions, average revenue per user, churn and cost per
gross addition are metrics used in the wireless telecommunications industry.
None of these terms are measures of financial performance under accounting
principles generally accepted in the United States. These terms, as used by the
Company, may not be comparable to similar terms used by other companies.

Customer Additions

As of March 31, 2002, we provided personal communication services to 180,468
customers compared to 134,927 customers as of September 30, 2001, a net addition
of 45,541 customers. The Company does not include in its customer base an
estimate of first payment default customers. The increase in net new customers
is due to customers attracted from other wireless carriers and increased demand
for wireless services in the United States.

Average Revenue Per User

An important operating metric in the wireless industry is Average Revenue Per
User (ARPU). ARPU summarizes the average monthly service revenue per customer,
excluding roaming revenue. ARPU is computed by dividing service revenue for the
period by the average subscribers for the period, which is net of an adjustment
for first payment default customers. For the six months ended March 31, 2002,
ARPU was $56. For the six months ended March 31, 2001, ARPU was $56.

Churn

                                      -17-

<PAGE>

Churn is the monthly rate of customer turnover expressed as the percentage of
the total customer base that both voluntarily and involuntarily discontinued
service during the month. Churn is computed by dividing the number of customers
that discontinued service during the month, net of 30 day returns and an
adjustment for estimated first payment default customers, by the average
customer base for the period. Churn for the six months ended March 31, 2002, was
2.6%, compared to 2.0% for the six months ended March 31, 2001. The increase in
churn is primarily a result of an increase in the number of sub-prime credit
quality customers the Company added whose service was involuntarily discontinued
during the period.

Cost Per Gross Addition

Cost Per Gross Addition (CPGA) summarizes the average cost to acquire new
customers during the period. CPGA is computed by adding the income statement
components of selling and marketing, cost of equipment and activation costs
(which are included as a component of cost of service) and reducing that amount
by the equipment revenue recorded. That net amount is then divided by the total
new customers acquired during the period, reduced for the reserve for first
payment default customers. CPGA was $356 for the six months ended March 31,
2002, compared to $375 for the six months ended March 31, 2001. The higher
number of total new customers acquired in the six months ended March 31, 2002
compared to the year earlier period leveraged down the fixed costs of selling
such as store costs and advertising over a greater number of customers.

Revenues

Service revenue and equipment revenue were $52.9 million and $4.1 million,
respectively, for the six months ended March 31, 2002, compared to $14.8 million
and $2.5 million, respectively, for the six months ended March 31, 2001, an
increase of $38.1 million and $1.6 million, respectively. These increased
revenues reflect the substantially higher average number of customers using the
Company's network. Service revenue consists of monthly recurring access and
feature charges and monthly non-recurring charges for local, long distance and
roaming airtime usage in excess of the pre-subscribed usage plan. Equipment
revenue is derived from the sale of handsets and accessories from our Sprint PCS
stores, net of sales incentives, rebates and an allowance for returns. Our
handset return policy allows customers to return their handsets for a full
refund within 14 days of purchase. When handsets are returned to us, we may be
able to reissue the handsets to customers at little additional cost to us.
However, when handsets are returned to Sprint for refurbishing, we receive a
credit from Sprint, which is less than the amount we originally paid for the
handset.

We recorded roaming revenue of $21.8 million during the six months ended March
31, 2002 (see roaming expense in Cost of Service and Roaming below), compared to
$8.7 million for the six months ended March 31, 2001, an increase of $13.1
million. The increase is attributable to the larger wireless customer base for
Sprint and its other network partners and additional coverage territory. We
receive roaming revenue at a per-minute rate from Sprint or another Sprint PCS
network partner when Sprint PCS subscribers outside of our territory use our
network. For the six months ended March 31, 2002, such roaming revenue was $21.2
million, or 97% of the roaming revenue recorded in the period. We also receive
non-Sprint PCS roaming revenue when subscribers of other wireless service
providers who have roaming agreements with Sprint roam on our network.

For the calendar year 2001, the Company's reciprocal roaming rate was $0.20 per
minute of use. Under an agreement in principle with Sprint, the roaming rate
with respect to calendar year 2002 is $0.10 per minute. For calendar year 2003
and beyond, the details of the agreement in principle reached by Sprint and its
network partners has not yet been finalized. Depending on the details of the
final agreement, the reciprocal roaming rate may be less than the rate charged
in 2002. The reduction in revenues from any rate decrease will be partially
offset by a lower cost of roaming expense.

Cost of Service and Roaming

The cost of service and roaming was $61.1 million for the six months ended March
31, 2002, compared to $19.2 million for the six months ended March 31, 2001, an
increase of $41.9 million. Cost of service and roaming principally consists of
costs to support the Company's customer base including: (i) network operating
costs (including salaries, cell site lease payments, fees related to the
connection of our switches to the cell sites that they support, inter-connect
fees and other expenses related to network operations), (ii) back office
services provided by Sprint PCS such as customer care, billing and activation,
(iii) the 8% of collected service revenue representing the Sprint affiliation
fee, (iv) bad debt related to uncollectible accounts receivable and (v) long
distance expense relating to inbound roaming revenue and our own customer's long
distance usage and roaming expense when customers from our territory place calls
on Sprint's PCS network.

Roaming expense included in the cost of service and roaming was $17.5 million
for the six months ended March 31, 2002, compared to $6.0 million for the six
months ended March 31, 2001, an increase of $11.5 million as a result of the
substantial increase in our customer base. As discussed above, the per-minute
rate we pay Sprint when customers from our territory roam

                                      -18-

<PAGE>

onto the Sprint PCS network decreased beginning January 1, 2002. The increased
roaming minutes resulting from increasing subscriber levels will be partially
offset by the lower per minute rate paid to Sprint.

We were supporting 180,468 customers at March 31, 2002, compared to 83,783
customers at March 31, 2001. At March 31, 2002, our network consisted of 581
active cell sites and three switches compared to 326 active cell sites and one
switch at March 31, 2001. There were approximately 58 employees performing
network operations functions at March 31, 2002, compared to 40 employees at
March 31, 2001. The 8% Sprint affiliation fee totaled $4.2 million in the six
months ended March 31, 2002, compared to $1.3 million for the six months ended
March 31, 2001, a $2.9 million increase related to the growth in service
revenues.

Cost of Equipment

Cost of equipment was $7.0 million for the six months ended March 31, 2002, and
$6.2 million for the six months ended March 31, 2001, an increase of $0.8
million. This increase is attributable to the increase in the number of
customers added during the period, as cost of equipment includes the cost of
handsets and accessories sold to customers from our Sprint PCS stores. The cost
of handsets exceeds the amount received from customers because we subsidize the
price of handsets to remain competitive in the marketplace.

Selling and Marketing

We incurred selling and marketing expenses of $25.7 million during the six
months ended March 31, 2002, compared to $16.5 million in the six months ended
March 31, 2001, an increase of $9.2 million. These amounts include retail store
costs such as salaries and rent in addition to promotion, advertising and
commission costs, and handset subsidies on units sold by national third party
retailers for which we do not record revenue. Under our management agreement
with Sprint PCS, when a national retailer sells a handset purchased from Sprint
PCS to a subscriber in the Company's territory, the Company is obligated to
reimburse Sprint PCS for the handset subsidy that Sprint PCS originally
incurred. The national retailers sell Sprint PCS wireless services under the
Sprint PCS brands and marks. At March 31, 2002, there were approximately 187
employees performing sales and marketing functions, compared to 65 employees as
of March 31, 2001. A net 48,961 customers were added in the six months ended
March 31, 2002 (net of expected first payment default customers), compared to
44,224 net customers added in the six months ended March 31, 2001.

General and Administrative

For the six months ended March 31, 2002, we incurred general and administrative
expenses of $23.0 million, compared to $6.7 million for the six months ended
March 31, 2001, an increase of $16.3 million. This increase was attributable to
$19.4 million of merger related expenses associated with our merger with AirGate
on November 30, 2001. Included in general and administrative costs are
administrative wages and benefits, legal fees, insurance expense and other
professional services.

Non-cash Stock Option Compensation

Non-cash stock option compensation expense was $4.0 million for the six months
ended March 31, 2002, and $1.0 for the six months ended March 31, 2001. We apply
the provisions of APB Opinion No. 25 and related interpretations in accounting
for our stock option plans. Unearned stock option compensation is recorded for
the difference between the exercise price and the fair market value of our
common stock at the date of grant and is recognized as non-cash stock option
compensation expense in the period in which the related services are rendered.
All stock options became fully vested at the time of the merger with AirGate and
therefore all unearned stock option compensation at the time of the merger was
recognized as expense.

Depreciation

For the six months ended March 31, 2002, depreciation increased to $14.2
million, compared to $6.0 million for the six months ended March 31, 2001, an
increase of $8.2 million. The increase in depreciation expense relates primarily
to additional network assets placed in service in 2001 and 2002. Depreciation
will continue to increase as additional portions of our network are placed into
service. We incurred capital expenditures of $56.2 million in the six months
ended March 31, 2002 compared to capital expenditures of $70.7 million in the
six months ended March 31, 2001.

Amortization of Intangible Assets

Amortization of intangible assets relates to the amounts recorded in July 2000
for the right to provide Sprint PCS service in twenty additional Iowa, Nebraska
and Michigan markets and in February 2001 for the right to provide Sprint PCS
service in the Iowa City and Cedar Rapids, Iowa markets. For the six months
ended March 31, 2002, we recorded approximately $1.2 million of

                                      -19-

<PAGE>

amortization expense compared to approximately $0.5 million for the six months
ended March 31, 2001. The increase is due to the amortization expense related to
the Iowa markets that were purchased in February 2001.

Asset Impairments

As a result of our merger with AirGate, management proposed new business plans
with respect to our network build-out and organizational structure. Accordingly,
the carrying value of property and equipment associated with identified
locations affected by the proposed business plans were adjusted to their fair
value. These adjustments to fair value resulted in impairments of approximately
$6.4 million for the six months ended March 31, 2002.

Interest Income

For the six months ended March 31, 2002, interest income was $0.3 million
compared to $3.5 million for the six months ended March 31, 2001, a decrease of
$3.2 million. We had higher cash and cash equivalent balances for the six months
ended March 31, 2001, resulting from the remaining proceeds from our debt
offering and proceeds from the sale of preferred stock. As capital expenditures
were required to complete the build-out of our PCS network, and as working
capital and operating losses were funded, decreasing cash balances and lower
interest rates resulted in lower interest income.

Interest Expense

For the six months ended March 31, 2002, interest expense was $11.2 million,
compared to $11.4 million for the six months ended March 31, 2001, a decrease of
$0.2 million. The decrease is primarily attributable to increased capitalized
interest of $1.9 million, lower interest rates and a change in the effective
interest method used to accrete our senior discount notes (as discussed in note
2), offset in part by increased average borrowings on the senior secured credit
facility.

Cumulative Effect of a Change in Accounting Principle

In connection with the merger of the Company with AirGate (as discussed in
Note 8), the Company changed its method of amortizing interest expense on its
senior discount notes effective as of October 1, 2001. While the Company's
previous method of accounting was in accordance with accounting principles
generally accepted in the United States of America, the Company believes it is
preferable to use the same methodology as its parent, AirGate. AirGate's method
of amorizing interest expense is also in accordance with accounting principles
generally accepted in the United States of America.

The cumulative effect of this change in accounting for the periods through
September 30, 2001, was a reduction in the carrying value of the senior notes by
$4.3 million along with a corresponding decrease in the Company's accumulated
deficit. In accordance with Accounting Principles Board Opinion No. 20,
"Accounting Changes", the change in accounting has been reflected as a
cumulative change in accounting effective as of October 1, 2001. The effect of
the change for the six-month period ended March 31, 2002 was a reduction to
interest expense of approximately $0.5 million.

Net Loss

For the six months ended March 31, 2002, the net loss was $70.2 million, a
increase of $33.1 million from a net loss of $37.1 million for the six months
ended March 31, 2001.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2002, we had $7.2 million in cash and cash equivalents, compared
to $54.6 million in cash and cash equivalents at September 30, 2001. Our net
working capital deficit was $19.8 million at March 31, 2002, compared to
positive working capital of $12.2 million at September 30, 2001.

Net Cash Used in Operating Activities

The $30.3 million of cash used in operating activities in the six months ended
March 31, 2002, was the result of the Company's $70.2 million net loss offset by
$35.6 million of asset impairments, depreciation, amortization of note
discounts, financing costs, amortization of intangibles, cumulative effect of
accounting change, provision for doubtful accounts, non-cash stock option
compensation and positive net working capital changes of $4.3 million. The $14.2
million of cash used in operating activities in the six months ended March 31,
2001 was the result of the Company's $37.1 million net loss being partially
offset by a net $9.0 million in cash provided by changes in net working capital
and $13.9 million of depreciation, amortization of note discounts, provision for
doubtful accounts, amortization of financing costs and non-cash stock option
compensation.

Net Cash Used in Investing Activities

The $47.0 million of cash used in investing activities during the six months
ended March 31, 2002, includes $47.9 million for capital expenditures. Capital
expenditures during the six months ended March 31, 2002, related to investments
to upgrade our network to 1XRTT, expansion of switch capacity and expansion of
coverage in our territories. For the six months ended March 31, 2001, cash used
in investing activities of $80.4 million includes cash payments of $56.3 made
for capital expenditures, $31.8 million for the acquisition of the Iowa
City/Cedar Rapids, Iowa markets offset by proceeds of $6.9 million from the sale
of tower assets.

Net Cash Provided by Financing Activities

The $29.9 million in cash provided by financing activities during the six months
ended March 31, 2002, includes $30.0 million in borrowings under senior credit
facility. The $89.8 million of cash provided by financing activities in the six
months ended March

                                      -20-

<PAGE>

31, 2001 includes $25.0 million borrowed under the senior credit facility and
$65.7 million of proceeds from the sale of redeemable convertible preferred
stock.

Liquidity

At March 31, 2002, we had $7.2 million of cash and cash equivalents and total
availability under our senior credit facility of $60.0 million. iPCS is an
unrestricted subsidiary of AirGate. As a result of this designation, funds
available under each of AirGate's and iPCS' senior credit facilities and
cashflows from AirGate and iPCS can only be used by AirGate or iPCS, as
applicable. To date, we have used proceeds from our senior subordinated discount
notes, proceeds from the sale of redeemable convertible preferred stock and
borrowings from the senior credit facility to fund capital expenditures,
operating losses, working capital and cash interest needs while we built out our
digital PCS network and acquired customers. By June 2003, we expect that our
customer base will have increased to a size sufficient for us to generate free
cash flow, which is defined as EBITDA minus capital expenditures and cash
interest payments. We expect our free cash flow after June 2003 will be
sufficient to meet currently anticipated cash requirements of the business
including: capital expenditures, cash interest, required amortizations of
principal under our senior credit facility and working capital needs. Our
projections contain significant assumptions including projections for gross new
customer additions, ARPU, churn, bad debt expense and roaming revenue. Based on
internal projections and the current condition and trends of our business and
industry, we anticipate that from April 1, 2002 until we become a net generator
of cash (free cash flow positive) in the three months ended June 30, 2003, a
portion of the $67.2 million of cash and cash equivalents and availability under
our senior secured credit facility discussed above, will be utilized as follows
(amounts in millions):

At March 31, 2002:
    Cash and cash equivalents                            $ 7.2
    Borrowing availability under senior
         credit facility                                  60.0
                                                 -------------
Total available cash at March 31, 2002                  $ 67.2

Ranges of estimated sources (uses) from April
1, 2002 to June 30, 2003:
     EBITDA (as defined in Critical Accounting
Policies)                                         ($11) - ($12)
     Sale of tower assets                              10 - 12
     Capital expenditures                           (25) - (26)
     Cash interest payments                           (6) - (7)
     Working capital requirements                     (7) - (8)
                                                 -------------
Estimated net uses                                ($37) - ($43)
                                                 -------------

Estimated cash available at June 30, 2003        $24.2 - $30.2

--------------------------------------------------------------------------------

Factors That May Affect Operating Results and Liquidity

In addition to the Investment Considerations included herein, the following risk
factors could materially and adversely affect our future operating results and
could cause actual events to differ materially from those predicted in
forward-looking statements related to our business.

We may not be able to sustain our growth or obtain sufficient revenue to achieve
and sustain profitability. For the six months ended March 31, 2002, we incurred
an EBITDA loss of $(38.0) million. Our business projections reflect continuing
growth in our subscriber base and a reduction and eventual elimination of EBITDA
losses as the cash flow generated by the growing subscriber base exceeds costs
incurred to acquire new customers. If we acquire more new customers than we
project, the upfront costs to acquire those customers (including the handset
subsidy, commissions and promotional expenses) may result in greater EBITDA
losses in the near term but higher cash flows in later periods. Conversely, if
there is a slowdown in new subscriber growth in the wireless industry, we may
acquire fewer new customers, which would result in lower EBITDA losses in the
near term but lower cash flows in later periods.

                                      -21-

<PAGE>

We may experience a higher churn rate. Our average customer monthly churn (net
of 30 day returns and a reserve for first payment default customers) for the six
months ended March 31, 2002 was 2.6%. This rate of churn was higher than our
historical average and may continue in the quarter ended June 30, 2002, before
an anticipated decline in the second half of calendar 2002. If the rate of churn
were not to decline as expected or to increase materially above its current
levels and remain there, we would lose the cash flow attributable to these
customers and have greater EBITDA losses.

We may receive a significantly lower roaming rate in 2003 and thereafter. We are
paid a fee from Sprint for every minute that a Sprint PCS subscriber based
outside of our territory uses our network; we refer to such fees as roaming
revenue. Similarly, we pay a fee to Sprint for every minute that our customers
use the Sprint PCS network outside of our markets; we refer to such fees as
roaming expense. Under our original agreements with Sprint, Sprint had the right
to change the reciprocal roaming rate exchanged for customers who roam into the
other party's or another network partner's network. We had an agreement with
Sprint PCS that fixed this per minute reciprocal rate at $0.20 per minute of use
through December 31, 2001. The roaming rate with respect to calendar year 2002
is $0.10 per minute. For calendar year 2003 and beyond, the details of the
agreement in principle regarding the roaming rate between Sprint and its network
partners has not yet been finalized. Depending on the details of the final
agreement, the reciprocal roaming rate may be less than the rate charged in
2002. While a much lower roaming rate would significantly reduce the roaming
revenue we receive, it would also significantly reduce the roaming expense we
pay to Sprint. The ratio of roaming revenue to expense for the six months ended
March 31, 2002, was 1.2 to one. We project that by 2003, the growth in our
customer base will result in a ratio of revenue to expense approaching one to
one, minimizing the net earnings and EBITDA impact of any substantial reduction
in the roaming rate.

Our ability to borrow funds under our senior credit facility may be restricted
or terminated due to our failure to maintain or comply with the restrictive
financial and operating covenants contained in the agreements governing the
senior credit facility. The senior credit facility contains covenants specifying
the maintenance of certain financial ratios, reaching defined subscriber growth
and network covered population goals, minimum quarterly service revenues,
maximum EBITDA losses and limiting capital expenditures. We believe that we are
currently in compliance with all financial and operational covenants relating to
the iPCS senior credit facility. We have recently completed an amendment to the
senior credit facility, primarily to provide additional relief under the maximum
EBITDA losses covenant, which we anticipated not meeting in future quarters. If
we are unable to operate the business within the covenants specified in the
senior credit facility, as amended, as applicable, our ability to obtain future
amendments to the covenants in the senior credit facility is not guaranteed and
our ability to make borrowings required to operate the business could be
restricted or terminated. Such a restriction or termination would have a
material adverse affect on our liquidity.

We may not be able to sell enough towers at an adequate price to generate
proceeds projected in our business plan. We own 87 towers. We do not
consider towers a strategic asset and plan on selling some or all of these
assets as market terms and conditions permit. There are several companies that
have traditionally been purchasers of towers in the wireless industry. However,
the financial condition of these tower companies and their willingness and
ability to purchase towers we own is not certain.

Variable interest rates may increase substantially. At March 31, 2002, we had
borrowed $80.0 million under the senior credit facility. The rate of interest on
our senior credit facility is based on a margin above either the alternate bank
rate (the prime lending rate in the United States) or the London Interbank Offer
Rate (LIBOR). Our weighted average borrowing rate on variable rate borrowings at
March 31, 2002, was 5.8%. While our business plan uses a 6.7% base-borrowing
rate, increases in a market interest rate substantially above our estimates may
result in unanticipated cash interest costs.

We operate with negative working capital because of amounts owed to Sprint. Each
month we pay Sprint amounts relating to: (i) roaming expense, (ii) the 8%
affiliation fee, (iii) costs for customer support and billing, (iv) handsets
purchased from Sprint, (v) reimbursements for commissions paid to national third
party retailers such as Radio Shack, Best Buy and Circuit City, (vi)
reimbursement for subsidies related to handsets sold by national third party
retailer, and (vii) wholesale long distance expense that our customers incur and
that Sprint PCS customers incur related to roaming revenue. A reduction in the
amounts we owe Sprint may result in a greater use of cash for working capital
purposes than our business plan currently projects.

We may not be able to access the credit markets for additional capital if the
liquidity discussed above is insufficient for the cash needs of our business. We
frequently evaluate options for additional financings to supplement our
liquidity position and maintain maximum financial flexibility. However, if the
assumptions used in our projections are incorrect, we may be unable to raise
additional capital.

Capital Resources

The senior secured discount notes due 2010 will require cash payments of
interest beginning on January 15, 2006.

                                      -22-

<PAGE>

The $140.0 million senior credit facility provides for a $90.0 million senior
secured term loan which matures on December 31, 2008, which is the first
installment of the loan, or tranche A. The second installment, or tranche B,
under the senior credit agreement is for a $50.0 million senior secured term
loan, which matures on December 31, 2008. The credit agreement requires us to
make quarterly payments of principal beginning March 31, 2004 for tranche A and
tranche B, initially in the amount of 2.5% of the loan balance then outstanding
and increasing thereafter. The commitment fee on unused borrowings ranges from
1.00% to 1.50%, payable quarterly. As of March 31, 2002, $60.0 million remained
available for borrowing under the senior credit facility. Our obligations under
the senior credit agreement are secured by all of the Company's operating
assets. As discussed above, we expect that cash and cash equivalents together
with future advances under the senior credit facility will fund capital
expenditures, operating losses and working capital requirements through the end
of fiscal 2003, at which time we expect to generate positive EBITDA. The senior
credit facility is subject to certain restrictive covenants including
maintaining certain financial ratios, reaching defined subscriber growth and
network covered population goals, minimum quarterly service revenues, maximum
EBITDA losses and limiting annual capital expenditures. We have recently
completed an amendment to the senior credit facility, primarily to provide
additional relief under the maximum EBITDA losses covenant, which we anticipated
violating in future quarters.

As of March 31, 2002, management believes that we are in compliance with all
material financial and operational covenants associated with our senior credit
facility, senior subordinated discount notes, and Sprint agreements.

Contractual Obligations

We are obligated to make future payments under various contracts we have entered
into, including amounts pursuant to the senior credit facility, the senior
secured discount notes, capital leases and non-cancelable operating lease
agreements for office space, cell sites, vehicles and office equipment. Future
minimum contractual cash obligations for the next five years and in the
aggregate at March 31, 2002, are as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                     Payments Due By Period
                             -----------------------------------------------------------------------
                                                            Years Ended March 31,
                                        -----------------------------------------------
  Contractual Obligation      Total      2003      2004      2005      2006      2007     Thereafter
  ----------------------     --------   -------   -------   -------   -------   -------   ----------
<S>                          <C>        <C>       <C>       <C>       <C>       <C>        <C>
Senior credit facility (1)     80,000        --     2,000     9,000    14,000    20,000      35,000
Operating leases (2)           70,442    11,430    11,271    10,714     9,483     6,331      21,213
Capital leases                    961        70        73        76        79        82         581
Senior subordinated
 discount notes               300,000        --        --        --        --        --     300,000
                             --------   -------   -------   -------   -------   -------    --------
  Total                      $451,403   $11,500   $13,344   $17,970   $23,562   $26,413    $356,794
                             ========   =======   =======   =======   =======   =======    ========
</TABLE>

     (1)  Total repayments are based upon borrowings outstanding as of March 31,
          2002, not projected borrowings under the respective senior credit
          facility.
     (2)  Does not include payments due under renewals to the original lease
          term.

There are provisions in the agreements governing the senior credit facility and
the senior subordinated discount notes providing for an acceleration of
repayment upon an event of default, as defined in the respective agreements.

Seasonality

Our business is subject to seasonality because the wireless industry
historically has been heavily dependent on fourth calendar quarter results.
Among other things, the industry relies on significantly higher customer
additions and handset sales in the fourth calendar quarter as compared to the
other three calendar quarters. A number of factors contribute to this trend,
including: the increasing use of retail distribution, which is heavily dependent
upon the year-end holiday shopping season; the timing of new product and service
announcements and introductions; competitive pricing pressures; and aggressive
marketing and promotions. The increased level of activity requires a greater use
of our available financial resources during this period.

                                      -23-

<PAGE>

                           PART II. OTHER INFORMATION
                           --------------------------

Item 1. LEGAL PROCEEDINGS
-------------------------

None.

Item 5. OTHER INFORMATION
-------------------------

Investment Considerations
-------------------------

Investment Considerations

Risks Related to Our Business, Strategy and Operations

We have a limited operating history and we may not achieve or sustain operating
profitability or positive cash flows

We have a limited operating history. Our ability to achieve and sustain
operating profitability will depend upon many factors, including our ability to
market Sprint PCS products and services and manage customer turnover rates and
our operating expenses. In addition, a key factor in our operational performance
depends upon our ability to manage our growth and our expenses through the
completion of our network build-out and through implementing the best practices
of AirGate and iPCS to increase market penetration in our current and future
markets. We will require additional expenditures for the continued development,
construction, testing, deployment and operation of our network. These activities
are expected to place demands on our managerial, operational and financial
resources. If we do not achieve and maintain positive cash flows from operations
when projected, our results of operations may be adversely affected.

The integration of AirGate and iPCS following the merger will present
significant challenges that could adversely affect our results of operations

AirGate acquired us with the expectation that it would result in expanding
AirGate's existing network and customer base and leveraging the best operating
practices of both organizations. Achieving the benefits of the merger with
AirGate will depend in part on integrating the operations of the two businesses
in an efficient and timely manner. We cannot assure you that this will occur. To
realize the anticipated benefits of this combination, our management team must
develop strategies and implement a business plan that will successfully:

     .    inability of customers to pay which results in involuntary
          de-activations;

     .    manage our networks and markets;

     .    maintain adequate focus on existing business and operations while
          working to integrate the two companies;

     .    combine two companies with limited operating histories;

     .    manage our company's cash and available credit lines for use in
          financing future growth and working capital needs of our company;

     .    manage our marketing and sales;

     .    manage the transition of iPCS' senior management expertise to the
          combined company; and

     .    retain and attract key employees of the combined company during a
          period of transition.

We cannot assure you that combining the businesses of AirGate and iPCS, even if
achieved in an efficient, effective and timely manner, will result in combined
results of operations and financial conditions superior to those that we could
have achieved independently. The diversion of management's attention from
ongoing operations and any difficulties encountered in the transition and
integration process could have a material adverse effect on our financial
condition and results of operations.

We may experience a higher rate of customer turnover in the future compared to
historical rates which would adversely affect our financial performance

                                      -24-

<PAGE>

The wireless personal communications services industry in general and Sprint in
particular have experienced a higher rate of customer turnover, commonly known
as churn, as compared to cellular industry averages. This churn rate has been
driven higher in recent months due to the introduction of NDASL and Clear Pay
programs. In addition, due to significant competition in our industry and
general economic conditions, among other things, our future rate of customer
turnover may be higher than our historical rate. Factors which may contribute to
higher churn include:

     .    our handset return policy that allows customers to return used
          handsets within 14 days of purchase and receive a full refund;

     .    the attractiveness of our competitors' products and services;

     .    network performance;

     .    customer service;

     .    increased prices;

     .    any future changes by us in the products and services we offer,
          especially to the Clear Pay program; and

     .    customer mix and credit class, which have accounted for 50% of our
          customer additions since May 1, 2001, including those related to the
          NDASL program and Clear Pay programs.

A high rate of customer turnover could adversely affect our competitive
position, liquidity, results of operations and our costs of, or losses incurred
in obtaining new subscribers, especially because we subsidize some of the costs
of initial purchases of handsets by customers.

Our allowance for doubtful accounts may not be sufficient to cover uncollectible
accounts

On an ongoing basis, we estimate the amount of customer receivables that we will
not collect to reflect the expected loss on such accounts in the current period.
However, our allowance for doubtful accounts may underestimate actual unpaid
receivables for various reasons, including:

     .    adverse changes in our churn rate exceeding our estimates;

     .    adverse changes in the economy generally exceeding our expectations;
          or

     .    unanticipated changes in Sprint PCS' products and services.

If our allowance for doubtful accounts is insufficient to cover losses on our
receivables, our business, financial position or results of operations could be
materially adversely affected.

The loss of the officers and skilled employees who we depend upon to operate our
business could adversely affect our results of operations

Our business is managed by a small number of executive officers. We believe that
our future success depends in part on our continued ability to attract and
retain highly qualified technical and management personnel. We may not be
successful in retaining our key personnel or in attracting and retaining other
highly qualified technical and management personnel. We currently have "key man"
life insurance for our President. We do not have long-term employment or change
of control agreements with any of our executive officers and most of the stock
options granted to senior management are at exercise prices above current market
prices of AirGate common stock. Parts of our territory have limited amounts of
licensed spectrum, which may adversely affect the  quality of our service and
our results of operations.

Parts of our territories have limited amounts of spectrum which may adversely
affect the quality of our service and our results of operations.

Sprint has licenses covering 30 MHz of spectrum throughout most of our
territory, but it has licenses covering only 10 MHz or 20 MHz in parts of
Illinois. As the number of customers in our territory increases, this limited
amount of licensed spectrum may not be able to accommodate increases in call
volume, may lead to increased dropped calls and may limit our ability to offer
enhanced services, all of which could result in increased customer turnover and
adversely affect our results of operations.

If we lose the right to install our equipment on certain wireless towers or are
unable to renew expiring leases or locate new sites for wireless towers on
favorable terms, our business and results of operations could be adversely
impacted.

Many of our cell sites are co-located on leased tower facilities shared with one
or more wireless providers. In addition, a large portion of these leased tower
sites are owned by a few tower companies. If a master co-location agreement with
one of these

                                      -25-

<PAGE>

tower companies were to terminate, or if one of these tower companies were
unable to support our use of its tower sites, we would have to find new sites or
we may be required to rebuild that portion of our network. In addition, the
concentration of our cell sites with a few tower companies could adversely
affect our results of operations if we are unable to renew expiring leases with
such tower companies on favorable terms.

Expanding our territory includes numerous risks and our failure to overcome
these risks and any other problems encountered may have a material adverse
effect on our business and reduce the market value of our securities

As part of our continuing operating strategy, we may expand our territory
through the grant of additional markets from Sprint or through acquisitions of
other Sprint network partners. These transactions may require the approval of
Sprint and commonly involve a number of risks, including the:

     .    difficulty of assimilating acquired operations and personnel;

     .    diversion of management's attention;

     .    disruption of ongoing business;

     .    impact on our cash and available credit lines for use in financing
          future growth and working capital needs;

     .    inability to retain key personnel;

     .    inability to successfully incorporate acquired assets and rights into
          our service offerings;

     .    inability to maintain uniform standards, controls, procedures and
          policies; and

     .    impairment of relationships with employees, customers or vendors.

Failure to overcome these risks or any other problems encountered in these
transactions could have a material adverse effect on our business. In connection
with these transactions, we also may incur additional debt or incur significant
amortization expenses related to intangible assets.

Because our former stockholders did not provide any indemnification following
the merger, we will be responsible for any of our undisclosed prior liabilities

We made certain representations and warranties to AirGate in the merger
agreement concerning our business and operations. The merger agreement did not
provide AirGate with any contractual indemnification from our former
stockholders for any breaches of our representations and warranties or any
failure to comply with our obligations under the merger agreement. As a result,
we will be responsible for any of our undisclosed prior liabilities. Such
liabilities could materially impact our future consolidated results of
operations.

Risks Particular to Our Indebtedness

We have substantial debt that we may not be able to service; a failure to
service such debt may result in the lenders under such debt controlling our
assets

Our substantial debt has a number of important consequences for our operations
and our investors, including the following:

     .    we have to dedicate a substantial portion of any cash flow from our
          operations to the payment of interest on, and principal of, our debt,
          which will reduce funds available for other purposes;

     .    we anticipate that we have sufficient resources to finance our
          currently projected business plan, but we may not be able to obtain
          additional financing if the assumptions underlying the business plan
          are not correct for unanticipated capital requirements, capital
          expenditures, working capital requirements and other corporate
          purposes;

     .    some of our debt, including financing under our senior credit
          facility, will be at variable rates of interest, which could result in
          higher interest expense in the event of increases in market interest
          rates; and

     .    due to the liens on substantially all of our assets and the pledges of
          stock of our existing and future subsidiaries that secure our senior
          debt and senior discount notes, lenders or holders of such senior
          discount notes may control our assets or the assets of our
          subsidiaries in the event of a default.

Our ability to make payments on our debt will depend upon our future operating
performance which is subject to general economic and competitive conditions and
to financial, business and other factors, many of which we cannot control. If
the cash

                                      -26-

<PAGE>

flow from our operating activities is insufficient, we may take actions, such as
delaying or reducing capital expenditures, attempting to restructure or
refinance our debt, selling assets or operations or seeking additional equity
capital. Any or all of these actions may not be sufficient to allow us to
service our debt obligations. Further, we may be unable to take any of these
actions on satisfactory terms, in a timely manner or at all. The credit facility
and indenture governing our debt limits our ability to take several of these
actions. Our failure to generate sufficient funds to pay our debts or to
successfully undertake any of these actions could, among other things,
materially, adversely affect our results of operations.

If we do not meet all of the conditions required under our senior secured credit
facility, we may not be able to draw down all of the funds we anticipate
receiving from our senior lenders and we may not be able to fund operating
losses and working capital needs

As of March 31, 2002, we had borrowed $80.0 million under our senior secured
credit facility. The remaining $60.0 million available under our senior secured
credit facility, a portion of which we expect to borrow in the future, is
subject to us meeting all of the conditions specified in our financing
documents. We recently completed an amendment to our senior secured credit
facility, primarily to provide additional relief under the minimum EBITDA
covenant, which we anticipated not meeting in future quarters. In addition,
additional borrowings are subject to specific conditions on each funding date,
including the following:

     .    that the representations and warranties in our loan documents are true
          and correct;

     .    that certain of our financial covenant tests are satisfied, including
          leverage and operating performance covenants and loss covenants
          relating to earnings before interest, taxes, depreciation and
          amortization; and

     .    the absence of a default under our loan documents.

If we do not meet these conditions at each funding date, our senior lenders may
not lend some or all of the remaining amounts under our senior secured credit
facility. If other sources of funds are not available, we may not be in a
position to meet our operating cash needs.

The ability of AirGate and iPCS to operate as a combined company is limited by
the separate public debt indentures and senior secured credit facilities of
AirGate and iPCS

In order to assure continued compliance with the indenture governing AirGate's
senior subordinated discount notes, AirGate has designated us as an
"unrestricted subsidiary." As a result, for purposes of their respective public
debt indentures, AirGate and we will operate as separate business entities. Due
to restrictions in AirGate's indenture, AirGate will be unable to provide direct
or indirect credit support to us and will be significantly limited in its
ability to maintain or preserve our financial condition or cause us to achieve a
specified level of operating results. Likewise, we will be restricted under our
debt instruments from paying dividends or freely transferring money to AirGate.
These restrictions may hinder the combined company's ability to achieve the
anticipated benefits of the merger, react to developments in either company's
business or take advantage of business opportunities.

If we fail to pay the debt under our senior secured credit facility, Sprint has
the option of purchasing our loans, giving Sprint certain rights of a creditor
to foreclose on our assets

Sprint has contractual rights, triggered by an acceleration of the maturity of
the debt under our senior secured credit facility, pursuant to which Sprint may
purchase our obligations to our senior lenders and obtain the rights of a senior
lender. To the extent Sprint purchases these obligations, Sprint's interests as
a creditor could conflict with our interests. Sprint's rights as a senior lender
would enable it to exercise rights with respect to our assets and continuing
relationship with Sprint in a manner not otherwise permitted under our Sprint
agreements.

Risks Particular to Our Relationship with Sprint

The termination of our affiliation with Sprint or Sprint's failure to perform
its obligations under the Sprint agreements would severely restrict our ability
to conduct our business

We do not own the licenses to operate our wireless network. Our ability to offer
Sprint PCS products and operate a PCS network is dependent on our Sprint
agreements remaining in effect and not being terminated. The management
agreement between Sprint and us is not perpetual. Sprint can choose not to renew
our management agreement at the expiration of the 20-year initial term or any
ten-year renewal term. In any event, our management agreement terminates in 50
years. In addition, the management agreement can be terminated for breach of any
material term, including, among others, build-out, network and operational
requirements. Many of these operational and network requirements are technical
and detailed in nature, and may apply to each retail store, cell site and switch
site. In addition, many of these requirements can be changed by Sprint with
little notice. As a result, we may disagree with Sprint from time to time
regarding our

                                      -27-

<PAGE>

compliance with all provisions of our Sprint agreements. We also are dependent
on Sprint's ability to perform its obligations under the Sprint agreements. The
non-renewal or termination of any of the Sprint agreements or the failure of
Sprint to perform its obligations under the Sprint agreements would severely
restrict our ability to conduct business.

Sprint may make business decisions that are not in our best interests, which may
adversely affect our relationships with customers in our territory, increase our
expenses and/or decrease our revenues

Sprint, under the Sprint agreements, has a substantial amount of control over
the conduct of our business. Accordingly, Sprint may make decisions that
adversely affect our business, such as the following:

     .    Sprint could price its national plans based on its own objectives and
          could set price levels or other terms that may not be economically
          sufficient for our business;

     .    Sprint could develop products and services or establish credit
          policies, such as NDASL, which could adversely affect our results of
          operations;

     .    Sprint could raise the costs to perform back office services, reduce
          levels of services or expenses or otherwise seek to increase expenses
          and other amounts charged;

     .    Sprint could prohibit us from selling non-Sprint approved equipment;

     .    Sprint could, subject to limitations under our Sprint agreements,
          alter its network and technical requirements or request that we build
          out additional areas within our territories, which could result in
          increased equipment and build-out costs;

     .    Sprint could make decisions which could adversely affect the Sprint
          and Sprint PCS brand names, products or services; and

     .    Sprint could decide not to renew the Sprint agreements or to no longer
          perform its obligations, which would severely restrict our ability to
          conduct business.

The occurrence of any of the foregoing could adversely affect our relationship
with customers in our territories, increase our expenses and/or decrease our
revenues.

Change in Sprint PCS products and services may reduce customer additions or
increase customer turnover

The competitiveness of Sprint PCS products and services is a key factor in our
ability to attract and retain customers. Under the Sprint PCS service plans,
customers who do not meet certain credit criteria can nevertheless select any
plan offered subject to an account-spending limit, referred to as ASL, to
control credit exposure. Account spending limits range from $125 to $200
depending on the credit quality of the customer. Prior to May 2001, all of these
customers were required to make a deposit ranging from $125 to $200 that could
be credited against future billings. In May 2001, the deposit requirement was
eliminated on all credit classes ("NDASL"). As a result, a significant amount of
our new customer additions (approximately 50% since May 2001) have been under
the NDASL program. On November 15, 2001, the NDASL program was replaced by the
"Clear Pay program" which requires a $125 deposit requirement for the lowest
credit class and featured increased back-office controls with respect to credit
collection efforts. On February 24, 2002, the Clear Pay program was superceded,
in our territories, by the "Clear Pay II program", which expanded the deposit
requirement across all new sub-prime credit quality customers and not just the
lowest credit class.

The inability of Sprint to maintain high quality back office services, or our
inability to use Sprint's back office services and third party vendors' back
office systems, could lead to customer dissatisfaction, increased churn or
otherwise increase our costs

We rely on Sprint's support systems, including customer care, billing and back
office support. Our operations could be disrupted if Sprint is unable to
maintain and expand its internal support systems in a high quality manner, or to
efficiently outsource those services and systems through third party vendors.
The rapid expansion of Sprint's PCS business is expected to continue to pose a
significant challenge to its internal support systems. Additionally, Sprint has
made reductions in its customer service support structure, which may have an
adverse effect on our churn rate. Additionally, Sprint has relied on third party
vendors for a significant number of important functions and components of its
internal support systems and may continue to rely on these vendors in the
future. We will depend on Sprint's willingness to continue to offer these
services and to provide these services effectively and at competitive costs. Our
Sprint agreements provide that, upon nine months' prior written notice, Sprint
may elect to terminate any of these services. The inability of Sprint to
maintain high quality back office services, or our inability to use

                                      -28-

<PAGE>

Sprint's back office services and third party vendors' back office systems,
could lead to customer dissatisfaction, increase churn or otherwise increase our
costs.

If Sprint does not complete the construction of its nationwide PCS network, we
may not be able to attract and retain customers

Sprint currently intends to cover a significant portion of the population of the
United States, Puerto Rico and the U.S. Virgin Islands by creating a nationwide
PCS network through its own construction efforts and those of its network
partners. Sprint is still constructing its nationwide network and does not offer
PCS services, either on its own network or through its roaming agreements, in
every city in the United States. Sprint has entered into management agreements
similar to ours with companies in other markets under its nationwide PCS
build-out strategy. Our results of operations are dependent on Sprint's national
network and, to a lesser extent, on the networks of Sprint's other network
partners. Sprint's network may not provide nationwide coverage to the same
extent as its competitors, which could adversely affect our ability to attract
and retain customers.

Certain provisions of the Sprint agreements may diminish the value of our
company and restrict the sale of our business

Under limited circumstances and without further stockholder approval, Sprint may
purchase the operating assets of our company at a discount. In addition, Sprint
must approve any change of control of our ownership and must consent to any
assignment of our Sprint agreements. Sprint also has a right of first refusal if
we decide to sell our operating assets to a third party. We are also subject to
a number of restrictions on the transfer of our business, including a
prohibition on the sale of us or our operating assets to competitors of Sprint
or Sprint PCS. These restrictions and other restrictions contained in the Sprint
agreements may limit our ability to sell our business, may reduce the value a
buyer would be willing to pay for our business and may reduce the "entire
business value," as described in our Sprint agreements.

We may have difficulty in obtaining an adequate supply of certain handsets from
Sprint, which could adversely affect our results of operations

We depend on our relationship with Sprint to obtain handsets. Sprint orders
handsets from various manufacturers. We could have difficulty obtaining specific
types of handsets in a timely manner if:

     .    Sprint does not adequately project the need for handsets for itself,
          its Sprint PCS network partners and its other third party distribution
          channels, particularly in a transition to new technologies, such as
          "one times radio transmission technology," or "1XRTT";

     .    Sprint gives preference to other distribution channels;

     .    we do not adequately project our need for handsets;

     .    Sprint modifies its handset logistics and delivery plan in a manner
          that restricts or delays our access to handsets; or

     .    there is an adverse development in the relationship between Sprint and
          its suppliers or vendors.

The occurrence of any of the foregoing could disrupt our customer service and/or
result in a decrease in our subscribers, which could adversely affect our
results of operations.

Non-renewal or revocation by the Federal Communications Commission of the Sprint
PCS licenses would significantly harm our business

PCS licenses are subject to renewal and revocation by the Federal Communications
Commissions, referred to as the FCC. Sprint PCS licenses in our territories will
begin to expire in 2007 but may be renewed for additional ten-year terms. There
may be opposition to renewal of Sprint's PCS licenses upon their expiration, and
the Sprint PCS licenses may not be renewed. The FCC has adopted specific
standards to apply to PCS license renewals. Any failure by Sprint or us to
comply with these standards could cause revocation or forfeiture of the Sprint
PCS licenses for our territories. If Sprint loses any of its licenses in our
territories, we would be severely restricted in our ability to conduct business.

If Sprint does not maintain control over its licensed spectrum, the Sprint
agreements may be terminated, which would result in our inability to provide
service

The FCC requires that licensees like Sprint maintain control of their licensed
spectrum and not delegate control to third-party operators or managers. Although
the Sprint agreements with us reflect an arrangement that the parties believe
meets the FCC requirements for licensee control of licensed spectrum, we cannot
assure you that the FCC will agree. If the FCC were to

                                      -29-

<PAGE>

determine that the Sprint agreements need to be modified to increase the level
of licensee control, we have agreed with Sprint to use our best efforts to
modify the Sprint agreements to comply with applicable law. If we cannot agree
with Sprint to modify the Sprint agreements, they may be terminated. If the
Sprint agreements are terminated, we would no longer be a part of the Sprint PCS
network and would be severely restricted in our ability to conduct business.

Risks Particular to Our Industry

Significant competition in the wireless communications services industry may
result in our competitors offering new or better products and services or lower
prices, which could prevent us from operating profitably

Competition in the wireless communications industry is intense. We anticipate
that competition will cause the market prices for two-way wireless products and
services to decline in the future. Our ability to compete will depend, in part,
on our ability to anticipate and respond to various competitive factors
affecting the telecommunications industry.

Our dependence on Sprint to develop competitive products and services and the
requirement that we obtain Sprint's consent to sell non-Sprint approved PCS
equipment may limit our ability to keep pace with competitors on the
introduction of new products, services and equipment. Some of our competitors
are larger than us, possess greater resources and more extensive coverage areas,
and may market other services, such as landline telephone service, cable
television and Internet access, with their wireless communications services.
Furthermore, there has been a recent trend in the wireless communications
industry towards consolidation of wireless service providers through joint
ventures, reorganizations and acquisitions. We expect this consolidation to lead
to larger competitors over time. We may be unable to compete successfully with
larger companies that have substantially greater resources or that offer more
services than we do. In addition, we may be at a competitive disadvantage since
we may be more highly leveraged than some of our competitors.

Increased penetration rates could limit or decrease our rate of net additions

Intense competition in the wireless communications industry could cause prices
for wireless products and services to decline. If prices drop, then our rate of
net customer additions will take on greater significance in improving our
financial condition and results of operations. However, as our markets become
more saturated with our and our competitor's customers, our rate in adding net
customers could decrease. If this decrease were to happen, our business and
financial results could be materially adversely affected.

Alternative technologies and current uncertainties in the wireless market may
reduce demand for PCS

The wireless communications industry is experiencing significant technological
change, as evidenced by the increasing pace of digital upgrades in existing
analog wireless systems, evolving industry standards, ongoing improvements in
the capacity and quality of digital technology, shorter development cycles for
new products and enhancements and changes in end-user requirements and
preferences. Technological advances and industry changes could cause the
technology used on our network to become obsolete. Sprint may not be able to
respond to such changes and implement new technology on a timely basis, or at an
acceptable cost.

If Sprint is unable to keep pace with these technological changes or changes in
the wireless communications market based on the effects of consolidation from
the Telecommunications Act of 1996 or from the uncertainty of future government
regulation, the technology used on our network or our business strategy may
become obsolete. In addition, wireless carriers are seeking to implement an
upgrade to "one times radio transmission technology", or "1XRTT", as well as
"third generation," or "3G," technology throughout the industry. The 3G
technology promises high-speed, always-on Internet connectivity and high-quality
video and audio. We cannot assure you that we or Sprint PCS can implement
"1XRTT" or "3G" technology successfully or on a cost-effective basis.

We are a consumer business and a recession in the United States involving
significantly lowered spending could negatively affect our results of operations

Our primary customer base is individual consumers and our accounts receivable
represent unsecured credit. In the event that the economic downturn that the
United States and our territory have recently experienced becomes more
pronounced or lasts longer than currently expected and spending by individual
consumers drops significantly, our business may be negatively affected.

Regulation by government and taxing agencies may increase our costs of providing
service or require us to change our services, either of which could impair our
financial performance

Our operations and those of Sprint may be subject to varying degrees of
regulation by the FCC, the Federal Trade Commission,

                                      -30-

<PAGE>

the Federal Aviation Administration, the Environmental Protection Agency, the
Occupational Safety and Health Administration and state and local regulatory
agencies and legislative bodies. Adverse decisions or regulation of these
regulatory bodies could negatively impact our operations and our costs of doing
business. For example, changes in tax laws or the interpretation of existing tax
laws by state and local authorities could subject us to increased income, sales,
gross receipts or other tax costs or require us to alter the structure of our
current relationship with Sprint.

Use of hand-held phones may pose health risks, which could result in the reduced
use of wireless services or liability for personal injury claims

Media reports have suggested that certain radio frequency emissions from
wireless handsets may be linked to various health problems, including cancer,
and may interfere with various electronic medical devices, including hearing
aids and pacemakers. Concerns over radio frequency emissions may discourage use
of wireless handsets or expose us to potential litigation. Any resulting
decrease in demand for wireless services, or costs of litigation and damage
awards, could impair our ability to achieve and sustain profitability.

Regulation by government or potential litigation relating to the use of wireless
phones while driving could adversely affect our results of operations

Some studies have indicated that some aspects of using wireless phones while
driving may impair drivers' attention in certain circumstances, making accidents
more likely. These concerns could lead to potential litigation relating to
accidents, deaths or serious bodily injuries, or to new restrictions or
regulations on wireless phone use, any of which could also have material adverse
effects on our results of operations.

Risks Relating to our Senior Discount Notes

Our senior discount notes may not have an active market and the price may be
volatile, so our noteholders may be unable to sell their notes at the price they
desire or at all

We cannot ensure that a liquid market will develop for our senior discount notes
or that our noteholders will be able to sell any of their notes at a particular
time, if at all, or that the price that they receive when they sell will be
favorable. Future trading prices of the notes will depend on many factors,
including our operating performance and financial condition, prevailing interest
rates and the market for similar securities.

We are a holding company and because the guarantees are unsecured and
subordinated to debt that encumbers our guarantor subsidiaries' assets, the
notes may not be fully repaid if we or our guarantor subsidiaries become
insolvent

The notes are unsecured obligations of ours. On November 30, 2001, we were
acquired by AirGate through the merger of a wholly owned subsidiary of AirGate
with us. As a result, we are now a wholly owned subsidiary of AirGate. The
assets of AirGate, however, are not available to meet our obligations with
respect to the notes. In addition, we are a holding company for operating
subsidiaries and derive all our operating income from our subsidiaries. We are
dependent on the earnings and cash flow of our subsidiaries to meet our
obligations with respect to the notes. If we or our guarantor subsidiaries
become insolvent, we or our guarantor subsidiaries may not have sufficient
assets to make payments on amounts due on any or all of the notes or the
subsidiary guarantees. In addition, the right to payment on the guarantees will
be subordinated to all of our guarantor subsidiaries' existing and future senior
debt. The senior secured credit facility is secured by liens on substantially
all of the assets of our guarantor subsidiaries. If our guarantor subsidiaries
were to default on the senior secured credit facility, such lenders could
foreclose on the collateral regardless of any default with respect to the notes.
These assets would first be used to repay in full all amounts outstanding under
the senior secured credit facility. If our guarantor subsidiaries become
bankrupt, liquidate, dissolve, reorganize or undergo a similar proceeding, such
guarantor subsidiaries' assets will be available to pay obligations on the notes
or the applicable guarantee only after all outstanding senior debt of such party
has been paid in full. In addition, an event of default under the senior secured
credit facility may prohibit us and the guarantors of the notes from paying the
notes or the guarantees of the notes.

Our agreements with Sprint and the infrastructure equipment used in our network
create the value of our assets. These assets are highly specialized and, taken
individually, have limited marketability, particularly as a result of some of
the provisions in the Sprint agreements. Therefore, in a foreclosure sale, these
assets are likely to be sold as an entirety, and the lender may not realize
enough money to satisfy all senior debt.

Because federal and state statutes may allow courts to void the guarantees of
the notes, our noteholders may not have the right to receive any money pursuant
to the guarantees

                                      -31-

<PAGE>

Although the guarantees of the notes provide our noteholders with a direct claim
against the assets of the applicable guarantor, they are subordinate to claims
under our senior secured credit facility secured by a first priority security
interest in substantially all of our assets. In addition, creditors of a
bankrupt guarantor may challenge the guarantee. If a challenge to a guarantee
were upheld, then the applicable guarantee would be invalid and unenforceable,
junior to all creditors, including trade creditors, of that guarantor.

The creditors of a bankrupt guarantor could challenge a guarantee on the grounds
that the guarantee constituted a fraudulent conveyance under bankruptcy law. If
a court were to rule that the guarantee did constitute a fraudulent conveyance,
then the court could void the obligations under the guarantee or further
subordinate the guarantee to other debt of the guarantor or take other action
detrimental to holders of the notes. In addition, any of the guarantees could be
subject to the claim that, since the guarantee was incurred for our benefit, and
only indirectly for the benefit of our subsidiary that provided the guarantee,
the obligations of the applicable guarantor were incurred for less than fair
consideration.

The indenture and the senior secured credit facility contain provisions and
requirements that could limit our ability to pursue borrowing opportunities

The restrictions contained in the indenture governing our senior discount notes,
and the restrictions contained in our senior secured credit facility, may limit
our ability to implement our business plan, finance future operations, respond
to changing business and economic conditions, secure additional financing, if
needed, and engage in opportunistic transactions. The senior secured credit
facility also restricts our ability and the ability of our subsidiaries and our
future subsidiaries to do the following:

     .    create liens;

     .    make certain payments, including payments of dividends and
          distributions in respect of capital stock;

     .    consolidate, merge and sell assets;

     .    engage in certain transactions with affiliates; and

     .    fundamentally change our business.

In addition, our senior secured credit facility requires us to maintain certain
ratios, including:

     .    leverage ratios;

     .    an interest coverage ratio; and

     .    a fixed charges ratio;

and to satisfy certain tests, including tests relating to:

     .    minimum number of subscribers to our services; and

     .    minimum revenues.

We may not satisfy the financial ratios and tests under the senior secured
credit facility due to events that are beyond our control. If we fail to satisfy
any of the financial ratios and tests, we could be in a default under the senior
secured credit facility or may be limited in our ability to access additional
funds under our senior secured credit facility which could result in our being
unable to make payments on the notes.

Because the notes their issued with original issue discount, our noteholders
will have to include interest in their taxable income before they receive cash.

The notes were issued at a substantial discount from their principal amount at
maturity. Consequently, although cash interest on the notes generally is not
payable prior to January 15, 2006, original issue discount will be includible in
the gross income of holders of notes for U.S. federal income tax purposes in
advance of the receipt of such cash payments on the notes. The amount of
original issue discount will be greater than the difference between the stated
principal amount at maturity of the notes and the issue price of the notes.

We will not be able to deduct a portion of our borrowing expense for federal
income tax purposes because the original issue discount on the notes exceeds
certain limitations

                                      -32-

<PAGE>

The notes are classified as "applicable high yield discount obligations" for
United States federal income tax purposes. We will not be entitled to deduct
original issue discount accruing on the notes until such amounts are actually
paid. In addition, because the yield to maturity of the notes is in excess of
the sum of the applicable federal rate plus six percentage points, we are
permanently precluded from deducting the original issue discount equal to such
excess.

The bankruptcy laws may reduce our noteholders claim in the event of our
insolvency

If a bankruptcy case were commenced by or against us under the United States
Bankruptcy Code, your claim with respect to the principal amount of the notes
may be limited to an amount equal to the sum of the initial offering price and
that portion of the original issue discount that is not deemed to constitute
unmatured interest for purposes of the United States Bankruptcy Code. Any
original issue discount that had not amortized as of the date of the bankruptcy
filing could constitute unmatured interest for purposes of the United States
Bankruptcy Code. To the extent that the United States Bankruptcy Code differs
from the Internal Revenue Code of 1986, as amended in determining the method of
amortization of original issue discount, our noteholders may recognize taxable
gain or loss upon payment of their claim in bankruptcy.

If an event constituting a change in control of us occurs, we may be unable to
fulfill our obligation to purchase the notes.

Our senior secured credit facility restricts distributions to us from our
subsidiaries and we may not have other sources of funds to purchase any of the
notes before their stated maturity. In addition, the senior secured credit
facility prohibits us from prepaying debt, including the notes. Under the
indenture, upon a change in control we will be required to make an offer to
repurchase all of the notes. Our merger with AirGate did not constitute a change
of control under the indenture. In the event we become subject to a change in
control at a time when we do not have funds to purchase the notes or when any
such prepayment would otherwise not be permitted, we may seek consent under the
senior secured credit facility to have our subsidiary make a distribution to us
so that we would have sufficient funds to purchase the notes and consent to make
the prepayment or attempt to refinance the senior secured credit facility that
contains the prohibition. Moreover, a change of control under the indenture
governing the notes constitutes an event of default under the senior secured
credit facility. If we do not obtain a consent, a waiver or repay the senior
secured credit facility, our failure to purchase the tendered notes would
constitute an event of default under the indenture, which would in turn result
in a default under the senior secured credit facility. Even if we obtain the
consent, we cannot be assured that we will have sufficient resources to
repurchase the notes following the change in control.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K
----------------------------------------

(a)       Exhibits

2         Omitted - Inapplicable

3.2       Omitted - Inapplicable

4         Omitted - Inapplicable

10.34     Services Agreement dated as of January 1, 2002 by and among AirGate
          PCS, Inc., AirGate Service Company, Inc., iPCS, Inc. and iPCS
          Wireless, Inc.

10.35     Technology License Agreement dated as of January 1, 2002 by and among
          AirGate PCS, Inc., AGW Leasing Company, Inc., AirGate Service Company,
          Inc., AirGate Network Services, Inc., iPCS, Inc., iPCS Wireless, Inc.
          and iPCS Equipment, Inc.

11        Omitted - Inapplicable

15        Omitted - Inapplicable

18        Omitted - Inapplicable

19        Omitted - Inapplicable

22        Omitted - Inapplicable

23        Omitted - Inapplicable

24        Omitted - Inapplicable

99        Omitted - Inapplicable

(b) Reports on Form 8-K

On February 22, 2002, we filed a Current Report on Form 8-K pursuant to which we
amended certain covenants of the iPCS Senior Secured Credit Facility. In
connection with such Form 8-K, the following exhibits were attached: (i) Fourth
Amendment to Amended and Restated Credit Agreement and Consent dated as of
February 14, 2002, by and among iPCS Wireless, Inc., iPCS Equipment, Inc., the
Lenders and Toronto Dominion (Texas), Inc. as administrative agent and (ii)
Press Release issued by AirGate PCS, Inc. dated February 15, 2002, announcing
reorganization and sales leadership changes.

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

                                            iPCS, Inc.


                                        By: /s/ Alan B. Catherall
                                            ------------------------------------
                                                Name:  Alan B. Catherall
                                                Title: Chief Financial Officer
                                                       (Duly Authorized Officer)


Date: May 15, 2002                          /s/ Alan B. Catherall
                                            ------------------------------------
                                                Alan B. Catherall
                                                Chief Financial Officer
                                                (Principal Financial and
                                                Chief Accounting Officer)

                                      -33-