##### Table of Contents



UNITED STATES
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 September 30, 2002

OR

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

For the transition period from __________________________________ to __________________________________

Commission file number 000-31511



---

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AT ROAD, INC.

(Exact name of registrant as specified in its charter)


|                                                                        |  |                                                
|----------------------------------------------------------------------- |  | -----------------------------------------------
|Delaware
(State or other jurisdiction of
incorporation or organization) |  | 94-3209170
(I.R.S. Employer
Identification No.)

47200 Bayside Parkway
Fremont, CA 94538
(Address of principal executive offices, including zip code)

510-668-1638
(Registrants telephone number, including area code)



---

---

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes  [X]    No  [   ]

As of
November 1, 2002 there were 47,524,452 shares of the registrants
Common Stock outstanding.





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TABLE OF CONTENTS



|                              |                                                                                                |                                                                                  |  |  |  |  |  | 
|----------------------------- | ---------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | Item 1. Financial Statements.                                                                 
|                              |                                                                                                | Condensed Consolidated Balance Sheets                                           
|                              |                                                                                                | Condensed Consolidated Statements of Operations                                 
|                              |                                                                                                | Condensed Consolidated Statements of Stockholders Equity And Comprehensive Loss
|                              |                                                                                                | Condensed Consolidated Statement of Cash Flows                                  
|                              |                                                                                                | Notes To Condensed Consolidated Financial Statements                            
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                              | Item 3. Quantitative and Qualitative Disclosures About Market Risk.                           
|                              | Item 4. Controls and Procedures.                                                              
|PART II. OTHER INFORMATION   
|                              | Item 1. Legal Proceedings.                                                                    
|                              | Item 2. Changes in Securities and Use of Proceeds.                                            
|                              | Item 4. Submission of Matters to a Vote of Security Holders.                                  
|                              | Item 6. Exhibits and Reports on Form 8-K.                                                     
|SIGNATURES                   
|Exhibit Index                
|EXHIBIT 99.1                 
|EXHIBIT 99.2                 



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##### Table of Contents



INDEX

|                              |  |         |  |                                                                                                                                                                                     |  | 
|----------------------------- |  | ------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|PART I. FINANCIAL INFORMATION |  |        
|                             
|                              |  | Item 1. |  | Financial Statements                                                                                                                                                                |  | 
|                             
|                              |  |         |  | Condensed Consolidated Balance Sheets at September 30, 2002 and
December 31, 2001                                                                                                   |  | 
|                             
|                              |  |         |  | Condensed Consolidated Statements of Operations for the three and
nine months ended September 30, 2002 and 2001                                                                     |  | 
|                             
|                              |  |         |  | Condensed Consolidated Statements of Stockholders Equity and
Comprehensive Loss for the nine months ended September 30, 2002
and 2001 and the three months ended December 31, 2001 |  | 
|                             
|                              |  |         |  | Condensed Consolidated Statements of Cash Flows for the nine months
ended September 30, 2002 and 2001                                                                               |  | 
|                             
|                              |  |         |  | Notes to Condensed Consolidated Financial Statements                                                                                                                                |  | 
|                             
|                              |  | Item 2. |  | Managements Discussion and Analysis of Financial Condition and
Results of Operations                                                                                               |  | 
|                             
|                              |  | Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                          |  | 
|                             
|                              |  | Item 4. |  | Controls and Procedures                                                                                                                                                             |  | 
|                             
|PART II. OTHER INFORMATION    |  |        
|                             
|                              |  | Item 1. |  | Legal Proceedings                                                                                                                                                                   |  | 
|                             
|                              |  | Item 2. |  | Changes in Securities and Use of Proceeds                                                                                                                                           |  | 
|                             
|                              |  | Item 4. |  | Submission of Matters to a Vote of Security Holders                                                                                                                                 |  | 
|                             
|                              |  | Item 6. |  | Exhibits and Reports on Form 8-K                                                                                                                                                    |  | 

2



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##### Table of Contents






PART I. FINANCIAL INFORMATION




Item 1. Financial Statements.




At Road, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share and par value amounts)
(unaudited)

|                                                     |                                                                                                                                                                     |                                            |          |               |        |              |          |         |        | 
|---------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | -------- | ------------- | ------ | ------------ | -------- | ------- | ------ | 
|                                                     |                                                                                                                                                                     |                                            |          | September 30, |        | December 31,
|                                                     |                                                                                                                                                                     |                                            |          | 2002          |        | 2001        
|                                                     |                                                                                                                                                                     |                                            |          |               |        |             
|ASSETS                                              
|Current assets:                                      |                                                                                                                                                                     |                                            |          |               |        |              |          |        
|                                                     | Cash and cash equivalents                                                                                                                                           |                                            | $        | 35,191        |        |              | $        | 40,164  |       
|                                                     | Restricted short-term investments                                                                                                                                   |                                            |          | 2,235         |        |              |          | 2,216   |       
|                                                     | Accounts receivable, net                                                                                                                                            |                                            |          | 6,444         |        |              |          | 4,781   |       
|                                                     | Inventories                                                                                                                                                         |                                            |          | 6,400         |        |              |          | 8,396   |       
|                                                     | Deferred product costs and other current assets                                                                                                                     |                                            |          | 9,552         |        |              |          | 9,081   |       
|                                                     |                                                                                                                                                                     |                                            |          |               |        |              |          |        
|                                                     |                                                                                                                                                                     | Total current assets                       |          |               | 59,822 |              |          |         | 64,638 | 
|Property and equipment, net                          |                                                                                                                                                                     |                                            | 3,038    |               |        |              | 4,900    |        
|Deferred product costs, intangibles and other assets |                                                                                                                                                                     |                                            | 7,474    |               |        |              | 8,936    |        
|                                                     |                                                                                                                                                                     |                                            |          |               |        |              |          |        
|                                                     |                                                                                                                                                                     | Total assets                               |          | $             | 70,334 |              |          | $       | 78,474 | 
|                                                     |                                                                                                                                                                     |                                            |          |               |        |              |          |        
|LIABILITIES AND STOCKHOLDERS EQUITY                
|Current liabilities:                                 |                                                                                                                                                                     |                                            |          |               |        |              |          |        
|                                                     | Accounts payable                                                                                                                                                    |                                            | $        | 2,146         |        |              | $        | 2,377   |       
|                                                     | Accrued liabilities                                                                                                                                                 |                                            |          | 5,065         |        |              |          | 4,837   |       
|                                                     | Deferred revenue                                                                                                                                                    |                                            |          | 7,248         |        |              |          | 6,124   |       
|                                                     |                                                                                                                                                                     |                                            |          |               |        |              |          |        
|                                                     |                                                                                                                                                                     | Total current liabilities                  |          |               | 14,459 |              |          |         | 13,338 | 
|Deferred revenue and other long-term liabilities     |                                                                                                                                                                     |                                            | 5,145    |               |        |              | 4,725    |        
|                                                     |                                                                                                                                                                     |                                            |          |               |        |              |          |        
|                                                     |                                                                                                                                                                     | Total liabilities                          |          |               | 19,604 |              |          |         | 18,063 | 
|Stockholders equity:                                |                                                                                                                                                                     |                                            |          |               |        |              |          |        
|                                                     | Preferred stock, $0.0001 par value, 10,000,000 shares
authorized, shares issued and outstanding: none at
September 30, 2002 and December 31, 2001                   |                                            |          |              |        |              |          |        |       
|                                                     | Common stock, $0.0001 par value, 250,000,000 shares
authorized, shares issued and outstanding: 47,195,392 at
September 30, 2002 and 46,499,451 at December 31, 2001 |                                            |          | 169,412       |        |              |          | 169,148 |       
|Deferred stock compensation                          |                                                                                                                                                                     |                                            | (747     | )             |        |              | (2,342   | )      
|Notes receivable from stockholders                   |                                                                                                                                                                     |                                            | (2,068   | )             |        |              | (2,748   | )      
|Accumulated deficit                                  |                                                                                                                                                                     |                                            | (115,867 | )             |        |              | (103,647 | )      
|                                                     |                                                                                                                                                                     |                                            |          |               |        |              |          |        
|                                                     |                                                                                                                                                                     | Total stockholders equity                 |          |               | 50,730 |              |          |         | 60,411 | 
|                                                     |                                                                                                                                                                     |                                            |          |               |        |              |          |        
|                                                     |                                                                                                                                                                     | Total liabilities and stockholders equity |          | $             | 70,334 |              |          | $       | 78,474 | 
|                                                     |                                                                                                                                                                     |                                            |          |               |        |              |          |        

See notes to condensed consolidated financial statements.

3



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##### Table of Contents






At Road, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(unaudited)

|                                                                |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |        |        |  |  | 
|--------------------------------------------------------------- | ---------------------------- | --------------------------------- | ------ | ----- | ------ | ------------------ | ------ | ----------------- | ------ | ---- | ------- | ------ | ------ | - | ------- | ------ | ------ |  |  | 
|                                                                |                              |                                   |        |       |        | Three months ended |        | Nine months ended
|                                                                |                              |                                   |        |       |        | September 30,      |        | September 30,    
|                                                                |                              |                                   |        |       |        |                    |        |                  
|                                                                |                              |                                   |        |       |        | 2002               |        | 2001              |        | 2002 |         | 2001  
|                                                                |                              |                                   |        |       |        |                    |        |                   |        |      |         |       
|Revenues:                                                       |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       
|                                                                | Service                      |                                   | $      | 8,657 |        |                    | $      | 5,550             |        |      | $       | 23,865 |        |   | $       | 13,818 |       
|                                                                | Product                      |                                   |        | 2,659 |        |                    |        | 1,980             |        |      |         | 7,609  |        |   |         | 5,020  |       
|                                                                |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       
|                                                                |                              | Total revenues                    |        |       | 11,316 |                    |        |                   | 7,530  |      |         |        | 31,474 |   |         |        | 18,838 | 
|                                                                |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       
|Costs and expenses:                                             |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       
|                                                                | Cost of service revenue      |                                   |        | 3,440 |        |                    |        | 3,375             |        |      |         | 9,974  |        |   |         | 9,503  |       
|                                                                | Cost of product revenue      |                                   |        | 4,264 |        |                    |        | 3,933             |        |      |         | 12,015 |        |   |         | 9,461  |       
|                                                                | Sales and marketing          |                                   |        | 2,433 |        |                    |        | 4,201             |        |      |         | 8,035  |        |   |         | 14,100 |       
|                                                                | Research and development     |                                   |        | 1,476 |        |                    |        | 1,575             |        |      |         | 4,538  |        |   |         | 6,015  |       
|                                                                | General and administrative   |                                   |        | 1,875 |        |                    |        | 2,692             |        |      |         | 6,590  |        |   |         | 9,700  |       
|                                                                | Restructuring charges        |                                   |        |      |        |                    |        | (30               | )      |      |         |       |        |   |         | 218    |       
|                                                                | Amortization of intangibles  |                                   |        | 418   |        |                    |        | 414               |        |      |         | 1,246  |        |   |         | 1,242  |       
|                                                                | Stock compensation (*)       |                                   |        | 380   |        |                    |        | 880               |        |      |         | 817    |        |   |         | 2,463  |       
|                                                                |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       
|                                                                |                              | Total costs and expenses          |        |       | 14,286 |                    |        |                   | 17,040 |      |         |        | 43,215 |   |         |        | 52,702 | 
|                                                                |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       
|Loss from operations                                            |                              |                                   | (2,970 | )     |        |                    | (9,510 | )                 |        |      | (11,741 | )      |        |   | (33,864 | )     
|                                                                |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       
|Other income (expense), net:                                    |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       
|                                                                | Interest income, net         |                                   |        | 202   |        |                    |        | 529               |        |      |         | 657    |        |   |         | 2,385  |       
|                                                                | Investment impairment charge |                                   |        |      |        |                    |        |                  |        |      |         | (1,035 | )      |   |         |        |       
|                                                                | Other income (expense), net  |                                   |        | 6     |        |                    |        | (12               | )      |      |         | (101   | )      |   |         | (22    | )     
|                                                                |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       
|                                                                |                              | Total other income (expense), net |        |       | 208    |                    |        |                   | 517    |      |         |        | (479   | ) |         |        | 2,363  | 
|                                                                |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       
|Net loss                                                        |                              | $                                 | (2,762 | )     |        | $                  | (8,993 | )                 |        | $    | (12,220 | )      |        | $ | (31,501 | )     
|                                                                |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       
|Basic and diluted net loss per share                            |                              | $                                 | (0.06  | )     |        | $                  | (0.20  | )                 |        | $    | (0.27   | )      |        | $ | (0.72   | )     
|                                                                |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       
|Shares used in calculating basic and
diluted net loss per share |                              |                                   | 46,355 |       |        |                    | 44,213 |                   |        |      | 45,849  |        |        |   | 43,634  |       
|                                                                |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       
|(*)                                                             |                              | Stock compensation:               |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       
|                                                                |                              | Cost of service revenue           |        | $     | 7      |                    |        | $                 | 20     |      |         | $      | 18     |   |         | $      | 67     | 
|                                                                |                              | Cost of product revenue           |        |       | 25     |                    |        |                   | 46     |      |         |        | 81     |   |         |        | 159    | 
|                                                                |                              | Sales and marketing               |        |       | 36     |                    |        |                   | 63     |      |         |        | 52     |   |         |        | 9      | 
|                                                                |                              | Research and development          |        |       | 83     |                    |        |                   | 137    |      |         |        | 274    |   |         |        | 122    | 
|                                                                |                              | General and administrative        |        |       | 229    |                    |        |                   | 614    |      |         |        | 392    |   |         |        | 2,106  | 
|                                                                |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       
|                                                                |                              | Total                             |        | $     | 380    |                    |        | $                 | 880    |      |         | $      | 817    |   |         | $      | 2,463  | 
|                                                                |                              |                                   |        |       |        |                    |        |                   |        |      |         |        |        |   |         |       

See notes to condensed consolidated financial statements.

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##### Table of Contents






At Road, Inc.
Condensed Consolidated Statements of Stockholders
Equity And Comprehensive Loss
For the nine months ended September 30, 2002 and 2001
and the three months ended December 31, 2001
(In thousands, except share amounts)
(unaudited)

|                                                                     |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   |         |   |  |   |         |  
|-------------------------------------------------------------------- |  | ------------ | ---------- | -------- |  | ------------ | ------- | ------------- |  | ------------- | ------ | ------------- |  | ------------- | ------ | ----------- |  | - | --- | - |  | - | -------- | - |  | - | ------- | - |  | - | ------- | -
|                                                                     |  |              |            |          |  |              |         |               |  |               |        |               |  | Notes         |        | Accumulated |  |   |     |   |  |   |          |   |  |   |         |  
|                                                                     |  | Common Stock |            | Deferred |  | Receivable   |         | Other         |  | Accumu-       |        |               |  |               |        | Total      
|                                                                     |  |              |            | Stock    |  | From         |         | Comprehensive |  | lated         |        | Stockholders |  | Comprehensive
|                                                                     |  | Shares       |            | Amount   |  | Compensation |         | Stockholders  |  | Income (Loss) |        | Deficit       |  | Equity        |        | Loss       
|                                                                     |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |            
|BALANCES, January 1, 2001                                            |  |              | 46,071,979 |          |  | $            | 171,208 |               |  | $             | (8,123 | )             |  | $             | (3,309 | )           |  | $ | (10 | ) |  | $ | (65,000  | ) |  | $ | 94,766  |   |  |   |         |  
|Net loss                                                             |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   | (31,501  | ) |  |   | (31,501 | ) |  | $ | (31,501 | )
|Change in net unrealized income
(loss) from short-term
investments   |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   | 10  |   |  |   |          |   |  |   | 10      |   |  |   | 10      |  
|                                                                     |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   |         |   |  |   |         |  
|Comprehensive loss                                                   |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   |         |   |  | $ | (31,491 | )
|                                                                     |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   |         |   |  |   |         |  
|Shares issued under employee
stock purchase plan                     |  |              | 173,480    |          |  |              | 317     |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   | 317     |   |  |   |         |  
|Exercise of stock options                                            |  |              | 267,691    |          |  |              | 193     |               |  |               |        |               |  |               | (34    | )           |  |   |     |   |  |   |          |   |  |   | 159     |   |  |   |         |  
|Common stock issued for
consulting services                          |  |              | 2,250      |          |  |              | 4       |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   | 4       |   |  |   |         |  
|Collection of notes receivable
from stockholders                     |  |              |            |          |  |              |         |               |  |               |        |               |  |               | 295    |             |  |   |     |   |  |   |          |   |  |   | 295     |   |  |   |         |  
|Repurchase of unvested options
exercised                             |  |              | (329,583   | )        |  |              | (278    | )             |  |               |        |               |  |               | 278    |             |  |   |     |   |  |   |          |   |  |   |        |   |  |   |         |  
|Deferred stock compensation                                          |  |              |            |          |  |              | 23      |               |  |               | (23    | )             |  |               |        |             |  |   |     |   |  |   |          |   |  |   |        |   |  |   |         |  
|Reversal of deferred stock
compensation due to employee
terminations |  |              |            |          |  |              | (2,569  | )             |  |               | 2,569  |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   |        |   |  |   |         |  
|Amortization of deferred stock
compensation                          |  |              |           |          |  |              |        |               |  |               | 2,463  |               |  |               |       |             |  |   |    |   |  |   |         |   |  |   | 2,463   |   |  |   |         |  
|                                                                     |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   |         |   |  |   |         |  
|BALANCES, September 30, 2001                                         |  |              | 46,185,817 |          |  |              | 168,898 |               |  |               | (3,114 | )             |  |               | (2,770 | )           |  |   |    |   |  |   | (96,501  | ) |  |   | 66,513  |   |  |   |         |  
|Net loss                                                             |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   | (7,146   | ) |  |   | (7,146  | ) |  | $ | (7,146  | )
|                                                                     |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   |         |   |  |   |         |  
|Change in net unrealized income
(loss) from short-term
investments   |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   |         |   |  |   |         |  
|Comprehensive loss                                                   |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   |         |   |  |   |         |  
|Shares issued under the employee
stock purchase plan                 |  |              | 194,099    |          |  |              | 354     |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   | 354     |   |  |   |         |  
|Exercise of stock options                                            |  |              | 119,535    |          |  |              | 88      |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   | 88      |   |  |   |         |  
|Collection of notes receivable
from stockholders                     |  |              |            |          |  |              |         |               |  |               |        |               |  |               | 22     |             |  |   |     |   |  |   |          |   |  |   | 22      |   |  |   |         |  
|Deferred stock compensation                                          |  |              |            |          |  |              | 63      |               |  |               | (63    | )             |  |               |        |             |  |   |     |   |  |   |          |   |  |   |        |   |  |   |         |  
|Reversal of deferred stock
compensation due to employee
terminations |  |              |            |          |  |              | (255    | )             |  |               | 255    |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   |        |   |  |   |         |  
|Amortization of deferred stock
compensation                          |  |              |           |          |  |              |        |               |  |               | 580    |               |  |               |       |             |  |   |    |   |  |   |         |   |  |   | 580     |   |  |   |         |  
|                                                                     |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   |         |   |  |   |         |  
|BALANCES, December 31, 2001                                          |  |              | 46,499,451 |          |  |              | 169,148 |               |  |               | (2,342 | )             |  |               | (2,748 | )           |  |   |    |   |  |   | (103,647 | ) |  |   | 60,411  |   |  |   |         |  
|Net loss                                                             |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   | (12,220  | ) |  |   | (12,220 | ) |  | $ | (12,220 | )
|                                                                     |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   |         |   |  |   |         |  
|Shares issued through employee
stock purchase plan                   |  |              | 259,725    |          |  |              | 508     |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   | 508     |   |  |   |         |  
|Exercise of stock options                                            |  |              | 529,966    |          |  |              | 660     |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   | 660     |   |  |   |         |  
|Collection of notes receivable
from stockholders                     |  |              |            |          |  |              |         |               |  |               |        |               |  |               | 554    |             |  |   |     |   |  |   |          |   |  |   | 554     |   |  |   |         |  
|Repurchase of unvested options
exercised                             |  |              | (93,750    | )        |  |              | (126    | )             |  |               |        |               |  |               | 126    |             |  |   |     |   |  |   |          |   |  |   |        |   |  |   |         |  
|Deferred stock compensation                                          |  |              |            |          |  |              | 17      |               |  |               | (17    | )             |  |               |        |             |  |   |     |   |  |   |          |   |  |   |        |   |  |   |         |  
|Reversal of deferred stock
compensation due to employee
terminations |  |              |            |          |  |              | (795    | )             |  |               | 795    |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   |        |   |  |   |         |  
|Amortization of deferred stock
compensation                          |  |              |           |          |  |              |        |               |  |               | 817    |               |  |               |       |             |  |   |    |   |  |   |         |   |  |   | 817     |   |  |   |         |  
|                                                                     |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   |         |   |  |   |         |  
|BALANCES, September 30, 2002                                         |  |              | 47,195,392 |          |  | $            | 169,412 |               |  | $             | (747   | )             |  | $             | (2,068 | )           |  | $ |    |   |  | $ | (115,867 | ) |  | $ | 50,730  |   |  |   |         |  
|                                                                     |  |              |            |          |  |              |         |               |  |               |        |               |  |               |        |             |  |   |     |   |  |   |          |   |  |   |         |   |  |   |         |  

See notes to condensed consolidated financial statements.

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At Road, Inc.
Condensed Consolidated Statement of Cash Flows
(In thousands)
(unaudited)

|                                             |                                                                            |                                             |                               |                                                     |       |                   |         |         |       |        |         |  
|-------------------------------------------- | -------------------------------------------------------------------------- | ------------------------------------------- | ----------------------------- | --------------------------------------------------- | ----- | ----------------- | ------- | ------- | ----- | ------ | ------- | -
|                                             |                                                                            |                                             |                               |                                                     |       | Nine months ended
|                                             |                                                                            |                                             |                               |                                                     |       | September 30,    
|                                             |                                                                            |                                             |                               |                                                     |       |                  
|                                             |                                                                            |                                             |                               |                                                     |       | 2002              |         | 2001   
|                                             |                                                                            |                                             |                               |                                                     |       |                   |         |        
|Cash flows from operating activities:        |                                                                            |                                             |                               |                                                     |       |                   |         |        
|                                             | Net loss                                                                   |                                             | $                             | (12,220                                             | )     |                   | $       | (31,501 | )    
|                                             | Adjustments to reconcile net loss to net cash used in operating activities |                                             |                               |                                                     |       |                   |         |         |      
|                                             |                                                                            | Depreciation and amortization               |                               |                                                     | 3,534 |                   |         |         | 3,452 |       
|                                             |                                                                            | Loss on disposal of property and equipment  |                               |                                                     | 19    |                   |         |         |      |       
|                                             |                                                                            | Investment impairment charge                |                               |                                                     | 1,035 |                   |         |         |      |       
|                                             |                                                                            | Amortization of deferred stock compensation |                               |                                                     | 817   |                   |         |         | 2,463 |       
|                                             |                                                                            | Provision for inventory reserves            |                               |                                                     | 718   |                   |         |         | 559   |       
|                                             |                                                                            | Provision for bad debts and sales returns   |                               |                                                     | 386   |                   |         |         | 1,551 |       
|                                             |                                                                            | Common stock issued for consulting services |                               |                                                     |      |                   |         |         | 4     |       
|                                             |                                                                            | Change in assets and liabilities:           |                               |                                                     |       |                   |         |         |       |       
|                                             |                                                                            |                                             | Accounts receivable           |                                                     |       | (2,049            | )       |         |       | (2,516 | )      
|                                             |                                                                            |                                             | Inventories                   |                                                     |       | 1,278             |         |         |       | (3,078 | )      
|                                             |                                                                            |                                             | Deferred product costs        |                                                     |       | (974              | )       |         |       | 466    |        
|                                             |                                                                            |                                             | Prepaid expenses and other    |                                                     |       | (200              | )       |         |       | (3,903 | )      
|                                             |                                                                            |                                             | Accounts payable              |                                                     |       | (231              | )       |         |       | 883    |        
|                                             |                                                                            |                                             | Accrued and other liabilities |                                                     |       | 148               |         |         |       | (315   | )      
|                                             |                                                                            |                                             | Deferred revenue              |                                                     |       | 1,624             |         |         |       | 3,216  |        
|                                             |                                                                            |                                             |                               |                                                     |       |                   |         |        
|                                             |                                                                            |                                             |                               | Net cash used in operating activities               |       |                   | (6,115  | )       |       |        | (28,719 | )
|                                             |                                                                            |                                             |                               |                                                     |       |                   |         |        
|Cash flows from investing activities:        |                                                                            |                                             |                               |                                                     |       |                   |         |        
|                                             | Purchase of property and equipment                                         |                                             |                               | (445                                                | )     |                   |         | (613    | )    
|                                             | Interest received on restricted short-term investments                     |                                             |                               | (19                                                 | )     |                   |         | 5,134   |      
|                                             | Other assets                                                               |                                             |                               | (116                                                | )     |                   |         | (227    | )    
|                                             |                                                                            |                                             |                               |                                                     |       |                   |         |        
|                                             |                                                                            |                                             |                               | Net cash provided by (used in) investing activities |       |                   | (580    | )       |       |        | 4,294   |  
|Cash flows from financing activities:        |                                                                            |                                             |                               |                                                     |       |                   |         |        
|                                             | Proceeds from sale of common stock                                         |                                             |                               | 1,168                                               |       |                   |         | 475     |      
|                                             | Proceeds from payments on note receivable issued to stockholders           |                                             |                               | 554                                                 |       |                   |         | 295     |      
|                                             |                                                                            |                                             |                               |                                                     |       |                   |         |        
|Net cash provided by financing activities    |                                                                            |                                             | 1,722                         |                                                     |       |                   | 770     |        
|                                             |                                                                            |                                             |                               |                                                     |       |                   |         |        
|Net decrease in cash and cash equivalents    |                                                                            |                                             | (4,973                        | )                                                   |       |                   | (23,655 | )      
|Cash and cash equivalents:                   |                                                                            |                                             |                               |                                                     |       |                   |         |        
|                                             | Beginning of period                                                        |                                             |                               | 40,164                                              |       |                   |         | 69,280  |      
|                                             |                                                                            |                                             |                               |                                                     |       |                   |         |        
|                                             | End of period                                                              |                                             | $                             | 35,191                                              |       |                   | $       | 45,625  |      
|                                             |                                                                            |                                             |                               |                                                     |       |                   |         |        
|Non-cash investing and financing activities: |                                                                            |                                             |                               |                                                     |       |                   |         |        
|                                             | Deferred stock compensation                                                |                                             | $                             | 17                                                  |       |                   | $       | 23      |      
|                                             |                                                                            |                                             |                               |                                                     |       |                   |         |        
|                                             | Reversal of deferred stock compensation                                    |                                             | $                             | 795                                                 |       |                   | $       | 2,569   |      
|                                             |                                                                            |                                             |                               |                                                     |       |                   |         |        
|                                             | Repurchase of common stock through cancellation of notes receivable        |                                             | $                             | 126                                                 |       |                   | $       | 278     |      
|                                             |                                                                            |                                             |                               |                                                     |       |                   |         |        
|                                             | Issuance of common stock for notes receivable                              |                                             | $                             |                                                    |       |                   | $       | 34      |      
|                                             |                                                                            |                                             |                               |                                                     |       |                   |         |        

See notes to condensed consolidated financial statements.

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Notes To Condensed Consolidated Financial Statements
(Unaudited)

Note 1  Basis of Presentation

The accompanying condensed consolidated financial statements were prepared by
At Road, Inc., without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (SEC). Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes the disclosures which are made are adequate to make the
information presented not misleading. In the opinion of management, the
financial statements include all adjustments necessary to fairly present the
financial condition, results of operations, and cash flows for such periods.
Results of operations for the periods presented are not necessarily indicative
of results for any other interim period or for the full year. These financial
statements should be read in conjunction with the Companys consolidated and
audited financial statements and notes thereto in its Form 10-K (No.
000-31511), filed on March 28, 2002 with the SEC.

Note 2  Basic and Diluted Net Loss Per Share

Basic and diluted net loss per share is computed by dividing the loss
attributable to common stockholders by the weighted average number of shares of
common stock outstanding for the period (excluding shares subject to
repurchase). Diluted loss per common share reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock. Common share equivalents are
excluded from the computation in loss periods, as their effect would be
antidilutive.

The following is a reconciliation of the denominators used in calculating basic
and diluted net loss per share (in thousands):

|                                                                 |  |                    |        |                   |  |      |        |      |  |  |        |   |  |  |        |  
|---------------------------------------------------------------- |  | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|                                                                 |  | Three months ended |        | Nine months ended
|                                                                 |  | September 30,      |        | September 30,    
|                                                                 |  |                    |        |                  
|                                                                 |  | 2002               |        | 2001              |  | 2002 |        | 2001
|                                                                 |  |                    |        |                   |  |      |        |     
|Weighted average common shares outstanding                       |  |                    | 47,135 |                   |  |      | 46,170 |      |  |  | 46,895 |   |  |  | 46,166 |  
|Weighted average common shares outstanding
subject to repurchase |  |                    | (780   | )                 |  |      | (1,957 | )    |  |  | (1,046 | ) |  |  | (2,532 | )
|                                                                 |  |                    |        |                   |  |      |        |      |  |  |        |   |  |  |        |  
|Shares used in computation, basic and diluted                    |  |                    | 46,355 |                   |  |      | 44,213 |      |  |  | 45,849 |   |  |  | 43,634 |  
|                                                                 |  |                    |        |                   |  |      |        |      |  |  |        |   |  |  |        |  

The total number of options and restricted stock subject to repurchase excluded
from the diluted net loss per share computation for the three and nine months
ended September 30, 2002 and 2001 were as follows (in thousands):

|                                             |  |                             |       |      |  |  |       | 
|-------------------------------------------- |  | --------------------------- | ----- | ---- |  |  | ----- | 
|                                             |  | Three and nine months ended
|                                             |  | September 30,              
|                                             |  |                            
|                                             |  | 2002                        |       | 2001
|                                             |  |                             |       |     
|Shares of common stock subject to repurchase |  |                             | 607   |      |  |  | 1,813 | 
|Outstanding options                          |  |                             | 8,011 |      |  |  | 6,052 | 

Note 3  Balance Sheet Items

Inventories consist of raw materials, work in process and finished goods, and
are stated at the lower of cost (average cost) or market and consist of the
following (in thousands):

|                |  |               |       |              |  |   |       | 
|--------------- |  | ------------- | ----- | ------------ |  | - | ----- | 
|                |  | September 30, |       | December 31,
|                |  | 2002          |       | 2001        
|                |  |               |       |             
|Raw materials   |  | $             | 3,649 |              |  | $ | 5,086 | 
|Work in process |  |               | 767   |              |  |   | 1,022 | 
|Finished goods  |  |               | 1,984 |              |  |   | 2,288 | 
|                |  |               |       |              |  |   |       | 
|Total           |  | $             | 6,400 |              |  | $ | 8,396 | 
|                |  |               |       |              |  |   |       | 

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Current deferred product costs and other current assets consists of the
following (in thousands):

|                                          |  |               |       |              |  |   |       | 
|----------------------------------------- |  | ------------- | ----- | ------------ |  | - | ----- | 
|                                          |  | September 30, |       | December 31,
|                                          |  | 2002          |       | 2001        
|                                          |  |               |       |             
|Current deferred product costs            |  | $             | 8,870 |              |  | $ | 8,599 | 
|Prepaid expenses and other current assets |  |               | 682   |              |  |   | 482   | 
|                                          |  |               |       |              |  |   |       | 
|Total                                     |  | $             | 9,552 |              |  | $ | 9,081 | 
|                                          |  |               |       |              |  |   |       | 

Non-current deferred product costs, intangibles and other assets consists of
the following (in thousands):

|                                   |  |               |       |              |  |   |       | 
|---------------------------------- |  | ------------- | ----- | ------------ |  | - | ----- | 
|                                   |  | September 30, |       | December 31,
|                                   |  | 2002          |       | 2001        
|                                   |  |               |       |             
|Purchased technology               |  | $             | 905   |              |  | $ | 2,071 | 
|Non-current deferred product costs |  |               | 5,794 |              |  |   | 5,091 | 
|Other assets                       |  |               | 775   |              |  |   | 1,774 | 
|                                   |  |               |       |              |  |   |       | 
|Total                              |  | $             | 7,474 |              |  | $ | 8,936 | 
|                                   |  |               |       |              |  |   |       | 

At December 31, 2001, the Company held approximately 148,000 shares of
preferred stock in Cellport Systems, Inc., with a book value of $1,035,000 and
which represented approximately seven percent ownership in Cellport
Systems, Inc. The
Company accounts for this investment using the cost method. During the quarter
ended June 30, 2002, it was determined that the investment had experienced a
decline in value that was other than temporary. Accordingly, $1,035,000 was
expensed in the quarter ended June 30, 2002.

Non-current deferred revenue and other long-term liabilities consists of the
following (in thousands):

|                             |  |               |       |              |  |   |       | 
|---------------------------- |  | ------------- | ----- | ------------ |  | - | ----- | 
|                             |  | September 30, |       | December 31,
|                             |  | 2002          |       | 2001        
|                             |  |               |       |             
|Non-current deferred revenue |  | $             | 4,926 |              |  | $ | 4,426 | 
|Other long-term liabilities  |  |               | 219   |              |  |   | 299   | 
|                             |  |               |       |              |  |   |       | 
|Total                        |  | $             | 5,145 |              |  | $ | 4,725 | 
|                             |  |               |       |              |  |   |       | 

Note 4  Restructuring of Operations

During June 2001, the Company adopted a formal plan to reduce operating costs
in response to a general downturn in the economy. In connection with these
actions, a pre-tax restructuring charge of approximately $248,000 was recorded
in June 2001. The principal actions of the plan involved reducing the number
of

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employees by approximately 11 percent. All areas of the Company were
affected by the reduction of 29 employees. The restructuring expense was
comprised of severance and related costs. The total restructuring expense paid
in 2001 was $218,000. The remaining $30,000 of costs were not incurred and
were reversed during the three months ending September 30, 2001.

Note 5  Comprehensive Income (Loss)

Statement of Financial Accounting Standards (SFAS) No. 130, Reporting
Comprehensive Income, requires that an enterprise report, by major components
and as a single total, the change in its net assets during the period from
non-owner sources. At September 30, 2002 and 2001, accumulated other
comprehensive income was zero.

Notes 6  Intangible Assets

In connection with the adoption of SFAS No. 142, Goodwill and Other Intangible
Assets, the Company performed a transitional impairment test on other
intangibles and determined that no impairment was necessary.

Information regarding the Companys intangible assets is as follows (in
thousands):

|                     |  |                    |       |                   |  |     |       |        |  |              |     |             |  |   |       |  |  |   |       |  |  |   |       | 
|-------------------- |  | ------------------ | ----- | ----------------- |  | --- | ----- | ------ |  | ------------ | --- | ----------- |  | - | ----- |  |  | - | ----- |  |  | - | ----- | 
|                     |  | September 30, 2002 |       | December 31, 2001
|                     |  |                    |       |                  
|                     |  | Carrying           |       | Accumulated       |  |     |       |        |  | Carrying     |     | Accumulated |  |   |       | 
|                     |  | amount             |       | depreciation      |  | Net |       | amount |  | depreciation |     | Net        
|                     |  |                    |       |                   |  |     |       |        |  |              |     |            
|Purchased technology |  | $                  | 5,049 |                   |  | $   | 4,144 |        |  | $            | 905 |             |  | $ | 4,969 |  |  | $ | 2,898 |  |  | $ | 2,071 | 

For the nine months ended September 30, 2002 and the year ended December 31,
2001, amortization of purchased technology was $1,246,000 and $1,656,000,
respectively. The estimated amortization for the three years subsequent to
December 31, 2001 is as follows (in thousands):

|             |       |              |   |       | 
|------------ | ----- | ------------ | - | ----- | 
|Year ended   |       | Amortization
|December 31, |       | expense     
|             |       |             
|             | 2002  |              | $ | 1,668 | 
|             | 2003  |              |   | 455   | 
|             | 2004  |              |   | 28    | 
|             |       |              |   |      
|             | Total |              | $ | 2,151 | 
|             |       |              |   |      

Note 7  Segment Reporting

In the nine months ended September 30, 2002 and 2001, the Company operated in a
single reportable segment. The Company plans to evaluate additional segment
disclosure requirements as it expands its operations. The Company had no
significant revenues from customers outside of the United States in the nine
months ended September 30, 2002 and 2001 and had no significant long-lived
assets deployed outside the United States as of September 30, 2002.

Note 8  Recently Issued Accounting Pronouncements

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In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No.
142, Goodwill and Other Intangible Assets. SFAS No. 142 addresses the initial
recognition and measurement of intangible assets acquired outside of a business
combination and the accounting for goodwill and other intangible assets
subsequent to their acquisition. SFAS No. 142 provides that intangible assets
with finite useful lives be amortized and that goodwill and intangible assets
with indefinite lives will not be amortized, but will be tested at least
annually for impairment. The Company adopted SFAS No. 142 for its fiscal year
beginning January 1, 2002. The adoption of SFAS No. 142 did not have an impact
on the Companys consolidated financial position, results of operations or cash
flows during the nine months ended September 30, 2002.

In October 2001, FASB issued SFAS No. 144, Accounting for Impairment of
Long-Lived Assets. SFAS No. 144 supersedes SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,
and addresses financial accounting and reporting for the impairment or disposal
of long-lived assets. This statement is effective for fiscal years beginning
after December 15, 2001. The Company adopted SFAS No. 144 on January 1, 2002.
The adoption of this statement did not have an impact on the Companys
consolidated financial position, results of operations or cash flows during the
nine months ended September 30, 2002.

In June 2002, FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities, which addresses accounting for restructuring and
similar costs. SFAS No. 146 supersedes previous accounting guidance,
principally Emerging Issues Task Force (EITF) Issue No. 94-3. The Company
expects to adopt the provisions of SFAS No. 146 for restructuring activities
initiated after December 31, 2002. SFAS No. 146 requires that the liability
for costs associated with an exit or disposal activity be recognized when the
liability is incurred. Under EITF Issue 94-3, a liability for an exit cost was
recognized at the date of the Companys commitment to an exit plan. SFAS No.
146 also establishes that the liability should initially be measured and
recorded at fair value. Accordingly, SFAS No. 146 may affect the timing of
recognizing future restructuring costs as well as the amounts recognized.




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

Except for the historical information contained herein, the matters discussed
in this Form 10-Q are forward-looking statements involving risks and
uncertainties that could cause actual results to differ materially from those
in such forward-looking statements. Potential risks and uncertainties include,
but are not limited to, general economic and political conditions, our
historical and future losses, limited operating history, the infancy of the
wireless data industry where there is no established market for our products
and services, our ability to adapt to rapid technological change and our
dependence on wireless networks, network infrastructure and positioning systems
owned and controlled by others. Further information regarding these and other
risks is included in this Form 10-Q, in our annual report on Form 10-K (No.
000-31511), dated March

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28, 2002 and in our other filings with the SEC. You
should read the following description of our financial condition and results of
operations in conjunction with our financial statements and notes thereto
included in this Form 10-Q, in our Form 10-K for the year ended December 31,
2001 and in our other filings with the SEC.

OVERVIEW

We integrate Global Positioning System technology, wireless communications and
the Internet to enable companies to efficiently manage their mobile resources
with location-relevant and time-sensitive information. Our service is
designed to be an
easy-to-use, cost-effective, Internet-based service for mobile resource
management that provides location, reporting, dispatch, messaging and other
management services. Our service allows customers to use our website to monitor
the activities of their employees, vehicles and goods and services, and
provides for two-way messaging between our customers and their mobile workers.
Our service also allows customers to conduct business operations such as event
confirmation, signature verification and forms processing while in the field.
We believe our service provides significant value to our customers by reducing
the costs and increasing the efficiency of their operations.

From July 1996 through June 1998, our operations consisted primarily of various
start-up activities relating to our current business, including development of
Global Positioning System technologies, recruiting personnel and raising
capital. We did not recognize any revenues prior to June 1998, and our expenses
consisted of research and development, sales and marketing and general and
administrative expenses. In 1998, we expanded our strategy and redirected our
focus to provide location-relevant and time-sensitive information services and
solutions to companies managing mobile resources. In the second half of 1998,
we introduced FleetASAP, a service that leverages existing infrastructure,
including the Global Positioning System, wireless networks and the Internet to
enable companies to efficiently manage their mobile resources. Our service
includes our platform, a proprietary hardware device embedded with software,
that integrates wireless Internet connectivity with a Global Positioning System
receiver. The platform is installed in any type of vehicle and receives signals
transmitted from Global Positioning System satellites to determine the
location, velocity and orientation of the vehicle. These data are transmitted
over wireless networks and the Internet to our Wireless Applications Processing
Center. Our customers can retrieve the information using an Internet browser or
wired or mobile telephone. Because the customer data and solution software
reside at our Wireless Applications Processing Center, our customers do not
need to make a substantial investment in acquiring and supporting capital
equipment, such as proprietary hardware, software and data networking
equipment, to use our service.

Since 1998, we have derived substantially all of our revenues from the sale of
our service and the associated product hardware. Our service revenue is
composed of monthly fees. Our customers can contract to receive our service for
terms of one, two or three years and can purchase enhanced service features for
additional fees. As more customers use our service, the impact on our service
revenue is compounded. Our product revenue consists of sales of the Internet
Location Manager, Internet Data Terminal and ruggedized personal digital
assistant.

We recognize revenue when earned in accordance with applicable accounting
standards including American Institute of Certified Public Accountants (AICPA)
Statement of Position (SOP) No. 97-2, Software Revenue Recognition,as
amended. Our service is only available through use of our platform.
Accordingly, service revenue is recognized ratably over the minimum service
contract period, which commences upon the installation of the platform. We
defer product revenue from our platform at installation and recognize it
ratably over the minimum service contract period. Product costs not in excess
of related product revenue are

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deferred at the time of shipment and amortized
ratably over the minimum service contract period. Where the selling prices of
our products are below our costs, we expense the difference at the time of
shipment of the related products. Allowances for sales returns are recorded at
the time product revenue is recognized.

To date, we have not sold our service outside the U.S. and Canada; however, we
intend to expand our service offerings to additional countries in the future.
We do not expect that revenues from international sales will be material in
2002.

We will incur substantial stock compensation expense in current and future
periods, which represents non-cash charges incurred as a result of the issuance
of stock options to employees and consultants. The charge related to options
granted to employees is recorded based on the difference between the deemed
fair value of the common stock and the option exercise price of such options at
the date of grant, which is amortized over the option-vesting period. The
charge related to options granted to consultants is calculated at the end of
each reporting period using the Black-Scholes model, which approximates fair
value and is amortized based on the term of the consulting agreement or service
period. The amount of the charge for options granted to consultants in each
period can fluctuate depending on our stock price and volatility. At September
30, 2002, deferred stock compensation expense was $747,000, which will be
amortized in future periods.

Since inception, we have invested substantially in research and development,
marketing, the building of sales channels and our overall infrastructure. We
anticipate that such investments may grow in the future. We have incurred
losses in each quarter since inception and expect to incur net losses in the
future. At September 30, 2002, we had an accumulated deficit of $115.9 million.
Our limited operating history makes it difficult to forecast future operating
results. Even if we were to achieve profitability in any period, we may not
sustain or increase profitability on a quarterly or annual basis.

In the third quarter of 2002, AT&T Wireless announced that it expects to cease
operating its Cellular Digital Packet Data network by June 30, 2004. We are
currently formulating our transition plans for subscribers that are on that
network at that time. Those plans may include migrating affected subscribers to
other providers of Cellular Digital Packet Data networks or to alternative
wireless networks such as Integrated Digital Enhanced Networks, General Packet
Radio Services or Code Division Multiple Access 1xRTT networks. We are
assessing the impact, if any, to our revenues or costs that could occur as a
result of the foregoing.

Critical Accounting Policies

Financial Reporting Release No. 60, which was recently released by the SEC,
requires all companies to include a discussion of critical accounting policies
or methods used in the preparation of financial statements. Included in Note 1
of the Notes to the Consolidated Financial Statements in our annual report on
Form 10-K (No. 000-31511), dated March 28, 2002, is a summary of the
significant accounting policies and methods we use. The following is a
discussion of the more significant of these policies and methods.

Revenue Recognition

In accordance with applicable accounting standards, including SOP No.
97-2, Software Revenue Recognition,as amended, we recognize revenue when
earned. Specifically, we recognize revenue when the price is fixed and
determinable, upon persuasive evidence of an agreement, when we have
fulfilled our obligations under any such agreement and upon a determination that collection is
probable.

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Our service is only available through the use of our platform. Accordingly,
service revenue, which is composed of monthly fees, is recognized ratably over
the minimum service contract period, which commences upon the installation of
the platform.

Our product revenue primarily consists of sales of the Internet Location
Manager, Internet Data Terminal and ruggedized personal digital assistant. We
defer product revenue at installation and recognize it ratably over the minimum
service contract, which is generally a two or three year period. Our service
renewal rates are not considered priced at a bargain in comparison to the
initial product selling prices (as described in Staff Accounting Bulletin No.
101, Revenue Recognition in Financial Statements).Changes to the pricing of
our products and services in the future could result in the recognition of
product revenue over periods that extend beyond the minimum service contract
period. Allowances for sales returns are recorded at the time product revenue
is recognized.

In 1999, 2000 and to a lesser degree in 2001 and the nine months ended
September 30, 2002, the selling prices of our products were often at or below
our costs. Product costs not in excess of related product revenue are deferred
at the time of shipment and amortized ratably over the minimum service contract
period. Where the selling prices of our products are below our costs, we
expense the difference at the time of shipment of the related products.

Allowances for Doubtful Accounts

Historically, we have had a significant number of small to medium sized
companies utilizing our products and services. These customers are involved in
diverse businesses. Our payment arrangements
with customers generally provide 30-day payment terms. At the time that
customers contract with us for our service, we assess their creditworthiness.

During economic downturns, certain of our customers may have difficulty with
their cash flows. The nature of our relationship with customers is inherently
long-term and we may extend payment terms on an exception basis. We regularly
review our customers ability to satisfy their payment obligations and provide
an allowance for doubtful accounts for all specific receivables that we believe
are not collectible. When these conditions arise, we suspend recognition of
revenue until collection becomes probable or cash is collected. Beyond these
specific customer accounts, we record an allowance based on the size and age of
all receivable balances against which we have not established a specific
allowance. These allowances are based on our experience in collecting such
accounts.

Although we believe that we can make reliable estimates for doubtful accounts,
the size and diversity of our customer base, as well as overall economic
conditions, may affect our ability to accurately estimate revenue and bad debt
expense. Actual results may differ from those estimates.

RESULTS OF OPERATIONS

Three Months and Nine Months Ended September 30, 2002 and 2001

Service Revenue

Service revenue, which is comprised of monthly fees, increased from $5.6
million for the three months ended September 30, 2001 to $8.7 million for the
same period in 2002, and increased from $13.8 million to $23.9

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million for the
nine months ended September 30, 2001 and 2002, respectively. This growth is
consistent with the increases in our installed base of subscribers.

Product Revenue

Product revenue rose from $2.0 million for the three months ended September 30,
2001 to $2.7 million for the same period in 2002. Product revenue rose from
$5.0 million to $7.6 million for the nine months ended September 30, 2001 and
2002, respectively. This growth is consistent with the increases in our
installed base of subscribers. Our customers generally subscribe for a two to
three year period. Upon renewal, the product revenue from their original
hardware purchase will have been fully recognized. As a result, product
revenue is expected to grow more slowly than service revenue.

Cost of Service Revenue

Cost of service revenue consists of employee salaries and expenses related to
the delivery and support of our services, costs and expenses associated with
connecting our services to wireless networks and the Internet, and depreciation
of our Wireless Applications Processing Center. Cost of service revenue
remained at $3.4 million for the three months ended September 30, 2001 and
2002. Cost of service revenue increased from $9.5 million to $10.0 million for
the nine months ended September 30, 2001 and 2002, respectively. The growth in
cost of service revenue resulted from increases in direct service delivery
expenses, offset by reductions in service infrastructure and personnel costs.

Cost of Product Revenue

Cost of product revenue consists of the cost of our hardware, including the
Internet Location Manager, Internet Data Terminal and ruggedized personal
digital assistant; costs associated with the final assembly, test,
provisioning, delivery, and installation of our products; and other costs such
as provisions for inventory and repair costs. In 1999, 2000 and to a lesser
degree in 2001 and the nine months ended September 30, 2002, the selling prices
of our products were often at or below our costs. Product costs not in excess
of related product revenue are deferred at the time of shipment and amortized
ratably over the minimum service contract period. Where the selling prices of
our products are below our costs, we expense the difference at the time of
shipment of the related products. Generally, we expect the selling prices of
our products to be approximately equal to or exceed the product costs in future
periods. The impact of selling products below costs on future cash flow from
operations is expected to be minimal as our service revenue stream grows.

Cost of product revenue rose from $3.9 million for the three months ended
September 30, 2001 to $4.3 million for the same period in 2002. Cost of
product revenue rose from $9.5 million to $12.0 million for the nine months
ended September 30, 2001 and 2002, respectively. The increase in cost of
product revenue was attributable primarily to the expansion of our business and
the resulting increase in the number of subscribers using our services.

Sales and Marketing Expenses

Sales and marketing expenses consist of employee salaries, sales commissions,
and marketing and promotional expenses. Sales and marketing expenses decreased
from $4.2 million for the three months ended September

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30, 2001 to $2.4 million
for the same period in 2002. Sales and marketing expenses decreased from $14.1
million for the nine months ended September 30, 2001 to $8.0 million for the
same period in 2002. Sales and marketing headcount decreased from 91 at
September 30, 2001 to 83 at September 30, 2002. Decreases in sales
commissions, employee-related expenses and marketing campaigns comprised the
majority of the decrease in expenses. As our sales channels expand, we expect
that sales and marketing expenses may grow from current levels.

Research and Development Expenses

Research and development expenses consist of employee salaries and costs
related to development personnel and consultants, as well as expenses
associated with software and hardware development. Research and development
expenses decreased from $1.6 million for the three months ended September 30,
2001 to $1.5 million for the same period in 2002. Research and development
expenses decreased from $6.0 million for the nine months ended September 30,
2001 to $4.5 million for the same period in 2002. Research and development
headcount decreased from 69 at September 30, 2001 to 61 at September 30, 2002.
Decreases in employee-related and consultant expenses accounted for the
majority of the decrease in expenses.

General and Administrative Expenses

General and administrative expenses consist of employee salaries, related
executive and administrative accounting and professional fees, recruiting and
provisions for doubtful accounts. General and administrative expenses
decreased from $2.7 million for the three months ended September 30, 2001 to
$1.9 million for the same period in 2002. The decrease was due to a reduction
in the provisions for allowances for doubtful accounts and reductions
in employee-related expenses. General and
administrative expenses decreased from $9.7 million for the nine months ended
September 30, 2001 to $6.6 million for the same period in 2002. The decreases
were due to the reduction in the provisions for allowances for doubtful
accounts and employee-related and consulting expenses. The provisions for doubtful
accounts decreased from $447,000 and $1.4 million for the three and nine months
ended September 30, 2001 to $(137,000) and $302,000 for the same periods in
2002, respectively, due to improved collection activity and receivables
management. General and administrative headcount decreased from 50 at
September 30, 2001 to 48 at September 30, 2002. We expect that general and
administrative expenses may increase as we incur such expenses in anticipation
of the growth of the business and because of the non-recurring nature of the
favorable adjustments to allowances for doubtful accounts in the
three months ended September 30, 2002.

Restructuring Charges

During the second quarter of 2001 and in response to a general downturn in the
economy, we undertook a formal plan to lower our cost structure and reorganized
to more effectively develop, market and sell mobile resource management
products and services. This effort resulted in the total number of employees
being reduced by approximately 11 percent. Restructuring expenses, comprised
of severance and related costs, were $248,000. The total restructuring expense
paid in 2001 was $218,000. The remaining $30,000 of costs were not incurred
and were reversed during the three months ended September 30, 2001.

Amortization of Intangibles

Intangibles amortization relates to the intangible assets (purchased
technology) that are being amortized over an estimated useful life of two to
three years.

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In June 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets. SFAS No. 142 addresses the initial recognition and measurement of
intangible assets acquired outside of a business combination and the accounting
for goodwill and other intangible assets subsequent to their acquisition. SFAS
No. 142 provides that intangible assets with finite useful lives be amortized
and that goodwill and intangible assets with indefinite lives will not be
amortized, but will be tested at least annually for impairment. We adopted
SFAS No. 142 on January 1, 2002. The adoption of SFAS No. 142 did not have an
impact on our consolidated financial position, results of operations or cash
flows during the nine months ended September 30, 2002.

Stock Compensation Expense

Deferred stock compensation expense related to stock option grants to employees
and consultants was $747,000 at September 30, 2002. Stock compensation expense
is amortized on an accelerated basis over the vesting period of individual
awards. Amortization of deferred stock compensation expense decreased from
$880,000 for the three months ended September 30, 2001 to $378,000 for the same
period in 2002. Amortization of deferred stock compensation expense decreased
from $2.5 million to approximately $817,000 for the nine months ended September
30, 2001 and 2002, respectively. The decrease was the result of lower
amortization in later periods under the accelerated amortization method.

Investment Impairment Charge

At December 31, 2001, we held approximately 148,000 shares of preferred stock
in Cellport Systems, Inc., with a book value of $1,035,000 and which
represented approximately seven percent ownership in Cellport Systems, Inc. We account
for this investment using the cost method. During the quarter ended June 30,
2002, we determined that the investment had experienced a decline in value that
was other than temporary. Accordingly, we expensed $1,035,000 in the quarter
ended June 30, 2002.

Interest Income, net

Net interest income is comprised of interest earned on cash, cash equivalents
and short-term investments. Net interest income decreased from $529,000 for
the three months ended September 30, 2001 to $202,000 for same period in 2002.
Net interest income decreased from $2.4 million for the nine months ended
September 30, 2001 to $657,000 for the same period in 2002. These decreases
resulted from declines in cash, cash equivalents and investments in debt
securities of the capital raised in our initial public offering and lower
yields.

Income Taxes

Since inception, we have incurred net losses for federal and state tax
purposes. Except for minimum state income and franchise taxes, we have not
recognized any tax provision or benefit.

Net Loss

Net loss decreased from $9.0 million for the three months ended September 30,
2001 to $2.8 million for the same period in 2002. Net loss decreased from
$31.5 million for the nine months ended September 30, 2001 to $12.2 million for
the same period in 2002. Our operating costs decreased from $17.0 million to
$14.3 million for the three months ended September 30, 2001 and 2002,
respectively, and decreased from $52.7 million to $43.2 million for the nine
months ended September 30, 2001 and 2002, respectively. The reduction in

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expenses was accompanied by an increase in revenues from $7.5 million to $11.3
million for the three months ended September 30, 2001 and 2002, respectively,
and an increase in revenues from $18.8 million to $31.5 million for the nine
months ended September 30, 2001 and 2002, respectively.

We believe period-to-period comparisons of our operating results are not
necessarily meaningful. You should not rely on them to predict our future
performance. The amount and timing of our operating expenses may fluctuate
significantly in the future as a result of a variety of factors.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2002, we held $35.2 million in unrestricted cash and cash
equivalents and $2.2 million in restricted short-term investments. We held no
unrestricted available-for-sale securities at September 30, 2002.

We currently have a $2.0 million revolving line of credit facility. The line,
against which letters of credit may be issued, is collateralized by a
restricted certificate of deposit of $2.2 million. At September 30, 2002, we
had a standby letter of credit outstanding for a total of $100,000. The line
of credit expires on December 31, 2002.

Net cash used in operating activities was $6.1 million and $28.7 million for
the nine months ended September 30, 2002 and 2001, respectively. Cash used in
operating activities during the nine months ended September 30, 2002, was
attributed primarily to net losses, an increase in accounts receivable and
deferred product costs, offset in part by depreciation and amortization, an
investment impairment charge, amortization of stock compensation, an increase
in deferred revenue and a decrease in inventory. Cash used in operating
activities during the nine months ended September 30, 2001 was attributed
primarily to net losses, increases in accounts receivable, inventories and
prepaid expenses and other, offset in part by depreciation and amortization,
increases in accounts payable, deferred revenue, amortization of stock
compensation and provisions for doubtful accounts.

Net cash used in investing activities during the nine months ended September
30, 2002, was $580,000 and primarily resulted from purchases of property and
equipment and other assets. Cash provided by investing activities during the
nine months ended September 30, 2001, was $4.3 million and was due to the sale
of short-term investments, offset by the purchase of property and equipment and
an increase in other assets.

Net cash provided by financing activities was $1.7 million and $770,000 for the
nine months ended September 30, 2002 and 2001, respectively. In both periods,
cash provided was attributed to the sale of common stock and proceeds from
payments on notes receivable issued to stockholders.

At September 30, 2002 approximately $1.9 million of our gross accounts
receivable were over 90 days old. We believe we have adequately provided
allowances as of September 30, 2002 for any such amounts that may ultimately
become uncollectible. We defer product costs at the time of shipment and expense
any amounts in excess of the related product revenue at that time. Generally,
we record accounts receivable from our customers and defer related product
revenue upon installation. Both deferred product cost and revenue are
recognized ratably over the minimum service contract period. As we grow our
business, deferred product costs will generally exceed deferred revenue due to
our practice of recording deferred product costs at time of
shipment versus deferred revenue at time of installation.

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We believe that our cash, cash equivalents and restricted short-term
investments will be sufficient to meet our anticipated cash needs for operating
expenses, working capital and capital expenditures for at least the next 12
months. If cash generated from operations is insufficient to satisfy our
liquidity requirements, we may seek to obtain a larger credit facility or to
sell additional equity or debt securities, which may not be available on
commercially reasonable terms or at all, and which could dilute existing
stockholders.

RISK FACTORS

In addition to the other information contained in
this Form 10-Q, the following
factors should be carefully considered in evaluating our business and
prospects. The risks and uncertainties described below are intended to be ones
that are specific to us or our industry and that we deem material, but they are
not the only ones that we face.

Due to our limited operating history it is difficult to predict future
operating results or our stock price.

An evaluation of our business is difficult because we have a limited operating
history. We commenced operations in July 1996 and commercially offered our
first services in the second half of 1998. We may not achieve profitability or
continue to grow. We face a number of risks encountered by companies in the
Global Positioning System, wireless communications and Internet information
industries, including:



| |  |  | our need to introduce reliable and robust products and services that
meet the demanding needs of customers;   
| | - |  | --------------------------------------------------------------------------------------------------------------
|
| |  |  | our need to expand our marketing, sales and support organizations, as
well as our distribution channels;      
|
| |  |  | our ability to anticipate and respond to market competition and technological change;                         
|
| |  |  | the uncertainty of market acceptance of our services;                                                         
|
| |  |  | our need to manage expanding operations;                                                                      
|
| |  |  | our dependence on wireless carriers;                                                                          
|
| |  |  | limited coverage of wireless networks; and                                                                    
|
| |  |  | migration to new networks, which could cause our products to be
incompatible with new networks or out of date.

Our business strategy may not be successful, and we may not successfully
address these risks.

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If we do not increase revenue from the sale of our services to new and existing
customers, our business may not be successful.

Our success depends on our ability to increase revenue from the sale of our
services to new and existing customers and on market acceptance of our
services. We may not be able to achieve widespread adoption of our services.
Furthermore, changes such as increases in our pricing for products and services
may harm our ability to increase sales of our products and services to new and
existing customers. If we are not able to expand our customer base and increase
our revenue from new and existing customers, our business will be seriously
harmed.

If, pursuant to its announcement,
AT&T Wireless ceases to operate its Cellular
Digital Packet Data network in 2004, or our other wireless carriers decide to
abandon Cellular Digital Packet Data or Integrated Digital Enhanced Network
technologies or do not continue to expand their Cellular Digital Packet Data or
Integrated Digital Enhanced Network systems, we may be unable to deliver our
services and our revenues would decrease.

Our services function only on Cellular Digital Packet Data networks or
Integrated Digital Enhanced Networks. These protocols cover only portions of
the U.S. and Canada, and may not gain widespread market acceptance. If wireless
carriers abandon these protocols in favor of other types of wireless
technology, we may not be able to provide our current services to our
customers. AT&T Wireless has announced that it expects to discontinue new sales
of Cellular Digital Packet Data service on March 31, 2003, and that it expects
to cease operating its Cellular Digital Packet Data network by June 30, 2004.
In addition, if wireless carriers do not expand their coverage areas, we will
be unable to meet the needs of customers who wish to use our services outside
the current coverage area.

If one or more of the agreements we have with wireless carriers is terminated,
we may be unable to offer our services to our customers within the carriers
coverage area.

Wireless carriers offering services compatible with our service have little
overlap in their primary service coverage areas. Our existing agreements with
wireless carriers may be terminated upon as little as fifteen-days written
notice or immediately upon the occurrence of certain conditions. In
connection with ceasing operations of its Cellular Digital Packet
Data service, AT&T Wireless may seek to terminate or not to
renew its contract with us. If one or more
of our wireless carriers decides to terminate or not to renew its contract with
us, we may incur additional costs relating to obtaining alternate coverage from
another wireless carrier outside of its primary coverage area, or we may be
unable to replace the coverage at all, causing a complete loss of service to
our customers in that coverage area.

We depend on a limited number of third parties to manufacture and supply
critical components for our services.

If these parties do not perform their obligations, or if they cease to
manufacture and supply components critical for our services, we may be unable
to find other suppliers or operate our business. A subscriber requires an
Internet Location Manager to use our service. To use our service with two-way
messaging, a subscriber requires an Internet Location Manager and either an
Internet Data Terminal or a ruggedized personal digital assistant. The Internet
Location Manager, which we install in each subscribers vehicle, determines the
workers location, velocity and orientation, and gathers other information
about the worker. The Internet Data Terminal, when installed in a subscribers
vehicle, adds the incremental ability to send and receive messages to and from
the worker. We cannot be sure that alternative sources for key components used
in the Internet Location Manager and the Internet Data Terminal will be
available when needed, or if

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available, that these components will be available
on commercially reasonable terms. We rely on sole suppliers and manufacturers
for a number of key components for these products and do not have long-term
agreements with any of these suppliers or manufacturers. Our sole suppliers and
manufacturers of key components include:



| |  |  | Taiwan Semiconductor Manufacturing Company, our sole manufacturer of
Global Positioning System receiver chips;
| | - |  | --------------------------------------------------------------------------------------------------------------
|
| |  |  | Orient Semiconductor Electronics, our sole manufacturer of Internet Location Managers;                        
|
| |  |  | Micronet, our sole supplier of Internet Data Terminals; and                                                   
|
| |  |  | Symbol Technologies, our sole supplier of ruggedized personal digital assistants.                             

Additionally, our sole manufacturer of radio frequency chips, Skyworks
Solutions (formerly Conexant Systems), has discontinued manufacturing our radio
frequency chips. We believe that we will have sufficient quantities of radio
frequency chips to meet our needs through the first half of 2003. We are in
the process of qualifying alternative sources for this component. We cannot be
sure, however, that alternative sources of radio frequency chips will be
available when needed, or if available, that the component will be available on
commercially reasonable terms. If we are unable to obtain alternative sources for this component, we
may be unable to sell our products and our business would be
seriously harmed.

If our agreements with these or other suppliers and manufacturers are
terminated or expire, if we are unable to obtain sufficient quantities of these
components, if the quality of these components is inadequate, or if the terms
for supply of these products become commercially unreasonable, our search for
additional or alternate suppliers and manufacturers could result in significant
delays, added expense and our inability to maintain or expand our subscriber
base. Any of these events could require us to take unforeseen actions or devote
additional resources to provide our services and could harm our ability to
compete effectively.

Our business will be harmed if the demand for services based on wireless
communications does not grow.

The markets for wireless data services and related products and services are
still emerging, and continued growth in demand for, and acceptance of, these
services remains uncertain. Current barriers to market acceptance of these
services include quality, functionality and ease of use. We cannot be certain
that these barriers will be overcome. Since the market for our services is new
and evolving, it is difficult to predict the size of this market or its growth
rate. Our financial performance will depend in large part upon the continued
demand for mobile resource management services through wireless technologies.
We cannot assure you that a sufficient volume of customers will demand these or
other services based on these technologies. If the market for wireless on-line
mobile resource management and other services grows more slowly than we
currently anticipate, our revenues may not grow.

If we cannot deliver the features and functionality our customers demand, we
will be unable to retain or attract new customers.

Our success depends upon our ability to determine the features and
functionality our customers demand and to design and implement services that
meet their needs in an efficient manner. We cannot assure you that we can

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successfully determine customer requirements or that our future services will
adequately satisfy customer demands. To date, the design of our services has
been based on our internal efforts and feedback from our existing and potential
customers. In addition, we may experience difficulties that could delay or
prevent the successful development, introduction or marketing of new services
and service enhancements. If we cannot effectively deploy, maintain and enhance
our services, our expenses may increase, we may not be able to recover our
costs and our competitive position may be harmed.

We have historically incurred losses and these losses may increase in the
future.

We have never been profitable. At September 30, 2002, we had an accumulated
deficit of $115.9 million. In order to become profitable and sustain
profitability, we will need to generate significant revenues to offset our cost
of revenues, sales and marketing, research and development and general and
administrative expenses. We may not achieve or sustain our revenue or profit
goals and our losses may increase in the future. In order to facilitate the
sale of our services, we have sold and may sell our hardware below our costs.
As a result, we have experienced, and expect to continue to experience,
negative gross margins on the sale of our hardware.

We depend on wireless networks owned and controlled by others. If our customers
do not have continued access to sufficient capacity on reliable networks, we
may be unable to deliver services and our revenues could decrease.

Our ability to grow and achieve profitability depends on the ability of
wireless carriers to provide sufficient network capacity, reliability and
security to our customers. Even where wireless carriers provide coverage to
entire metropolitan areas, there are occasional lapses in coverage, for example
due to tall buildings blocking the transmission of data to and from vehicles.
These effects could make our services less reliable and less useful, and
customer satisfaction could suffer. Our financial condition could be seriously
harmed if our wireless carriers were to increase the prices of their services,
or to suffer operational or technical failures. If wireless carriers do not
expand their coverage, we may be unable to offer our service to additional areas.

Our quarterly operating results are subject to fluctuations, and our stock
price may decline if we do not meet the expectations of investors and analysts.

Our quarterly revenues and operating results are difficult to predict and may
fluctuate significantly from quarter to quarter due to a number of factors,
many of which are outside our control. These factors include, but are not
limited to:



| |  |  | delays in market acceptance or implementation by customers of our
services;                          
| | - |  | -----------------------------------------------------------------------------------------------------
|
| |  |  | changes in length of sales cycles of or demand by our customers for
existing and additional services;
|
| |  |  | changes in or cancellations of our agreements with wireless carriers;                                
|
| |  |  | introduction of new services by us or our competitors;                                               

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| |  |  | changes in our pricing policies or those of our competitors or suppliers;                                                                
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | changes in our mix of sources of revenues;                                                                                               
|
| |  |  | changes in the productivity of our distribution channels;                                                                                
|
| |  |  | changes in accounting standards, including standards relating to
revenue recognition, business combinations and stock-based compensation;
|
| |  |  | wireless data and Internet market conditions; and                                                                                        
|
| |  |  | general economic and political conditions.                                                                                               

Our expense levels are based, in part, on our expectation of future revenues.
Additionally, a substantial portion of our expenses are relatively fixed. As a
result, any shortfall in revenues relative to our expectations could cause
significant changes in our operating results from quarter to quarter. We
believe period-to-period comparisons of our revenue levels and operating
results are not meaningful. You should not rely on our quarterly revenues and
operating results to predict our future performance. In some future quarter our
operating results may be below the expectations of public market analysts and
investors and, as a result, the price of our common stock may fall.

Our success depends on our ability to maintain and expand our sales channels.

In order to increase our market awareness, customer base and revenues, we need
to expand our direct and indirect sales operations. There is strong competition
for qualified sales personnel in our business, and we may not be able to
attract and retain sufficient new sales personnel to expand our operations. New
sales personnel will require training and will take time to achieve full
productivity, if at all. In addition, we believe that our success is dependent
on expansion of our indirect distribution channels, including our relationships
with wireless carriers, independent sales agents and distribution partners. To
date, we have relationships with a limited number of these wireless carriers,
independent sales agents and distribution partners. These sales channel
partners require training in selling our products and services and it will take
time for these partners to achieve productivity, if at all. We may not be able
to establish relationships with additional distributors on a timely basis, or
at all. Our distributors, many of which are not engaged with us on an exclusive
basis, may not devote adequate resources to promoting and selling our services.

Our stock price is volatile, which may cause you to lose money and result in
costly litigation that could divert our resources.

Stock markets have recently experienced dramatic price and volume fluctuations,
particularly for shares of technology companies. These fluctuations can be
unrelated to the operating performance of these companies. Broad market
fluctuations may reduce the market price of our common stock and cause you to
lose some or all of your investment. These fluctuations may be exaggerated if
the trading volume of our common stock is low. In addition, due to the
technology-intensive and emerging nature of our business, the market price of
our common stock may rise and fall in response to:

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| |  |  | announcements of technological or competitive developments;                                            
| | - |  | -------------------------------------------------------------------------------------------------------
|
| |  |  | acquisitions or strategic alliances by us or our competitors;                                          
|
| |  |  | the gain or loss of a significant customer or order;                                                   
|
| |  |  | changes in estimates of our financial performance or changes in
recommendations by securities analysts;
|
| |  |  | security breaches; and                                                                                 
|
| |  |  | disposition of shares of our common stock held by large investors.                                     

When the market price of a companys stock drops significantly, stockholders
often institute securities class action lawsuits against that company. A
lawsuit against us could cause us to incur substantial costs and could divert
the time and attention of our management and other resources from our business.

We have limited resources and may be unable to manage our anticipated growth in
operations.

If we fail to develop and maintain our services as we experience rapid growth,
demand for our services could decrease, which would result in a decrease in our
revenues. Our development and expansion have placed, and will continue to
place, significant strain on our managerial, operational, and financial
resources. Due to the limited deployment of our services, we are unable to
assess our ability to grow the business and manage a substantially larger
number of customers and additional services.

We face competition from existing and potential competitors, which could reduce
our market share and revenues.

The market for our services is competitive and is expected to become even more
competitive in the future. Our customers evaluate our services and
those of our competitors primarily on the
basis of the functionality, ease of use, quality, geographic coverage and corporate financial strength. If we are unable to compete
successfully in these areas, competitive pressures may harm our business,
resulting in a loss of market share and revenues. Our current and potential
competitors include:



| |  |  | other providers of vehicle-location services, such as QUALCOMM, whose
OmniTRACS service uses satellite communication technology to manage
fleets of trucks that travel long distances;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | other wireless Internet companies, such as Openwave, Research in
Motion and Aether Systems;                                                                                           
|
| |  |  | companies with solutions that integrate location, wireless
communications and call centers, such as General Motors; and                                                               
|
| |  |  | companies that provide wireless, location-relevant applications, or
that are working on emergency-911 solutions, such as SignalSoft (a
subsidiary of Openwave).                       

Many of our existing and potential competitors have substantially greater
financial, technical, marketing and distribution resources than we do.
Additionally, many of these companies have greater name recognition and

23



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more established relationships with our target customers. Furthermore, these
competitors may be able to adopt more aggressive pricing policies and offer
customers more attractive terms than we can.

Our services also compete with alternative means of communication between
mobile workers and their managers, including wireless telephones, two-way
radios and pagers. In addition, we expect that new competitors will enter the
market for location-relevant wireless information as businesses and consumers
increasingly demand information when they are mobile. Furthermore, the
widespread adoption of industry standards may make it easier for new market
entrants or existing competitors to offer the services we offer or may offer in
the future.

Our success and ability to compete depends upon our ability to secure and
protect patents, trademarks and other proprietary rights.

Our success depends on our ability to protect our proprietary rights to the
technologies used to implement and operate our services in the U.S. and in
foreign countries. In the event that a third party breaches the confidentiality
provisions or other obligations in one or more of our agreements or
misappropriates or infringes on our intellectual property or the intellectual
property licensed to us by third parties, our business would be seriously
harmed. To protect our proprietary rights, we rely on a combination of trade
secrets, confidentiality and other contractual provisions and agreements, and
patent, copyright and trademark laws, which afford us only limited protection.
Third parties may independently discover or invent competing technologies or
reverse engineer our trade secrets, software or other technology. Furthermore,
laws in some foreign countries may not protect our proprietary rights to the
same extent as the laws of the U.S. Therefore, the measures we take to protect
our proprietary rights may not be adequate.

A disruption of our services due to accidental or intentional security breaches
may harm our reputation, cause a loss of revenues and increase our expenses.

Unauthorized access, computer viruses and other accidental or intentional
actions could disrupt our information systems or communications networks. We
expect to incur significant costs to protect against the threat of security
breaches and to alleviate problems caused by any breaches. Currently, the
transmission of our customers proprietary information is not protected by
encryption technology. If a third party were to misappropriate our customers
proprietary information, we could be subject to claims, litigation or other
potential liabilities that could seriously harm our revenues and result in the
loss of customers.

System or network failures could reduce our sales, increase costs or result in
liability claims and seriously harm our business.

Any disruption to our services, information systems or communications networks
or those of third parties could result in the inability of our customers to
receive our services for an indeterminate period of time. Our services may not
function properly if our systems fail, or if there is an interruption in the
supply of power, or if there is an earthquake, fire, flood or other natural
disaster, or an act of war or terrorism. Any disruption to our services could
cause us to lose customers or revenue, or face litigation, customer service or
repair work that would involve substantial costs and distract management from
operating our business. We currently do not have fully redundant systems for
uninterrupted services at an alternate site. Our operations depend upon our
ability to maintain and protect our computer systems in our principal
facilities in Fremont, California, which are on or near earthquake fault zones,
and Philadelphia, Pennsylvania.

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We depend on Global Positioning System technology owned and controlled by
others. If we do not have continued access to global positioning system
technology and satellites, we will be unable to deliver our services and
revenues will decrease.

Our services rely on signals from Global Positioning System satellites built
and maintained by the U.S. Department of Defense. Global Positioning System
satellites and their ground support systems are
subject to electronic and mechanical failures and sabotage. If one or more
satellites malfunction, there could be a substantial delay before they are
repaired or replaced, if at all, and our services may cease and customer
satisfaction would suffer.

In addition, the U.S. government could decide not to continue to operate and
maintain Global Positioning System satellites over a long period of time or to
charge for the use of the Global Positioning System. Furthermore, because of
ever-increasing commercial applications of the Global Positioning System, other
U.S. government agencies may become involved in the administration or the
regulation of the use of Global Positioning System signals in the future. If
factors such as the foregoing affect the Global Positioning System, for example
by affecting the availability and pricing of Global Positioning System
technology, our business will suffer.

Our Global Positioning System technology depends on the use of radio frequency
spectrum controlled by others.

Global Positioning System technology is dependent on the use of radio frequency
spectrum. An international organization known as the International
Telecommunications Union controls the assignment of spectrum. If the
International Telecommunications Union reallocates radio frequency spectrum,
our services may become less useful or less reliable. This would, in turn, harm
our business. In addition, emissions from mobile satellites and other equipment
using other frequency bands may adversely affect the utility and reliability of
our services.

Defects or errors in our services could result in the cancellation or delays of
our services, which would damage our reputation and harm our financial
condition.

We must develop our services quickly to keep pace with the rapidly changing
Global Positioning System, wireless communications and Internet markets.
Products and services that address these markets are likely to contain
undetected errors or defects, especially when first introduced or when new
versions are introduced. Our services may not be free from errors or defects,
which could result in the cancellation or disruption of our services or
dissatisfaction of customers. This would damage our reputation and result in
lost revenues, diverted development resources, and increased service and
warranty costs.

The reporting of inaccurate location-relevant information could cause the loss
of customers and expose us to legal liability.

The accurate reporting of location-relevant information is critical to our
customers businesses. If we fail to accurately report location-relevant
information, we could lose customers, our reputation and ability to attract new
customers could be harmed, and we could be exposed to legal liability. We may
not have insurance adequate to cover losses we may incur as a result of these
inaccuracies.

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Claims that we infringe third-party proprietary rights could result in
significant expenses or restrictions on our ability to provide our services.

Third parties may claim that our current or future products or services
infringe their proprietary rights or assert other claims against us. As the
number of entrants into our market increases, the possibility of an
intellectual property or other claim against us grows. Any intellectual
property or other claim, with or without merit, would be time-consuming and
expensive to litigate or settle and could divert management attention from
focusing on our core business. As a result of such a dispute, we may have to
pay damages, incur substantial legal fees, develop costly non-infringing
technology, if possible, or enter into license agreements, which may not be
available on terms acceptable to us, if at all. This would increase our
expenses and could decrease the functionality of our service, which would make
our services less attractive to our current or potential customers. We have
agreed in some of our agreements, and may agree in the future, to indemnify
other parties for any expenses or liabilities resulting from claimed
infringements of the proprietary rights of third parties.

We may be subject to product liability claims that could result in significant
costs to us.

We may be subject to claims for damages related to errors and malfunctions of
our hardware components or their installation. A product liability claim could
seriously harm our business because of the costs of defending against this type
of lawsuit, diversion of employees time and attention, and potential damage to
our reputation. Some of our agreements with our customers contain provisions
designed to limit exposure to potential product liability claims. Limitation of
liability provisions contained in our agreements may not be enforceable under
the laws of some jurisdictions. As a result, we could be required to pay
substantial amounts of damages in settlement or upon the determination of any
of these types of claims.

We may establish alliances or acquire technologies or companies in the future,
which could result in the dilution of our stockholders and disruption of our
business.

We are continually evaluating business alliances and external investments in
technologies related to our business. Acquisitions of companies, divisions of
companies, businesses or products and strategic alliances entail numerous
risks, any of which could materially harm our business in several ways,
including:



| |  |  | diversion of managements attention from our core business objective
and other business concerns;
| | - |  | -------------------------------------------------------------------------------------------------
|
| |  |  | failure to integrate the acquired company into our pre-existing business;                        
|
| |  |  | potential loss of key employees from either our pre-existing business or the acquired business;  
|
| |  |  | dilution of our existing stockholders as a result of issuing equity securities; and              
|
| |  |  | assumption of liabilities of the acquired company.                                               

Some or all of these problems may result from current or future alliances,
acquisitions or investments. Furthermore, we may not realize any value from
these alliances, acquisitions or investments.

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If the use of the Internet by businesses does not continue to grow, our
business will be harmed.

Our future success is dependent on continued growth in the use of the Internet
by businesses. The use and acceptance of the Internet by businesses may not
increase for a number of reasons, including the cost and availability of
Internet access and concerns about privacy, security and reliability.

Capacity constraints caused by growth in the use of the Internet may impede
further development of the Internet to the extent that users experience delays,
transmission errors and other difficulties. If the necessary infrastructure,
products, services or facilities are not developed, or if the Internet does not
become a viable and widespread commercial medium, we may not be able to grow
our business.

Government regulations and standards may harm our business and could increase
our costs or reduce our opportunities to earn revenues.

In addition to regulations applicable to businesses in general, we may also be
subject to direct regulation by governmental agencies, including the Federal
Communications Commission and Department of Defense. These regulations may
impose licensing requirements or safety standards, for example with respect to
human exposure to electromagnetic radiation and signal leakage. A number of
legislative and regulatory proposals under consideration by federal, state,
provincial, local and foreign governmental organizations may lead to laws or
regulations concerning various aspects of the Internet, wireless communications
and Global Positioning System technology, including on-line content, user
privacy, taxation, access charges and liability for third-party activities.
Additionally, it is uncertain how existing laws governing issues such as
taxation on the use of wireless networks, intellectual property, libel, user
privacy and property ownership, will be applied to our services. The adoption
of new laws or the application of existing laws may expose us to significant
liabilities and additional operational requirements, which could decrease the
demand for our services and increase our cost of doing business. Wireless
carriers who supply us with airtime are subject to regulation by the Federal
Communications Commission, and regulations that affect them could also increase
our costs or limit the provision of our services.

We depend on recruiting and retaining qualified personnel and our inability to
do so would seriously harm our business.

Because of the technical nature of our services and the market in which we
compete, our success depends on the continued services of our current executive
officers and our ability to attract and retain qualified personnel with Global
Positioning System, wireless communications and Internet software
expertise. Competitors and others have in the
past, and may in the future, attempt to recruit our employees. In addition, new
employees generally require substantial training, which requires significant
resources and management attention. Even if we invest significant resources to
recruit, train and retain qualified personnel, we may not be successful in our
efforts.

We may need and may not be able to obtain additional capital, which could
prevent us from carrying out our business strategy.

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We anticipate that our available cash resources will be sufficient to fund our
operating needs for at least the next 12 months, including the expansion of
sales and marketing and research and development programs during that period.
Thereafter, we may require additional financing in an amount that we cannot
determine at this time. If our plans or assumptions change or are inaccurate,
we may be required to seek capital sooner than anticipated. We may need to
raise funds through public or private debt or equity financings. If we need to
raise additional funds, we may not be able to do so on commercially reasonable
terms, or at all, and may not be able to continue to fund our operations.

Fluctuations in the value of foreign currencies could result in increased
product costs and operating expenses.

We have suppliers and manufacturers that are located outside the U.S. Some
transactions relating to supply and development agreements may be conducted in
currencies other than the U.S. dollar, and fluctuations in the value of foreign
currencies relative to the U.S. dollar could cause us to incur currency
exchange costs. In addition, some of our transactions denominated in U.S.
dollars may be subject to currency exchange rate risk. We cannot predict the
effect of exchange rate fluctuations on our future operating results. Should
there be a sustained increase in average exchange rates for the local
currencies in these countries, our suppliers and manufacturers may request a
price increase at the end of the contract period.

Our platform contains encryption technology whose export is restricted by law,
which may slow our growth or result in significant costs.

The U.S. government generally limits the export of encryption technology, which
our services incorporate. Foreign countries may impose similar regulatory
requirements. If any export approval that we receive is revoked or modified, if
our technology is unlawfully exported or if the U.S. government adopts new
legislation or regulations restricting export of our services and encryption
technology, we may not be able to distribute our services to potential
customers outside the U.S., which may seriously harm our business. We may need
to incur significant costs and divert resources to develop replacement
technologies or may need to adopt inferior substitute technologies to satisfy
these export restrictions. These replacement or substitute technologies may not
be the preferred security technologies of our customers, in which case our
business may not grow. In addition, we may suffer similar consequences if the
laws of any other country limit the ability of third parties to sell encryption
technologies to us.

Our certificate of incorporation and bylaws and state law contain provisions
that could discourage a takeover.

We have adopted a certificate of incorporation and bylaws, which in addition to
state law, may discourage, delay or prevent a merger or acquisition that a
stockholder may consider favorable. These provisions include the following:



| |  |  | establishing a classified board in which only a portion of the total
board members will be elected at each annual meeting;
| | - |  | --------------------------------------------------------------------------------------------------------------------------
|
| |  |  | authorizing the board to issue preferred stock;                                                                           

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| |  |  | prohibiting cumulative voting in the election of directors;                                                                                                                           
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | limiting the persons who may call special meetings of stockholders;                                                                                                                   
|
| |  |  | prohibiting stockholder action by written consent; and                                                                                                                                
|
| |  |  | establishing advance notice requirements for nominations for election
to the board of directors or for proposing matters that can be acted on
by stockholders at stockholder meetings.

We have adopted a certificate of incorporation that permits our board to issue
shares of preferred stock without stockholder approval, which means that our
board could issue shares with special voting rights or other provisions that
could deter a takeover. In addition to delaying or preventing an acquisition,
the issuance of a substantial number of shares of preferred stock could
adversely affect the price of our common stock and dilute existing
stockholders.

A limited number of stockholders
collectively continue to own a majority of our
stock and may act, or prevent certain types of corporate actions, to the
detriment of other stockholders.

Our directors, officers and greater than 5 percent stockholders own a majority
of our outstanding common stock. Accordingly, these stockholders may, if they
act together, exercise significant influence over all matters requiring
stockholder approval, including the election of a majority of the directors and
the determination of significant corporate actions. This concentration could
also have the effect of delaying or preventing a change in control that could
otherwise be beneficial to our stockholders.




Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Short-Term Investments

At September 30, 2002, we did not hold any unrestricted available-for-sale
securities.

Foreign Currency Exchange

We transact business primarily in U.S. dollars. We are subject, however, to
adverse movements in foreign currency exchange rates in those countries where
we conduct business. To date, the effect of fluctuations in foreign currency
exchange rates on expenses has not been material. Operating expenses incurred
by our subsidiary in India are denominated in Indian rupees. This subsidiary
was formed in November 1999 to perform research and development activities. We
hold fixed-price agreements denominated in U.S. dollars with key foreign-based
suppliers: Orient Semiconductor Electronics, in Taiwan, manufactures the
Internet Location Manager; Novatel, in Canada, provides the modem for the
Internet Location Manager; Taiwan Semiconductor Manufacturing Company, in
Taiwan, manufactures our Global Positioning System receiver chips; and
Micronet, in Israel, supplies our Internet Data Terminal. Should there be a
sustained increase in average exchange rates for the local currency in any of
the foregoing countries, our suppliers may request increased pricing on any new
agreements. If this were to occur for all of these currencies and with each of
these suppliers, a 10 percent increase in average exchange rates could increase
our product costs by approximately 7 percent.

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We do not use derivative financial instruments for speculative trading
purposes, nor do we currently hedge any foreign currency exposure to offset the
effects of changes in foreign exchange rates. Similarly, we do not use
financial instruments to hedge operating expenses of our subsidiary in India.




Item 4. Controls and Procedures.

Within 90 days prior to the date of this Report, the Company carried out an
evaluation, under the supervision and with the participation of the Companys
management, including the Companys principal executive officer and principal
financial officer, of the effectiveness of the Companys disclosure controls
and procedures as defined in Rules 13a-14(c) and 15d-14(c) of the
Securities Exchange Act of 1934. Based upon that evaluation, the principal executive officer and
principal financial officer have concluded that the Companys disclosure
controls and procedures are effective to ensure that information
required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in SEC rules and forms. It
should be noted that the design of any system of controls is based in
part upon certain assumptions about the likelihood of future events,
and the design of our disclosure controls and procedures may not
achieve our stated goals under all potential future conditions,
regardless of how remote.

There were no significant changes in the Companys internal controls or in
other factors that could significantly affect these internal controls
subsequent to the date of their evaluation.




PART II. OTHER INFORMATION




Item 1. Legal Proceedings.

We are not currently involved in any material legal
proceedings, though we may from time to time become a party to
various legal proceedings that arise in the ordinary course of
business.




Item 2. Changes in Securities and Use of Proceeds.

On September 28, 2000, our Registration Statement on Form S-1 (No. 333-41372)
was declared effective by the SEC, pursuant to
which 7,000,000 shares of our common stock were offered and sold for our
account at a price of $9.00 per share, for an aggregate offering price of $63.0
million. The offering was closed on October 4, 2000. The managing
underwriters of the offering were Credit Suisse First Boston Corporation, JP
Morgan Chase and Company (formerly Chase H&Q) and U.S. Bancorp Piper Jaffray.

We incurred the following expenses in connection with the offering:

|                                       |  |   |           | 
|-------------------------------------- |  | - | --------- | 
|Underwriting discounts and commissions |  | $ | 4,400,000 | 
|Other expenses                         |  |   | 1,600,000 | 
|                                       |  |   |           | 
|Total Expenses                         |  | $ | 6,000,000 | 
|                                       |  |   |           | 

All of such expenses were direct or indirect payments to others.

The net offering proceeds to us after deducting the total expenses above were
approximately $57.0 million. From the closing of the offering through the
three months ended September 30, 2002, we used such net offering proceeds, in
direct or indirect payments to others, as follows:

|                                                                                 |  |   |            | 
|-------------------------------------------------------------------------------- |  | - | ---------- | 
|Investment in cash, cash equivalents and short-term, interest
bearing securities |  | $ | 31,000,000 | 
|Other working capital                                                            |  |   | 26,000,000 | 
|                                                                                 |  |   |            | 
|Total                                                                            |  | $ | 57,000,000 | 
|                                                                                 |  |   |            | 

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Each of such amounts is a reasonable estimate of the application of the net
offering proceeds. This use of proceeds does not represent a material change
in the use of proceeds described in the prospectus of our Registration
Statement.




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

None.




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

(a)  Exhibits

|     |  |                                              
|---- |  | ---------------------------------------------
|99.1 |  | Statement pursuant to 18 U.S.C. Section 1350.
|99.2 |  | Statement pursuant to 18 U.S.C. Section 1350.

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SIGNATURES

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

| |  |                                                                                      
| |  | -------------------------------------------------------------------------------------
| |  | AT ROAD, INC.                                                                        
|
| |  | By: /s/ Thomas C. Hoster                                                             
| |  |                                                                                      
| |  | Thomas C. Hoster
Chief Financial Officer
(Principal Financial and Accounting Officer)

Date: November 14, 2002

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CERTIFICATIONS

I, Krish Panu, certify that:

1. I have reviewed this quarterly report on Form 10-Q of At Road, Inc.;

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

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

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

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

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

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

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

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

6. The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002

/s/ Krish Panu
Krish Panu
Chief Executive Officer





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##### Table of Contents



CERTIFICATIONS

I, Thomas C. Hoster, certify that:

1. I have reviewed this quarterly report on Form 10-Q of At Road, Inc.;

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

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

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

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

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

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

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

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

6. The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002

/s/ Thomas C. Hoster
Thomas C. Hoster
Chief Financial Officer





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Exhibit Index

|            |  |                                             
|----------- |  | --------------------------------------------
|Exhibit No. |  | Description of Exhibit                      
|            |  |                                             
|99.1        |  | Statement pursuant to 18 U.S.C. Section 1350
|99.2        |  | Statement pursuant to 18 U.S.C. Section 1350