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

                       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, 1999

                                       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 0-28968


                         MDSI MOBILE DATA SOLUTIONS INC.
             (Exact name of registrant as specified in its charter)

            CANADA                                   NOT APPLICABLE
  (State or Other Jurisdiction              (I.R.S. Employer Identification No.)
of Incorporation or Organization)

                              10271 Shellbridge Way
                           Richmond, British Columbia,
                                 Canada V6X 2W8
                    (Address of Principal Executive Offices)


                                 (604) 207-6000
              (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  [ ]

     The number of outstanding common shares, no par value, of the Registrant at
September 30, 1999 was 7,343,416.


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


<PAGE>


                         MDSI MOBILE DATA SOLUTIONS INC.

                             INDEX TO THE FORM 10-Q
                For the quarterly period ended September 30, 1999

<TABLE>
                                                                                                     Page
                                                                                                     ----
<S>  <C>                                                                                             <C>
Part I -  Financial Information

    ITEM 1.  FINANCIAL STATEMENTS

             Consolidated Balance Sheets................................................................3

             Consolidated Statements of Operations and Deficit..........................................4

             Consolidated Statements of Cash Flows......................................................5

             Notes to the Consolidated Financial Statements.............................................6

    ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
             CONDITION AND RESULTS OF OPERATIONS........................................................9

    ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.................................19

Part II - Other Information

    ITEM 1.  LEGAL PROCEEDINGS ........................................................................19

    ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.................................................19

    ITEM 3.  DEFAULTS UPON SENIOR SECURITIES ..........................................................19

    ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.......................................20

    ITEM 5.  OTHER INFORMATION.........................................................................20

    ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K..........................................................20

Signatures

</TABLE>



<PAGE>



Part I -   Financial Information

     ITEM 1. FINANCIAL STATEMENTS

                         MDSI MOBILE DATA SOLUTIONS INC.

                           Consolidated Balance Sheets
                         (Expressed in Canadian dollars)
                                   (Unaudited)

<TABLE>
                                                                                           As at
                                                                         -------------------------------------------
                                                                             September 30           December 31
                                                                                 1999                   1998
                                                                         ---------------------   -------------------
<S>                                                                           <C>                    <C>
Assets
Current assets
     Cash and cash equivalents........................................        $   21,359,378         $   6,136,711
     Accounts receivable, net
        Trade.........................................................            16,272,126            16,603,944
        Unbilled......................................................            10,102,089             7,789,586
     Prepaid expenses ................................................             2,331,287             3,458,348
     Deferred income taxes............................................               776,638             1,016,766
     Current portion of lease receivable..............................               560,951               560,478
                                                                         --------------------   -------------------
                                                                                  51,402,469            35,565,833
Lease receivable......................................................               341,685               845,889
Investments, at cost .................................................             5,532,730                     -
Capital assets, net...................................................             8,388,805             5,137,296
Intangible assets, net................................................             2,850,418             3,130,334
                                                                         --------------------   -------------------
                                                                                  68,516,107            44,679,352
Assets of discontinued operations (note 4)............................               971,393            11,889,004
                                                                         --------------------   -------------------
Total assets..........................................................        $   69,487,500        $   56,568,356
                                                                         ====================   ===================
Liabilities and stockholders' equity
Current liabilities
     Accounts payable ................................................        $    3,234,520         $   7,140,470
     Accrued liabilities .............................................             3,471,530             3,320,436
     Income taxes payable ............................................             1,704,761             2,442,571
     Deferred revenue.................................................             6,393,931             7,317,895
     Current portion of long-term debt ...............................                     -               377,332
     Current obligations under capital leases ........................             1,341,033               872,917
                                                                         --------------------   -------------------
                                                                                  16,145,775            21,471,621
Obligations under capital leases......................................             3,709,624             1,907,037
Liabilities of discontinued operations (note 4) ......................             1,383,421             2,370,579
                                                                         --------------------   -------------------
Total liabilities.....................................................            21,238,820            25,749,237
                                                                         --------------------   -------------------
Stockholders' equity
     Common stock.....................................................            62,419,667            44,637,778
     Treasury stock...................................................              (122,743)             (122,743)
     Deficit..........................................................           (14,048,244)          (13,695,916)
                                                                         --------------------   -------------------
                                                                                  48,248,680            30,819,119
                                                                         --------------------   -------------------
Total liabilities and stockholders' equity............................        $   69,487,500        $   56,568,356
                                                                         =====================   ==================

</TABLE>

                 See notes to consolidated financial statements


                                      -3-
<PAGE>

                         MDSI MOBILE DATA SOLUTIONS INC.

                Consolidated Statements of Operations and Deficit
                         (Expressed in Canadian dollars)
                                   (Unaudited)

<TABLE>
                                                                    Three months ended                   Nine months ended
                                                                        September 30                        September 30
                                                            -----------------------------------  -----------------------------------
                                                                    1999              1998            1999                 1998
                                                            ----------------  -----------------  ----------------   ----------------
<S>                                                           <C>               <C>               <C>                <C>
Revenue
     Software and services................................    $  15,657,991     $   11,026,508    $  44,270,276      $  28,755,291
     Third-party products and services....................        1,991,545          6,719,436        8,536,091         10,523,520
     Maintenance and support..............................        2,504,017          1,616,139        5,940,996          4,021,855
                                                            ----------------  -----------------  ----------------   ----------------
                                                                 20,153,553         19,362,083       58,747,363         43,300,666

Direct costs..............................................        8,859,268          9,646,439       25,904,780         20,187,507
                                                            ----------------  -----------------  ----------------   ----------------
Gross profit..............................................       11,294,285          9,715,644       32,842,583         23,113,159
                                                            ----------------  -----------------  ----------------   ----------------
Operating expenses
     Research and development.............................        2,513,997          2,508,851        7,468,425          5,949,975
     Sales and marketing .................................        2,914,046          2,776,268       10,490,859          8,370,943
     General and administrative...........................        1,886,580          1,427,778        5,950,529          3,732,034
     Amortization of intangible assets....................           94,383             94,383          283,149            283,149
                                                            ----------------  -----------------  ----------------   ----------------
                                                                  7,409,006          6,807,280       24,192,962         18,336,101
                                                            ----------------  -----------------  ----------------   ----------------
Operating income..........................................        3,885,279          2,908,364        8,649,621          4,777,058

Other income (expense)....................................           65,879           (181,788)        (670,365)           118,502
                                                            ----------------  -----------------  ----------------   ----------------
Income before tax provision...............................        3,951,158          2,726,576        7,979,256          4,895,560
Provision for income taxes................................       (1,205,258)          (845,332)      (2,478,798)        (1,557,517)
                                                            ----------------  -----------------  ----------------   ----------------
Net income from continuing operations.....................        2,745,900          1,881,244        5,500,458          3,338,043
Loss from discontinued operations (note 4)................                -           (116,875)      (5,852,786)          (361,037)
                                                            ----------------  -----------------  ----------------   ----------------
Net income (loss).........................................        2,745,900          1,764,369         (352,328)         2,977,006

Deficit, beginning of period..............................      (16,794,144)       (17,982,223)     (13,695,916)       (19,194,860)
                                                            ----------------  -----------------  ----------------   ----------------

Deficit, end of period....................................    $ (14,048,244)    $  (16,217,854)   $ (14,048,244)     $ (16,217,854)
                                                            ================  =================  ================   ================

Earnings (loss) per common share
Earnings from continuing operations
     Basic ...............................................    $        0.37     $         0.29    $        0.76      $        0.51
                                                            ================  =================  ================   ================
     Diluted .............................................    $        0.36     $         0.28    $        0.71      $        0.50
                                                            ================  =================  ================   ================
Net earnings (loss)
     Basic ...............................................    $        0.37     $         0.27    $       (0.05)     $        0.46
                                                            ================  =================  ================   ================
     Diluted .............................................    $        0.36     $         0.26    $       (0.05)     $        0.45
                                                            ================  =================  ================   ================
Weighted average shares outstanding

     Basic................................................        7,326,940          6,526,990        7,208,129          6,490,805
                                                            ================  =================  ================   ================
     Diluted..............................................        7,673,625          6,664,467        7,708,942          6,640,610
                                                            ================  =================  ================   ================
</TABLE>

                 See notes to consolidated financial statements


                                      -4-
<PAGE>

                         MDSI MOBILE DATA SOLUTIONS INC.

                      Consolidated Statements of Cash Flows
                         (Expressed in Canadian dollars)
                                   (Unaudited)

<TABLE>
                                                                                        Nine months ended September 30
                                                                         -----------------------------------------------------------
                                                                                     1999                             1998
                                                                         ------------------------------   --------------------------
<S>                                                                              <C>                            <C>
Cash flow from operating activities
     Net income (loss) for the period.................................           $    5,500,458                 $     3,338,043
     Items not affecting cash:
          Depreciation and amortization...............................                1,775,947                       1,447,810
          Deferred income taxes.......................................                  240,128                         903,303
          Changes in non-cash operating working capital items.........               (6,270,254)                      2,382,494
                                                                             --------------------              ------------------
     Net cash provided by (used in) operating activities..............                1,246,279                       8,071,650
                                                                             --------------------              ------------------

Cash flows from financing activities
     Issuance of common stock.........................................               17,781,889                       1,069,549
     Repayment of long-term debt......................................                 (377,332)                       (142,654)
     Proceeds from capital leases.....................................                2,270,703                       1,541,253
                                                                             --------------------              ------------------
     Net cash provided by financing activities........................               19,675,260                       2,468,148
                                                                             --------------------              ------------------
Cash flows from investing activities
     Long term lease receivable.......................................                  503,731                               -
     Acquisition of capital assets....................................               (4,747,540)                     (2,194,175)
                                                                             --------------------              ------------------
     Net cash used in investing activities............................               (4,243,809)                     (2,194,175)
                                                                             --------------------              ------------------
Cash provided by continuing operations................................               16,677,730                       8,345,623
Cash provided by (used for) discontinued operations (note 4)..........               (1,455,063)                     (3,770,829)
                                                                             --------------------              ------------------
Net cash inflow.......................................................               15,222,667                       4,574,794
Cash and cash equivalents, beginning of period........................                6,136,711                         110,117
                                                                             --------------------              ------------------
Cash and cash equivalents, end of period..............................           $   21,359,378                 $     4,684,911
                                                                             ====================              ==================
</TABLE>



                 See notes to consolidated financial statements





                                      -5-
<PAGE>

                         MDSI MOBILE DATA SOLUTIONS INC.

                 Notes to the Consolidated Financial Statements
                  For the nine months ended September 30, 1999
                         (Expressed in Canadian dollars)
                                   (Unaudited)


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     (a)  Basis of presentation

          These  financial  statements  have been  prepared in  accordance  with
          accounting  principles  generally  accepted  in the United  States for
          interim  financial  reporting and pursuant to the  instructions of the
          United States Securities and Exchange Commission Form 10-Q and Article
          10 of Regulation  S-X. While these  financial  statements  reflect all
          normal recurring  adjustments which are, in the opinion of management,
          necessary for fair  presentation of the results of the interim period,
          they do not include all of the information  and footnotes  required by
          generally  accepted  accounting   principles  for  complete  financial
          statements. For further information, refer to the financial statements
          and footnotes thereto included in the Company's Annual Report filed on
          Form 10-K for the year ended December 31, 1998.

     (b)  Use of estimates

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


2.   SEGMENTED INFORMATION

     Segmented information

     The Company  develops,  markets and supports  mobile work force  management
     systems serving the needs of industry and government.  Examples include the
     utility, telecommunications/cable and public safety industries. At December
     31, 1998,  the Company  reported two business  segments - Field Service and
     Delivery.  In February  1999, the Company's  Board of Directors  approved a
     plan to dispose of its Delivery  segment  (Transportation  Business  Unit -
     note 4). As a result, the Company now has only one business segment.

     Geographic information

     The  Company  earned  revenue  from  sales to  customers  in the  following
     geographic locations:

<TABLE>
                                                Three months ended                      Nine months ended
                                                   September 30                           September 30
                                      ---------------------------------------------------------------------------
                                             1999                1998                1999               1998
                                      ---------------------------------------------------------------------------
<S>                                   <C>                  <C>                  <C>                <C>
Canada............................    $       446,491      $    1,342,718       $   2,607,291      $   2,167,151
United States.....................         12,308,267          17,481,999          41,353,468         39,588,799
Europe............................          6,906,955             471,114          12,909,137            978,819
Asia..............................            491,840              66,252           1,877,467            310,972
South America.....................                  0                   0                   0            254,925
                                    -----------------------------------------------------------------------------
                                      $    20,153,553      $   19,362,083       $  58,747,363      $  43,300,666
                                      ===========================================================================
</TABLE>




                                      -6-
<PAGE>

                         MDSI MOBILE DATA SOLUTIONS INC.

                 Notes to the Consolidated Financial Statements
                  For the nine months ended September 30, 1999
                         (Expressed in Canadian dollars)
                                   (Unaudited)


3.   EARNINGS (LOSS) PER COMMON SHARE

Basic  earnings  (loss) per common  share is  calculated  by dividing net income
(loss) by the weighted  average number of common shares  outstanding  during the
period.  Diluted earnings (loss) per share was calculated by dividing net income
(loss) by the sum of the weighted  average  number of common shares  outstanding
plus  all  additional   common  shares  that  would  have  been  outstanding  if
potentially  dilutive common shares had been issued.  In periods for which there
is a reported net loss,  potentially dilutive securities have been excluded from
the calculation as their effect would be anti-dilutive.

The following  table  reconciles  the number of shares  utilized in the earnings
(loss) per common share calculations for the periods indicated:

<TABLE>
                                                       Three months ended                 Nine months ended
                                                          September 30                       September 30
                                                 --------------------------------  ---------------------------------
                                                      1999             1998             1999             1998
                                                 ---------------  ---------------  ---------------  ----------------

<S>                                                   <C>              <C>              <C>               <C>
Weighted average shares outstanding.........          7,326,940        6,526,990        7,208,129         6,490,805
Common stock equivalents
Stock options...............................            346,685          137,271          500,813           142,864
Share purchase warrants ....................                  -              206                -             6,941
                                                 ---------------  ---------------  ---------------  ----------------
Total shares for diluted earnings (loss) per
common share................................          7,673,625        6,664,467        7,708,942         6,640,610
                                                ================  ===============  ===============  ================
</TABLE>


4.   DISCONTINUED OPERATIONS

In February 1999, the Company's Board of Directors  approved a plan for the sale
of the Transportation Business Unit which develops mobile workforce software for
the taxi,  courier and roadside  recovery market.  The disposition was completed
June 24,  effective  June 1, 1999,  for  proceeds of  $5,532,730.  The  proceeds
comprise common shares  representing an 11% interest in Digital Dispatch Systems
Inc.,  a supplier of dispatch  systems to the taxi market,  and an 8%,  $500,000
promissory note due January 1, 2001.

This  business is accounted  for as a  discontinued  operation and for reporting
purposes  the  results  of  operations,  financial  position  and cash  flow are
segregated  from  those of  continuing  operations  for the  current  and  prior
periods. The Company has included in the results of the discontinued  operation,
the sale proceeds, the costs of disposition,  the results of operations from the
measurement  date to the disposal  date and an estimate of the costs to complete
the remaining contract.





                                      -7-
<PAGE>

                         MDSI MOBILE DATA SOLUTIONS INC.

                 Notes to the Consolidated Financial Statements
                  For the nine months ended September 30, 1999
                         (Expressed in Canadian dollars)
                                   (Unaudited)


4.   DISCONTINUED OPERATIONS (continued)


Summarized financial information of the discontinued operations is as follows:


<TABLE>
Results of discontinued operations
------------------------------------------------------------------------------------------------------------------
                                                                September 30, 1999            September 30, 1998
                                                              ---------------------          ---------------------
<S>                                                            <C>                           <C>
   Revenues                                                    $       4,008,198               $    12,238,531
                                                              =====================          =====================
   Loss before income taxes                                           (2,375,492)                     (359,256)
   Income tax                                                                  -                         1,781
                                                              ---------------------          ---------------------
   Operating loss to measurement date                                 (2,375,492)                     (361,037)
   Estimated loss on disposal
      (net of nil income taxes)                                       (3,477,294)                            -
                                                              =====================          =====================
   Income (loss) from discontinued operations                  $      (5,852,786)              $      (361,037)
                                                              =====================          =====================


Financial position of discontinued operations
------------------------------------------------------------------------------------------------------------------
                                                                September 30, 1999            December 31, 1998
                                                              ---------------------          ---------------------
   Current assets                                              $         971,393               $     9,147,621
   Long term assets                                                            -                     2,741,383
                                                              =====================          =====================
   Total assets of discontinued operations                     $         971,393               $    11,889,004
                                                              =====================          =====================
   Current liabilities                                         $       1,383,421               $     2,370,579
   Long term liabilities                                                       -                             -
                                                              =====================          =====================
   Total liabilities of discontinued operations                $       1,383,421               $     2,370,579
                                                              =====================          =====================


 Cash flow of discontinued operations
------------------------------------------------------------------------------------------------------------------
                                                                September 30, 1999            September 30, 1998
                                                              ---------------------          ---------------------
   Operating activities                                        $      (1,323,583)              $    (3,770,253)
   Investing activities                                                 (131,480)                         (576)
   Financing activities                                                        -                             -
                                                              =====================          =====================
   Cash provided by (used for) discontinued operations         $      (1,455,063)              $    (3,770,829)
                                                              =====================          =====================

</TABLE>




                                      -8-
<PAGE>


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

     Certain  statements  and  information  contained in this Report  constitute
forward-looking  statements  within the meaning of Section 21E of the Securities
Exchange Act of 1934. Such forward-looking  statements involve known and unknown
risks,  uncertainties  and other  factors  that may cause  the  actual  results,
performance or  achievements  of the Company,  or  developments in the Company's
industry,  to differ  materially  from the anticipated  results,  performance or
achievements  expressed  or implied  by such  forward-looking  statements.  Such
factors  include,  but are not  limited  to:  the  Company's  limited  operating
history,  history of losses, lengthy sales cycles, the Company's dependence upon
large  contracts and relative  concentration  of customers,  risks involving the
management of growth and  integration of  acquisitions,  risks  associated  with
performance of pre-existing contracts assumed through acquisitions, competition,
product  development  risks and risks of  technological  change,  dependence  on
selected vertical markets and third-party marketing relationships and suppliers,
the Company's ability to protect its intellectual  property rights and the other
risks and  uncertainties  detailed  in the  Company's  Securities  and  Exchange
Commission  filings,  including the Company's Annual Report on Form 10-K for the
year ended December 31, 1998.

     All financial  information in this Report is expressed in Canadian  dollars
unless otherwise noted.

Overview

     The Company  develops,  markets,  implements and supports mobile  workforce
management  and wireless  connectivity  software and related  network and mobile
computing equipment for use by a wide variety of companies that have substantial
mobile workforces,  such as utility,  telecommunications and cable companies and
public safety  organizations.  The Company's products are used by such companies
in conjunction with public and private wireless data communications  networks to
provide  comprehensive  solutions  for  the  automation  of  business  processes
associated  with  the  scheduling,   dispatching  and  management  of  a  mobile
workforce.  The Company's products provide a cost-effective method for companies
with mobile workers to use data communications to communicate with such workers,
and for such  workers to  interface  on a real-time  basis with their  corporate
information systems.

     The Company's revenue is derived from (i) software and services, consisting
of the  licensing  of software  and  provision  of related  services,  including
project management, installation,  integration, customization and training; (ii)
third-party  products  and  services,  consisting  of the  provision of non-MDSI
products and services as part of a total  contract;  and (iii)  maintenance  and
support,  consisting of the provision of after-sale  support services as well as
hourly, annual or extended maintenance contracts.

     The  implementation  of a complete mobile data solution requires a wireless
data communications  network, a land-based data communications  network,  mobile
computing  devices  integrated  with wireless data  communication  modems,  host
computer   equipment,   industry   specific   application   software,   wireless
connectivity  software  and a variety of services  to manage and  install  these
components,  integrate them with an organization's existing computer systems and
configure or customize the software to meet customer  requirements.  Frequently,
in the Company's larger contracts, only a limited number of the mobile computing
devices and  in-vehicle  equipment  are  initially  installed,  with the balance
implemented  over a rollout period that may extend up to one year or more. Where
increases in mobile work forces  require,  or where  additional  departments  of
mobile workers are added, additional mobile computing devices may be installed.



                                      -9-
<PAGE>

Overview (Continued)

     Revenue  for  software  and  services  has  historically  accounted  for  a
substantial portion of the Company's revenue. Typically, the Company enters into
a fixed price  contract with a customer for the  licensing of selected  software
products and the provision of specific  services  that are  generally  performed
within six to twelve months.  Pricing for these contracts  includes license fees
as well as a fee for professional  services.  The Company  generally  recognizes
total  revenue for  software  and services  associated  with a contract  using a
percentage of completion method based on the total costs incurred over the total
estimated costs to complete the contract.

     The Company may also be called on to provide,  in addition to MDSI products
and services,  certain third-party products,  such as host computer hardware and
operating  system  software,  mobile  computing  devices and radio data  network
infrastructure  equipment,  and sub-contract services, such as radio data system
design and  implementation.  The  Company  recognizes  revenue for the supply of
third-party  hardware  upon  transfer  of title  to the  customer.  The  Company
recognizes revenue for the supply of third-party  services using a percentage of
completion  method based on the costs incurred over the total  estimated cost to
complete the third-party services contract.

     The Company  believes that it will often supply some portion of third-party
products  and services to customers  where it is  successful  in selling its own
products and services.  There can be no assurance,  however,  that any contracts
entered into by the Company to supply  third-party  software and products in the
future will  represent a  substantial  portion of revenue in any future  period.
Since the revenue generated from the supply of third-party products and services
may represent a significant  portion of certain  contracts and the  installation
and  rollout of  third-party  products is  generally  at the  discretion  of the
customer,  the Company may,  depending on the level of third-party  products and
services  provided during a period,  experience large quarterly  fluctuations in
revenue.

     The Company's customers typically enter into ongoing maintenance agreements
that provide for maintenance, product enhancement and technical support services
for a  period  commencing  after  expiration  of the  initial  warranty  period.
Maintenance  agreements  typically have a term of twelve months and are invoiced
either annually,  quarterly or monthly. The Company recognizes revenue for these
services ratably over the term of the contract.

     The Company's revenue is dependent, in large part, on significant contracts
from a limited number of customers.  As a result,  any substantial  delay in the
Company's  completion of a contract or the  introduction  of new  products,  the
inability  of the  Company to obtain new  contracts  or the  cancellation  of an
existing  contract  by a customer  could have a material  adverse  effect on the
Company's  results  of  operations,  cash  flows and  financial  condition.  The
Company's  contracts are generally  cancelable upon notice by the customer.  The
loss of certain  contracts could have a material adverse effect on the Company's
business,  operating results, cash flows and financial condition. As a result of
these and other factors,  the Company's results of operations have fluctuated in
the past and may continue to fluctuate from period-to-period.

     The  Company's  backlog of pending  orders at September  30, 1999 was lower
than the amount of backlog at the end of the first and second  quarters of 1999,
as well as the amount of backlog at the end of the third and fourth  quarters of
1998.  The  Company  believes  that  the  reduction  in  backlog  in 1999 may be
attributable,  in part, to decisions by customers to defer purchasing  decisions
until after  December 31, 1999,  and the allocation by customers of resources to
their  own  Year  2000  remediation  efforts.  There  can be no  assurance  that
decisions by customers to delay purchasing decisions or to allocate resources to
Year 2000  remediation  efforts  will not not have an  adverse  effect  upon the
Company's results of operations in future periods.



                                      -10-
<PAGE>

Disposition of Transportation Business Unit

     In February  1999,  the  Company's  Board of  Directors  approved a plan to
dispose of its Delivery segment  (Transportation  Business Unit). Effective June
1, 1999, the Company completed the sale of the  Transportation  Business Unit to
Digital Dispatch Systems,  Inc.  ("DDS"),  a supplier of dispatch systems to the
taxi market for proceeds of  $5,532,730.  The proceeds were  comprised of common
shares of DDS, representing an 11% interest in DDS, and a promissory note in the
initial principal amount of $500,000,  due January 1, 2001,  bearing interest at
8% per annum.

     Under the terms of the  agreement  between the Company and DDS, the Company
has retained certain assets and liabilities of the discontinued operations.  The
Company  expects that it will liquidate these assets and liabilities by June 30,
2000. In addition,  the Company has agreed to complete the  implementation  of a
large  contract  with a taxi  customer.  The  Company  has  experienced,  and is
continuing to experience delays in the  implementation of this contract.  If the
Company is unable to complete  the  implementation  of the  contract on a timely
basis,  the  taxi  customer  has the  right to  cancel  the  contract.  Any such
cancellation  may require the Company to  reimburse  the  customer  for payments
received to date. The Company  believes that it has adequately  provided for the
costs to complete this contract.

     As a result of the Company's  decision to dispose of its Delivery  segment,
the Delivery  segment has been  classified as a  discontinued  operation and the
results of  operation,  financial  position  and cash flow for this segment have
been segregated from those of continuing  operations.  The following  discussion
and  analysis of the  Company's  results of  operations  excludes  the  Delivery
segment for the current and corresponding prior period.

     The Company's year-to-date loss of $352,000 was comprised of a $5.5 million
after-tax  profit  from  continuing  operations  and an  after-tax  loss of $5.9
million on  discontinued  operations.  The loss on  discontinued  operations  is
comprised  of loss on  operations  of $2.4  million and loss on disposal of $3.5
million. There is no tax effect on these losses. The discontinued operating loss
includes not only the results of operations but also foreign exchange losses and
provisions  against  contracts to the measurement date of February 25, 1999. The
estimated loss on disposal  includes the operating  results from the measurement
date to the effective  date,  the costs of disposal,  severance  costs,  and the
estimated costs to complete the remaining taxi contract.




                                      -11-
<PAGE>

Results of Operations

     The  following  table  sets  forth,  for  the  periods  indicated,  certain
components  of the selected  financial  data of the Company as a  percentage  of
total revenue:

<TABLE>
                                                        Three months ended                 Nine months ended
                                                           September 30                      September 30
                                                  --------------------------------  ------------------------------
                                                       1999             1998            1999             1998
                                                  ---------------  ---------------  --------------   -------------
                                                   (Unaudited)      (Unaudited)      (Unaudited)      (Unaudited)
<S>                                                     <C>             <C>              <C>             <C>
Revenue
   Software and services.......................         77.7%           57.0%            75.4%           66.4%
   Third-party products and services...........          9.9            34.7             14.5            24.3
   Maintenance and support.....................         12.4             8.3             10.1             9.3
                                                  ---------------  ---------------  --------------   -------------
                                                       100.0           100.0            100.0           100.0

Direct costs...................................         44.0            49.8             44.1            46.6
                                                  ---------------  ---------------  --------------   -------------
Gross profit...................................         56.0            50.2             55.9            53.4
                                                  ---------------  ---------------  --------------   -------------
Operating expenses
   Research and development....................         12.5            13.0             12.7            13.8
   Sales and marketing ........................         14.4            14.3             17.9            19.3
   General and administrative..................          9.3             7.4             10.1             8.6
   Amortization of intangible assets...........          0.5             0.5              0.5             0.7
                                                  ---------------  ---------------  --------------   -------------
                                                        36.7            35.2             41.2            42.4
                                                  ---------------  ---------------  --------------   -------------
Operating income (loss)........................         19.3            15.0             14.7            11.0

Other income ..................................          0.3            (0.9)            (1.1)            0.3
                                                  ---------------  ---------------  --------------   -------------
Income (loss) before tax provision.............         19.6            14.1             13.6            11.3
Provision for income taxes.....................         (6.0)           (4.4)            (4.2)           (3.6)
                                                  ---------------  ---------------  --------------   -------------
Net income (loss) from continuing operations.           13.6             9.7              9.4             7.7

                                                  ---------------  ---------------  --------------   -------------
Income (loss) from discontinued operations.....         (0.0)           (0.6)           (10.0)           (0.8)
                                                  ---------------  ---------------  --------------   -------------
Net income (loss)..............................         13.6%            9.1%            (0.6)%           6.9%
                                                  ===============  ===============  ==============   =============
</TABLE>





                                      -12-
<PAGE>

Three  Months  Ended  September  30,  1999  Compared to the Three  Months  Ended
September 30, 1998

     Revenue.  Revenue  increased by $791,000  (4.1%) for the three months ended
September  30, 1999 as compared to the three  months ended  September  30, 1998.
This  increase  was due  primarily  to the  increase in revenue for software and
services  delivered in the third  quarter of 1999 relative to the same period in
1998.

     Software and  services  revenue  increased by $4.6 million  (42.0%) for the
three  months  ended  September  30, 1999 as compared to the three  months ended
September 30, 1998. This increase is due to increased  revenue from customers in
the telecommunications markets.

     Third-party products and services revenue decreased by $4.7 million (70.3%)
for the three  months ended  September  30, 1999 as compared to the three months
ended September 30, 1998.  Third-party  products typically include host computer
equipment  and  mobile  computing  devices,  and  are  delivered  as part of the
installation  of software and provision of services.  Revenue from deliveries of
third-party products and services will generally fluctuate from period to period
due to the  timing and nature of certain  contracts  and the  rollout  schedules
which are established primarily by the customers. In addition, not all customers
under  contract  require the  provision of  third-party  products and  services.
Accordingly,  there may be large  fluctuations in revenue,  direct costs,  gross
profits and income from operations from one period to another.

     Maintenance and support revenue was $2.5 million for the three months ended
September  30,  1999 as  compared to $1.6  million  for the three  months  ended
September 30, 1998.  Maintenance and support revenue increased  primarily due to
the increased growth in the Company's  installed  customer base. Such revenue is
expected to fluctuate as it generally  corresponds  to the level of software and
services   revenue  the  Company  is  engaged  to  provide  in  support  of  its
installations.

     Direct Costs. Direct costs were 44.0% of revenue for the three months ended
September 30, 1999 as compared to 49.8% for the three months ended September 30,
1998.  Direct costs include labor and other costs directly related to a project,
including the provision of services and support, production and costs related to
host equipment and mobile devices on behalf of third-party  product sales. Labor
costs included direct payroll, benefits and overhead charges.

     Gross  Margins.  Gross  margins  were 56.0% of revenue for the three months
ended  September  30,  1999 as  compared  to 50.2%  for the three  months  ended
September  30, 1998.  The  increase in gross  margin as a percentage  of revenue
relates primarily to the change in the mix of revenues.  During the three months
ended September 30, 1999, there was an increase in software and services revenue
and a reduction in third-party products and services revenue, as compared to the
same period in 1998.  Software and services revenue typically has a higher gross
margin than revenues attributable to third-party products and services.

     Research and Development.  Research and development  expenses were 12.5% of
revenue for the three month period ended September 30, 1999 versus 13.0% for the
same period in 1998.  Total research and development  expenditures for the three
months ended September 30, 1999 of $2.5 million  represents a marginal  increase
of $5,000  (0.2%) as  compared  to the same  period in 1998.  The  research  and
development expenses in 1999 represent continued  development and enhancement of
the Company's  Advantex products.  The Company intends to continue  committing a
significant  portion of its product  revenues to enhance  existing  products and
develop new products, resulting in an anticipated increase in the dollar amounts
of research and development expenses in future periods.

     Sales and Marketing. Sales and marketing expenses were 14.4% of revenue for
the three  months  ended  September  30, 1999 and 14.3% of revenue for the three
months ended  September 30, 1998. This represents an increase of $138,000 (4.9%)
as compared to the same period in 1998.  The  increase was  primarily  due to an
increase in marketing,  sales and technical  support  personnel  supporting  the
Company's increased marketing activities worldwide. The Company anticipates that
the dollar amounts of its sales and marketing expenses will continue to increase
as a result of the Company's commitment to its international marketing efforts.



                                      -13-
<PAGE>

Three  Months  Ended  September  30,  1999  Compared to the Three  Months  Ended
September 30, 1998 (Continued)

     General and Administrative.  General and administrative  expenses were 9.3%
of revenue for the three months ended September 30, 1999 and 7.4% of revenue for
the three months ended  September  30, 1998.  Total  general and  administrative
expenses of $1.9  million  represents  an  increase of $459,000  (32.1%) for the
three  months ended  September  30, 1999 as compared to the same period in 1998.
The  increase  represents  expanded   administrative  activity  to  support  the
Company's  growth.  The Company expects that the dollar amounts will continue to
increase as the  Company  expands its  staffing,  information  systems and other
administrative requirements necessary to support this growth.

     Other Income  (Expense).  Other income  (expense) was $65,000 for the three
months ended  September 30, 1999 as compared to $(182,000)  for the three months
ended September 30, 1998. Substantially all of other income (expense) relates to
fluctuations in the currencies of the Company's foreign operations,  interest on
cash and short term deposits, and capital lease obligations.

     Income  Taxes.  The Company  provided  for income taxes on earnings for the
three months ended September 30, 1999 at the rate of 30.0%,  after adjusting for
the amortization of intangible assets. The Company's effective tax rate reflects
the application of certain  operating loss carry forwards against taxable income
and the blended effect of Canadian,  U.S., and other foreign  jurisdictions' tax
rates.

Nine months ended September 30, 1999 Compared to the Nine months ended September
30, 1998

     Revenue.  Revenue  increased by $15.4  million  (35.7%) for the nine months
ended  September  30, 1999 as compared to the nine months  ended  September  30,
1998. This represents  increases in software and services as well as maintenance
and support with an offsetting decrease in third-party products and services for
the nine months ended September 30, 1999 relative to the same period in 1998.

     Software and services  revenue  increased by $15.5 million  (54.0%) for the
nine months  ended  September  30,  1999 as  compared  to the nine months  ended
September 30, 1998. This increase relates to an increase in revenues in both the
Telecommunications and Utilities markets.

     Third-party products and services revenue decreased by $2.0 million (18.9%)
for the nine months ended  September  30, 1999 compared to the nine months ended
September 30, 1998. Revenue from deliveries of third-party products and services
will fluctuate  from period to period given the timing of certain  contracts and
the  rollout  schedules  which  are  established  primarily  by  the  customers.
Accordingly,  this will result in large  fluctuations in revenue,  direct costs,
gross profits and income from operations from one period to another.

     Maintenance  and support revenue was $5.9 million for the nine months ended
September  30,  1999 as  compared  to $4.0  million  for the nine  months  ended
September 30, 1998.  Maintenance and support revenue increased as a result of an
increase in the level of the Company's installed customer base.

     Direct Costs.  Direct costs were 44.1% of revenue for the nine months ended
September 30, 1999 as compared to 46.6% for the nine months ended  September 30,
1998. The change in direct costs as a percentage of revenue is reflective of the
proportional changes in the individual revenue components.

     Gross  Margins.  Gross  margins  were 55.9% of revenue  for the nine months
ended  September  30,  1999 as  compared  to  53.4%  for the nine  months  ended
September  30, 1998.  The  increase in gross  margin as a percentage  of revenue
relates  primarily  to the change in the mix of revenues  during the nine months
ended September 30, 1999 relative to the same period in 1998.



                                      -14-
<PAGE>

Nine Months Ended September 30, 1999 Compared to the Nine Months Ended September
30, 1998 (Continued)

     Research and Development.  Research and development  expenses were 12.7% of
revenue for the nine months  ended  September  30, 1999 and 13.8% of revenue for
the nine months  ended  September  30,  1998.  Total  research  and  development
expenditures  for the nine  months  ended  September  30,  1999 of $7.5  million
represents an increase of $1.5 million (25.5%) as compared to the same period in
1998. The increase in the dollar amount of research and development  expenses in
1999 is a result of the continued  development  and enhancement of the Company's
Advantex  products.  The Company  intends to continue  committing a  significant
portion of its product  revenues to enhance  existing  products  and develop new
products, resulting in an anticipated increase in the dollar amounts of research
and development expenses.

     Sales and Marketing. Sales and marketing expenses were 17.9% of revenue for
the nine  months  ended  September  30,  1999 and 19.3% of revenue  for the nine
months ended  September  30, 1998.  This  represents an increase of $2.1 million
(25.3%) as compared to the same period in 1998.  The increase was  primarily due
to an increase in marketing,  sales and technical support  personnel  supporting
the Company's increased marketing activities worldwide.  The Company anticipates
that the dollar  amounts of its sales and  marketing  expenses  will continue to
increase as a result of the Company's commitment to its international  marketing
efforts.

     General and Administrative.  General and administrative expenses were 10.1%
of revenue for the nine months ended  September 30, 1999 and 8.6% of revenue for
the nine months ended  September  30,  1998.  Total  general and  administrative
expenses of $6.0 million  represents an increase of $2.2 million (59.4%) for the
nine months ended  September  30, 1999,  as compared to the same period in 1998.
The Company expects that its general and  administrative  expenses will increase
in the future as the Company expands its staffing, information systems and other
administrative costs to support its expanding operations.

     Other Income.  Other income  (expense) was  ($670,365)  for the nine months
ended  September  30, 1999 as compared  to  $119,000  for the nine months  ended
September 30, 1998. Substantially all of other income relates to fluctuations in
the currencies of the Company's  foreign  operations and interest income on cash
and short-term deposits.

     Income  Taxes.  The Company  provided  for income taxes on earnings for the
nine months ended  September 30, 1999 at the rate of 30.0%,  after adjusting for
the amortization of intangible assets. The Company's effective tax rate reflects
the blended effect of Canadian, U.S. and other foreign jurisdictions' tax rates.





                                      -15-
<PAGE>

Liquidity and Capital Resources

     The Company finances its operations,  acquisitions and capital expenditures
with cash generated from operations,  loans, capital leases,  private placements
and public  offerings of its securities.  At September 30, 1999, the Company had
cash and cash equivalents of $21.4 million and working capital of $35.3 million.

     Cash  provided by (used in) operating  activities  was $1.2 million for the
nine  months  ended  September  30, 1999  compared to $8.1  million for the nine
months ended  September 30, 1998. The inflow of cash from operating  activities,
during the period was generated from $7.5 million of net income, after adjusting
for depreciation  and  amortization  and deferred taxes,  offset by $6.3 million
increase in non-cash  working  capital  used.  The increase in non-cash  working
capital  used was  caused  primarily  by a $2.3  million  increase  in  unbilled
accounts receivable and a $3.9 million decrease in trade accounts payable.

     Cash  provided by financing  activities  of $19.7  million  during the nine
months ended September 30, 1999 was attributable  primarily to proceeds of $17.8
million  from the  issuance of common  shares  pursuant to the exercise of stock
options,  purchases  under the Company's  Employee  Share  Purchase Plan and net
proceeds from a public share issue of 575,000 shares completed January 29, 1999,
which provided net proceeds of $14.7  million.  The Company also had proceeds of
$2.3 million from its capital lease program. The capital leases are to be repaid
evenly over a 36 month period  ending  October 31, 2002,  bear interest at 7.83%
and are secured by certain computer hardware and software assets of the Company.

     Cash used in  investing  activities  was $4.2  million  for the nine months
ended  September  30, 1999 as compared to $2.2 million for the nine months ended
September 30, 1998.  Investing  activity  during the nine months ended September
30, 1999 and 1998 consisted  primarly of purchases of capital assets,  including
computer  hardware and software for use in research and  development  activities
and to support the growth of the Company's corporate information systems.

     Existing  sources of liquidity at September  30, 1999 include $21.4 million
in  cash  and  cash  equivalents  and up to $8.0  million  available  under  the
Company's operating line of credit. Under the terms of the agreement, borrowings
and  letters  of credit  under the line are  limited  to 60% to 90% of  eligible
accounts  receivable.  Borrowings  accrue interest at the bank's prime rate plus
0.5%.  At September 30, 1999,  the Company had no  borrowings  under the line of
credit.  The Company  also had  provided  as  performance  bonds an  irrevocable
revolving  letter of credit expiring May 28, 2001 for Belgian Franc  101,068,000
($3.6 million) and a bank guarantee  expiring  February 2, 2000 in the amount of
Danish Kroner 9,740,000 ($2.0 million).

     The Company  believes that future cash flows,  in addition to funds on hand
and its borrowing  capacity  under the line of credit,  will provide  sufficient
funds  to  meet  cash   requirements  for  at  least  the  next  twelve  months.
Commensurate with its past and expected future growth, the Company may increase,
from time to time, its borrowing  facility under its operating line of credit to
support its operations.  The Company may use cash to fund other  acquisitions of
businesses  or products  complementary  to the Company's  business  although the
Company  has  no  plans  to do  so.  The  Company  has  no  material  additional
commitments  other than  operating and capital  leases.  The Company may seek to
obtain  additional  equity  or debt  financing  to fund  future  growth or other
investing activities,  which may or may not be available on attractive terms, or
at all, and may be dilutive to current or future shareholders.



                                      -16-
<PAGE>

Year 2000

General

     The Year 2000 issue is the result of computer  programs being written using
two digits  rather  than four  digits to define the  applicable  year.  Computer
equipment,  software  and  other  devices  with  embedded  technology  that  are
time-sensitive  may recognize a date using "00" as the year 1900 rather than the
year 2000.  This could  result in system  failures  or  miscalculations  causing
disruption of operations,  including,  among other things, a temporary inability
to manufacture products,  acquire or ship products,  process transactions,  send
invoices,  or engage in other  normal  business  activities.  The  inability  of
business  processes to function  correctly  in 2000 could have  serious  adverse
effects on companies and entities throughout the world.

     In 1997, the Company established a team of professionals within the Company
to plan and implement its year 2000 compliance initiative.

     The Company has  implemented a  Company-wide  Year 2000 Plan to ensure that
its computer equipment and software with date sensitive embedded  technology are
able to  distinguish  between the year 1900 and the year 2000 and will  function
properly with respect to all dates (referred to as "Year 2000  Compliant").  The
Company  presently  believes that the required  modifications or replacements of
certain  existing  computer  equipment and software have been completed so as to
minimize any of the potential Year  2000-related  disruptions or malfunctions of
its computer equipment and software.

     The Company's Plan consists of two major focus areas:  1) internal  systems
including personal computing, facilities and business systems and 2) third-party
considerations  including  products and  suppliers.  The tasks common to each of
these areas are: 1) the  identification  and assessment of Year 2000 issues;  2)
assessment  of  remediation  required  to  meet  compliance   requirements;   3)
prioritization of risk; 4) remediation and testing; and 5) contingency planning.

Projects

Internal systems

     The  Company's  compliance  team has  evaluated  all  significant  internal
personal  computing  and  business  systems  that are  critical  to the  ongoing
operation  of the Company and has  identified  computer  software  and  hardware
upgrades and  replacements  necessary to make such systems Year 2000  Compliant.
Remediation  requirements  related to the  replacement  and upgrades to specific
computer  hardware and software  have been  determined  and are  completed as of
November 1, 1999.

     The  assessment  of the Company's  facilities  identified  certain  upgrade
requirements  which were completed  prior to the end of the second quarter 1999.
The  Company  has  reviewed  its present  financial  systems  and its  long-term
requirements  and a decision has been made to purchase and  implement a new Year
2000 Compliant system.

Third-party considerations

Customers

     The  Company is a software  developer  and has been  testing  its  software
internally  and in  conjunction  with  customers  for Year 2000  readiness.  The
Company  believes  that all its current  products  are Year 2000  compliant  and
believes that it has identified and informed all its customers of the steps that
are  required  to make  existing  software in the hands of  customers  Year 2000
compliant.  The Company's  software runs on a variety of computers and operating
systems  which  are not the  responsibility  of the  Company  but for  which the
company has suggested to customers to apply  available Year 2000  remedies.  The
Company is assisting its customers with Year 2000 validation efforts,  including
synchronization of Year 2000 upgrades and testing to eliminate implementation of
non-compatible solutions by customers.



                                      -17-
<PAGE>

Year 2000 (Continued)

Suppliers

     The Company has  identified  its  third-party  software and, in conjunction
with its vendors, has considered aspects of possible  remediation  requirements.
After review and  consultation,  the Company has determined  that no updates are
required to make existing software Year 2000 compliant. Business operations will
also be dependent on the Year 2000 readiness of infrastructure suppliers such as
banking, communications, transportation and other services. In this environment,
there will  likely be  instances  of failure  that could  cause  disruptions  in
business   processes.   The   likelihood   and  effects  of  such   failures  in
infrastructure systems and the supply chain cannot be estimated.

Costs

     The total cost of the Company's Year 2000 Plan is not  considered  material
to the Company's  financial  condition.  The estimated total cost of the Plan is
expected to be  approximately  $400,000,  and is being funded through  operating
cash flow.  To  September  30,  1999,  the  Company has  incurred  approximately
$350,000  in  costs  related  to  its  Year  2000  identification,   assessment,
remediation and testing efforts.  At September 30, 1999 the major portion of the
of the  Company's  Year 2000  compliance  efforts have been  completed  with the
balance to be expended thereafter monitoring the compliance process. None of the
Company's  other  projects  have been  delayed  or  deferred  as a result of the
implementation of the Year 2000 Compliance Plan.

Risks

     To date,  the  Company  has not  incurred,  and does not  expect  to incur,
material costs to review and remedy Year 2000 compliance problems.  Although the
Company  believes that its products are Year 2000 compliant,  failure to provide
Year 2000  compliant  solutions to its  customers  or to receive  such  business
solutions  from its  suppliers  could  have a  material  adverse  effect  on the
Company's  business,  financial  condition,  operating  results  and cash flows.
Furthermore,  the Company may incur additional  expense if its products are used
by customers on  third-party  hardware and  operating  systems that are not Year
2000 compliant, which could result in a material adverse effect on the Company's
business,  operating results,  financial condition, and cash flows. There can be
no  assurance  that the  systems or products of other  entities,  including  the
Company's  suppliers  on which the Company  relies,  disruptions  in the economy
generally  resulting from Year 2000, issues, and disruptions caused by customers
deferring  their  purchase  decisions or  implementation  plans due to their own
internal  Year 2000  remediation  activities,  will not have a material  adverse
effect on the Company.

Contingency Plans

     As part of the Company's continuing  assessment of its Year 2000 compliance
requirements,  the Company has developed  contingency plans to deal with what it
feels is its worst case scenario.  This contingency plan revolves around a staff
team of  information  technology  professionals  that will be  available on site
during the Year 2000 date  change  period  and the  facilities  to support  that
staff. This contingency plan will increase the availability of qualified Company
system support staff at our Customer Service Center  facilities in North America
on December 31, 1999, and January 1,2,and 3, 2000.  Additional qualified support
staff will be available on a stand-by basis to be called on, if required.

     The  preceding  "Year 2000"  discussion  contains  various  forward-looking
statements  which  represent the  Company's  beliefs or  expectations  regarding
future  events.   These   forward-looking   statements   include  the  Company's
expectations  and beliefs as to the most likely  scenarios or  occurrences.  All
forward-looking  statements,  however,  involve  a  number  of risks  which  and
uncertainties that could cause actual results to differ from projected results.



                                      -18-
<PAGE>

ITEM 3:   QUANTITIATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The Company's  primary market risk is foreign currency  exchange rates. The
Company's  foreign  currency  exposure is primarily  with the United  States and
Western  Europe.  Foreign  exchange  risk arises  when the  Company  enters into
transactions denominated in local currencies and not the functional currency.

     The Company has  established  procedures to manage  sensitivity  to foreign
currency  exchange rate market risk. These procedures  include the monitoring of
the  Company's  net  exposure to each  foreign  currency  and the use of foreign
currency forward  contracts to hedge firm exposures to currencies other than the
Canadian and United  States  dollars.  The Company has  operations in the United
States in addition to its Canadian  operations and did not hedge these exposures
in 1999.  However,  the Company may from time-to-time  hedge any net exposure to
the United States dollar.

     As of September 30, 1999, the potential reduction in future earnings from a
hypothetical  instantaneous 10% change in quoted foreign currency exchange rates
applied to the foreign currency sensitive  contracts would be approximately $3.9
million.  The  majority of the  Company's  foreign  exchange  exposure is to the
United States dollar.  The foreign currency  sensitivity model is limited by the
assumption  that all foreign  currencies  to which the Company is exposed  would
simultaneously  change  by 10%.  The  sensitivity  model  does not  include  the
inherent risks associated with anticipated  future  transactions  denominated in
foreign  currencies  or  future  forward  contracts  entered  into  for  hedging
purposes.

     The Company has entered into foreign currency forward  contracts in respect
of net  exposures  under  customer  contracts  in the  amount of  Belgian  Franc
238,000,000  ($9 million)  and Great  Britain  Pounds  680,000  ($1.65  million)
Effective  January  1,  1999,  the  Belgian  Franc is tied to the Euro,  the new
European  Union  common  currency.  The effect of the these  transactions  is to
reduce  the  potential   reduction  in  future   earnings  from  a  hypothetical
instantaneous  10%  change in quoted  foreign  currency  exchange  rates to $2.9
million.

     The  Company  believes  that it does  not  have any  material  exposure  to
interest or commodity  risks.  The Company is exposed to economic and  political
changes in international  markets where the Company competes,  such as inflation
rates,  recession,   foreign  ownership   restrictions,   domestic  and  foreign
government  spending,  budgetary and trade policies and other  external  factors
over which the Company has no control.

Part II -  OTHER INFORMATION

     ITEM 1. LEGAL PROCEEDINGS

     As of the date hereof,  there is no material litigation pending against the
Company.  From time to time,  the  Company is a party to  litigation  and claims
incident to the ordinary course of business. While the results of litigation and
claims cannot be predicted with certainty,  the Company  believes that the final
outcome of such matters will not have a material adverse effect on the Company's
business, financial condition, results of operations and cash flows.

     ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

          None.


     ITEM 3. DEFAULTS UPON SENIOR SECURITIES

          None.



                                      -19-
<PAGE>


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

          None.

     ITEM 5. OTHER INFORMATION

          None.

     ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

          a)   Exhibits

     Exhibit
      Number        Description
      ------        -----------

      10.14         Employment Agreement dated December 1, 1998 between the
                    Company and Kenneth R. Miller

      10.15         Employment Agreement dated February 1, 1999 between the
                    Company and Robert G. Cruickshank

          b)   Reports on Form 8-K

               None.










                                      -20-
<PAGE>

                                   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.



                                    MDSI MOBILE DATA SOLUTIONS INC.


Date:  November 15, 1999            By:  /s/ KENNETH R. MILLER
                                         ---------------------------------------
                                         Name:    Kenneth R. Miller
                                         Title:   Chief Executive Officer




Date:  November 15, 1999            By:  /s/ VERNE D. PECHO
                                         ---------------------------------------
                                         Name:    Verne D. Pecho
                                         Title:   Vice President Finance &
                                                  Administration and Chief
                                                  Financial Officer (Principal
                                                  Financial and Accounting
                                                  Officer)








<PAGE>

                                 EXHIBIT INDEX
                                 -------------



     Exhibit
      Number        Description
      ------        -----------

      10.14         Employment Agreement dated December 1, 1998 between the
                    Company and Kenneth R. Miller

      10.15         Employment Agreement dated February 1, 1999 between the
                    Company and Robert G. Cruickshank