<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[x]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

                     For the quarterly period ended March 31, 2002
                                       or

[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934
  For the transition period from ____________________  to  _________________

                         Commission File Number 0-18299



                              i3 MOBILE, INC.
             (Exact name of registrant as specified in its charter)


          Delaware                             51-0335259
(State or other jurisdiction of              (IRS Employer
incorporation or organization)             Identification No.)


          181 Harbor Drive                       06902
        Stamford, Connecticut                  (Zip Code)
(Address of principal executive offices)


      Registrant's telephone number, including area code:  (203) 428-3000

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

                               Yes_X__ No ___.


Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                                               Outstanding at
     Class                                     May 7, 2002
     -----                                     --------------
Common Stock, Par Value $.01                    20,860,232




                                       1


<PAGE>



                                 i3 MOBILE, INC.
                           FORM 10-Q QUARTERLY REPORT

                                TABLE OF CONTENTS









                         PART I - Financial Information

Item 1. - Financial Statements (Unaudited)

<TABLE>
<S>                                                                             <C>
Consolidated Balance Sheet as of March 31, 2002 and
  December 31, 2001...........................................................    3

Consolidated Statement of Operations for the Three
  Months Ended March 31, 2002 and 2001........................................    4

Consolidated Statement of Cash Flows for the Three
  Months Ended March 31, 2002 and 2001........................................    5

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



Item 2. - Management's Discussion and Analysis of Financial
            Condition and Results of Operations...............................    8

Item 3. - Quantitative and Qualitative Disclosures about Market Risk..........   18


                           Part II - Other Information

Item 6. - Exhibits and Reports on Form 8-K....................................   19

Signatures....................................................................   20
</TABLE>


















                                       2


<PAGE>



                                  i3 MOBILE, INC.

                            CONSOLIDATED BALANCE SHEET
                         (IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>
                                                              March 31,     December 31,
                                                                 2002          2001
                                                            ------------   -------------
                                                             (UNAUDITED)      (NOTE)
<S>                                                            <C>           <C>
                           ASSETS

Current assets:
  Cash and cash equivalents................................... $  44,853     $  52,612
  Accounts receivable, net of allowances......................       580           651
  Deferred advertising .......................................        19         2,245
  Prepaid expenses and other current assets...................       631           749
                                                               ---------     ---------
         Total current assets.................................    46,083        56,257
  Fixed assets, net ..........................................    10,257        11,423
  Deposits and other non-current assets.......................       598           778
                                                               ---------     ---------
         Total assets......................................... $  56,938     $  68,458
                                                               =========     =========
      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable............................................ $     765     $   1,827
  Accrued liabilities ........................................     2,903         3,363
  Capital lease obligation, current portion ..................       413           568
                                                               ---------     ---------
         Total liabilities....................................     4,081         5,758

Stockholders' equity:
  Preferred stock; 50,000 shares authorized, none
    issued....................................................        --            --
  Common stock; $.01 par value, 50,000,000 shares authorized,
    24,805,640 and 24,788,740 shares issued...................       248           248
  Additional paid-in capital..................................   166,986       166,919
  Notes receivable from stockholder ..........................      (500)         (500)
  Deferred compensation.......................................       (95)         (133)
  Accumulated deficit.........................................  (108,803)      (98,871)
  Treasury stock at cost, 2,240,800 and 2,230,800 shares......    (4,979)       (4,963)
                                                               ---------     ---------
         Stockholders' equity ................................    52,857        62,700
                                                               ---------     ---------
         Total liabilities and stockholders'
           equity ............................................ $  56,938     $  68,458
                                                               =========     =========
</TABLE>






NOTE:  The balance sheet at December 31, 2001 has been derived from the audited
consolidated financial statements at that date.

See accompanying notes to consolidated financial statements.




                                       3


<PAGE>




                               i3 MOBILE, INC.

                      CONSOLIDATED STATEMENT OF OPERATIONS
                         (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED
                                                                ----------------------
                                                                  March 31,  March 31,
                                                                    2002       2001
                                                                ----------   ---------
                                                                      (UNAUDITED)

<S>                                                               <C>        <C>
Net revenue.....................................................   $   911    $ 1,333
                                                                   -------    -------

Expenses:
  Operating ....................................................     1,696      1,018
  Sales and marketing ..........................................     3,781      1,322
  Product development ..........................................     1,469      1,121
  General and administrative ...................................     4,106      3,707
                                                                   -------    -------
Total expenses..................................................    11,052      7,168
                                                                   -------    -------
Operating loss..................................................   (10,141)    (5,835)
Interest income, net............................................      (209)    (1,141)
                                                                   -------    -------
Net loss........................................................    (9,932)    (4,694)
                                                                   =======    =======

Net loss per share - basic and diluted..........................   $ (0.44)   $ (0.21)
                                                                   =======    =======
Shares used in computing net loss per share.....................    22,568     22,830
                                                                   =======    =======
</TABLE>










See accompanying notes to consolidated financial statements.




                                       4

<PAGE>


                                 i3 MOBILE, INC.

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)



<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED
                                                                     ----------------------
                                                                      March 31,   March 31,
                                                                        2002        2001
                                                                     ---------    ---------
                                                                           (UNAUDITED)

<S>                                                                   <C>        <C>
Cash flows from operating activities:

  Net loss..........................................................   $(9,932)   $(4,694)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
    Depreciation ...................................................     1,498        940
    Non-cash stock compensation charges ............................        61        141
Changes in operating assets and liabilities:
      Decrease (increase) in accounts receivable....................        71       (397)
      Decrease in deferred advertising..............................     2,226         -
      Decrease (increase) in other assets...........................       325         (7)
      (Decrease) in accounts payable................................    (1,062)    (1,460)
      (Decrease) in accrued liabilities.............................      (460)    (1,106)
                                                                       -------    -------
Net cash (used) in operating activities.............................    (7,273)    (6,583)
                                                                       -------    -------
Investing activities:
    Purchase of fixed assets........................................      (332)      (750)
                                                                       -------    -------
Net cash (used) in investing activities.............................      (332)      (750)
                                                                       -------    -------
Financing activities:
  Payments on capital lease obligations.............................      (155)      (205)
  Proceeds from exercise of stock options...........................        17          7
  Repurchase of common stock........................................       (16)         -
  Repayments of notes receivable - related parties..................         -          4
                                                                       -------    -------
Net cash (used) in financing activities.............................      (154)      (194)
                                                                       -------    -------
Decrease in cash and cash equivalents...............................    (7,759)    (7,527)
Cash and cash equivalents at beginning of period....................    52,612     84,900
                                                                       -------    -------
Cash and cash equivalents at end of period..........................   $44,853    $77,373
                                                                       =======    =======
</TABLE>










See accompanying notes to consolidated financial statements.




                                       5

<PAGE>


                             i3 MOBILE, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 1 - COMPANY OVERVIEW:

         i3 Mobile, Inc., "i3" or the "Company", was incorporated in Delaware on
June 28, 1991. During 2001, the Company evolved from a company that distributed
customized text-based information to mobile devices under the "Powered by i3
Mobile" product brand into a company that it believes is among the first to
create a premium mobile subscription information and communication service for
telephones. This service, Pronto, is being marketed directly to consumers and
delivers information on demand 24 hours a day, combining the service of a mobile
concierge with the power of voice recognition technology.

         Pronto provides telephone users with information accessible through the
Company's live operators and proprietary, automated flat menu voice recognition
system. The Company's live operators provide its subscribers with services such
as making restaurant reservations and providing driving directions. The
Company's live operators are also available to answer questions outside the
scope of its automated voice recognition system, and can assist subscribers if
the automated voice recognition system cannot properly answer the request. The
Company's automated content currently features news, stock quotes, sports,
weather, movie reviews and schedules and leisure categories such as horoscopes
and lottery results. The Company's content is automatically accessible in an
"ask a question/get an answer" format.

         The Company also offers wireless alert products in many different
categories for mobile device consumers. These "Powered by i3 Mobile" products
are sold primarily through relationships with wireless network operators on a
subscription basis.

LIQUIDITY:

         The Company has incurred substantial losses and negative cash flows
from operations in every fiscal period since inception. For the three months
ended March 31, 2002, the Company incurred a loss from operations of
approximately $10.1 million and negative cash flows from operations of $7.3
million. As of March 31, 2002, the Company had an accumulated deficit of
approximately $108.8 million. Management expects operating losses and negative
cash flows to continue for the foreseeable future as the Company incurs
additional costs and expenses related to brand development, marketing and other
promotional activities, expansion of product offerings and development of
relationships with other businesses. Certain of these costs could be reduced if
working capital decreased significantly. Future failures to generate sufficient
revenues, raise additional capital or reduce certain discretionary spending
could have a material adverse effect on the Company's ability to continue as a
going concern and to achieve its intended business objectives.

NOTE 2 - BASIS OF PRESENTATION:

         The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information. Certain information
and note disclosures normally included in financial statements have been omitted
pursuant to Article 10 of Regulation S-X. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included in the accompanying unaudited financial
statements. Operating results for the three month period ended March 31, 2002
are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 2002.

         For further information, refer to the consolidated financial statements
and footnotes thereto included in our annual report on Form 10-K for the year
ended December 31, 2001.

         Certain reclassifications have been made for consistent presentation.



                                       6
<PAGE>


NOTE 3 - SIGNIFICANT CUSTOMERS:

         During the periods ending March 31, 2002 and March 31, 2001, the
Company had two wireless network operator customers for its legacy wireless
alert product, which combined, accounted for approximately 80% and 64%,
respectively of its total net revenues. During April 2002, the Company received
notice from it's largest wireless network operator customer, who accounted for
62% of net revenues for the three month period ending March 31, 2002, that it
will be terminating its legacy wireless alert product with the Company effective
December 31, 2002.

NOTE 4 - ALLOWANCE FOR DOUBTFUL ACCOUNTS:

         The Company maintained an allowance for doubtful accounts of $0.1
million at March 31, 2002 and December 31, 2001, respectively.

NOTE 5 - STOCK REPURCHASE PLAN:

         On April 16, 2001, the Company issued a press release announcing that
its Board of Directors had authorized a share repurchase program to acquire up
to 2.3 million shares of its common stock. Pursuant to this repurchase program,
such purchases will be made from time to time in the open market and through
privately negotiated transactions, subject to general market and other
conditions. The Company will finance the repurchase program through existing
cash resources. Shares acquired pursuant to this repurchase program will become
treasury shares and will be available for reissuance for general corporate
purposes. As of March 31, 2002, and December 31, 2001, 0.4 million shares and
$0.3 million shares have been repurchased by the Company under this plan at a
weighted average repurchase price of $2.10 per share and $2.12 per share,
respectively.

NOTE 6 - SUBSEQUENT EVENTS:

         During April 2002 the Company announced it had repurchased 1.5 million
shares of the Company's common stock, at $1.10 per share, from Keystone Ventures
IV, L.P. and Keystone Ventures V, L.P., which had purchased the shares in a
private placement prior to the Company's April 2000 initial public offering. In
addition, the Company also repurchased 0.2 million shares of its common stock
from a former member of the Company's Board of Directors, also at $1.10 per
share. With the completion of these transactions, the outstanding shares of i3
Mobile have been reduced by 7.5% to approximately 20.9 million shares.




                                       7
<PAGE>


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

     The following discussion of our financial condition and results of
operations should be read together with our consolidated financial statements
and the related notes included in this document and with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the audited financial statements and notes thereto for the years ended December
31, 2001, 2000 and 1999 included in our annual report on Form 10-K for the year
ended December 31, 2001, and presumes that readers have access to, and will have
read, "Management's Discussion and Analysis of Financial Conditions and Results
of Operations" contained in such Form 10-K.

OVERVIEW

         Since our inception in June 1991 until 2001, our business was comprised
of distributing customized text-based information to mobile devices under the
"Powered by i3 Mobile" product brand. During 2001, we evolved from a company
that distributed customized text-based information to mobile devices under the
"Powered by i3 Mobile" product brand into a company that we believe is among the
first to create a premium mobile subscription information and communication
service for telephones. This service, Pronto, is being marketed directly to
consumers and delivers information and service on demand 24 hours a day,
combining the service of a mobile concierge with the simplicity of flat-menu
voice recognition technology. The results of operations discussed below
primarily relate to the operation of our legacy business, since our Pronto
service has not yet generated significant revenues.

         In fiscal 2001, we invested significant financial resources developing
Pronto and its supporting technology infrastructure. In addition, we spent
approximately $1 million on independent consumer research to identify specific
consumer needs and preferences in order to develop applications that are most
compelling to telephone users, especially mobile telephones. The Pronto
experience, unlike the experience afforded by the current "wireless internet,"
leverages the core voice interface functionality of telephones, rather than the
telephone keypad, to create a seamless user experience.

         Pronto was test marketed in the Hartford/New Haven region of
Connecticut in the fourth quarter of 2001. While currently available on a
national basis, we have begun a coordinated national marketing campaign for
Pronto during the second quarter of 2002. As of March 31, 2002 we had
approximately 1,100 paying subscribers on our Pronto service.

         We anticipate that our financial results for the remainder of 2002 and
during the first half of 2003 will be principally driven by our ability to
properly allocate the extent and timing of our limited cash resources to the
enhancement of the capacity of the Pronto service call center infrastructure,
technology development and to our national marketing and other customer
acquisition efforts. The application of these resources must be coordinated with
and take into account the projected rate of growth of our Pronto service
subscriber base and the pricing assumptions in our business model. Based on our
test marketing to date, management has made significant estimates regarding the
anticipated growth of our subscriber base, taking into account many variables,
certain of which are outside our control. These variables include growth in the
market for wireless services, customer demand for our products and services, the
efficacy of our marketing efforts (particularly our national campaign in 2002),
and the reliability and speed of our technology infrastructure and live operator
service. We may decide to expand the capabilities of our existing call center
arrangement, acquire a call center operation, or establish our own call center;
each of these choices would require significantly different levels of funding.
This decision will be influenced, in part, by the projected and actual rate of
growth in the Pronto service subscriber base and related revenue growth. Our
business model requires expanding and improving the technology and call center
capabilities in order to properly service anticipated increased usage by a
growing subscriber base, and if our subscriber base does not grow at projected
rates, or our pricing assumptions are incorrect, then our up front expenses,
including our decision regarding call center alternatives, will exceed our
revenues by amounts greater than currently anticipated, accelerating our
projected losses and putting additional pressure on our cash resources.



                                       8

<PAGE>


RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2002 AND MARCH 31, 2001

         Net Revenue. Net revenue decreased 32% to $0.9 million for the three
months ended March 31, 2002 from $1.3 million for the three months ended March
31, 2001. This decrease was attributable to a $0.2 million decrease in
subscription revenues from wireless network operators as well as $0.2 million of
non-recurring development revenues recognized during the 2001 period. We would
anticipate that subscription revenues from this legacy product will continue to
decrease substantially in the future as we de-emphasize this product and
implement our Pronto service. During April 2002, we received notice from our
largest wireless network operator customer, who accounted for 62% of net
revenues for the three month period ending March 31, 2002, that it will be
terminating its legacy wireless alert product with us effective December 31,
2002.

         Operating Expenses. Operating expenses increased by 67% to $1.7 million
for the three months ended March 31, 2002 from $1.0 million for the three months
ended March 31, 2001. The increase was primarily attributed to the cost of
expanding our live operator, customer service and customer acquisition costs in
connection with the marketing of Pronto in the 2002 period. During 2002, we will
continue to incur substantial operating expenses relating to our various
Pronto-related call center requirements.

         Sales and Marketing Expenses. Sales and marketing expenses increased by
292% to $3.8 million for the three months ended March 31, 2002 from $1.3 million
for the three months ended March 31, 2001. The increase from the March 31, 2001
period is primarily attributable to our utilization of non-cash media credits
with the National Broadcasting Company, Inc. which reduced our deferred
advertising asset, amounting to $2.2 million of expense. By June 30, 2002, in
addition to other sales and marketing expenses we may incur, we are
contractually obligated to purchase for cash approximately $1.3 million in
television advertising from the National Broadcasting Company, Inc., which
advertising may appear on the NBC or CNBC television networks and/or on NBC's
owned and operated television stations.

         Product Development Expenses. Product development expenses increased by
31% to $1.5 million for the three months ended March 31, 2002 from $1.1 million
for the three months ended March 31, 2001. The increase was primarily as a
result of labor and related costs resulting from the ongoing refinement and
enhancement of Pronto.

         General and Administrative Expenses. General and administrative
expenses increased by 11% to $4.1 million for the three months ended March 31,
2002 from $3.7 million for the three months ended March 31, 2001. This increase
from the March 31, 2001 period was primarily attributable to depreciation which
increased $0.6 million as compared to the prior year quarter due to our capital
investing activities undertaken in 2001.

         Interest Income, Net. Net interest income was $0.2 million for the
three months ended March 31, 2002 as compared to $1.1 million for the three
months ended March 31, 2001. The decrease was attributable to a lower amount of
funds invested in the 2002 period as compared to 2001 as well as lower average
returns on investments due to a general decrease in interest rates.

LIQUIDITY AND CAPITAL RESOURCES

         Since our inception we have financed our operations primarily through
sales of our common and preferred securities and the issuance of long-term debt,
which has resulted in aggregate cash proceeds of $130.1 million through March
31, 2002.

         Net cash used in operating activities was $7.3 million for the three
months ended March 31, 2002 and $6.6 million for the three months ended March
31, 2001. The principal use of cash in each of these periods was to fund our
losses from operations.

         We believe that our current cash and cash equivalents will be
sufficient to meet our anticipated cash needs for working capital and capital
expenditures for at least the next twelve months. We anticipate utilizing our
cash and cash equivalents to fund expected losses from operations and to invest
in systems development to further refine



                                       9
<PAGE>


our content delivery and business systems support. Specifically, we anticipate
such utilization to include national advertising campaigns and other subscriber
acquisition efforts as well as operating expenses associated with our Pronto
product offering, including call center, live operator and associated expenses,
ongoing refinement of our speech recognition technology, and expanded content
acquisition. We anticipate our overall cash expenditures in 2002 will exceed the
total cash used in 2001. The anticipated cash expenditures for the remainder of
2002 include approximately $2.4 million of non-cancelable commitments. In
addition, we may incur significant uses of cash in connection with possible
strategic acquisitions. Because we are in the process of transforming our
business model to focus on the direct to consumer nationwide marketing of the
Pronto suite of services, and intend, during 2002, to de-emphasize our legacy
wireless alert product offering, we anticipate that our historical source of
revenues will diminish, and that we will incur negative operating margins
through most of 2002 and net losses throughout 2002 and early 2003 as we incur
significant marketing, sales and development expenses in connection with Pronto.
While we anticipate that revenues from Pronto will eventually replace and exceed
those from our legacy wireless alert business, there can be no assurance of this
occurrence. In addition, we may not generate revenues at levels sufficient to
cover anticipated expenses, resulting in ongoing net losses and depletion of our
cash resources. In such event, we would need to seek and obtain additional
financing; there can be no assurance we will be able to do so on favorable
terms, or at all. Future failures to generate sufficient revenues, raise
additional capital or reduce certain discretionary spending could have a
material adverse effect on our ability to continue as a going concern and to
achieve our intended business objectives.

         Net cash used in investing activities was $0.3 million for the three
months ended March 31, 2002 and $0.8 million for the three months ended March
31, 2001. The principal use of cash in each of these periods relates primarily
to purchases of fixed assets.

         Net cash used in financing activities was $0.2 million for the three
months ended March 31, 2002 and March 31, 2001, respectively. The principal use
of cash in each of these periods was for the repayment of certain capital lease
obligations.

     As of March 31, 2002, we had cash and cash equivalents of $44.9 million.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

         This quarterly report on Form 10-Q contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. When used in this report,
the words "believe," "anticipate," "think," "intend," "plan," "expect,"
"project," "will be" and similar expressions identify such forward-looking
statements. The forward looking statements included herein are based on current
expectations and assumptions that involve a number of risks and uncertainties,
including the statements in Liquidity and Capital Resources regarding the
adequacy of funds to meet funding requirements. Our actual results may differ
significantly from the results discussed in the forward-looking statements. A
number of uncertainties exist that could affect our future operating results,
including, without limitation, the growth rate of the market for wireless
products, consumer awareness of our products, the progress and cost of
development of our products and services, the timing and market acceptance of
those products and services, our ability to manage our cash resources until we
are able to generate revenues and profitable operations from our Pronto product,
our history of losses, competitive economic conditions, and general economic
factors. We have incurred significant operating losses since our inception.
There can be no assurance that we will be able to achieve or maintain
profitability in the future. In light of the significant risks and uncertainties
inherent in the forward-looking statements included herein, the inclusion of
such statements should not be regarded as a representation by the Company or any
other person that the objectives and plans of the Company will be achieved.

OTHER FACTORS THAT MAY AFFECT FUTURE PERFORMANCE

         Before deciding to invest in i3 Mobile or to maintain or increase your
investment, you should carefully consider the risks described below, in addition
to the other information contained in this report and in our other filings with
the SEC. Additional risks and uncertainties not presently known to us may also
affect our business operations. If any of these risks actually occur, our
business, financial condition or



                                       10
<PAGE>


results of operations could be seriously harmed. In that event, the market price
of our common stock could decline and you may lose all or part of your
investment.

         WE HAVE A NEW PRODUCT AND BUSINESS MODEL, WHICH MAKES PREDICTIONS OF
OUR FUTURE RESULTS OF OPERATIONS DIFFICULT.

         During 2001 we initiated our current business model involving offering
subscription-based voice-activated premium wireless content and services, and in
the fall of 2001 we launched local consumer testing of our current "Pronto"
service offering. Our formal national marketing and sales campaign for Pronto
has only commenced earlier during the second quarter of 2002. Due to our new
product offering and business model, and evolving consumer preferences in our
industry, it is difficult or impossible to predict our future results of
operations. Investors must consider our business, industry and prospects in
light of the risks and difficulties typically encountered by companies in
rapidly evolving and intensely competitive markets requiring significant capital
expenditures such as those in which we are engaged.

         WE HAVE A HISTORY OF LOSSES AND MAY NOT BE ABLE TO GENERATE SUFFICIENT
NET REVENUE FROM OUR NEW BUSINESS IN THE FUTURE TO ACHIEVE OR SUSTAIN
PROFITABILITY.

         We have incurred losses since inception and expect that our net losses
and negative cash flow will continue for the foreseeable future as we seek to
implement our business plan, expand our service infrastructure, attract
subscription customers and grow our business. To date, our revenues have come
from our legacy "Powered by i3 Mobile" SMS alerts distribution arrangements, and
it is anticipated that this revenue stream will decrease as we implement and
expand our new business. We cannot assure you that we will ever generate
sufficient net revenue to achieve or sustain profitability.

         A high percentage of our expenses are, and will continue to be, fixed.
We may also incur significant new costs related to possible acquisitions and the
integration of new technologies. We expect to continue to incur increasing
levels of expenses for research and development, sales and marketing, call
center operation, customer support, developing distribution channels and general
and administrative expenses as we seek to increase our product and service
offerings, expand into new markets and launch our national campaign for our
Pronto service. In particular, given our early stage of development, our
significant operating expenses, the rate at which consumers subscribe to Pronto,
and the rate at which competition in our industry is intensifying, we may not be
able to maintain adequate operating margins. Our ability to achieve and sustain
profitability will depend on the accuracy of our expense projections and revenue
growth projections and on our ability to generate and sustain substantially
higher revenue, while maintaining reasonable cost and expense levels, as we seek
to increase our product offerings, customer base, geographic reach and
technological advantages. As a result, if we fail to increase our revenue, or if
we experience delays in generating revenue, we would incur continuing
substantial operating losses. We do not anticipate achieving profitability for
the remainder of 2002 and into 2003.

         THE ACCURACY OF OUR SUBSCRIBER BASE AND EXPENSE PROJECTIONS ARE
CRITICAL TO OUR PROFITABILITY.

         We anticipate that our financial results for the remainder of 2002 and
during the first half of 2003 will be principally driven by our ability to
properly allocate the extent and timing of our limited cash resources to the
enhancement of the capacity of the Pronto service call center infrastructure,
technology development and to our national marketing and other customer
acquisition efforts. The application of these resources must be coordinated with
and take into account the projected rate of growth of our Pronto service
subscriber base and the pricing assumptions in our business model. Based on our
test marketing to date, management has made significant estimates regarding the
anticipated growth of our subscriber base, taking into account many variables,
certain of which are outside the Company's control. These variables include
customer demand for our products and services, the efficacy of our marketing
efforts (particularly our national campaign in 2002), and the reliability and
speed of our technology infrastructure and live operator service. We may decide
to expand the capabilities of our existing call center arrangement, acquire a
call center operation, or establish our own call center; each of these choices
would require significantly different levels of funding. This decision will be
influenced, in part, by the projected and actual rate of growth in the Pronto
service subscriber base and related revenue growth. Our business model requires
expanding and improving the technology and call center capabilities in order to
properly



                                       11
<PAGE>


service anticipated increased usage by a growing subscriber base, and if our
subscriber base, which as of March 31, 2002 was approximately 1,100 subscribers,
does not grow at projected rates, or our pricing assumptions are incorrect, then
our up front expenses, including our decision regarding call center
alternatives, will exceed our revenues by amounts greater than currently
anticipated, exacerbating our projected losses and putting additional pressure
on our cash resources.

         OUR RELIANCE ON CERTAIN SUPPLIERS AND VENDORS COULD ADVERSELY AFFECT
OUR ABILITY TO PROVIDE OUR PRONTO BRAND SERVICES TO OUR SUBSCRIBERS ON A TIMELY
AND COST-EFFICIENT BASIS.

         We currently rely on iNetNow, Inc. and Abacus Communications LLC to
provide the call center services for our products, and on Voxeo Corporation to
host our voice recognition application. We do not currently have internal call
center capabilities. The initial term of our agreement with iNetNow expired on
April 30, 2002 and is currently on automatic monthly renewals until October 31,
2002, unless earlier terminated. Our agreement with Abacus expires on September
20, 2002 with automatic annual renewals unless earlier terminated. Our agreement
with Voxeo expires on September 30, 2002 with automatic annual renewals unless
earlier terminated. Our reliance on these service providers involves a number of
risks, including the long-term financial viability of these chosen vendors, and
the inability to control quality and timing of delivery of services. If iNetNow,
Inc., Abacus Communications LLC or Voxeo Corporation are unable or unwilling to
continue supporting our products in required volumes and at high quality levels,
or if these agreements are terminated, we will have to identify, qualify and
select acceptable alternative service providers. Significant interruptions may
result as it is possible that an alternate source may not be available to us
when needed or be in a position to satisfy our requirements at acceptable prices
and quality. Although none of iNetNow, Abacus or Voxeo have indicated to us that
they will terminate our agreements, nor do we have reason to believe that they
will, they have the right to do so later in 2002. There can be no assurance we
will be able avoid termination of these agreements. Any significant interruption
in call center, customer phone service or voice recognition operations would
result in us having to reduce our support of our customers, which in turn could
have a material adverse effect on our customer relations, business, financial
condition and results of operations. We may not be able to effectively manage
our relationships with our call center service providers and they may not meet
our future requirements for quality.

         THE MARKET FOR WIRELESS CONTENT SERVICES IS NEW, AND OUR BUSINESS WILL
SUFFER IF THE MARKET DOES NOT DEVELOP AS WE EXPECT OR IF THE USAGE OF WIRELESS
CONTENT PRODUCTS DOES NOT CONTINUE TO GROW.

         The wireless content services market is new and may not grow or be
sustainable. It is possible that our services may never achieve market
acceptance or be well received by consumers. We have a limited number of
customers and we have not yet provided our services on the scale that is
anticipated in the future. We incur operating expenses based largely on
anticipated revenue trends that are difficult to predict given the recent
emergence of the premium wireless content and concierge services market. If
general wireless product usage does not continue to increase, or the market for
premium wireless content service does not develop, or develops more slowly than
we expect, demand for our Pronto services may be limited and our business,
financial condition and operating results could be harmed.

         OUR SUCCESS WILL BE DEPENDENT ON INCREASING AWARENESS OF THE PRONTO
BRAND.

         We expect to incur significant expenditures in order to increase
awareness of our Pronto services and brand name through sales and marketing and
other promotional activities. We believe that continuing to strengthen the
Pronto brand is critical to achieving widespread acceptance of the Pronto
service, particular in light of the competitive nature of our market. Promoting
and positioning this brand will depend largely on the success of our ability to
provide high quality services and our marketing efforts. In order to promote our
brand, we will need to increase our marketing budget and otherwise increase our
financial commitment to create and maintain brand loyalty among users. Further,
there can be no assurance that any new users attracted to the Pronto brand will
maintain an ongoing customer relationship with our products. If we fail to
promote and maintain our brand or incur substantial expenses in an attempt to
promote and maintain our brand or if our existing or future strategic
relationships fail



                                       12
<PAGE>


to promote our brand or increase brand awareness, our business, financial
condition and operating results would be materially adversely affected.

         WE WILL INVEST A SIGNIFICANT AMOUNT OF OUR RESOURCES TO DEVELOP,
MARKET, AND SUPPORT OUR PRODUCTS AND SERVICES AND MAY NOT REALIZE ANY RETURN ON
THIS INVESTMENT.

         We plan to invest a significant amount of our resources to develop,
market and support our products and services, particularly in connection with
the national launch of Pronto. Accordingly, our success will depend on our
ability to generate sufficient revenue from sales of these products and services
to offset the expenses associated with developing, marketing and supporting
them, as well as the expenses of establishing our new call center. There are
many risks that we face in doing so. In particular, we will need to improve the
reliability of our voice recognition system to reduce the number of calls that
fail over to the live operator for basic requests of news, sports and weather.
Additionally, the rapidly changing technological environment in which we operate
can require the frequent introduction of new products, resulting in short
product lifecycles. Accordingly, if our products and services do not quickly
achieve market acceptance, they may become obsolete before we have generated
enough revenue from their sales to realize a sufficient return on our
investment.

         As a result, we expect to incur significant expenses and losses for the
remainder of 2002 and into 2003. If we incur substantial development, sales and
marketing expenses that we are not able to recover, and we are not able to
compensate for such expenses, our business, financial condition and results of
operations would be materially adversely affected.

         IF WE DO NOT HAVE SUFFICIENT CAPITAL TO FUND OUR OPERATIONS, WE MAY BE
FORCED TO DISCONTINUE PRODUCT DEVELOPMENT, REDUCE OUR SALES AND MARKETING
EFFORTS OR FOREGO ATTRACTIVE BUSINESS OPPORTUNITIES.

         We may not have sufficient capital to fund our operations and
additional capital may not be available on acceptable terms, if at all. Any of
these outcomes could adversely impact our ability to respond to competitive
pressures or could prevent us from conducting all or a portion of our planned
operations. The speed at which we utilize our available capital is likely to
increase substantially as we launch Pronto nationally on a direct-to-consumer
basis. We expect that the cash we receive through our operations and our
currently available cash resources will be sufficient to meet our working
capital and capital expenditure needs for the at least the next 12 months. After
that, we may need to raise additional funds, and additional financing may not be
available on acceptable terms, if at all. We also may require additional capital
to acquire or invest in complementary businesses or products or to obtain the
right to use complementary technologies. If we issue additional equity
securities to raise funds, the ownership percentage of existing shareholders
will be reduced. If we incur debt, the debt will rank senior to our common
shares, we will incur debt service costs and we will likely have to enter into
agreements that will restrict our operations in some respects and our ability to
declare dividends to the holders of our common shares.

         IF WE FAIL TO ENHANCE PRONTO TO MEET CHANGING CUSTOMER REQUIREMENTS AND
TECHNOLOGICAL ADVANCES, OUR OPERATIONS WOULD BE MATERIALLY ADVERSELY AFFECTED.

         The timely development of new or enhanced products and services is a
complex and uncertain process and although we believe we currently have the
funding to implement our business plan, we may not have sufficient resources to
successfully and accurately anticipate technological and market trends, or to
successfully manage long development cycles. We may also experience design,
marketing and other difficulties that could delay or prevent our development,
introduction or marketing of our Pronto services, as well as new products and
enhancements. We may also be required to collaborate with third parties to
develop our products and may not be able to do so on a timely and cost-effective
basis, if at all. If we are not able to develop new products or enhancements to
existing products on a timely and cost-effective basis, or if our new products
or enhancements fail to achieve market acceptance, our business, financial
condition and results of operations would be materially adversely affected.

         IF WE ARE NOT ABLE TO ESTABLISH RELATIONSHIPS WITH A VARIETY OF
DISTRIBUTION PARTNERS, WE MAY NOT BE ABLE TO INCREASE OUR SALES AND GROW OUR
BUSINESS.



                                       13

<PAGE>


         We believe that our future success is dependent upon establishing
successful relationships with a variety of distribution partners including
wireless network operators, Internet portals, business enterprises, national
retail chains and selected vertical retail outlets. We cannot be certain that we
will be able to reach agreement with distribution partners on a timely basis or
at all, or that any of our current or future distribution partners will devote
adequate resources to selling our products. If we cannot establish these
relationships, we may not be able to increase our sales and grow our business.

         WE RELY ON THIRD-PARTY SOFTWARE AND TECHNOLOGY, THE LOSS OF WHICH COULD
FORCE US TO USE INFERIOR SUBSTITUTE TECHNOLOGY OR TO CEASE OFFERING OUR
PRODUCTS.

         We rely on third party intellectual property licenses. For example, we
have entered into license agreements with Nuance Communications, Inc. and Voxeo
Corporation for use of their speech recognition technology and voice centers. In
addition, we use, and will use in the future, some third-party software that may
not be available in the future on commercially reasonable terms, or at all. We
could lose our ability to use this software if the agreements are terminated or
if the rights of our suppliers to license it were challenged by individuals or
companies which asserted ownership of these rights. The loss of, or inability to
maintain or obtain, any required intellectual property could require us to use
substitute technology, which could be more expensive or of lower quality or
performance, or force us to develop the technology ourselves or cease offering
our products. Moreover, some of our license agreements from third parties are
non-exclusive and, as a result, our competitors may have access to some of the
technologies used by us. Any significant interruption in the supply of any
licensed software could cause a decline in product sales, unless and until we
are able to replace the functionality provided by this licensed software. We
also depend on these third parties to deliver and support reliable products,
enhance their current products, develop new products on a timely and
cost-effective basis, and respond to emerging industry standards and other
technological changes. The failure of these third parties to meet these criteria
could materially harm our business.

         WE DEPEND ON THIRD PARTIES FOR CONTENT, AND THE LOSS OF ACCESS TO THIS
CONTENT COULD HARM OUR BUSINESS.

         We do not create all of our own content. Rather, we acquire rights to
information from numerous third-party content providers, and our future success
is dependent upon our ability to maintain relationships with these content
providers and enter into new relationships with other content providers. We
typically license content through one or a combination of the following formats:
a revenue-sharing arrangement, a one-time fee, a periodic fee or a fee for each
query from subscribers. If we fail to enter into and maintain satisfactory
arrangements with content providers, our business will suffer.

         WE MAY BE SUBJECT TO LIABILITY FOR OUR USE OR DISTRIBUTION OF
INFORMATION THAT WE RECEIVE FROM THIRD PARTIES.

         We obtain content and commerce information from third parties. When we
integrate and distribute this information through Pronto, we may be liable for
the data that is contained in that content. This could subject us to legal
liability for such things as defamation, negligence, intellectual property
infringement and product or service liability. Many of our content agreements do
not provide us with indemnity protection. Even if a given contract does contain
indemnity provisions, these provisions may not cover a particular claim. Our
insurance coverage may be inadequate to cover fully the amounts or types of
claims that might be made against us. Any liability that we incur as a result of
content we receive from third parties could adversely affect our financial
results. We also gather personal information from users in order to provide
personalized services. Gathering and processing this personal information may
subject us to legal liability for negligence, defamation, invasion of privacy,
product or service liability. We may also be subject to laws and regulations,
both in the United States and abroad, regarding user privacy.

         WE RELY HEAVILY ON OUR PROPRIETARY TECHNOLOGY, BUT WE MAY BE UNABLE TO
ADEQUATELY PROTECT OR ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS.

         Our success depends significantly upon our proprietary technology. To
protect our proprietary rights, we rely on a combination of copyright and
trademark laws, patents, trade secrets, confidentiality agreements with
employees and third parties and protective



                                       14
<PAGE>


contractual provisions. Despite our efforts to protect our proprietary rights,
unauthorized parties may copy aspects of our products or services or obtain and
use information that we regard as proprietary. In addition, others could
possibly independently develop substantially equivalent intellectual property.
If we do not effectively protect our intellectual property our business could
suffer. If we cannot adequately protect our intellectual property, our
competitive position may suffer. Companies in the software industry have
frequently resorted to litigation regarding intellectual property rights. We may
have to litigate to enforce our intellectual property rights, to protect our
trade secrets or to determine the validity and scope of other parties'
proprietary rights. Similarly, we cannot ensure that our employees will comply
with the confidentiality agreements that they have entered into with us, or they
will not misappropriate our technology for the benefit of a third party. If a
third party or any employee breaches the confidentiality provisions in our
contracts or misappropriates or infringes on our intellectual property, we may
not have adequate remedies. In addition, third parties may independently
discover or invent competing technologies or reverse engineer our trade secrets,
software or other technology.

         OUR PRODUCTS MAY INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS,
AND RESULTING CLAIMS AGAINST US COULD BE COSTLY AND REQUIRE US TO ENTER INTO
DISADVANTAGEOUS LICENSE OR ROYALTY ARRANGEMENTS.

         The software industry is characterized by the existence of a large
number of patents and frequent litigation based on allegations of patent
infringement and the violation of intellectual property rights. Although we
attempt to avoid infringing known proprietary rights of third parties, we may be
subject to legal proceedings and claims for alleged infringement by us or as
licensees of third-party proprietary rights, such as patents, trade secrets,
trademarks or copyrights, from time to time in the ordinary course of business.
From time to time, we have received, and we may receive in the future, notice of
claims of infringement of other parties' proprietary rights. Any such claims
could be time-consuming, result in costly litigation, divert management's
attention, cause product or service release delays, require us to redesign our
products or services or require us to enter into royalty or licensing
agreements. If a successful claim of infringement were made against us and we
could not develop non-infringing technology or license the infringed or similar
technology on a timely and cost-effective basis, our business could suffer.
Furthermore, former employers of our employees may assert that these employees
have improperly disclosed confidential or proprietary information to us. Any of
these results could harm our business. We may be increasingly subject to
infringement claims as the number of, and number of features of, our products
grow.

         OUR FAILURE TO RESPOND TO RAPID CHANGE IN THE MARKET FOR VOICE
INTERFACE SERVICES COULD CAUSE US TO LOSE REVENUE AND HARM OUR BUSINESS.

         The voice interface services industry is relatively new and rapidly
evolving. Our success will depend substantially upon our ability to enhance our
existing Pronto product release and to develop and introduce, on a timely and
cost-effective basis, new versions with features that meet changing end-user
requirements and incorporate technological advancements. If we are unable to
develop new enhanced functionalities or technologies to adapt to these changes,
or if we cannot offset a decline in revenue from existing products with revenues
from new products, our business would suffer. Commercial acceptance of our
products and technologies will depend on, among other things, the ability of our
products and technologies to meet and adapt to the needs of our target markets,
and the performance and price of our products and our competitors' products.

         IF OUR PRODUCTS CONTAIN DEFECTS, WE COULD BE EXPOSED TO SIGNIFICANT
PRODUCT LIABILITY CLAIMS AND DAMAGE TO OUR REPUTATION.

         Because our products are partially designed to provide critical
communications services, we may be subject to significant liability claims. Our
agreements with customers typically contain provisions intended to limit our
exposure to certain liability claims, but may not preclude all potential claims
resulting from a defect in one or more of our products. Although we believe that
we maintain adequate product liability insurance covering certain damages
arising from implementation and use of our products, our insurance may not be
sufficient to cover us against all possible liability. Liability claims could
also require us to spend significant time and money in litigation or to pay
significant damages. As a result, any such claims, whether or not successful,




                                       15
<PAGE>


could seriously damage our reputation and have a material adverse effect on our
business, financial condition and results of operations.

         IF WE FAIL TO COMPLY WITH REGULATIONS AND EVOLVING INDUSTRY STANDARDS,
SALES OF OUR EXISTING AND FUTURE PRODUCTS COULD BE ADVERSELY AFFECTED.

         We are not currently subject to direct regulation by the Federal
Communications Commission or any other governmental agency, other than laws and
regulations applicable to businesses in general. However, in the future, we may
be subject to regulation by the FCC or another regulatory agency. In addition,
the wireless carriers who supply us airtime are subject to regulation by the FCC
and regulations that affect them could increase our costs or reduce our ability
to continue selling and supporting our services. While we believe that our
products comply with all current governmental laws, regulations and standards,
we cannot assure you that we will be able to continue to design our products to
comply with all necessary requirements in the future. In addition, we may be
required to customize our products to comply with various industry or
proprietary standards promoted by our competitors. Our key competitors may
establish proprietary standards, which they do not make available to us. As a
result, we may not be able to achieve interoperability with their products.

         We may otherwise deem it necessary or advisable to modify our products
to address actual or anticipated changes in the regulatory environment. Failure
of our products to comply, or delays in compliance, with the various existing,
anticipated, and evolving industry regulations and standards could adversely
affect sales of our existing and future products. Moreover, the enactment of new
laws or regulations, changes in the interpretation of existing laws or
regulations or a reversal of the trend toward deregulation in the
telecommunications industry, could have a material adverse effect on our
customers, and thereby materially adversely affect our business, financial
condition and operating results.

         IF WE FAIL TO MANAGE THE GROWTH OF OUR OPERATIONS, OUR BUSINESS WILL BE
ADVERSELY AFFECTED.

         In connection with the implementation of our new business model, we
have rapidly and significantly expanded our operations. This expansion has
placed significant new demands on our managerial, operational and financial
resources. In 2001, we added several senior managerial, technical and operations
personnel whom we are in the process of integrating into our new business, and
we expect to add additional key personnel in these areas in the near future as
we implement our business plan and the national launch of our Pronto service. To
manage the expected growth of our operations and personnel, we will be required
to improve existing and implement new operational, financial and management
controls, reporting systems and procedures; hire, train, motivate and manage our
personnel; and effectively manage multiple relationships with our customers,
suppliers and other parties. In addition, our success depends, in part, on our
ability to provide prompt, accurate and complete service to our customers on a
competitive basis, and our ability to purchase and promote products, manage
sales and marketing activities and maintain efficient operations through our
management information systems. A significant disruption in our management
information systems could adversely affect our relations with our customers and
our ability to manage our operations and would have a material adverse effect on
our business, financial condition and operating results. There can be no
assurance that we will successfully manage the integration and expansion of our
new business.

         OUR BUSINESS WILL SUFFER IF WE ARE UNABLE TO HIRE, RETAIN AND MOTIVATE
HIGHLY QUALIFIED EMPLOYEES.

         Our future success depends on our ability to identify, attract, hire,
train, retain and motivate highly skilled technical, managerial, sales and
marketing and business development personnel. Our services and the industries to
which we provide our services are relatively new. As a result, qualified
technical personnel with experience relevant to our business are scarce and
competition to recruit them is intense. If we fail to successfully attract,
assimilate and retain a sufficient number of highly qualified technical,
managerial, sales and marketing, business development and administrative
personnel, our business could suffer.

         Stock options are an important means by which we compensate employees.
We face a significant challenge in retaining our employees if the value of these
stock options is



                                       16
<PAGE>


either not substantial enough or so substantial that the employees leave after
their stock options have vested. To retain our employees, we expect to continue
to grant new options, subject to vesting, which could be dilutive to our current
stockholders. If our stock price does not increase significantly above the
prices of our options, we may also need to issue new options or grant additional
shares of stock in the future to motivate and retain our employees.

         WE DO NOT PLAN TO PAY ANY DIVIDENDS.

         Investors who need income from their holdings should not purchase our
shares. We intend to retain any future earnings to fund the operation and
expansion of our business. We do not anticipate paying cash dividends on our
shares in the future. As a result, our common stock is not a good investment
from people who need income from their holdings.

         INSIDERS OWN A LARGE PERCENTAGE OF OUR STOCK, WHICH COULD DELAY OR
PREVENT A CHANGE IN CONTROL AND MAY NEGATIVELY AFFECT YOUR INVESTMENT.

         As of March 31, 2002, our officers, directors and affiliated persons
beneficially owned approximately 42% of our voting securities. J. William
Grimes, our Chairman, beneficially owned approximately 21% of our voting
securities as of that date. These stockholders will be able to exercise
significant influence over all matters requiring stockholder approval, including
the election of directors and approval of significant corporate transactions,
which could have the effect of delaying or preventing a third party from
acquiring control over us and could affect the market price of our common stock.
In addition, some of our executive officers have stock option grants which
provide for accelerated vesting upon a change in control if their employment is
actually or constructively terminated as a result. The interests of those
holding this concentrated ownership may not always coincide with our interests
or the interests of other stockholders, and, accordingly, they could cause us to
enter into transactions or agreements that we would not otherwise consider.

         WE HAVE IMPLEMENTED ANTI-TAKEOVER PROVISIONS THAT COULD MAKE IT MORE
DIFFICULT TO ACQUIRE US.

         Our certificate of incorporation, our bylaws and Delaware law contain
provisions that could make it more difficult for a third party to acquire us
without the consent of our board of directors, even if doing so would be
beneficial to our stockholders. For example, a takeover bid otherwise favored by
a majority of our stockholders might be rejected by our board of directors. Last
year, we changed our charter to include provisions classifying our board of
directors into three groups so that the directors in each group will serve
staggered three-year terms, which would make it difficult for a potential
acquirer to gain control of our board of directors. We are also afforded the
protections of Section 203 of the Delaware General Corporation Law, which
provides certain restrictions against business combinations with interested
stockholders.

         OUR STOCK PRICE MAY BE VOLATILE DUE TO FACTORS OUTSIDE OF OUR CONTROL.

         Since our initial public offering on April 6, 2000, our stock price has
been extremely volatile. During that time, the stock market in general, and The
Nasdaq National Market and the securities of technology companies in particular,
has experienced extreme price and trading volume fluctuations. These
fluctuations have often been unrelated or disproportionate to the operating
performance of individual companies. The following factors, among others, could
cause our stock price to fluctuate: actual or anticipated variations in
operating results; announcements of operating results and business conditions by
our customers and suppliers; announcements by our competitors relating to new
customers, technological innovation or new services; economic developments in
our industry as a whole; and general market conditions. These broad market
fluctuations may materially adversely affect our stock price, regardless of our
operating results. Our stock price may fluctuate due to variations in our
operating results.

         CERTAIN PROVISIONS OF OUR CHARTER DOCUMENTS PROVIDE FOR LIMITED
PERSONAL LIABILITY OF SUBSCRIBERS OF OUR BOARD OF DIRECTORS.

         Our certificate of incorporation and by-laws contain certain provisions
which reduce the potential liability of subscribers of our board of directors
for certain monetary damages and provide for indemnity of other persons. We are
unaware of any



                                       17
<PAGE>


pending or threatened litigation against us or our directors that would result
in any liability for which any of our directors would seek indemnification or
other protection.

         OUR COMMON STOCK MAY BE SUBJECT TO DELISTING FROM THE NATIONAL NASDAQ
MARKET.

         Our common stock is currently trading on the Nasdaq National Market.
Although we meet the current listing criteria for the Nasdaq National Market, no
assurance can be given as to our ongoing ability to meet the standards of the
Nasdaq National Market maintenance requirements. These standards require, among
other things, that our common stock have a minimum bid price of $1 and state
that a deficiency shall exist if such minimum bid price remains below $1 for a
period of thirty consecutive business days. In addition, if our stock price is
below $5 per share, we must maintain minimum net tangible assets of at least $4
million. If we are unable to demonstrate compliance with the Nasdaq criteria for
maintaining our listing, our common stock could be subject to delisting. If our
common stock were to be delisted from trading on the Nasdaq National Market and
were neither re-listed thereon nor listed for trading on the Nasdaq Small Cap
Market or other recognized securities exchange, trading, if any, in the common
stock may continue to be conducted on the OTC Bulletin Board or in the
non-Nasdaq over-the-counter market. Delisting would result in limited release of
the market price of the common stock and limited news coverage of our company
and services and could restrict investors' interest in our common stock and
materially adversely affect the trading market and prices for our common stock
and our ability to issue additional securities or to secure additional
financing.

         INFORMATION THAT WE MAY PROVIDE TO INVESTORS FROM TIME TO TIME IS
ACCURATE ONLY AS OF THE DATE WE DISSEMINATE IT, AND WE UNDERTAKE NO OBLIGATION
TO UPDATE THE INFORMATION.

         From time to time, we may publicly disseminate forward-looking
information or guidance in compliance with Regulation FD promulgated by the
Securities and Exchange Commission. This information or guidance represents our
outlook only as of the date that we disseminated it, and we undertake no
obligation to provide updates to this information or guidance in our filings
with the Securities and Exchange Commission or otherwise.

         IF OUR REVENUE AND OPERATING RESULTS FALL BELOW ANALYSTS' AND
INVESTORS' EXPECTATIONS, OUR STOCK PRICE COULD SIGNIFICANTLY DECLINE.

         Our quarterly operating results have fluctuated in the past and are
likely to fluctuate significantly in the future due to a variety of factors,
many of which are outside of our control. If our quarterly or annual operating
results do not meet the expectations of investors and securities analysts, the
trading price of our common stock could significantly decline. As a result of
any of these factors, our quarterly or annual operating results could fall below
the expectations of public market analysts and investors. In this event, the
price of our common stock could significantly decline.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We have limited exposure to financial market risks, including changes
in interest rates. We do not currently transact significant business in foreign
currencies and, accordingly, are not subject to exposure from adverse movements
in foreign currency exchange rates. Our exposure to market risks for changes in
interest rates relates primarily to corporate debt securities. We place our
investments with high credit quality issuers and, by policy, limit the amount of
the credit exposure to any one issuer. Our general policy is to limit the risk
of principal loss and ensure the safety of invested funds by limiting market and
credit risk. All highly liquid investments with a maturity of less than three
months at the date of purchase are considered to be cash equivalents.

         As of March 31, 2002 we had no debt outstanding. We currently have no
plans to incur debt during the next twelve months. As such, changes in interest
rates will only impact interest income. The impact of potential changes in
hypothetical interest rates on budgeted interest income in 2002 has been
estimated at approximately $0.4 million or approximately 1% of budgeted net loss
for each 1% change in interest rates.




                                       18

<PAGE>


                           Part II - Other Information


Item 6.  Exhibits and Reports on Form 8-K

       (a)  Exhibits

            None.

       (b)  Reports on Form 8-K

            None.






























                                       19


<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.

Dated: May 13, 2002



                                    i3 MOBILE, INC.



                                    By: /s/ Edward J. Fletcher
                                        --------------------------------
                                        Senior Vice President of Finance

























                                       20