SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                    FORM 10-K



[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      For the fiscal year ended December 31, 2000

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      For transition period from          to

                                    333-35021
                             Commission file number

                                 TELETRAC, INC.
             (Exact Name of Registrant as Specified in Its Charter)

          Delaware                                         48-1172403
(State or Other Jurisdiction of                         (I.R.S. Employer
 Incorporation or Organization)                        Identification No.)

3220 Executive Ridge Dr. #100
          Vista, CA                        92083
 (Address of Principal                     (Zip Code)
   Executive Offices)

Registrant's telephone number, including area code: 760-597-0510

Securities registered pursuant to Section 12(b) of the Act:

                                              Name of Each Exchange Title of
         Each Class                           On Which Registered
         -------------------                  ---------------------

            None                                  None

Securities registered pursuant to Section 12(g) of the Act:

                                      None
                                (Title of Class)

            Indicate by check mark whether the registrant (1) has filed all
reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|

            Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K

<PAGE>

or any amendment to this Form 10-K. |_|

            The Registrant has no publicly traded equity securities. As of
December 31, 2000, Teletrac, Inc. had outstanding 9,986,700 shares of Common
Stock, par value $0.01 per share.

                  Documents Incorporated By Reference: None


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                                     PART I

Item 1.     BUSINESS

General

            As used in this Report, unless the context otherwise requires, the
term "Company" refers to Teletrac, Inc. ("Teletrac").

            This Report contains certain forward-looking statements covering the
Company's objectives, planned or expected activities and anticipated financial
performance. These forward-looking statements may generally be identified by
words such as "expects", "anticipates", "believes", "plans", "should", "will",
"may", "projects" (or variants of these words or phrases), or similar language
indicating the expression of an opinion or view concerning the future with
respect to the Company's financial position, results of operations, prospects or
business. Investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve risks and uncertainties, and
that actual results may differ materially from those projected in the
forward-looking statements as a result of various factors discussed herein and
those factors discussed in detail in the Company's filings with the Securities
and Exchange Commission, including the "Risk Factors" section of the Company's
Registration Statement on Form S-1 (Registration Number 333-35017), as declared
effective by the Securities and Exchange Commission ("SEC") on November 5, 1997
(the "Form S-1").

            The Company is a leading provider of vehicle location and wireless
data solutions to commercial fleet operators. The Company has developed an
information services platform that enables customers to better manage their
mobile workforce, provide security for their property and personnel and
communicate more effectively with mobile workers. The Company utilizes various
wireless data networks to provide vehicle location and data communications. The
majority of the location and data traffic today for the Company is carried via
the Company-developed proprietary land-based location and data communications
technology. In addition, the Company has multiple customers utilizing the
cellular digital packet data network (or "CDPD") coupled with global positioning
(or "GPS") for location determination. The Company purchases CDPD services from
various cellular carriers in certain markets in order to facilitate service to
these customers. The Company is also in the process of evaluating other data
networks combined with GPS for other applications for commercial fleet
operators.

            As of December 31, 2000, the Company maintained operations in 13
metropolitan market areas: Los Angeles, Chicago, Detroit, Dallas, Miami,
Houston, Orlando, San Francisco, San Diego, Sacramento, Washington
D.C./Baltimore, Phoenix and New York. As of December 31, 2000, the Company
served approximately 3000 commercial fleet accounts, more than any other
provider of fleet vehicle location services, and had approximately 49,657
vehicle applications with commercial customers. In its Los Angeles market, the
Company also uses its proprietary location systems to provide vehicle location
and stolen vehicle recovery services to consumers. As of December 31, 2000, the
Company had approximately 4,467 consumer units in service.


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<PAGE>

            The Company believes that there is substantial demand for reliable,
cost-effective information services that offer both location tracking and data
communications for metropolitan markets. The Company's products can be used
either on a standalone basis or in conjunction with other communications
technologies and allows those other technologies to be more effective and
efficient. The Company believes that the majority of its target customers'
vehicles are currently equipped with wireless communications devices that do not
provide automatic location features, such as two-way radio, specialized mobile
radio ("SMR"), pagers and cellular devices. The Company's products and services
allow commercial fleet operators to (i) increase driver productivity and fleet
efficiency, (ii) improve customer service, (iii) limit unauthorized vehicle use,
and (iv) reduce driver overtime. The Company's customers include metropolitan
commercial fleets (such as trade service providers, delivery services, bus and
taxi fleets, ambulance companies, telecommunications companies, utility
companies, municipal government vehicles and law enforcement agencies) and
long-haul trucking fleets when operating within metropolitan markets.

            The Company offers a range of fleet management solutions, depending
on the customer's budget and location and messaging needs. All of these
solutions involve the installation in each vehicle of a vehicle location unit
("VLU") or a "VLU+" in the case of a CDPD/GPS application. The VLU is a radio
transceiver that receives and transmits signals used to determine a vehicle's
location. In addition to the VLU, commercial fleet customers purchase software
and location services from the Company. The Company's primary product for
commercial fleets is Fleet Director Enterprise Edition(R), a proprietary
software application that permits simultaneous location of all fleet vehicles on
a real-time 24-hour-a-day basis through a digitized map displayed on the
customer's dedicated personal computer or network server, which is connected to
the Company's Network Control Center. Fleet Director Enterprise Edition (R) can
be complemented with the Company's data communication units, which allow two-way
messaging between the fleet dispatcher and drivers directly from the Fleet
Director Enterprise Edition(R) screen.

            In its Los Angeles market, the Company also uses its proprietary
location systems to provide vehicle location and stolen vehicle recovery
services to consumers. The Company's service locates and tracks stolen vehicles
in real time and its equipment can be integrated with a vehicle's alarm system
and/or ignition so that it is automatically activated if the vehicle is stolen.
The Company's service also allows a subscriber to initiate vehicle location in
other emergency or roadside assistance situations. The Company has continued
providing consumer service as a legacy of the business acquired from AirTouch
Teletrac but has not launched and does not intend to launch any new marketing
efforts with respect to this service.

Recent Developments

          The aggregate of $3.0 million  principal  amount of 10% Senior Secured
Notes due September 30, 2000 that the Company issued in order to fund operations
after the 1999  reorganization  was paid off in May of 2000.  As a result of the
reorganization,  the Company has outstanding an aggregate of $15,000,000  Senior
Notes with a 9% interest rate due September 30, 2004 (the "Senior  Notes").  The
Senior Notes have a deferred interest election provision whereby the Company may
elect to pay  interest by the  issuance of  Deferred  Interest  Notes with a 12%
interest rate due September 30, 2004. The Company has issued  Deferred  Interest
Notes in the aggregate of $1,800,000 as of December 31, 2000. On March 15, 2001,
in conjunction with interest due for the prior six months, the Company issued an
additional $900,000 of Deferred Interest Notes.

            In May, 2000, Ituran USA purchased the Miami and Orlando networks
from the Company pursuant to an option to buy these networks, which was granted
by the Company to Ituran USA as part of the 1999 reorganization.  The proceeds
from the sale were approximately $4.0 million.

            On January 9, 2001, the Company entered into a credit facility with
Aspen Capital Partners, L.P. The facility provides for a loan of up to $750,000
that is secured by the accounts receivable of the Company, accrues interest at a



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rate of prime plus 6% and is due on January 9, 2002. As of March 15, 2001,
$550,000 has been drawn down from the facility.

            On February 23, 2001, the Company entered into an Agreement and Plan
of Merger with Trafficmaster pursuant to which Trafficmaster will acquire the
Company for cash (including the assumption of debt). The merger has been
approved by the Board of Directors and the holders of a majority of the
Company's outstanding Common Stock. In addition, the holders of a majority of
the Company's Senior Notes consented to the merger and waived certain rights
such holders of Senior Notes may have pursuant to the Indenture governing the
terms of the Senior Notes, including the right to receive notice of a Change of
Control (as defined in the Indenture) and to require the Company to repurchase
their Senior Notes. The Senior Noteholders also waived events of noncompliance
or default under the Indenture that would occur as a result of the Company's
failure to satisfy the covenants set forth in Sections 4.14 and 5.01(iv) of the
Indenture in connection with the merger. Such holders also consented to and
approved the adoption of the Supplemental Indenture by the Indenture Trustee
amending certain provisions of the Indenture. The Company expects consummation
of the merger to occur in April, 2001, subject to the satisfaction of certain
closing conditions in the merger agreement, including regulatory approval of the
transfer of control of the FCC licenses used in the Company's business. The
Company has filed with the SEC a Current Report on Form 8-K, dated March 6,
2001, in connection with this merger agreement.

Commercial Fleet Management

            Target Markets

            The Company's commercial fleet services provide reliable,
cost-effective location information, data communications and fleet management
services in real time. The Company markets its fleet management products both to
metropolitan fleets and long-haul trucking fleets, which may desire to optimize
driver efficiency in metropolitan areas because of the impact on customer
service and overall fleet productivity. The Company believes that metropolitan
commercial fleets represent the largest market for its existing products.

            Many metropolitan commercial fleet operators have not employed
location information or data communications because of the lack of
cost-effective and reliable alternatives. Two-way voice services (such as
cellular, SMR and two-way radio) cost significantly more to provide a similar
level of location services and rely on the driver to frequently report vehicle
location. A significant number of metropolitan fleet vehicles utilize lower-cost
one-way paging services, but such services lack both location tracking and
two-way data communications. Management believes the Company's commercial fleet
service generates demonstrable cost benefits and efficiency gains for
metropolitan fleet customers.

            Due to the diversity of metropolitan commercial fleets, the
Company's customer base ranges from independent plumbers with five or six
vehicles to large municipal bus and ambulance fleets and national delivery
companies. The Company's range of products allows it to provide a fleet
management solution to meet each segment of these markets. The Company primarily
focuses it sales efforts at fleets of at least five vehicles, which it believes
can be serviced more cost-effectively than smaller fleets. The Company believes
that by utilizing alternative wireless data networks like CDPD, the Company will
be able to attract nationwide customers with fleet operations in a number of


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<PAGE>

metropolitan markets. Among the Company's current customers are Emery Air
Freight, Inc., Brinks Incorporated (security transportation), Pepsi, the City of
Houston, and department stores such as Target.

            Products and Services

            The Company offers its customers a range of fleet management,
communications and security products. The Company relies on the installation of
a VLU or VLU+ in each customer vehicle in order to provide vehicle location and
data communication services.

            Fleet Management. The Company's fleet management software products
and services are designed to address the needs of key vertical markets within
the metropolitan fleet marketplace. The vertical markets that the Company is
focused on today include municipals, utilities, distribution, services, and
on-demand transportation. These vertical markets share common characteristics
and represent the best fit for the Company's current products and services. The
Company emphasizes a solution approach with these vertical markets emphasizing
integration where necessary to the customer's existing back office systems.

            Fleet Director Enterprise Edition(R) ("FDEE") is a proprietary
software application that provides fleet customers accurate fleet vehicle
location through the customer's detailed digitized map of a metropolitan area
displayed on the customer's dedicated personal computer or network server, which
is connected to the Company's networks. Fleet Director Enterprise Edition(R)
displays the position of all VLU-equipped vehicles at periodic intervals
determined by the customer (typically every 15 minutes), at the time of each
communication with a vehicle and otherwise as specified by the customer.
Customers can adjust the level of map detail through a zoom in/zoom out feature,
allowing a customer to simultaneously view the location of all fleet vehicles or
to focus in on a single vehicle. Fleet operators can establish "zones of
compliance" around their customers' locations, their drivers' homes, or other
locations to detect whether vehicles enter or leave specific areas. Fleet
Director Enterprise Edition(R) also produces reports that detail a driver's
route and the time of each stop and provides documentation for customers who
require verification of deliveries. Real-time location reports can also be saved
on the customer's computer to be retrieved and reviewed on-screen or printed at
a later time.

            Fleet Director Enterprise Edition(R) can also act as a platform from
which the customer can use the Company's two-way communications products
(discussed below) to send and receive messages to and from drivers. Customers
can type messages directly to drivers from the computer on which Fleet Director
Enterprise Edition(R) operates and send the messages to a single vehicle,
several vehicles or the entire fleet.

            For customers with smaller fleets, the Company also provides a
software option called Winfleet. Winfleet is a Microsoft Windows(R)-based
program that allows for positioning updates up to 24 hours a day at intervals of
15 to 30 minutes.

            Communications. The Company offers two communication systems to its
Fleet Director(R) customers. The Mobile Data Terminal ("MDT") is the Company's


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<PAGE>

more advanced two-way messaging system. It allows for alphanumeric
communications from the fleet operator to its drivers and up to thirty-five
pre-programmed messages from the drivers to the fleet operator. The Status
Messaging Terminal ("SMT") is a low-cost alternative to the MDT. The SMT allows
for four pre-programmed messages that may be sent from the customer to the
drivers and eight pre-programmed messages that may be sent from the drivers to
the customer. The MDT and the SMT are both small terminals typically mounted on
the fleet vehicle's dashboard and are connected to the VLU or VLU+.

            Both the MDT and the SMT automatically provide customers with an
electronic "receipt" when the message is received and therefore do not rely on
drivers for vehicle locations or message delivery. As a result, the Company's
system provides more reliable location information and messages than many
competing technologies. The Company's communication applications generally have
lower service costs than conventional real-time, two-way communication services,
such as cellular, SMR and Enhanced Specialized Mobile Radio ("ESMR") services.

            Security Services. The Company offers its commercial fleet customers
several vehicle security and driver safety options that operate through the
Company's location networks. A VLU can be connected directly to a vehicle's
alarm system, triggering the Company's security system when the alarm is set
off, or connected to an alarm button either located in the vehicle or carried
remotely by the driver. Customers with Fleet Director Enterprise Edition(R) may
also establish a "zone of compliance" that activates the Company's security
system when vehicles leave the zone. When the security system is activated, a
signal is sent by the VLU to the Company's local network system, which
automatically alerts the customer through Fleet Director Enterprise Edition(R).
If the customer does not respond, the Company will telephone the customer
directly. If the customer believes that the vehicle has been stolen or a driver
is in danger, the Company will work directly with the local law enforcement
authorities to track the location of the vehicle in real-time. Many customers
also attach VLUs directly to valuable cargo or to expensive equipment such as
construction equipment. The Company believes it has developed excellent
relations with local law enforcement officials due to the past performance of
the Company's location system, and that such relations contribute to its ability
to quickly recover stolen vehicles and equipment.

            Sales and Marketing; Customer Service

            The Company uses a direct sales force to sell its commercial vehicle
location and fleet management services, and has a sales force located in each
market where it operates. The Company's sales efforts rely on sales managers who
supervise the sales activities of sales representatives, contact and negotiate
with larger potential customers, and have authority to negotiate prices within
defined parameters. Sales commissions generally are directly linked to the
number of units a sales person sells. As of December 31, 2000, the Company's
direct sales force consisted of approximately 34 employees.

            The Company's advertising and marketing efforts are generally
directed to local and regional markets and its strategy has focused on print
advertising in industry journals, direct mail, videos, telemarketing, industry
trade shows and on-site marketing promotions and demonstrations.


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<PAGE>

Consumer Vehicle Services

            The Company is currently focusing on its core business of commercial
fleet management. As a legacy of the business acquired from AirTouch Teletrac in
January 1996 (the "Acquisition"), the Company has continued to provide consumer
service (now sold under the name Teletracer(TM)) and has allowed dealer
arrangements in place at the time of the Acquisition to continue, but has not
launched any new marketing efforts. The imbedded base of consumer customers has
continued to decline over the past several years. In addition, the Company has
sold off a portion of its customers to Ituran in its Miami market. As of
December 31, 2000, the Company provided consumer auto security services to
approximately 4,400 vehicles.

            Target Market

            The demand for vehicle security products and services has grown as
consumers have become increasingly concerned with vehicle theft. The consumer
vehicle security industry encompasses a number of security products and
services, including mechanical theft-prevention devices such as The Club(R),
installed automated vehicle alarms and vehicle recovery services such as
LoJack(R).

            The vehicle security industry has developed rapidly since the late
1970s, as motor vehicle theft has increased. Vehicle theft and the demand for
vehicle security are higher in the metropolitan centers and surrounding suburbs
serviced by the Company.

            Products and Services

            The Company's proprietary location technology and VLU equipment can
be used for consumer applications without modification. A VLU is installed in a
consumer's vehicle and is generally connected to a security alarm and/or
integrated with the vehicle's internal ignition system. By connecting the unit
to a vehicle security alarm, vehicle recovery service can be initiated
automatically. If the vehicle alarm is triggered, the unit emits an emergency
locate signal, notifying the Company's regional control center of a potential
vehicle theft. Each regional control center is staffed twenty-four hours a day,
seven days a week with Company employees who contact local law enforcement
authorities and direct them to the location of the stolen vehicle. The Company
currently distributes its consumer product and services through auto dealers,
electronic retailers and other distributors.

            The Company's ability to offer automated, reliable and real-time
service differentiates its stolen vehicle recovery service from other available
services. The VLU provides automatic vehicle tracking at the time of theft. This
is in contrast to other vehicle recovery services, such as LoJack(R), that
require a subscriber to report a vehicle stolen in order to begin the tracking
process.

            The Company also offers a proprietary telephone-operated mobile
information service called OZZ(R). This service allows its subscribers telephone
access to a computer that will locate a subscriber's vehicle in real-time and
report its location for compliance, security and convenience purposes. The
subscriber calls the Teletrac OZZ(R) telephone number, enters a personal
identification number for the vehicle to be located and within seconds receives


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an automated voice response indicating the location of the vehicle at that time.
In addition to providing the customer with the location of the vehicle, OZZ(R)
is a "mobile yellow pages" that provides the customer the location of nearby
prominent businesses or landmarks from a menu of choices. The customer can call
OZZ(R) and obtain information such as the location of the nearest fast food
restaurant, automatic teller machine, gas station, hospital, police station, or
interstate on-ramp. Teletrac offers OZZ(R) to both consumer and commercial
customers. The OZZ(R) service can also be used to remotely instruct the VLU to
lock/unlock the doors of the vehicle. The firm that has contracted to provide
roadside assistance service for the Company estimates that 25% of roadside
assistance calls are for keys locked in the vehicle.

            All of the Company's consumer customers can telephone the Company's
call-in Roadside Assistance Program, and the Company will have a tow truck sent
to the caller's location. Under its Automated Roadside Assistance Program,
offered to its customers at a higher monthly fee, the Company can direct a tow
truck directly to a subscribing customer's location when the customer presses a
roadside assistance button installed in his or her vehicle.

Technology

            The Company utilizes various wireless data networks to provide
vehicle location and data communications. The majority of the location and data
traffic today for the Company is carried via the Company-developed proprietary
land-based location and data communications technology. In addition, the Company
has multiple customers utilizing CDPD coupled with GPS for location
determination. The Company is also in the process of evaluating other data
networks combined with GPS for other applications for commercial fleet
operators.

            The Company has developed a proprietary, accurate and reliable
spread spectrum-based wireless network architecture that provides for both
location determination and two-way messaging. The Company's low-cost wireless
network architecture permits cost-effective and accurate location and messaging
services in metropolitan areas. The Company's networks use multilateration-based
techniques and land-based receivers for position determination, avoiding the
"line-of-sight" problems that may arise for satellite-based systems in urban
areas where tall buildings can block a satellite's view of a vehicle. The
Company believes that its land-based multilateration techniques are uniquely
appropriate for precise location determination in urban settings and that it can
accurately locate a vehicle equipped with its equipment in real-time within a
range of less than one-half of an average city block (approximately 150 feet).

            In order to locate a subscriber vehicle, the Company's local network
broadcasts a "paging" transmission (the "Forward Link") simultaneously from each
transmitter on the network. The Forward Link is used to transmit both location
commands and alphanumeric messages to the VLU. Each subscriber's vehicle is
equipped with a VLU, a videocassette-sized "transceiver" unit that responds to
the location command of the Forward Link by emitting a response signal (the
"Reverse Link"). The Reverse Link is received by at least four nearby base
station units ("BSUs") which calculate both the time of transmission of the
Forward Link and the time of arrival of the Reverse Link and relay this data,
via wireline telephone networks, to the Network Control Center ("NCC"), the



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local network's data processing center. The NCC uses the Company's proprietary
network software to calculate the location of the VLU from the information
received by the BSUs. The NCC consists of the Company's radio-frequency control
equipment, telecommunication access connection computers, proprietary software
and the Company's customer database. The NCC instantaneously relays the location
information to a subscriber's Fleet Director(R) software application or OZZ(R)
call-in request (via automated response).

            The Company's customers can also use the Forward Link to transmit
alphanumeric messages from their centralized dispatch office to their fleet
vehicles and the Reverse Link to transmit more limited messages from vehicles to
the centralized dispatch office. The network system can transmit alphanumeric
messages at a transmission speed of 2,400 bits per second.

            At December 31, 2000, the Company maintained and operated its
proprietary network in six metropolitan markets: Los Angeles, Chicago, Detroit,
Dallas, Houston, and San Diego. In New York, Washington D.C./Baltimore, Miami
and Orlando, Ituran USA owns, operates and maintains the proprietary network and
the Company pays Ituran USA a monthly fee for usage on their network for the
Company's subscribers in those markets.

            In a number of customer vehicle applications, the Company utilizes
CDPD coupled with GPS for location determination. The vehicle is equipped with a
subscriber unit (the VLU+) that includes both a CDPD wireless data modem and a
GPS receiver. The CDPD services are provided by certain cellular carriers who
have built packet data capabilities onto their existing cellular networks. The
Company currently has a nationwide reseller agreement with AT&T for CDPD
services. The CDPD services are available in over 80 metropolitan markets across
the U.S. For the VLU+ service offering, the Company also provides wireless data
or messaging communications by combining SMT or MDT terminals with the VLU+. The
messaging information is transmitted over the CDPD network and delivered to the
customer in a similar fashion as with the Company's proprietary network.

Network and Subscriber Equipment

            The Company terminated its agreements with Tadiran, its former
supplier of VLUs, in December 1998. The Company does not expect to purchase
additional VLUs because inventory is expected to be sufficient to cover
projected sales. See "Management's Discussion and Analysis of Results of
Operations and Financial Condition." The Company has contracted with a San
Diego-based manufacturer for VLU+s. The components of the VLU+ are generally
off-the-shelf wireless components that are available commercially from a number
of different manufacturers.

            The Company's network also includes a number of components that are
used in the wireless messaging industry. The Company purchases standard
transmitters from Glenayre Technologies, Inc. and Motorola, Inc. The
transmitters, which are similar to transmitters used in one-way paging networks,
transmit the Forward Link in a manner similar to a paging network. Much of the
Company's communications equipment, its antennas and many other components of
its networks are also available through a number of existing suppliers of
wireless messaging equipment.


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Competition

            The Company currently faces competition for each type of service it
offers. The Company expects that in the future it will face competition from new
technologies as well as from existing products. Certain of the Company's
competitors are larger and have substantially greater financial and research and
development resources and more extensive marketing and selling organizations
than the Company. There can be no assurance that additional competitors will not
enter markets that the Company already serves or plans to serve or that the
Company will be able to withstand such competition. Moreover, changes in
technology could lower the cost of competitive services to a level where the
Company's services would become less competitive or where the Company would need
to reduce its service prices in order to remain competitive, which could have a
material adverse effect on the Company's business.

            Commercial Vehicle Market

            The Company knows of three basic classes of products that offer
commercial location and messaging capabilities competitive with the Company's
products: (i) GPS, private satellite and Loran-C systems, (ii) LMS systems and
(iii) traditional wireless communication.

            GPS, Private Satellite and Loran-C Systems. GPS, certain private
satellite networks and Loran-C can provide location information, and when paired
with a communications system, may provide a system competitive with the
Company's products. GPS systems receive signals from NAVSTAR satellites, U.S.
government-funded satellites used for position location. GPS systems and certain
private satellite systems use satellite ranging techniques to measure a GPS
device's distance relative to a group of satellites in space. Typically, a GPS
device must be in "sight" of several satellites to receive adequate transmission
data for the determination of relative location on earth. The Loran-C system
uses land-based transmitting stations to send a low-frequency radio signal that
is used by a vehicle to calculate its position relative to the location of other
Loran-C transmitters. Satellite and Loran-C systems are generally not as
effective as LMS networks such as the Company's in metropolitan areas. Because
GPS and other satellite services require "line of sight" to the orbiting
satellite, dense metropolitan areas, parking garages, tunnels or other covered
areas can impact the system's effectiveness and reliability. Loran-C systems
also frequently have difficulty penetrating "metropolitan canyons" and therefore
may provide inaccurate position readings in urban areas.

            In most GPS, private satellite and Loran-C vehicle location systems,
vehicle-mounted equipment gathers location data and transmits it by a wireless
communication system to a dispatch center. There are a number of wireless
systems that can be linked to a satellite system or a Loran-C system to transmit
location information to a dispatch center:

      o     Cellular and PCS Communication Systems- Cellular and PCS systems can
            provide local or nationwide networks to transmit location
            information to a dispatcher. However, cellular and PCS operators
            generally price their airtime at price levels that do not allow for
            frequent location information transmittals by vehicles equipped with
            GPS, private satellite or Loran-C systems to dispatchers on a
            cost-basis competitive with the Company. Most vehicle location


                                       11
<PAGE>

            systems that link a satellite or Loran-C location system with a
            cellular or PCS communication system, such as HighwayMaster, are
            best-suited for long-haul trucking fleets. In addition, in certain
            U.S. markets, some cellular operators have added a data service over
            their existing cellular infrastructure that can improve the cost and
            delivery of location information over existing cellular networks.
            The data service, called CDPD, is an overlay of a packet switched
            data service on a traditional cellular system. CDPD is available in
            approximately 80 metropolitan markets throughout the U.S., including
            all the markets, other than Los Angeles, in which the Company is
            currently operating or plans to operate. One company that is
            currently utilizing CDPD coupled with GPS to the metropolitan fleet
            market is @Road, a publicly-held corporation based in Fremont,
            California. At December 31, 2000, @Road had approximately 40,000
            units installed.

      o     SMR/ESMR- SMR has traditionally been used to serve the needs of
            local dispatch services, such as taxis and couriers, which typically
            broadcast short messages to a large number of units. Several SMR
            operators are constructing ESMR digital systems that offer mobile
            telephone services. Some SMR and ESMR providers are beginning to
            integrate GPS with their systems to determine location and transmit
            the location information back to the subscriber via the SMR or ESMR
            communications network.

      o     Satellite-based Communications- Satellite-based communication is
            accomplished through transmission of a signal from a vehicle-based
            transmitter to a satellite, which automatically retransmits the
            signal to a dispatcher. Such systems provide seamless nationwide
            service for transmitting location information, but do not currently
            transmit location data at a cost competitive with the Company's
            system. Vehicle location products with satellite-based
            communications are currently offered by Orbcomm Global, L.P. and
            Qualcomm, Inc.

      o     Dedicated Wireless Networks- ARDIS and RAM are dedicated wireless
            two-way data networks that also can be used to transmit location
            information through integration with GPS. ARDIS is owned by American
            Mobile Satellite Corporation and RAM is owned by a joint venture
            between RAM Broadcasting Corp. and BellSouth. Both wireless
            providers cover primarily metropolitan markets. ARDIS covers
            approximately the top 400 markets in the United States, and RAM
            reports coverage in approximately the top 100 markets (in both
            cases, including all the markets in which the Company currently
            operates or plans to operate).

            LMS Systems. The Company knows of other companies that are
developing competitive LMS location and messaging systems. Pinpoint
Communications Inc., METS Inc./MobileVision, L.P. and Comtrak Inc. each have
developed technologies that use LMS spectrum to provide both location
information and messaging. Such alternative LMS systems are also land-based
wireless systems suited for providing accurate and cost-effective service in
metropolitan areas. Current LMS operators and prospective LMS operators may also
benefit from an FCC auction of three frequency bands, including the band on
which the Company's system operates, for LMS purposes. The Company believes



                                       12
<PAGE>

that, to date, it is the only company that has established a commercially
operational LMS network in the U.S.

            Traditional Wireless Communication. Many fleet managers use existing
SMR, ESMR, two-way radio, cellular or paging systems to communicate with
vehicles and obtain their location. Such systems are less reliable than the
Company's products, however, because they rely exclusively on drivers to
accurately identify their location.

            Consumer Vehicle Market

            LoJack(R). The Company's principal competitor to date in the
consumer vehicle market has been LoJack(R). The LoJack(R) system is based on a
VHF transponder (essentially a homing device) with a range of approximately two
miles. The LoJack(R) vehicle recovery system requires a customer to report a
stolen vehicle to LoJack(R) in order to initiate the location process. Once a
stolen vehicle report is received, LoJack(R) personnel activate the transponder
unit located in the stolen vehicle by transmitting a signal across the area in
which the vehicle was stolen. Police equipped with LoJack(R) equipment track the
signal from the stolen vehicle by the strength of the signal. The LoJack(R)
system is not an automatic, real-time, screen-based tracking system, and it does
not provide the service features of the Company's OZZ(R) and roadside assistance
products.

            GPS/Cellular Systems. Several companies have begun to link GPS
location technology with cellular communications to create emergency location
systems for consumer vehicles. Carcop(R), Onstar(TM) and Lincoln Rescu(TM) all
rely on this technology to provide emergency roadside assistance and/or stolen
car recovery. Such systems, because they are based on GPS locating technology,
can be less effective in metropolitan areas where most auto thefts occur.

            Theft Deterrents. A number of products are currently sold for
vehicle theft deterrence. Consumer products range from The Club(R) to automatic
alarm systems. While such systems do not provide the location information or
range of services of the Company's consumer products, they are often available
at a significantly lower cost.

Product Protection

            The Company currently has no material patents and generally seeks to
protect its proprietary network software, software products and trade secrets by
requiring that its consultants, employees and others with access to such
software and trade secrets sign nondisclosure and confidentiality agreements.
Management believes that these actions provide appropriate legal protection for
the Company's intellectual property rights in its software and products.
Furthermore, management believes that the competitive position of the Company
depends primarily on the technical competence and creative ability of its
personnel and that its business is not materially dependent on patents,
copyright protection or trademarks.

Regulation

            The construction, operation and acquisition of radio-based systems
in the LMS industry in the U.S. are subject to regulation by the FCC under the


                                       13
<PAGE>

Communications Act. Multilateration LMS is a service operating under new FCC
rules. As such, the LMS rules have not been subject to any significant
interpretation by the FCC in written decisions.

            As a pioneer in this new service, the Company may operate under
rules with significant ambiguities. The application of largely uninterpreted
rules in situations that the Company may encounter will present matters of first
impression to the FCC's staff. The Company cannot predict how changes to or
interpretations of these rules may affect its operations or its business plans.

            Construction and Operation of Grandfathered Systems

            The FCC adopted its initial rules for the LMS service in 1995. The
FCC's LMS rules provide for the "grandfathering" of LMS systems, such as those
of the Company, that were in operation or authorized as of February 3, 1995. LMS
licenses granted prior to the 1995 rules, including those under which the
Company operates its system, were granted for individual transmitter sites. The
FCC's rules provide that future LMS licenses will be granted on a geographic
basis and awarded through auctions. The FCC stopped accepting applications for
new site-based LMS facilities in 1995, pending its development of rules and
procedures for auctioning the LMS spectrum on a geographic area basis.

            To maintain grandfathered status for its existing licenses, the
Company was required, among other things, to complete its construction of
licensed transmitter sites by January 1, 1997, to a level where each system
would be capable of locating a vehicle. By December 31, 1996, the Company had
constructed LMS systems capable of locating a vehicle in 26 markets, including
the six markets in which the Company had systems that were in operation prior to
1995. The grandfathered authorizations issued to the Company allow the operation
of multilateration LMS base stations at particular sites specified in the
authorization, subject to a requirement that base stations may not be relocated
to a site more than two kilometers from an initially authorized site. In a few
instances, the Company has obtained waivers from the FCC to permit location of a
transmitter site to a location more than two kilometers from the original site.
In December 1998, the Company requested that the FCC cancel licenses in three
markets, and the Company also has assigned licenses for some of its original
markets. The Company continues to hold grandfathered multilateration LMS
licenses for locations in and around Chicago, Los Angeles/San Diego, Dallas,
Houston and Detroit.

            Current FCC rules do not provide for grandfathered LMS licensees
like the Company to construct "fill-in" transmitters to service gaps in the
service coverage area due to terrain obstructions. On December 18, 1997,
however, the FCC granted the Company, at the Company's request, a waiver that
permits the Company to obtain authorizations for new "fill-in" transmitters
within the coverage area of its facilities. The Commission granted the Company's
applications for "fill-in" transmitters in several markets. Under the terms of
the waiver order, the Company may no longer submit applications for "fill-in"
transmitters.

            In July, 1998, the FCC adopted auction rules for the multilateration
LMS service, and the auction began in February 1999, for 528 licenses
representing three frequency blocks in 176 geographic LMS license areas which,


                                       14
<PAGE>

in the aggregate, encompassed all of the United States. In the auction, four
bidders acquired 289 of the licenses. No minimum bid was placed on the remaining
licenses and they remain unassigned. The Company did not bid for spectrum in the
LMS auction. The FCC has tentatively scheduled a further auction for the
remaining unassigned LMS licenses for June 6, 2001. The Company understands that
the FCC will expect cooperative arrangements for sharing between grandfathered
licensees and the EA licensees resulting from the auction. The Company will be
permitted to continue operating its grandfathered facilities in that EA, but it
will be precluded from expanding its coverage area within such EA.

            Permissible Use Restrictions and Interconnection

            The FCC's rules do not contemplate that LMS be used for "general
messaging purposes," but LMS systems may transmit status and instructional
messages, either voice or non-voice, so long as they are related to the location
or monitoring functions of the system. This restriction precludes an LMS
licensee from offering messaging services other than as part of its location and
monitoring services. Under the FCC's rules, LMS service may include location of
non-vehicular traffic, so long as the primary operations involve location of
vehicles.

            In addition, the FCC order requires that interconnection to the
public switched telephone network be on a "store and forward" basis. This
requirement limits the Company's ability to offer real-time voice communications
services, except with respect to emergency communications. LMS customers may
engage in delayed voice or data messaging over the telephone system. The FCC set
a thirty-second delay as the "safe harbor" for store and forward interconnection
but acknowledged that other approaches may also be acceptable depending upon the
configuration of the system.

            Regulatory Certification and Foreign Ownership

            The FCC has not declared whether multilateration LMS will be
classified as a private mobile radio service (PMRS) or as a commercial mobile
radio service (CMRS), but has proposed to classify LMS providers on a
case-by-case basis. The Company believes that, because of the nature of its
operation, its licenses are properly treated as PMRS rather than CMRS.

            If the Company's services were reclassified as CMRS rather than as
PMRS, the Company would be subject to fees, fund contribution requirements and
regulations applicable to CMRS carriers such as cellular and PCS. In addition,
the Company, which holds its FCC authorizations through a wholly-owned
subsidiary, Teletrac License, Inc., would be subject to the foreign ownership
restrictions under the Communications Act that apply to the parent corporations
of CMRS licensees. Under this restriction, non-U.S. persons would not be
permitted to hold, directly or indirectly, in the aggregate, more than 25% of
the ownership or 25% of the voting rights in the Company, absent a waiver or
determination by the FCC that a higher level of foreign ownership would be in
the public interest.

            Although the Company is controlled by U.S. citizens, non-U.S.
persons currently hold slightly more than 25% of the ownership of the Company.
If the FCC were to reclassify its multilateration LMS as CMRS at a time when the
Company's level of foreign ownership or foreign voting rights exceeded 25%, the


                                       15
<PAGE>

Company would be required to obtain a public interest determination from the FCC
approving its level of foreign ownership or to restructure its ownership to meet
the 25% benchmark. World Trade Organization ("WTO") agreements and the FCC's
rules and policies implementing the WTO telecommunications agreements recognize
the national policy of permitting foreign investments by WTO member countries in
U.S. entities that control CMRS licenses. The FCC's implementation of the WTO
agreements would require the Company, if its services were classified as CMRS
and its foreign ownership exceeded the benchmark to obtain a public interest
determination from the FCC. The FCC typically grants these determinations
routinely to permit investment from nationals of WTO member countries.

            Technical Requirements

            Multilateration LMS systems must use equipment that is
"type-accepted" by the FCC. Under the type-acceptance procedure, the FCC
confirms that the model of equipment proposed for use in a particular radio
service conforms to the technical requirements for the service as specified in
the FCC's rules. All equipment used by the Company that is required to be
type-accepted has been type-accepted.

            Multilateration LMS systems operate on frequencies that have been
allocated to LMS by the FCC on a secondary basis. This means that LMS operations
cannot cause interference to, and may be required to accept interference from,
users of those same or adjacent frequencies in the industrial, scientific, and
medical radio service and in the Federal government's radio location service. In
addition, under Part 15 of the FCC's rules, certain unlicensed radio devices
(such as spread spectrum devices used for local area networks) operate on the
same or adjacent frequencies as LMS systems. Although multilateration LMS
systems generally have priority in the use of their frequencies over such Part
15 devices, the FCC's rules provide a "safe harbor" for the operation of Part 15
devices in LMS spectrum. If a Part 15 device is operated in a manner that
satisfies those safe harbor requirements (which were designed to avoid or
minimize the risk of interference to LMS services), an LMS system that
nonetheless suffers interference from such a Part 15 device may have no recourse
other than to negotiate with the Part 15 user on methods for eliminating or
reducing the interference. In addition, as a condition of the LMS license, the
FCC has stated that operators of new LMS systems must perform testing to
demonstrate that the system does not cause unacceptable interference to Part 15
devices. To date, the FCC has specifically declined to specify the nature of
such testing and how they might be used to determine whether the multilateration
LMS system is causing unacceptable interference to Part 15 devices. The FCC has
indicated that the purpose of the testing is to ensure that multilateration LMS
licensees make efforts to minimize interference to existing Part 15 devices when
designing and constructing their systems; Part 15 devices remain secondary to
multilateration LMS operations.

            Current FCC Applications and Proceedings

            The Company may have various applications pending before the FCC
from time to time in the ordinary course of business, in connection with the
implementation of the Company's planned merger with Trafficmaster plc, and in
connection with the renewal of its grandfathered multilateration LMS licenses,
which expire beginning in March 2001.


                                       16
<PAGE>

            Other Proceedings. Other proceedings pending from time to time at
the FCC may affect the business and operations of the Company, including but not
limited to, (i) changes in spectrum allotments and usage restrictions that may
permit the operation of terrestrial location-related services in other bands;
(ii) changes in FCC rules and policies governing interconnection with the
switched telephone network; (iii) rule making proceedings to develop the rules
and policies that will govern the auction of the LMS spectrum; (iv) changes in
the general licensing rules and policies of the FCC affecting LMS applications;
and (v) auctions for additional licenses available for the provision of location
and monitoring services, and (vi) changes in FCC regulatory policies generally
governing the land mobile communication services.

            The Company cannot predict when the FCC will act on any of these
matters or what effect such action may have on its business.

Employees

            At December 31, 2000, the Company had approximately 224 employees.
Substantially all of the Company's employees are full-time. The Company's
employees are not unionized and the Company believes that its relations with its
employees are good.

Item 2.     DESCRIPTION OF PROPERTIES

            As of December 31, 2000, the Company had approximately 217 site and
tower leases for the operation of its transmitters and other equipment on
commercial broadcast towers and at other fixed sites. The Company believes that
in general the terms of its leases are competitive based on market conditions.
The Company believes its facilities are suitable and adequate for its purposes.
The Company relocates its transmission and receiver sites from time to time and
does not anticipate any material problems in obtaining and retaining site and
tower leases in the future.

Item 3.     LEGAL PROCEEDINGS

            Prior to the acquisition of AirTouch Teletrac, PacTel Teletrac
(predecessor to AirTouch Teletrac) brought an action before the United States
Patent and Trademark Trial and Appeal Board against T.A.B. Systems ("TAB")
opposing TAB's registration of the mark "Teletrak." The Trademark Trial and
Appeal Board granted PacTel Teletrac's motion for summary judgment, but summary
judgment was reversed by the U.S. Court of Appeals for the Federal Circuit. TAB
then filed an infringement action against PacTel Teletrac, the Company and other
parties in the U.S. District Court for the Central District of California. On
December 22, 1997, the District Court granted summary judgment in favor of the
Company. This decision was appealed by TAB to the U.S. Court of Appeals for the
Ninth Circuit and such appeal was pending as of the date the Company filed its
bankruptcy petition. The Bankruptcy Court issued an order permitting the Ninth
Circuit appeal to proceed. Oral arguments were heard on April 10, 2000. On March
20, 2001, the Ninth Circuit Court of Appeals filed a decision affirming the
District Court's grant of summary judgment. Under the terms of the Asset
Purchase Agreement between AirTouch Teletrac and the Company, AirTouch Teletrac
must pay the costs of any litigation relating to this matter and must indemnify
the Company against any losses relating thereto. AirTouch Teletrac has notified
the Company that it intends to continue to litigate this matter on its own
behalf as well as on behalf of the Company, and that it will bear the cost of
such


                                       17
<PAGE>

litigation.  There  can be no  assurance  that  AirTouch  Teletrac  will be
successful  in  such  litigation  or  that  AirTouch  Teletrac  will  honor  its
indemnification  obligations (including any costs or losses relating to a change
of name, if required as a result of the litigation).

            The Company settled the litigation in Bankruptcy Court with Milgo
Solutions f/k/a Raycal-Datacom, Inc. ("Milgo") and Newcourt Leasing, Inc.
("Newcourt") regarding certain telecommunications equipment that the Company
believes it purchased from Milgo. Milgo and Newcourt asserted that the Company
did not purchase this equipment, and alleged that the Company holds same
pursuant to one or more leases. The settlement stipulation, which was approved
by Bankruptcy Court on October 27, 2000 and became final and non-appealable on
November 21, 2000, provides that the Company shall pay Milgo the sum of
$1,000,000 over a three-year term, in monthly installments and without interest.
As part of the settlement, complete mutual releases were delivered in favor of
all parties.

            The Company was a defendant in an American Arbitration Association
("AAA") proceeding brought by StarTrac, Inc. ("StarTrac") on or about February
23, 2000. StarTrac asserted that the Company breached the dealer agreement
between the parties and sought actual and punitive damages. The Company denied
the claims asserted by StarTrac and initially felt that these claims were
discharged by the bankruptcy proceeding and filed a motion to enforce the
injunction created by the Plan of Reorganization. However, the Bankruptcy Court
determined that the allegations set forth by StarTrac were too intertwined with
both pre and post-effective date events to enforce the injunction. The parties
arbitrated the matter and on January 26, 2001, the AAA rendered a decision in
favor of Teletrac and denying StarTrac's claims.

            The Company is from time to time subject to claims and suits arising
in the ordinary course of business. The Company is not currently a party to any
proceeding that, in management's opinion, is likely to have a material adverse
effect on the Company's business.

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

            None.


                                     PART II

Item 5.     MARKET FOR THE COMPANY'S COMMON EQUITY
            AND RELATED SECURITY HOLDER MATTERS

            There is no established trading market for the Company's Common
Stock.

            The Company has not paid any cash dividends to the holders of its
equity securities. The ability of the Company to pay dividends is restricted by
the Indenture dated September 29, 1999 between the Company and HSBC Bank USA, as
Trustee, which governs the Senior Notes.

Item 6.     SELECTED FINANCIAL DATA

            Set forth below are selected historical financial data of the


                                       18
<PAGE>

Company and its predecessor. Certain of such historical financial and operating
data have been derived from the audited consolidated financial statements of the
Company and its predecessor as of and for the periods noted. The data contained
in the following table should be read in conjunction with "Management's
Discussion and Analysis of Results of Operations and Financial Condition" and
the Company's and its predecessor's audited consolidated financial statements
and the notes thereto included elsewhere in this Annual Report.

            On September 29, 1999, the Company's Plan of Reorganization was
declared effective (the "Reorganization"). For the three months ended December
31, 1999, the Company has adopted Fresh Start Accounting in accordance with the
AICPA's Statement of Position No. 90-7 ("SOP 90-7"). As a result, all financial
statements presented for periods prior to September 30, 1999 are reflected as
those of the predecessor company. See "Management's Discussion and Analysis of
Results of Operations and Financial Condition" and "Consolidated Financial
Statements."

            In accordance with the SEC Staff Accounting Bulletin No. 101,
"Revenue Recognition in Financial Statements" ("SAB 101"), the Company has
changed its accounting for Equipment Revenue as of January 1, 2000 to be
recognized over the expected life of the customer relationship rather than in
the month in which the equipment is installed. As a result, unaudited pro forma
financial data is presented to reflect the adoption of SAB 101 for all periods
presented.
                                       19
<PAGE>
<TABLE>
<CAPTION>
                                                                       Predecessor Company
                                 ------------------------------------------------------------------------------------------------

                                                                        Twelve Months Ended
                                 -------------------------------------------------------------------------------------------------
                                      12/31/96        12/31/96       12/31/97        12/31/97      12/31/98       12/31/98
                                      --------        --------       --------        --------      --------       --------
                                                      Pro Forma                      Pro Forma                    Pro Forma
                                                     (unaudited)                    (unaudited)                  (unaudited)

                                                                          (In thousands)
<S>                                    <C>            <C>            <C>            <C>            <C>            <C>
Statement of Operations Data:

Revenues                               $ 15,957       $  9,491       $ 24,821       $ 15,771       $ 28,615       $ 23,389

Operating expenses:

  Cost of revenues                        7,031          2,704         11,660          4,643         13,469          9,299
  Selling, general and administrative    20,186         20,186         35,373         35,373         40,842         40,842
  Refrequencing costs (1)                 1,340          1,340          1,110          1,110            390            390
  Restructuring charge                        -              -              -              -         19,668         19,668
  Depreciation and amortization           1,254          1,254          2,679          2,679          5,781          5,781
                                       --------       --------       --------       --------       --------       --------

Total operating expenses                 29,811         25,484         50,822         43,805         80,150         75,980
                                       --------       --------       --------       --------       --------       --------

Operating loss                          (13,854)       (15,993)       (26,001)       (28,034)       (51,535)       (52,591)

Interest expense                           (109)          (109)        (6,374)        (6,374)       (14,501)       (14,501)

Other income                                171            171          2,620          2,620          2,616          2,616
                                       --------       --------       --------       --------       --------       --------
Net loss                               $(13,792)      $(15,931)      $(29,755)      $(31,788)      $(63,420)      $(64,476)
                                       =========      =========      =========      =========      =========      =========
<CAPTION>
                                                                           New Company
                            ------------------------------------------------------------------------------------------------

                               Nine Months Ended                 Three Months Ended              Twelve Months Ended
                            ---------------------------   ------------------------------   ---------------------------------
                             9/30/99          9/30/99         12/31/99      12/31/99         12/31/00       12/31/00
                             -------          -------         --------      --------         --------       --------
                                              Pro Forma                     Pro Forma                       Pro Forma
                                             (unaudited)                   (unaudited)                     (unaudited)

                                                                          (In thousands)
<S>                          <C>             <C>             <C>            <C>             <C>             <C>
Statement of Operations
Data:

Revenues                     $  25,337        $  23,897       $  7,570     $   7,825        $  30,753       $  28,370

Operating expenses:

  Cost of revenues               7,186           7,443           2,162         2,051           11,132           9,223
  Selling, general and          21,690          21,690           5,813         5,813           21,940          21,940
  administrative and
  engineering
  Depreciation and               4,341           4,341             328           328            1,420           1,420
  amortization
                             ---------       ---------       ---------     ---------        ---------       ---------
Total operating expenses        33,217          33,474           8,303         8,192           34,492          32,583
                             ---------       ---------       ---------     ---------        ---------       ---------

Operating loss                  (7,880)         (9,577)           (733)         (367)          (3,739)         (4,213)

Interest expense                (7,735)         (7,735)          (900)          (900)          (2,117)         (2,117)

Other income                       913             913             27             27            2,467           2,467

Reorganization costs            (1,322)         (1,322)           --             --               --              --
Gain on debt discharge/
Reorganization costs (2)       123,775         123,775            --             --               --              --
Cumulative effect of
change in accounting
principle (3)                     --              --              --             --            (4,828)            --
                              ---------       ---------       ---------    ---------         ---------       ---------

Net income (loss)             $ 107,751       $ 106,054       $  (1,606)   $  (1,240)       $  (8,217)      $  (3,863)
                              =========       =========       ==========   ==========       ==========      ==========
</TABLE>

                                       20
<PAGE>


<TABLE>
<CAPTION>
                                                  Predecessor Company                                New Company
                              ---------------------------------------------------------   --------------------------------
                                 12/31/96        12/31/97      12/31/98       9/30/99       12/31/99       12/31/00
                               ------------    ------------  ------------   -----------   ------------   ------------
                                                    (In thousands)                                (In thousands)

<S>                              <C>           <C>            <C>            <C>           <C>           <C>
Balance Sheet Data:

Cash and cash
equivalents                      $  27,639     $  41,481      $   5,954      $   3,119     $   1,270     $     503
Restricted cash and
investments                          1,256        36,692         22,023           --            --            --

Total assets                        53,713       132,362         77,397         24,899        22,873        31,946

Long-term debt                       1,615       100,326        101,215         15,426        15,426        17,877

Preferred stock                     33,340        38,920         54,068           --            --            --

Stockholders' equity (deficit)       7,111       (20,556)       (89,932)         2,363           757        (7,459)
</TABLE>
<TABLE>
<C>            <S>
<FN>

(1)            Refrequencing costs are certain costs accrued in connection with
               conversion of vehicle location units to a new frequency band
               plan mandated by the FCC. See also "Management's Discussion
               and Analysis of Results of Operations and Financial Condition."

(2)            Pursuant to the Plan of Reorganization, certain indebtedness of
               the Company was discharged in exchange for cash, and/or new
               indebtedness, and/or new equity interests and certain
               indebtedness was reinstated. See Note 3 to the Consolidated
               Financial Statements for further discussion of the
               Reorganization.

(3)            Cumulative effect as of 1/1/00.
</FN>
</TABLE>


                                       21
<PAGE>

Item 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
            FINANCIAL CONDITION

OVERVIEW

            The Company is a leading national provider of vehicle location and
fleet management services in metropolitan areas. The Company currently has
operations relating to commercial fleet management and consumer vehicle
services. The commercial fleet management provides products and services that
allow fleet operators to increase driver productivity, improve customer service,
limit unauthorized vehicle use, and reduce driver overtime. The consumer vehicle
services provide real-time stolen vehicle recovery, vehicle location, and
roadside assistance. Management's Discussion and Analysis of Financial Condition
and Results of Operations contain statements regarding matters that are not
historical facts, but rather are forward-looking statements. These statements
are based on current financial and economic conditions and current expectations
and involve risk and uncertainties. The Company's actual results may differ
materially from the results discussed in forward-looking statements. There can
be no assurance that the Company's future operations will generate operating or
net income. Factors that might cause such a difference include, but are not
limited to, the "Risk Factors" set forth in the Company's Form S-1 filed on
September 5, 1997.

            On September 15, 1999, the Reorganization was confirmed by the
United States Bankruptcy Court and it was effective on September 29, 1999. As a
result of the Reorganization, the recording of the restructuring transaction and
the implementation of Fresh Start Accounting, the Company's results of
operations after September 30, 1999 (the cutoff date used for financial
reporting purposes) are not comparable to results reported in prior periods.

            On February 23, 2001, the Company entered into an Agreement and Plan
of Merger with Trafficmaster pursuant to which Trafficmaster will acquire the
Company for cash (including the assumption of debt). The merger has been
approved by the Board of Directors and the holders of a majority of the
Company's outstanding Common Stock. In addition, the holders of a majority of
the Company's Senior Notes consented to the merger and waived certain rights
such holders of Senior Notes may have pursuant to the Indenture, governing the
terms of the Senior Notes, including the right to receive notice of a Change of
Control (as defined in the Indenture) and to require the Company to repurchase
their Senior Notes. The Senior Noteholders also waived events of noncompliance
or default under the Indenture that would occur as a result of the Company's
failure to satisfy the covenants set forth in Sections 4.14 and 5.01(iv) of the
Indenture in connection with the merger. Such holders also consented to and
approved the adoption of the Supplemental Indenture by the Indenture Trustee
amending certain provisions of the Indenture. The Company expects consummation
of the merger to occur in April, 2001, subject to the satisfaction of certain
closing conditions in the merger agreement, including regulatory approval of the
transfer of control of the FCC licenses used in the Company's business. The
Company has filed with the SEC a Current Report on Form 8-K, dated March 6,
2001, in connection with this merger agreement.

            In accordance with SAB 101, the Company changed its revenue
recognition on sales of commercial systems to be recognized over the expected
life of the customer relationship. See the Consolidated Statements of Operations
included in the accompanying Consolidated Financial Statements for the impact of
the cumulative effect of change in accounting principle.

            The twelve-month information provided below for the year 1999 does
not comply with SOP 90-7 requirements for companies upon emergence from
bankruptcy, which requirements call for separate reporting for the newly
reorganized company and the predecessor company. To facilitate a meaningful
comparison of the Company's year-to-date operating performance in fiscal years
2000, 1999 and 1998, the following discussion of results of operations on a
consolidated basis is presented on a traditional comparative basis for all
periods presented.

                                               Twelve Months Ended
                                  --------------------------------------------
                                  12/31/2000       12/31/1999      12/31/1998
                                  ----------       ----------      ----------

OPERATING REVENUES:

Service revenue                   $21,823,318      $21,296,671     $18,028,832
Equipment revenue                   8,685,468        8,531,404      10,585,835
Other revenue                         243,905        3,078,667          -
                                  -----------      -----------     -----------
     Total operating revenues      30,752,691       32,906,742      28,614,667
                                  -----------      -----------     -----------

                                       22
<PAGE>



OPERATING EXPENSES:

  Cost of service revenue           3,252,826        3,208,951       4,206,939
  Cost of equipment revenue         7,879,704        6,138,824       9,261,564
  Selling, general and
  administrative                   17,964,052       21,480,659      30,217,327
  Engineering and research          3,975,945        6,022,639      10,624,945
  and development costs
  Refrequencing costs                    -                -            390,000
  Restructuring charge and other         -                -         19,667,557
  Depreciation and
  amortization                      1,419,609        4,668,644       5,781,103
                                  ------------     ------------    ------------

LOSS FROM OPERATIONS               (3,739,445)      (8,612,975)    (51,534,768)

OTHER EXPENSE (INCOME):

   Interest expense                 2,116,677        8,635,018      14,501,454
   Interest and other income         (268,861)        (939,838)     (2,616,394)
   Gain on disposal                (2,198,253)            -               -
                                  ------------     ------------    ------------

LOSS BEFORE REORGANIZATION AND
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE               (3,389,008)     (16,308,155)    (63,419,828)

CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE                4,827,516            -               -

REORGANIZATION COSTS                    -            1,321,746           -
GAIN ON DEBT
DISCHARGE/REORGANIZATION                -         (123,774,589)          -
                                  ------------    -------------    ------------

(LOSS) GAIN BEFORE INCOME TAXES    (8,216,524)     106,144,688     (63,419,828)

PROVISION FOR INCOME TAXES              -                -               -
                                  ------------    -------------    ------------

NET (LOSS) INCOME                  (8,216,524)     106,144,688     (63,419,828)

PREFERRED DIVIDENDS                     -           $4,145,596      $5,839,674
                                  ------------    -------------    ------------

(LOSS) INCOME APPLICABLE TO
     COMMON STOCKHOLDERS          $(8,216,524)    $101,999,092    $(69,259,502)
                                  =============  ==============   =============



                                       23
<PAGE>


RESULTS OF OPERATIONS

Year Ended December 31, 2000 Compared to Unaudited Pro Forma Year Ended December
31, 1999.

            OPERATING REVENUES. Total operating revenues for 2000 were $30.8
million, compared to $32.9 million in 1999.

            Service revenues, which include revenues from both unit sales and
rental units, increased to $21.8 million in 2000 from $21.3 million in 1999. The
average commercial service revenue per vehicle application increased to $33.90
in December 2000 from $30.95 in December 1999 as a result of an increase in both
ancillary services and monthly airtime rates.

            Equipment revenues increased to $8.7 million for the year ended
December 31, 2000 from $8.5 million for the year ended December 31, 1999. Gross
commercial sales (installations) decreased to 11,480 units for the year ended
December 31, 2000 from 13,561 units for year ended December 31, 1999. The effect
of SAB 101 increased the revenue for the year ended December 31, 2000 by $2.4
million.

            COST OF SERVICE REVENUES. Cost of service revenues includes the
direct cost of providing service (network telephone, billing, roadside
assistance and bad debt expense). Cost of service revenues increased to $3.3
million for the twelve months ended December 31, 2000 from $3.2 million for the
twelve months ended December 31, 1999.

            COST OF EQUIPMENT REVENUES. Cost of equipment revenues includes the
direct cost of equipment provided to customers, installation and other direct
ancillary equipment. Cost of equipment revenues increased to $7.9 million for
the twelve months ended December 31, 2000 from $6.1 million for the twelve
months ended December 31, 1999. The effect of SAB 101 increased the cost of
equipment for the year ended December 31, 2000 by $1.9 million.

            SELLING, GENERAL AND ADMINISTRATIVE, ENGINEERING AND RESEARCH AND
DEVELOPMENT EXPENSES. Selling, general and administrative, engineering, and
research and development expenses decreased by $5.6 million, to $21.9 million
for the twelve months ended December 31, 2000 from $27.5 million for the twelve
months ended December 31, 1999. The Company reduced expenses through significant
reductions in personnel along with the closing of the San Francisco/Sacramento
network and sale of the New York and Washington D.C./Baltimore networks. The
Company's cost of research and development activities was not material in either
2000 and 1999.

            DEPRECIATION AND AMORTIZATION. Depreciation and amortization
decreased for the twelve months ended December 31, 2000 to $1.4 million from
$4.7 million for the twelve months ended December 31, 1999, primarily due to
depreciation on fewer assets due to the sale of the New York and Washington D.C.
networks to Ituran USA and the closing of the San Francisco/Sacramento network
as well as lower cost bases resulting from Fresh Start Accounting beginning on
October 1, 1999.

            OPERATING LOSSES. Operating losses incurred by the Company were $3.7
million for the twelve months ended December 31, 2000, as compared to $8.6
million for the twelve months ended December 31, 1999, for the reasons discussed
above.


                                       24
<PAGE>


            INTEREST EXPENSE. Interest expense was $2.1 million for the twelve
months ended December 31, 2000 compared to $8.6 million for the twelve months
ended December 31, 1999, and primarily relates to the senior notes. The decrease
is a result of the reduction in the senior notes from $105 million to $15
million as part of the reorganization.

            REORGANIZATION COSTS. Reorganization costs were $1.3 million for the
twelve months ended December 31, 1999. These costs primarily represent
professional fees incurred to effect the Reorganization.

            GAIN ON DEBT DISCHARGE/REORGANIZATION. The gain on debt discharge
and reorganization was $123.8 million for the twelve months ended December 31,
1999. See Note 3 to the Consolidated Financial Statements for a description of
the gain.

            NET LOSS. For the reasons discussed above and the cumulative effect
of SAB 101 for $4.8 million, net loss was $8.2 million for twelve months ended
December 31, 2000 compared to $106.1 million net income for twelve months ended
December 31, 1999.

            TAX BENEFIT. No tax benefit has been recognized for any period due
to the uncertainty of net operating loss carry-forward utilization.

Unaudited Pro Forma Year Ended December 31, 1999 Compared to Year Ended December
31, 1998.

            OPERATING REVENUES. Total operating revenues for 1999 were $32.9
million, compared to $28.6 million in 1998, an increase of 15%.

            Service revenues, which include revenues from both unit sales and
rental units, increased to $21.3 million in 1999 from $18.0 million in 1998, an
increase of 18%. The average commercial service revenue per vehicle application
increased to $30.95 in December 1999 from $24.99 in December 1998 as a result of
an increase in both ancillary services and monthly airtime rates.

            Equipment revenues decreased to $8.5 million for the year ended
December 31, 1999 from $10.6 million for the year ended December 31, 1998,
principally due to lower gross sales over the period. Gross commercial sales
(installations) decreased to 13,561 vehicle applications for the year ended
December 31, 1999 from 20,600 vehicle applications for year ended December 31,
1998 due to fewer sales personnel. Average equipment revenue per vehicle
application increased to $629.11 for 1999 from $513.88 for 1998 mostly due to
fewer discounts being offered to customers.

            Equipment rental revenues, which are included in total equipment
revenues, increased to approximately $826,000 for the twelve months ended
December 31, 1999 from $573,000 for the twelve months ended December 31, 1998.

            COST OF SERVICE REVENUES. Cost of service revenues includes the
direct cost of providing service (network telephone, billing, roadside
assistance and bad debt expense). Cost of service revenues decreased to $3.2
million for the twelve months ended December 31, 1999 from $4.2 million for the


                                       25
<PAGE>

twelve months ended December 31, 1998. The reduction is a reflection of the sale
of the New York and Washington D.C./Baltimore networks to Ituran USA and the
closing of the San Francisco/Sacramento network.

            COST OF EQUIPMENT REVENUES. Cost of equipment revenues includes the
direct cost of equipment provided to customers, installation and other direct
ancillary equipment. Cost of equipment revenues decreased to $6.1 million for
the twelve months ended December 31, 1999 from $9.3 million for the twelve
months ended December 31, 1998. Cost of equipment revenues includes a one-time
charge to write down inventory by approximately $1.1 million at the end of 1998.

            SELLING, GENERAL AND ADMINISTRATIVE, ENGINEERING AND RESEARCH AND
DEVELOPMENT EXPENSES. Selling, general and administrative, engineering, and
research and development expenses decreased by $13.3 million, from $40.8 million
for the twelve months ended December 31, 1998 to $27.5 million for the twelve
months ended December 31, 1999. The Company reduced expenses through significant
reductions in personnel along with the closing of the San Francisco/Sacramento
network and sale of the New York and Washington D.C./Baltimore networks. The
Company had no material research and development costs in 1999, compared with
$1.5 million in 1998.

            REFREQUENCING COSTS. Refrequency costs accrued for the twelve months
ended December 31, 1998 was $0.4 million. The accrual reflects a change in
estimate for the total refrequencing liability.

            RESTRUCTURING CHARGE AND OTHER. The Company recorded a charge of
$19.7 million for the twelve months ended December 31, 1998. The charge was the
result of management and organizational changes designed to improve
profitability, increase customer focus, and decrease customer cancellations by
becoming technologically neutral. The Company no longer plans to open new
markets using its proprietary RF networks and has written-down assets and the
costs of deinstalling those assets amounting to $17.3 million. The Company has
terminated its agreement with its VLU supplier and was subject to a penalty and
write-off totaling $1.4 million of VLU's that were not on the correct frequency.
The Company cancelled its revolving credit agreement and wrote-off the
unamortized deferred costs of $0.8 million. The Company also expensed deferred
costs of $0.2 million for certain RF related projects.

            DEPRECIATION AND AMORTIZATION. Depreciation and amortization
decreased for the twelve months ended December 31, 1999 to $4.7 million from
$5.8 million for the twelve months ended December 31, 1998, primarily due to
depreciation on fewer assets due to the sale of the New York and Washington D.C.
networks to Ituran USA and the closing of the San Francisco/Sacramento network
as well as lower cost bases resulting from Fresh Start Accounting beginning on
October 1, 1999.

            OPERATING LOSSES. Operating losses incurred by the Company were $8.6
million for the twelve months ended December 31, 1999, as compared to $51.5
million for the twelve months ended December 31, 1998, for the reasons discussed
above.

            INTEREST EXPENSE. Interest expense was $8.6 million for the twelve
months ended December 31, 1999, compared to $14.5 million for the twelve months
ended December 31, 1998. The decrease relates to the cancellation of the


                                       26
<PAGE>

Predecessor Company's old senior note as part of the Reorganization as well as
reduced interest expense on the new debt instruments.

            REORGANIZATION COSTS. Reorganization costs were $1.3 million for the
twelve months ended December 31, 1999. These costs primarily represent
professional fees incurred to effect the Reorganization.

            GAIN ON DEBT DISCHARGE/REORGANIZATION. The gain on debt discharge
and reorganization was $123.8 million for the twelve months ended December 31,
1999. See Note 3 to the Consolidated Financial Statements for a further
discussion of this gain.

            NET (LOSS) INCOME . For the reasons discussed above there was net
income of $105.6 million for the twelve months ended December 31, 1999, compared
to a net loss of $63.4 million for twelve months ended December 31, 1998.

            TAX BENEFIT. No tax benefit has been recognized for any period due
to the uncertainty of net operating loss carry-forward utilization.

LIQUIDITY AND CAPITAL RESOURCES

            Capital expenditures were $1.5 million for the twelve months ended
December 31, 2000, primarily for the development of the Company's internal
software and database platforms. The Company currently expects that its
aggregate capital expenditures will be less than $2.0 million for 2001. These
capital expenditures will consist primarily of costs associated with internal
software development, the maintenance of existing markets, and other capital
improvements.

            As a result of the Reorganization, the Company has outstanding an
aggregate $15,000,000 of Senior Notes. The Senior Notes have a deferred interest
election provision whereby the Company may elect to pay interest by the issuance
of Deferred Interest Notes with a 12% interest rate due September 30, 2004. The
Company has issued Deferred Interest Notes in the aggregate of $1,800,000 as of
December 31, 2000. On March 15, 2001, in conjunction with interest due for the
prior six months, the Company issued an additional $900,000 of Deferred Interest
Notes.

            In May 2000, the Company paid off its $3,000,000 Senior Secured Note
with the proceeds from the sale of the Miami and Orlando networks to Ituran USA.
In January of 2001, the Company entered into a credit facility for a maximum of
$750,000. The credit facility is secured by the accounts receivable of the
Company. As of March 15, 2001, $550,000 has been drawn down from the facility.
Pursuant to the merger agreement with Trafficmaster, all amounts owing under
this facility would be repaid no later than the effective time of the merger.

            The Company has incurred recurring losses and has an overall
stockholders' deficit of $7,459,212 as of December 31, 2000. In addition, the
Company has long-term commitments that will require additional financing to meet
those commitments. There is no assurance that the Company can reduce expenses
sufficiently enough or be able to raise additional capital if needed to meet its
commitments. In particular, if for any reason the contemplated merger with
Trafficmaster is not consummated, the Company will be required to seek
additional financing to support its operations. There can be no assurance that
such financing will be available on acceptable terms, if at all.




                                       27
<PAGE>

YEAR 2000 COMPLIANCE AND EXPENDITURES

            To date we have not spent material amounts to comply with accounting
and statutory requirements regarding the Year 2000. We believe that we will
spend minimal additional amounts in the foreseeable future. The Company did not
incur any significant changes to its results of operations from increased costs
due to the Year 2000. The Company was not affected by any significant changes in
the Company's customers buying patterns and did not experience an increase in
returns in Year 2000.

INFLATION

            The Company believes that, to date, inflation has not had a material
effect on its results of operations. Although inflation may in the future effect
the cost of VLU and messaging units sold by the Company, the Company expects
that technology and engineering improvements are likely to offset any
foreseeable cost increases.

FASB PRONOUNCEMENTS

            In June 1999, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 137 ("SFAS No. 137"), an
amendment of SFAS No. 133 "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 133 establishes accounting and reporting standards for
derivative instruments and for hedging activities. SFAS No. 137 is effective for
fiscal years beginning after June 15, 2000. The Company believes the adoption of
SFAS No. 137 will not have a material effect on the Company's consolidated
results of operations or financial condition.

Item 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

            The fair market value of long-term fixed interest rate debt is
subject to interest rate risk. Generally, the fair market value of fixed
interest rate debt will increase as interest rates fall and decrease as interest
rates rise. Based on our market risk sensitive instruments outstanding at
December 31, 2000 and 1999, we have determined that there was no material market
risk exposure to our consolidated financial position, results of operations or
cash flows as of such dates.


Item 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

            See the Financial Statements listed in the accompanying Index to
Consolidated Financial Statements which appear elsewhere in this Annual Report.
Information required by the schedules called for under Regulation S-X is either
not applicable or is included in the consolidated financial statements or notes
thereto.


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

              Not applicable.



                                       28
<PAGE>

                          TELETRAC, INC. AND SUBSIDIARY

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Public Accountants..................................... 30
Consolidated Balance Sheets as of December 31, 2000 and
  1999....................................................................... 31
Consolidated Statements of Operations for the year ended
  December 31, 2000, the three months ended December 31, 1999, the nine months
  ended September 30, 1999 and the year ended December 31,
   1998 ..................................................................... 33
Consolidated Statements of Cash Flows for the year ended December 31, 2000,
   the three months ended December 31, 1999, the nine months ended September
   30, 1999 and the year ended December 31, 1998 ............................ 34
Consolidated Statements of Stockholders' (Deficit) Equity for the year ended
   December 31, 2000, the three months ended December 31, 1999, the nine months
   ended September 30, 1999 and the year ended December 31, 1998 ............ 35
Notes to Consolidated Financial Statements .................................. 36


                                       29
<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Teletrac, Inc.:

            We have audited the accompanying consolidated balance sheets of
Teletrac, Inc. and subsidiary (a Delaware company) as of December 31, 2000 and
1999, and the related consolidated statements of operations, stockholders'
(deficit) equity and cash flows for the year ended December 31, 2000, the three
months ended December 31, 1999, the nine months ended September 30, 1999, and
the year ended December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

            We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

            In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Teletrac, Inc. and
subsidiary as of December 31, 2000 and 1999, and the results of their operations
and their cash flows for the year ended December 31, 2000, the three months
ended December 31, 1999, the nine months ended September 30, 1999, and the year
ended December 31, 1998 in conformity with accounting principals generally
accepted in the United States.

            The Company had recurring losses and has an overall stockholders'
deficit of $7,459,212 as of December 31, 2000. In addition, the Company has
long-term debt that could require additional equity or debt financing. The
Company has entered into an agreement to be acquired as further discussed in
Note 1. If the contemplated merger is not consummated, the Company will be
required to seek additional financing to support its operations and long-term
debt commitments. There can be no assurance that such financing will be
available on acceptable terms, if at all.

ARTHUR ANDERSEN LLP
San Diego, California
March 15, 2001


                                       30
<PAGE>


                          TELETRAC, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2000 AND 1999


<TABLE>
<CAPTION>
ASSETS                                                                        2000            1999
                                                                         --------------   -------------

<S>                                                                      <C>              <C>
CURRENT ASSETS:
Cash and cash equivalents                                                   $   502,802      $1,270,065
Accounts receivable, less allowance of
       $663,035 and $1,874,717 at 2000
       and 1999, respectively                                                 2,442,565       2,752,173
Accounts receivable - short-term equipment leasing,
       less allowance of $73,000 and $0 at 2000
       and 1999, respectively                                                   306,084               -
Inventories                                                                   4,128,110       4,411,507
Deferred equipment cost, short-term                                           6,106,129               -
Prepaid expenses and other                                                      849,843         936,691
                                                                         --------------   -------------

       Total current assets                                                  14,335,533       9,370,436


ACCOUNTS RECEIVABLE-LONG-TERM EQUIPMENT LEASING, less allowance
       of $104,000 and $0 at 2000 and 1999, respectively                        362,833       2,404,249
INVENTORIES, LONG-TERM                                                        1,144,800       2,977,650
DEFERRED EQUIPMENT COST, LONG-TERM                                            7,646,218               -
PROPERTY AND EQUIPMENT, net of accumulated depreciation of
       $1,544,401 and $322,602 at 2000 and 1999, respectively                 7,296,559       7,740,758
LICENSES AND OTHER, net of accumulated amortization of
       $24,015 and $4,830 at 2000 and 1999, respectively                      1,160,052         380,190
                                                                         --------------   -------------

       Total assets                                                         $31,945,995     $22,873,283
                                                                         ==============   =============


LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

CURRENT LIABILITIES AND OTHER:
   Accounts payable - trade                                                  $1,489,431      $1,009,529
   Accrued expenses                                                           1,432,842       2,562,014
   Accrued interest - 9% Senior Secured Notes                                   450,000               -
   Current portion of long-term obligations                                     500,000         118,733
   Secured Senior Note payable, 10%                                                   -       3,000,000
   Deferred equipment revenue, short-term                                     8,047,630               -
                                                                         --------------   -------------

       Total current liabilities and other                                   11,919,903       6,690,276


9% SENIOR SECURED NOTES                                                      15,000,000      15,000,000
12% DEFERRED INTEREST NOTES PAYABLE                                           1,800,000               -
</TABLE>

                                       31
<PAGE>

<TABLE>
<S>                                                                      <C>              <C>
CAPITAL LEASE OBLIGATIONS                                                       626,722         425,695
DEFERRED EQUIPMENT REVENUE, LONG-TERM                                        10,058,582               -


STOCKHOLDERS' (DEFICIT) EQUITY:

Common stock, $.01 par value, 20,000,000 shares authorized,9,986,700 and
       10,000,000 issued and outstanding as of December 31, 2000 and 1999,      99,867         100,000
       respectively
Warrants, 3,000,000 warrants to purchase 3,000,000 shares                      468,000         468,000
       of common stock
Additional paid-in-capital                                                   1,795,645       1,795,512
Accumulated deficit                                                         (9,822,724)     (1,606,200)


       Total stockholders' (deficit) equity                                  (7,459,212)        757,312
                                                                         --------------   -------------

       Total liabilities and stockholders' (deficit) equity                 $31,945,995     $22,873,283
                                                                         ==============   =============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.



                                       32
<PAGE>


                          TELETRAC, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      FOR THE YEAR ENDED DECEMBER 31, 2000,
                    THE THREE MONTHS ENDED DECEMBER 31, 1999,
                    THE NINE MONTHS ENDED SEPTEMBER 30, 1999
                      AND THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
                                                                  New Company
                                     --------------------------------------------------------------------
                                                Year Ended                      Three Months Ended
                                                ----------                      ------------------
                                         12/31/2000      12/31/2000         12/31/1999      12/31/1999
                                     ---------------  ----------------   ---------------  -------------
OPERATING REVENUES:                                    Pro Forma                           Pro Forma
                                                      (unaudited)                         (unaudited)
<S>                                     <C>             <C>                 <C>             <C>
  Service revenue                       $21,823,318     $21,823,318         $5,556,162      $5,556,162
  Equipment revenue                       8,685,468       6,303,158          1,713,900       1,968,593
  Other revenue                             243,905         243,905            300,000         300,000
                                       ------------   -------------       ------------    ------------

Total operating revenues                 30,752,691      28,370,381          7,570,062       7,824,755
                                       ------------   -------------       ------------    ------------

OPERATING EXPENSES:
  Cost of service revenue                 3,252,826       3,252,826            672,312         672,312
  Cost of equipment revenue               7,879,704       5,971,045          1,489,765       1,378,435
  Selling, general and administrative    17,964,052      17,964,052          4,554,442       4,554,442
  Engineering and research and            3,975,945       3,975,945          1,259,018       1,259,018
  development costs
  Depreciation and amortization           1,419,609       1,419,609            327,513         327,513
                                       ------------   -------------       ------------    ------------

LOSS FROM OPERATIONS                     (3,739,445)     (4,213,096)          (732,988)       (366,965)

OTHER EXPENSE (INCOME):
  Interest expense                        2,116,677       2,116,677            900,141         900,141
  Interest and other income                (268,861)       (268,861)           (26,929)        (26,929)
  Gain on disposal of equipment          (2,198,253)     (2,198,253)                 -               -
                                       ------------   -------------       ------------    ------------

LOSS BEFORE CUMULATIVE EFFECT            (3,389,008)     (3,862,659)        (1,606,200)     (1,240,177)

CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE                   4,827,516               -                  -               -
                                       ------------   -------------       ------------    ------------

LOSS BEFORE INCOME TAXES                 (8,216,524)     (3,862,659)        (1,606,200)     (1,240,177)

PROVISION FOR INCOME TAXES                        -               -                  -               -
                                       ------------   -------------       ------------    ------------

NET (LOSS) INCOME                        (8,216,524)     (3,862,659)        (1,606,200)     (1,240,177)
                                       ------------   -------------       ------------    ------------

LOSS APPLICABLE TO
COMMON STOCKHOLDERS                     $(8,216,524)    $(3,862,659)       $(1,606,200)    $(1,240,177)
                                       ============   =============       ============    ============


<CAPTION>
                                                                   Predecessor Company
                                     ------------------------------------------------------------------------
                                             Nine Months Ended                       Year Ended
                                             -----------------                       ----------
                                        9/30/1999         9/30/1999         12/31/1998         12/31/1998
                                     --------------   ---------------   -----------------   -----------------
                                                         Pro Forma                              Pro Forma
                                                        (unaudited)                            (unaudited)
<S>                                    <C>                <C>                <C>                <C>
OPERATING REVENUES:
  Service revenue                      $15,740,509        $15,740,509        $18,028,832        $18,028,832
  Equipment revenue                      6,817,504          5,378,273         10,585,835          5,359,553
  Other revenue                          2,778,667          2,778,667                  -                  -
                                      -------------      -------------      -------------      -------------

Total operating revenues                25,336,680         23,897,449         28,614,667         23,388,385

OPERATING EXPENSES:
 Cost of service revenue                 2,536,639          2,536,639          4,206,939          4,206,939
 Cost of equipment revenue               4,649,059          4,906,446          9,261,564          5,091,308
 Selling, general and administrative    16,926,217         16,926,217         30,217,327         30,217,327
 Engineering and research and            4,763,621          4,763,621         10,624,945         10,624,945
 development costs
 Refrequencing costs                             -                  -            390,000            390,000
 Restructuring charge and other                  -                  -         19,667,557         19,667,557
 Depreciation and amortization           4,341,131          4,341,131          5,781,103          5,781,103
                                     -------------      -------------      -------------      -------------

LOSS FROM OPERATIONS                    (7,879,987)        (9,576,605)       (51,534,768)       (52,590,794)

OTHER EXPENSE (INCOME):
  Interest expense                       7,734,877          7,734,877         14,501,454         14,501,454
  Interest and other income               (912,909)          (912,909)        (2,616,394)        (2,616,394)
                                     -------------      -------------      -------------      -------------
LOSS BEFORE REORGANIZATION
COSTS AND (GAIN) OF
DISCHARGE                             (14,701,955)       (16,398,573)       (63,419,828)       (64,475,854)

REORGANIZATION COSTS                     1,321,746         1,321,746                  -                  -
(GAIN) ON DEBT
DISCHARGE/REORGANIZATION              (123,774,589)     (123,774,589)                 -                  -
                                     -------------      -------------      -------------      -------------

GAIN (LOSS) BEFORE
INCOME TAXES                           107,750,888        106,054,270        (63,419,828)       (64,475,854)

PROVISION FOR INCOME TAXES                       -                  -                  -                  -
                                     -------------      -------------      -------------      -------------

                                       33
<PAGE>

NET INCOME (LOSS)                      107,750,888        106,054,270        (63,419,828)       (64,475,854)

PREFERRED DIVIDENDS                      4,145,596          4,145,596          5,839,674          5,839,674
                                     -------------      -------------      -------------      -------------

INCOME (LOSS) APPLICABLE TO
COMMON STOCKHOLDERS                   $103,605,292       $101,908,674       $(69,259,502)      $(70,315,528)
                                     =============      =============      =============      =============
</TABLE>


               The accompanying notes are an integral part of these
                        consolidated financial statements.


                                       34
<PAGE>

                          TELETRAC, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      FOR THE YEAR ENDED DECEMBER 31, 2000,
                   THE THREE MONTHS ENDED DECEMBER 31, 1999,
                    THE NINE MONTHS ENDED SEPTEMBER 30, 1999
                        AND THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
                                                                                  New Company
                                                                  ------------------------------------------
                                                                     Year Ended           Three Months Ended
                                                                      12/31/00                 12/31/99
                                                                  --------------         -------------------

<S>                                                               <C>                      <C>
OPERATING ACTIVITIES:
  Net income (loss)                                               $(8,216,524)             $(1,606,200)
  Adjustments to reconcile net loss to net cash used in
  operating activities -
      Depreciation and amortization                                 1,419,609                  327,513
      Gain on assets disposed/sold                                 (2,198,253)                       -
      Cumulative effect of change in accounting principle           4,827,516
      Accrued interest on warrant discount                                  -                  468,000
      Changes in working capital and other assets and
      liabilities:
         Accounts receivables                                       1,794,942                 (761,660)
         Inventories                                                1,642,596                  237,051
         Prepaid expenses and other                                   367,605                  (24,913)
         Current liabilities                                         (311,771)                (519,977)
         Accrued interest on senior secured notes                   1,979,131                  337,500
                                                                  --------------         -------------------

  Net cash provided by (used in) operating activities               1,304,851               (1,542,686)
                                                                  --------------         -------------------

INVESTING ACTIVITIES:
  Proceeds from sale of assets                                      3,601,205                    5,254
  Purchase of property and equipment                               (1,546,289)                (247,260)
  Purchase of other intangible assets                                (799,183)                       -
                                                                  --------------         -------------------

  Net cash provided by (used in) investing activities               1,255,733                 (242,006)
                                                                  --------------         -------------------

FINANCING ACTIVITIES:
  Payments of 10% Senior Secured Notes                             (3,000,000)                       -
  Capital lease payments                                             (286,282)                 (63,887)
  Payments on Milgo note payable                                      (41,565)                       -
                                                                  --------------         -------------------

  Net cash used in financing activities                            (3,327,847)                 (63,887)
                                                                  --------------         -------------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                            (767,263)              (1,848,579)

CASH AND CASH EQUIVALENTS, beginning of period                      1,270,065                3,118,644
                                                                  --------------         -------------------

CASH AND CASH EQUIVALENTS, end of period                          $   502,802              $ 1,270,065
                                                                  ==============         ===================
SUPPLEMENTAL DISCLOSURE-
Interest paid (note 3)                                            $   221,609              $   432,141
                                                                  ==============         ===================

Capital lease obligations entered into for equipment              $      -                 $    74,755
                                                                  ==============         ===================

</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       35
<PAGE>

<TABLE>
<CAPTION>

                                                                              Predecessor Company
                                                                  ------------------------------------------
                                                                    Nine Months Ended         Year Ended
                                                                        9/30/1999             12/31/1998
                                                                  --------------------   -------------------

<S>                                                               <C>                           <C>
OPERATING ACTIVITIES:
  Net income (loss)                                                   $107,750,888              $(63,419,828)
  Adjustments to reconcile net income (loss) to
  net cash used in operating activities -
     Depreciation and amortization                                       4,341,131                 5,781,103
     Accretion of discount on senior notes                                 196,853                   192,399
     Loss on assets disposed/sold                                                -                   128,699
     Loss on assets from restructuring                                           -                19,667,557
     Gain on debt discharge                                           (123,774,589)                        -
     Changes in working capital and other assets and
     liabilities:                                                                -                         -
        Restricted cash                                                          -                 1,750,000
        Accounts receivable                                               (486,143)                 (823,032)
        Inventories                                                      1,928,508                (7,262,461)
        Prepaid expenses and other                                         275,300                 3,611,973
        Current liabilities                                               (136,902)                 (776,208)
        Refrequency liability                                              (58,184)               (3,012,402)
        Accrued interest on senior secured notes                                 -                   204,167
                                                                    ---------------      -------------------

  Net cash used in operating activities                              (9,963,138)             (43,958,033)
                                                                    ---------------      -------------------

INVESTING ACTIVITIES:
  Proceeds from sale of assets                                           10,500                        -
  Purchase of property and equipment                                 (1,189,983)             (12,013,902)
  Purchase of other intangible assets                                  (705,596)              (1,095,690)
                                                                    ---------------      -------------------
  Net cash used in investing activities                              (1,885,079)             (13,109,592)
                                                                    ---------------      -------------------

FINANCING ACTIVITIES:
  Issuance of preferred stock, Series B, net                                  -                9,820,980
  Proceeds from issuance of senior notes                              3,000,000                        -
  Restricted investments                                              6,503,863               12,715,006
  Credit facility                                                             -                   (2,254)
  Capital lease payments                                               (490,507)                (993,339)
                                                                    ---------------      -------------------


  Net cash provided by financing activities                           9,013,356               21,540,393
                                                                    ---------------      -------------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                            (2,834,861)             (35,527,232)

CASH AND CASH EQUIVALENTS, beginning of period                        5,953,505               41,480,737
                                                                    ---------------      -------------------

CASH AND CASH EQUIVALENTS, end of period                            $ 3,118,644            $   5,953,505
                                                                    ===============      ===================

SUPPLEMENTAL DISCLOSURE-
Interest paid                                                       $ 6,509,877            $  15,070,874

Capital lease obligations entered into for equipment                $    21,516            $   2,210,210

</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       36
<PAGE>


                          TELETRAC, INC. AND SUBSIDIARY
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY
                      FOR THE YEAR ENDED DECEMBER 31, 2000,
                    THE THREE MONTHS ENDED DECEMBER 31, 1999,
                THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND THE
                          YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
                                                         Common Stock
                                     --------------------------------------------------------
                                     Class A        Class B        Par $.01         Warrants
                                     --------       --------       ---------        ---------

<S>                               <C>             <C>            <C>               <C>
BALANCE, December 31, 1997         $   2,490       $       -      $        -       $7,039,954

Cost of issuance of preferred
      stock, series B
Net loss                                   -               -               -                -
Preferred stock dividends                  -               -               -                -
                                  ----------      ----------      ----------       ----------


BALANCE, December 31, 1998             2,490               -               -        7,039,954

Net income                                 -               -               -                -
Preferred stock dividends                  -               -               -                -
Gain on debt discharge                (2,490)              -               -       (7,039,954)
Issuance of common
 stock $.01 par                            -               -         100,000                -
Issuance of warrants                       -               -               -          468,000
                                  ----------      ----------      ----------       ----------



BALANCE, September 30, 1999                -               -         100,000          468,000

Net loss                                   -               -               -                -
                                  ----------      ----------     -----------       ----------

BALANCE, December 31, 1999                 -               -         100,000          468,000

Returned and retired common stock          -               -            (133)               -

Net loss                                   -               -               -                -
                                  ----------      ----------     -----------       ----------

BALANCE, December 31, 2000        $        -      $        -        $998,670         $468,000
                                  ==========      ==========     ===========       ==========


<CAPTION>

                                      Additional         Accumulated
                                   Paid-In-Capital         Deficit           Total
                                  -----------------       --------           -----

<S>                                 <C>                <C>              <C>
BALANCE, December 31, 1997           $16,732,656        $(44,331,060)   $(20,555,960)

Cost of issuance of preferred
      stock, series B                   (117,027)                  -        (117,027)
Net loss                                       -         (63,419,828)    (63,419,828)
Preferred stock dividends             (5,839,674)                  -      (5,839,674)
                                     -----------        ------------     -----------


BALANCE, December 31, 1998            10,775,955        (107,750,888)    (89,932,489)

Net income                                     -         107,750,888     107,750,888
Preferred stock dividends             (4,145,596)                  -      (4,145,596)
Gain on debt discharge                (6,630,359)                  -     (13,672,803)
Issuance of common
 stock $.01 par                        1,795,512                   -       1,895,512
Issuance of warrants                           -                   -         468,000
                                     -----------        ------------     -----------



BALANCE, September 30, 1999            1,795,512                   -       2,363,512

Net loss                                       -          (1,606,200)     (1,606,200)
                                     -----------        ------------     -----------

BALANCE, December 31, 1999             1,795,512          (1,606,200)        757,312

Returned and retired common stock            133                   -               -

Net loss                                      -           (8,216,524)     (8,216,524)
                                     -----------        ------------     -----------

BALANCE, December 31, 2000            $1,795,645         $(9,822,724)    $(7,459,212)
                                     ===========        ============     ===========
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       37
<PAGE>
                          TELETRAC INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  DESCRIPTION OF BUSINESS:

Teletrac, Inc., a Delaware corporation, through its wholly-owned subsidiary,
Teletrac License, Inc. (collectively, the "Company"), controls licenses issued
by the Federal Communications Commission (FCC) to construct and operate radio
location networks for the purpose of locating, tracking and communicating with
commercial fleet and consumer vehicles as a result of its acquisition of
AirTouch Teletrac. As of December 31, 2000, the Company operated in thirteen
metropolitan markets: Los Angeles, Chicago, Detroit, Dallas, Miami, Houston,
Orlando, San Francisco, San Diego, Sacramento, Washington D.C./Baltimore,
Phoenix and New York. The Company also uses its proprietary location systems to
provide vehicle location and stolen vehicle recovery services to consumers in
its Los Angeles market. The networks consist primarily of antennas,
transmission and receiving equipment, customer-owned vehicle locating units
(VLUs) that receive and transmit signals, and operating centers that interpret
and relay the transmissions.

On June 9, 1999 the Company filed for voluntary protection under Chapter 11 of
the U.S. Bankruptcy Code. On September 15, 1999, the Company's Prenegotiated
Plan of Reorganization was approved by the United States Bankruptcy Court and
was declared effective on September 29, 1999 (the "Reorganization"). Pursuant to
the Reorganization, $105.0 million in 14% Senior Secured Notes were cancelled in
exchange for cash, and/or new indebtedness, and/or new equity interests, certain
indebtedness was reinstated, certain claims were settled, executory contracts
and unexpired leases were assumed or rejected, certain prepetition claims were
discharged, and the new members of the new Board of Directors of the Company
were designated. The Company distributed to creditors approximately $21.6
million in restricted cash, $0.2 million in unrestricted cash, $15.0 million
principal amount of its 9% Senior Notes due September 30, 2004 (the "Senior
Notes"), equity securities consisting of 10 million shares of new common stock
and 800,000 warrants, each of which is convertible into one share of new common
stock at an exercise price of $7.40 per share.

In order to fund operations of the Company post Reorganization, the Company
issued an aggregate of $3.0 million principal amount of 10% Senior Secured Notes
due September 30, 2000 (the "Senior Secured Notes"). The Senior Secured Notes
had quarterly interest payments and 3,000,000 detachable warrants, each of which
is convertible into one share of new common stock at an exercise price of $0.05
per share. These warrants have been valued at $468,000 and have been amortized
to interest expense in the accompanying statement of operations. The principal
and interest were paid in full in May 2000.

In May, 2000, Ituran USA purchased the Miami and Orlando networks from the
Company pursuant to an option to buy these networks, which was granted by the
Company to Ituran USA as part of the Reorganization. The proceeds from the sale
were approximately $4.0 million and were used to repay the Senior Secured Notes
discussed above.

On February 23, 2001, the Company entered into a merger agreement with
Trafficmaster plc ("Trafficmaster") pursuant to which Trafficmaster will acquire
the Company for cash (including the assumption of debt). The merger has been
approved by the Board of Directors and the holders of a majority of the
Company's outstanding common stock. In addition, the holders of a majority of
the Company's outstanding 9% Senior Secured Notes due September 2004 (the
"Senior Notes") consented to the merger and waived certain rights such holders
of Senior Notes may have pursuant to the Indenture, dated as of September 29,
1999 between the Company and HSBC Bank USA, as Trustee (the "Indenture")
governing the terms of the Senior Notes, including the right to receive notice
of a Change of Control (as defined in the Indenture) and to require the Company
to repurchase their Senior Notes.  The Senior Noteholders also waived events of
noncompliance or default under the Indenture that would occur as a result of the
Company's failure to satisfy the covenants set forth in Sections 4.14 and
5.01(iv) of the Indenture in connection with the merger. Such holders also
consented to and approved the adoption of a supplemental indenture (the
"Supplemental Indenture") by the Indenture Trustee amending certain provisions
of the Indenture. The Company expects consummation of the merger to occur in
April, 2001, subject to the satisfaction of certain closing conditions in the
merger agreement, including regulatory approval of the transfer of control of
the FCC licenses used in the Company's business. The Company has filed with the
Securities and Exchange Commission (the "SEC") a Current Report on Form 8-K,
dated March 6, 2001, in connection with this merger agreement.

The Company has incurred recurring losses and has an overall stockholders'
deficit of  $7,459,212 as of December 3, 2000.  Also,  the Company has long-term
commitments that will require additional  financing.  There is no assurance that
the  Company  can  reduce  expenses  sufficiently  enough  or be able  to  raise
additional capital if needed to meet its commitments.  In particular, if for any
reason the  contemplated  merger  with  Trafficmaster  is not  consummated,  the
Company will be required to seek additional financing to support its operations.
There can be no assurance  that such  financing  will be available on acceptable
terms, if at all.

2.  ACCOUNTING POLICIES:

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and
its subsidiary. All significant intercompany accounts and transactions have been
eliminated in consolidation.

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 and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

Revenue Recognition

The Company services the commercial market for use in fleet management and the
consumer market for individual vehicle tracking. The commercial systems include
VLUs, computer hardware, and vehicle tracking software. For the year ended
December 31, 1998, the nine months ended September 30, 1999 and the three months
ended December 31, 1999, the Company recognized sales of commercial systems upon
installation of the system. However, in accordance with the Securities and
Exchange Commission's Staff Accounting Bulletin No. 101 ("SAB 101") "Revenue
Recognition in Financial Statements," the Company changed its revenue
recognition on sales of commercial systems to be recognized over the expected
life of the customer relationship. This resulted in a cumulative effect of
change in accounting principle of $4.8 million as of January 1, 2000, recorded
in the fourth quarter of the year ended December 31, 2000. As a result, the
Company restated its first three quarters of fiscal 2000 results. See Note 12
for a more complete presentation of the effect of SAB 101 on the quarterly
financial results. The commercial service fee revenues are recognized monthly as
the services are provided. The VLUs for the consumer market are sold along with
monthly service contracts. Service revenues for the consumer market may be paid
in advance and are recognized monthly as earned.

                                       38
<PAGE>

Cash and Cash Equivalents

The Company considers investments, which consist primarily of investments in
commercial paper purchased with a maturity of three months or less to be
cash equivalents. The carrying amounts approximate fair value due to the
short maturities of these instruments.

Inventories

Inventories consist of VLUs, computer systems and other receiving and
transmitting equipment held for sale. Inventories are stated at the lower of
cost or market using the first-in, first-out method of valuation.

Inventories consist of the following at December 31:

                                              2000                  1999
                                        -----------------    -----------------

Vehicle Location Units ("VLU")                 $3,417,073           $5,538,409

Messaging units                                   998,412              944,686

Computers and software                            251,657              328,016

Other inventory                                   605,768              578,046
                                        -----------------    -----------------

         Total inventories                      5,272,910            7,389,157

         Less: Long-term inventories            1,144,800            2,977,650
                                        -----------------    -----------------

         Current portion                       $4,128,110           $4,411,507
                                        =================    =================


In connection with a supply agreement with a vendor, the Company was required to
purchase minimum quantities of VLU's. These purchase requirements resulted in
inventory quantities which exceed the next year's anticipated demand. The
Company does not have plans to alter its technology in its existing markets.
Accordingly, quantities in excess of one year's anticipated demand have been
classified as long-term inventory in the accompanying consolidated balance
sheets.

Property and Equipment

The Company provides for depreciation expense using the straight-line method
over five to seven years for all categories other than leasehold improvements,
which are depreciated over the life of the lease. Property and equipment are
recorded at cost. In accordance with Fresh Start Accounting, property and
equipment were reflected at fair market values based on the equity valuation of
the Company as of September 30, 1999.

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

System software and equipment                  $5,897,369            $5,803,006
Computer equipment                              2,065,037             1,371,926
Furniture and fixtures                            679,818               666,875
Automobiles                                        87,086               118,015

                                       39
<PAGE>

Leasehold improvements                             76,881               101,005

Construction in progress                           34,769                 2,533
                                        -----------------     -----------------
                                                8,840,960             8,063,360

    Less:  accumulated depreciaiton            (1,544,401)             (322,602)
                                        -----------------     -----------------
       Net property and equipment              $7,296,559            $7,740,758
                                        =================     =================

Maintenance and repair expenses are charged to operations as incurred. When
assets are sold or otherwise disposed of, the cost and accumulated depreciation
are removed from the accounts and any resulting gain or loss is included in
operations.

The Company capitalizes certain costs incurred in the development of
internal-use software. As a result, approximately $860,000 and $547,000 is
capitalized as of December 31, 2000 and 1999, respectively. Capitalized costs
include only (1) external direct costs of materials and services consumed in
developing or obtaining internal-use software and (2) payroll and
payroll-related costs for employees who are directly associated with and who
devote time to the internal-use software project. Capitalization of such costs
ceases no later than the point at which the project is substantially complete
and ready for its intended purpose.

Licenses and Other

Licenses represent a long-term intangible asset that allows FCC authorization to
broadcast at designated frequencies. They are amortized using the straight-line
method over 15 years. FCC license terms are for 5-year periods with unlimited
options to renew for subsequent 5-year periods. These licenses were revalued as
part of Fresh Start Accounting and account for approximately $0.3 million of
licenses and other. The remaining $0.9 million relates to product development
costs for FDEE and will be expensed in future periods through costs of equipment
revenues.

The Company accounts for software development costs in accordance with SFAS No.
86, Accounting for the Costs of Computer Software to be Sold, Leased or
Otherwise Marketed, whereby costs for the development of new software products
and substantial enhancements to existing software products are expensed as
incurred until technological feasibility has been established, at which time any
additional costs are capitalized. Technological feasibility is established upon
completion of a working model. Software development costs incurred subsequent to
the establishment of technological feasibility have been capitalized in other
assets on the accompanying consolidated balance sheets and were approximately
$894,000 and $95,000 at December 31, 2000 and 1999, respectively.

Long-Lived Assets

The Company periodically evaluates the recoverability of its long-lived assets
based on expected undiscounted cash flows and recognizes impairments, if any.

Stock-Based Compensation

The Company measures compensation expense for its stock-based employee and
non-employee directors compensation plan using the intrinsic value method and
provides pro forma disclosures of net loss as if the fair value method had been
applied in measuring compensation expense.

Income Taxes

Deferred tax assets or liabilities are computed based on the difference between
the financial statement and income tax basis of assets and liabilities applying
tax regulations existing at the end of the reporting period. The Company has
fully reserved its deferred tax asset, principally consisting of net operating
loss carry-forward generated as of December 31, 2000 and 1999.

Recent Accounting Pronouncements

In June 1999, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 137 ("SFAS No. 137"), an amendment of SFAS
No. 133 "Accounting for Derivative Instruments and Hedging Activities". SFAS No.
133 establishes accounting and reporting standards for derivative instruments
and for hedging activities. SFAS No. 137 is effective for fiscal years beginning
after June 15, 2000. The Company believes the adoption of SFAS No. 137 will not
have a material effect on the Company's consolidated results of operations or
financial condition.


                                       40
<PAGE>

Fair Value of Financial Instruments

The following methods and assumptions were used by the Company in estimating its
fair value disclosures for financial instruments: the carrying amount reported
on the balance sheet approximates the fair value for cash, short-term borrowings
and current maturities of long-term obligations; and the fair value for the
Company's fixed rate long-term obligations is estimated based on the current
rates offered to the Company for obligations of the same remaining maturities.
Based on the above, amounts reported on the consolidated balance sheet above for
financial instruments approximate fair value.

Reclassifications

Certain amounts previously reported in the 1999 financial statements have been
reclassified to conform with the 2000 presentation.



                                       41
<PAGE>


3.  FRESH START ACCOUNTING:

As of September 30, 1999, the Company adopted Fresh Start Accounting in
accordance with AICPA Statement of Position 90-7 ("SOP 90-7"), "Financial
Reporting by Entities in Reorganization under the Bankruptcy Code." Fresh Start
Accounting resulted in material changes to the consolidated balance sheet,


                                       42
<PAGE>

including valuation of assets, intangible assets, and liabilities at fair market
value and valuation of equity based upon the appraised reorganization value of
the ongoing business.

The Company's reorganization equity value of $2.3 million was based on an equity
valuation performed by an independent firm in accordance with standards
established by the American Society of Appraisers and submitted to the court as
part of the Plan of Reorganization. The equity valuation resulted in a lower
value than the historical carrying value of the net assets. As such, the
difference was applied as a reduction to the carrying values of long-term
assets.

The following sets forth the results of Fresh Start Accounting:




                                       43
<PAGE>

<TABLE>
<CAPTION>
                                   Predecessor          Reorganization and Fresh Start            New
                                     Company                     Adjustments                    Company
                                                        ------------------------------
                                September 30, 1999      Debit             Credit          September 30, 1999
                               -------------------      ------           --------          ------------------
   ASSETS

<S>                                <C>              <C>                <C>                   <C>
Total current assets                $34,675,005      $         -       $22,344,345 (a)       $12,330,660

Property and equipment (net)         17,510,571                -         9,598,966 (b)         7,911,605


Long-term receivables                   853,499                -                 -               853,499


Other assets                          3,965,779                -           162,129 (c)         3,803,650
                                    -----------       ----------       -----------           -----------
                                    $57,004,854       $        -       $32,105,440           $24,899,414
                                    ===========       ==========       ===========           ===========


   LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

   Current liabilities:
         Current portion of
            long-term debt          $   707,862         $600,000 (d)     $     -             $   107,862

         Accounts payable and other
            accrued liabilities       6,373,676             -               628,669 (e)        7,002,345
                                   ------------       ----------        -----------          -----------

   Total current liabilities          7,081,538          600,000            628,669            7,110,207

   Total noncurrent liabilities     109,484,499      109,058,804 (f)     15,000,000 (g)       15,425,695


   Stockholders' (deficit) equity:
      Preferred stock                58,213,276       58,213,276 (h)             -                    -
      Common stock                        2,490            2,490 (i)        100,000  (j)        100,000
      Warrants                        7,039,954        7,039,954 (i)        468,000  (k)        468,000
      Additional paid-in-
      capital                         6,630,360        6,630,360 (l)      1,795,512  (j)      1,795,512
      Retained earnings
        (accumulated deficit)      (131,447,263)      10,382,952 (m)    141,830,215  (n)              -
                                   ------------     ------------       ------------         -----------

                                    $57,004,854     $191,927,836       $159,822,396         $24,899,414
                                   ============     ============       ============         ===========
</TABLE>

Explanations of the above adjustments are as follows:

a) To remove the restricted cash of $21,644,345 that was paid to the 14% Senior
Secured Note holders and an adjustment of $700,000 to accounts receivable for
realizability due to the Reorganization.

b) To adjust the property and equipment to estimated fair market value and to
decrease the identifiable assets by the reorganization value less the
identifiable assets.

c) To decrease the intangible assets by the amount in excess of the
reorganization value.


                                       44
<PAGE>

d) To reflect the cancellation of debtor-in-possession financing and issuance of
new current obligations.

e) To adjust current liabilities to fair market value.

f) Remove old Senior Note, remove accrued interest on 14% Senior Secured Notes,
remove cancelled debts and remove accrued interest on debtor-in-possession
financing.

g) To reflect the issuance of the 9% Senior Notes.

h) To reflect the cancellation of the Series A, A-1 and B preferred stock.

i) To reflect cancellation of the Class A and B common stock and predecessor
warrants.

j) To reflect the issuance of 10,000,000 shares of new common stock (par value
$0.01) at estimated fair market value.

k) To record new warrants on $3,000,000 10% Senior Secured Notes.

l) To reflect the elimination of stockholders' equity of the Predecessor
Company.

m) Remove positive accumulated earnings after posting gain from debt discharge
and reorganization charges.

n) Post debt discharge and reorganization gain against retained deficit.

4. REORGANIZATION COSTS:

In accordance with SOP 90-7, expenses of the Predecessor Company resulting from
the Reorganization are reported separately as reorganization items in the
accompanying consolidated statement of operations, and are summarized below:

                                                            Nine Months Ended
                                                            September 30, 1999
                                                            ------------------
Legal fees                                                       $1,245,029
Court fees                                                           27,500
Printing fees                                                        49,217
                                                            ------------------
                                                                 $1,321,746
                                                            ==================

5. LONG-TERM OBLIGATIONS:

Long-term obligations consist of the following as of December 31:

                                                      2000                  1999
                                                      ----                  ----



                                       45
<PAGE>

<TABLE>
<S>                                              <C>                    <C>
9% Senior Notes payable to a bank, principal
and interest due September 30, 2004, secured
by substantially all the assets of the
Company                                           $   15,000,000        $    15,000,000

12% Deferred Interest Notes payable to a bank,
principal and interest due October 1, 2004,            1,800,000                      -
secured by substantially all the
assets of the Company

10% Senior Secured Notes payable to a bank,
principal and interest due September 30,
2004, secured by substantially all the assets
of the Company                                                 -              3,000,000

Accrued interest secured notes                           516,630                      -

Capital lease obligations                                632,882                544,428
Note payable to Milgo                                    427,210                      -
                                              -------------------    -------------------
                                                      18,376,722             18,544,428
      Less current portion                               500,000              3,118,733
                                              -------------------    -------------------
                                                 $    17,876,722        $    15,425,695
                                              ===================    ===================
</TABLE>


The Company holds leases on automobile, furniture, telephone and frequency
receiving and transmitting equipment for periods greater than one year.

The 9% Senior Notes have a deferred interest election provision which the
Company elected in September 2000, which resulted in the 12% Deferred Interest
Note. On March 15, 2001, the Company elected to convert the interest payable for
the 9% Senior Notes into an additional 12% Deferred Interest Note for $900,000.

Principal maturities of long-term obligations as of December 31,
2000 follows:

           Fiscal year ending

                  2001                                        $    500,000
                  2002                                             322,647
                  2003                                             304,075
                  2004                                          17,250,000
                                                          ----------------

                                  TOTAL:                      $ 18,376,722
                                                          ================

On January 9, 2001, the Company entered into a credit facility with Aspen
Capital Partners, L.P., a holder of approximately 19% of the Company's
outstanding common stock.  The facility provides for a loan of up to $750,000
that is secured by the accounts receivable of the Company, accrues interest at
a rate of prime plus 6% and is due on January 9, 2002.

6. STOCKHOLDERS' (DEFICIT) EQUITY:

Common Stock

The Company's authorized capital stock consists of 20,000,000 shares of common
stock, par value $0.01 per share.

The holders of the common stock are entitled to one vote per share on all
matters on which stockholders are entitled to vote. The holders of common stock
are entitled to receive such dividends as may be declared by the Board of
Directors.




                                       46
<PAGE>

Stock Options

The Company has reserved 1,346,071 shares of common stock for issuance pursuant
to the exercise of nonqualified and incentive stock options under its 1999 Stock
Option and Restricted Stock Purchase Plan (the "Plan"). The Company applies
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," under which no compensation cost has been recognized in 1999.

The following table represents the total number of option shares granted and
forfeited under all plans for the twelve months ended December 31, 2001:

        Outstanding at December 31, 1999        1,188,500
                                                ---------
          Granted                                  30,000
          Forfeited                               139,500
                                                ---------
        Outstanding at December 31, 2000        1,079,000
                                                =========

The shares were issued with an excise price of $0.16, based on the equity
valuation of the Company during the Reorganization.

Statement of Financial Accounting Standards No. 123 "Accounting for Stock-Based
Compensation" ("SFAS No. 123") was issued by the Financial Accounting Standards
Board in 1995 and, if fully adopted, changes the methods for recognition of cost
on plans similar to those of the Company. Adoption of SFAS No. 123 is optional,
however, pro forma disclosures as if the Company had adopted the cost
recognition method are required. Had compensation cost for stock options awarded
under the Plan been determined consistent with SFAS No. 123, the effect to net
income and earnings per share would have been immaterial.

The Black-Scholes option valuation model was used in estimating the fair value
of traded options that have no vesting restrictions and are fully transferable.
Option valuation models require the input of highly subjective assumptions such
as expected option life and expected stock price volatility. Because the
Company's employee stock-based compensation plan has characteristics
significantly different from those of traded options and because changes in the
subjective input assumptions can materially affect the fair value estimate, the
Company believes that the existing option valuation models do not necessarily
provide a reliable single measure of the fair value of awards from those plans.

The fair value at date of grant for options granted during fiscal 2000 and 1999
were $.21 and $.20, respectively, and were estimated using the Black-Scholes
option pricing model with the following assumptions:

                                Options                 Options
                                Granted                 Granted
                                in 1999                 in 2000
                                -------                 -------
      Volatility                  1.0%                    1.0%
      Dividend yield              0.00%                   0.00%
      Risk free interest rate     5.8%                    6.53%
      Expected option life      3-5 years               3-5 years

7.  EMPLOYEE BENEFIT PLANS:

The Company sponsors a defined-contribution profit sharing 401(k) plan (the
"401(k) Plan") which covers all full-time employees. The benefits of the 401(k)
Plan are based on years of service, the employee's compensation, employee
contributions and earnings of plan assets. The Company's funding policy is to
contribute an amount equal to $0.50 for every dollar contributed by the
employees up to $1,000 annually. The Company contributed approximately $106,000
and $164,536 during 2000 and 1999, respectively.

8.  INCOME TAXES:

Deferred income taxes are provided for temporary differences between the
financial accounting basis and tax basis of assets and liabilities and temporary
differences in reporting income and expense.

The Company's Net Operating Losses ("NOL's") and Alternative Minimum Tax ("AMT")
NOL's total approximately $70 million and $63.8 million, respectively, for 2000.
However, the utilization of these NOL's is limited under Internal Revenue Code
Section 382. Pursuant to the Plan of Reorganization, the Company incurred a
greater than fifty percent ownership change, thereby, subjecting the NOL's to
the Section 382 limitations. The Company estimates that only $17.2 million of
NOL's are available to be utilized to offset future taxable income due to the
Section 382 limitations.

The components of net deferred tax assets (liabilities) are as follows (in
thousands):
<TABLE>
<CAPTION>
                                                              December 31,            December 31,
                                                                  2000                    1999
                                                               ---------                --------
<S>                                                            <C>                    <C>
DEFERRED TAX ASSETS:
  NOL                                                          $ 26,567               $  2,486
  Reduction for Internal Revenue Code Section 382               (20,054)                  --
                                                                -------                  -----
  Net NOL available for future use                                6,513                  2,486

  Reserves and Accruals                                            --                      785
  Depreciation                                                      898                  2,591
  Other                                                           2,724                    330

Deferred Tax Liabilities -
  Other                                                             (63)                  --
                                                                -------                 ------

Net deferred tax assets                                          10,072                  6,192
Tax asset reserve                                               (10,072)                (6,192)
                                                                -------                 ------

Net deferred taxes                                             $      -                 $    -
                                                               ========                 ======
</TABLE>

                                       47
<PAGE>



9.  COMMITMENTS AND CONTINGENCIES:

The Company has operating leases for office space and antenna sites for periods
greater than one year. Minimum payments under such operating leases are as
follows (in thousands):

            Year Ending
            -----------

                2001                                  $1,448

                2002                                     847

                2003                                     456

                2004                                     313

                2005                                     278

            Thereafter                                    80
                                                     -------
                                     Total           $ 3,422
                                                     =======

Employment Agreements

          The five most senior officers of the Company (the "Principal
Officers") have employment agreements with the Company (the "Employment
Agreements"). The Employment Agreements of four officers were initially for a
period of two years commencing on September 29, 1999. One officer's employment
commenced on January 17, 2000. On September 28, 2000, each of the officer's
agreements was amended to extend the term to September 29, 2002.

          The Employment Agreements all provide the same terms, other than
salary and salary position, for each of the Principal Officers and provide for
aggregate salaries of $872,000 per annum.

          In addition to base compensation, the Employment Agreements also
provide that each Principal Officer is eligible for a bonus, which shall be
established by the Compensation Committee of the Board of Directors and shall be
based on target performance objectives set by the Compensation Committee. The
Employment Agreements also grant three of the officers options to purchase
75,000 shares of Common Stock of the Company and one officer options to purchase
30,000 shares of Common Stock of the Company, all pursuant to the Company's
stock option plan, which is described below.

          The Employment Agreements contain a provision stating that in the
event that the employee is terminated other than for cause and/or in the event
that all or a majority of the stock or the assets are sold to a purchaser, he
shall be entitled to severance compensation equal to the lesser of (i) one
year's base salary or (ii) the amount of the base salary for the remaining term
of his employment agreement. The Employment Agreements also include a
confidentiality provision that survives the employee's term of employment for
three years. The Employment Agreements also contain a non-competition provision
that remains in effect for a period of two years after the employee's
termination.

                                       48
<PAGE>

10.  RESTRUCTURING CHARGE:

In the fourth quarter of 1998, the Company recorded a restructuring charge of
approximately $19.7 million. The charge was the result of management and
organizational changes designed to improve profitability, increase customer
focus, and decrease customer cancellations by becoming technologically neutral.
The major components of the restructuring charge are as follows (in thousands):

               Write-down RF network assets in unopened markets     $16,562
               VLU contract termination costs                         1,373
               Deinstallation costs                                     809
               Revolver cancellation                                    752
               Abandoned RF projects                                    172
                                                                    -------
                              Total                                 $19,668
                                                                    =======

The Company no longer plans to open new markets using its proprietary RF
networks and has written down assets and the costs of deinstalling those assets.
The Company has terminated its agreement with its VLU supplier and was subject
to a penalty and wrote-off VLU's that were not on the correct frequency. The
Company cancelled its revolving credit agreement and wrote-off the deferred
costs of the facility. The Company also expensed deferred costs of certain RF
related projects. As of December 31, 2000, no costs remain accrued for the
restructuring.

11.  LEGAL PROCEEDINGS:

Prior to the acquisition of AirTouch Teletrac, PacTel Teletrac (predecessor to
AirTouch Teletrac) brought an action before the United States Patent and
Trademark Trial and Appeal Board against T.A.B. Systems ("TAB") opposing TAB's
registration of the mark "Teletrak." The Trademark Trial and Appeal Board
granted PacTel Teletrac's motion for summary judgment, but summary judgment was
reversed by the U.S. Court of Appeals for the Federal Circuit. TAB then filed an
infringement action against PacTel Teletrac, the Company and other parties in
the U.S. District Court for the Central District of California. On December 22,
1997, the District Court granted summary judgment in favor of the Company. This
decision was appealed by TAB to the U.S. Court of Appeals for the Ninth Circuit
and such appeal was pending as of the date the Company filed its bankruptcy
petition. The Bankruptcy Court issued an order permitting the Ninth Circuit
appeal to proceed. Oral arguments were heard on April 10, 2000. On March 20,
2001 the Ninth Circuit Court of Appeals filed a decision affirming the District
Court's grant of summary judgment.  Under the terms of the Asset Purchase
Agreement between AirTouch Teletrac and the Company, AirTouch Teletrac must
pay the costs of any litigation relating to this matter and must indemnify
the Company against any losses relating thereto. AirTouch Teletrac has
notified the Company that it intends to continue to litigate this matter on its
own behalf as well as on behalf of the Company, and that it will bear the cost
of such litigation. There can be no assurance that AirTouch Teletrac will be
successful in such litigation or that AirTouch Teletrac will honor its
indemnification obligations (including any costs or losses relating to a change
of name, if required as a result of the litigation).

                                       49
<PAGE>

The Company settled the litigation in Bankruptcy Court with Milgo Solutions
f/k/a Raycal-Datacom, Inc. ("Milgo") and Newcourt Leasing, Inc. ("Newcourt")
regarding certain telecommunications equipment that the Company believes it
purchased from Milgo. Milgo and Newcourt asserted that the Company did not
purchase this equipment, and alleged that the Company holds same pursuant to one
or more leases. The settlement stipulation, which was approved by Bankruptcy
Court on October 27, 2000 and became final and non-appealable on November 21,
2000, provides that the Company shall pay Milgo the sum of $1,000,000 over a
three-year term, in monthly installments and without interest. As part of the
settlement, complete mutual releases were delivered in favor of all parties.

The Company was a defendant in an American Arbitration Association ("AAA")
proceeding brought by Star Trac, Inc. ("StarTrac") on or about February 23,
2000. StarTrac asserted that the Company breached the dealer agreement between
the parties and sought actual and punitive damages. The Company denied the
claims asserted by StarTrac initially on the basis that these claims were
discharged by the bankruptcy proceeding and filed a motion to enforce the
injunction created by the Plan of Reorganization. However, the Bankruptcy Court
determined that the allegations set forth by StarTrac were too intertwined with
both pre and post-effective date events to enforce the injunction. The parties
arbitrated the matter and on January 26, 2001, the AAA rendered a decision in
favor of Teletrac and denying StarTrac's claims.

The Company is from time to time subject to claims and suits arising in the
ordinary course of business. The Company is not currently a party to any
proceeding that, in management's opinion, is likely to have a material adverse
effect on the Company's business.

12.  SUMMARY OF UNAUDITED QUARTERLY FINANCIAL INFORMATION:

The following is a summary of the unaudited quarterly results of operations
for the years ended December 31, 2000 and 1999, as restated to reflect the
change in accounting principle effective January 1, 2000 discussed in Note 2,
and a reconciliation of amounts previously reported to the amounts as restated
(in thousands):

<TABLE>
<CAPTION>
                                          March 31,    June 30,   Sept 30,
                                            2000         2000       2000
                                         -----------   --------   --------
<S>                                        <C>         <C>        <C>
Revenues as reported                       $ 7,187     $ 7,357    $ 7,251
Impact of accounting change on revenues        480         483        417
                                           -------     -------    -------
Revenues as restated                       $ 7,667     $ 7,840    $ 7,668
                                           =======     =======    =======

Net income (loss) as reported              $(1,342)    $ 1,758    $(1,009)
Impact of accounting change                     60          65         39
Cumulative effect of accounting change      (4,828)       --         --
                                           -------     -------    -------
Net income (loss) as restated              $(6,110)    $ 1,823    $  (970)
                                           =======     =======    =======

<CAPTION>
                                         March 31,    June 30,      Sept 30,       Dec 31,
                                           2000         2000          2000          2000
                                           ----         ----          ----          ----
<S>                                    <C>           <C>           <C>           <C>
Revenues as restated                   $   7,667     $   7,840     $   7,668     $   7,578
Total operating expenses                  (8,949)       (6,017)       (8,638)      (10,538)
                                       ---------     ---------     ---------     ---------
Net income (loss) before cumulative       (1,282)        1,823          (970)       (2,960)
  effect of accounting change
Effect of accounting change               (4,828)         --            --            --
                                          -------       -------       -------        ------
Net income (loss) as restated          $  (6,110)    $   1,823     $    (970)    $  (2,960)
                                          ======         =====          ====        ======

<CAPTION>
                                         March 31,     June 30,     Sept. 30,      Dec. 31,
                                           1999          1999         1999           1999
                                         ---------     --------     --------        ------
<S>                                      <C>           <C>           <C>            <C>
Revenues                                  10,455         7,440         7,441         7,825
Total operating expenses                 (17,430)      (14,620)      114,460        (9,065)
                                         -------       -------       -------        ------
Net income (loss)                         (6,975)       (7,180)      121,901        (1,240)
                                         =======       =======       =======        ======
</TABLE>

                                       50
<PAGE>

                                    PART III

Item 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

            The Board of Directors and the executive officers of the Company and
their ages as of December 31, 2000, are as follows:

Name                         Age              Position
-----                        ---              --------

Steven D. Scheiwe             40              Chief Executive Officer, General
                                              Counsel and Director
Alan B. Howe                  39              Chief Financial Officer, Vice-
                                              President of Finance and Corporate
                                              Development
Steven M. Settelmayer         41              Vice-President of Sales and
                                              Marketing
Charles A. Scheiwe            34              Controller
Kenneth A. Wiesner            37              Vice-President of Customer
                                              Operations
Paul M. Albert, Jr.           57              Director
Mark E. Holliday              32              Director
Neil Subin                    36              Director
R. Ted Weschler               39              Director


            Steven D. Scheiwe, the Chief Executive Officer and General Counsel
of Teletrac, served as General Counsel and Secretary of Teletrac from November
1995 through September 1999. He also served as General Counsel and Secretary of
Premiere Page, Inc. ("Premiere Page"), a leading Southeast paging company, from
its 1988 start up as well as the predecessor companies to Premiere Page. He was
actively involved in raising capital, developing real estate, and managing human
resources. Mr. Scheiwe received his B.A. from the University of Colorado in 1982
and a J.D. degree from Washburn University in 1986.

          Alan B. Howe, the Chief Financial Officer, Vice-President of Finance
and Corporate Development of Teletrac, joined Teletrac in November 1995 from
Wireless Co., L.P. ("Wireless"), where he served as Director of Corporate
Development. Wireless, a joint venture of Sprint, TCI, Comcast and Cox Cable,
successfully acquired multiple personal communication system licenses throughout
the United States. Prior to his affiliation with Wireless Co., Mr. Howe held
various finance positions at Sprint in its Wireless Task Force and Corporate
Treasury Group. Before joining Sprint, Mr. Howe was an assistant Vice-President
at Manufacturers Hanover Trust. He received an M.B.A. from Indiana University,
Graduate School of Business, and a B.A. from the University of Illinois.

            Steven M. Settelmayer, Director of Sales and Marketing, has been
with Teletrac since 1995. Prior to his current role, he served as Sales Manager,
Branch Manager and Project Manager for the team that developed Teletrac's
advanced integrated marketing and sales automation system. Prior to joining
Teletrac, Mr. Settelmayer worked for Rockwell International from July 1995
through November 1995, most recently as Western Regional Sales Manager for the
FleetMaster Group.  Prior to this he had served four years as one of the top
performing and innovative sales executives for Air Touch Teletrac. Mr.


                                       51
<PAGE>

Settelmayer received his BS in Industrial Marketing from San Francisco State
University.

          Charles A. Scheiwe has served as Controller of Teletrac since 1995, in
which position he has been responsible for Teletrac's back office operations,
including accounting, billing and information systems. Mr. Scheiwe, a certified
public accountant, joined Teletrac in 1995 from Pentapage, where he served as
its Controller. Prior to Pentapage, Mr. Scheiwe held various positions at
Premiere Page from 1989 through 1995. Mr. Scheiwe received his B.A./B.S. from
the University of Colorado in 1989.

            Kenneth A. Wiesner, the Vice-President of Customer Operations, is
responsible for product distribution, product maintenance and service
implementation. He also manages field operations, national support and national
help desk support. Prior to joining Teletrac, Mr. Wiesner served as Regional
Vice-President of Premiere Page from 1995 through 1997, in which position his
responsibilities included overall sales growth, proper maintenance of the
Premiere System, and management of the Customer Services Department. Mr. Wiesner
received his B.A./B.S. from the University of Missouri and an M.B.A. in Finance
from Rockhurst University in Kansas City, Missouri.

            Paul M. Albert, Jr. has served as a director of EarthWatch
Incorporated since June 1999. Since December 1996, Mr. Albert has been retained
as a consultant and/or employee of The Globecon Group, a financial services
consulting company and also serves as an independent finance and capital market
consultant to corporate clients. Prior to such time, from September 1996 to
November 1996, Mr. Albert served as a consultant to Eccles Associates, Inc., a
financial consulting company working primarily with multinational financial
institutions in developing countries. From September 1983 to February 1996, he
served as a Managing Director, Investment Banking of Prudential Securities,
Inc., a financial services company. Mr. Albert received an A.B. degree from
Princeton University in 1964 and an M.B.A. degree from Columbia University
Graudate School of Business in 1970.

            Mark E. Holliday founded and has been the Managing Director of
Heartland Capital Corp. ("Heartland") since 1995. Heartland is a private hedge
fund focusing primarily on financially distressed companies. Prior to forming
Heartland, Mr. Holliday was affiliated with Option Opportunities and Continental
Partners. Mr. Holliday is a graduate of Northwestern University.

            Neil Subin is the Managing Director of Trendex Capital Management, a
private hedge fund focusing primarily on distressed and bankrupt companies.
Prior to forming Trendex Capital Management in 1991, Mr. Subin was affiliated
with Oppenheimer & Co. Mr. Subin currently is a member of the Board of Directors
of Nucentrix Broadband Networks, Inc., a provider of wireless broadband network
and multichannel subscription television services, located in Plano, Texas. Mr.
Subin received a Bachelor of Arts degree from Brooklyn College in 1985.

            R. Ted Weschler is the Managing Partner of Peninsula Capital
Advisors, LLC, a private investment management firm in Charlottesville,
Virginia, a position he has held since January 1, 2000. Mr. Weschler previously
served as an executive officer of Quad-C, Inc. ("Quad-C") since its formation in
1989. Quad-C is a Charlottesville, Virginia-based investment firm that primarily


                                       52
<PAGE>

engages in the acquisition of businesses in partnership with company management.
Mr. Weschler is currently a director of Nucentrix Broadband Networks, Inc., a
provider of wireless broadband network and multichannel subscription television
services, located in Plano, Texas; WSFS Financial Corporation, a thrift holding
company based in Wilmington, Delaware; Deerfield Healthcare Corporation, a
provider of adult day care; Virginia National Bank, a national banking
association and NWS Holdings, a national furniture retailer. Prior to the
formation of Quad-C, Mr. Weschler was employed by W.R. Grace & Co., focusing on
acquisition and divestiture activities associated with W.R. Grace's restaurant,
retail, healthcare, natural resources and chemical operations. Mr. Weschler
received a Bachelor of Science degree in Economics with concentrations in
Finance and Accounting from The Wharton School of the University of Pennsylvania
in 1983.

            The executive officers of the Company are elected by the Board of
Directors and serve at its discretion.

            All directors are elected annually and hold office until the next
annual meeting of stockholders and until their successors are duly elected and
qualified. Directors do not receive an annual retainer or meeting attendance
fees. However, the Company reimburses non-management directors for expenses
incurred in attending meetings of the Board of Directors.

            During 2000, the Board of Directors held ten meetings. The only
standing committees of the Board of Directors are the Audit Committee and the
Compensation Committee. During 2000, the members of the Audit Committee were
Mark Holliday, Neil Subin and Paul Albert. The Audit Committee periodically
consults with the Company's management and independent public accountants on
financial matters, including the Company's internal financial controls and
procedures. The Audit Committee held three meetings in 2000. During 2000, the
members of the Compensation Committee were Steven Scheiwe, Neil Subin and Ted
Weschler. The Compensation Committee approves compensation arrangements for the
Company's executive officers and administers the Company's stock option plans.
The Compensation Committee held two meetings in 2000.


                                       53
<PAGE>

Item 11.    EXECUTIVE COMPENSATION

     The following table sets forth certain compensation information as to the
Chief Executive Officer and the four other highest paid executive officers of
the Company for the fiscal year ended December 31, 2000:

<TABLE>
<CAPTION>
                                                                                                 LONG-TERM
                                                                                               COMPENSATION
                                               ANNUAL COMPENSATION                                AWARDS
                             -------------------------------------------------------     ------------------------
                                                                                         SECURI-      ALL
                                                                         OTHER           TIES         OTHER
                                                                         ANNUAL          UNDER-       COMPEN-
NAME AND                                                                 COMPEN-         LYING        SATION
PRINCIPAL                      YEAR       SALARY           BONUS         SATION          OPTIONS      ($)
POSITION                                  ($)              ($)                           (#)
-----------------            ---------   -------------    ------------   -----------     ----------   ----------

<S>                              <C>         <C>              <C>        <C>             <C>            <C>
Steven D. Scheiwe                1998        143,830          34,890        -               -           1,000
 Chief Executive Officer         1999        188,861          15,925        -               -           1,000
 General Counsel                 2000        214,442          75,000        -               -           1,000

Alan B. Howe                     1998        131,124          43,940        -               -           1,000
Chief Financial Officer          1999        156,724          13,163        -               -           1,000
 Vice President of Finance       2000        177,681          75,000        -               -           1,000
 and Corporate Development

Steven M. Settelmayer            1998        100,000          15,000        -               -           1,000
 Vice President of Sales         1999        125,500               -        -               -           1,000
  and Marketing                  2000        179,023          25,000        -               -           1,000

Charles A. Scheiwe               1998         99,000          50,128        -               -             495
 Controller                      1999        128,136          10,602        -               -             613
                                 2000        143,370          75,000        -               -             702

Kenneth A. Wiesner               1998        125,100          41,337        -               -           1,000
  Vice President of              1999        160,814           9,375        -               -           1,000
  Customer Operations            2000        177,681          75,000        -               -           1,000
</TABLE>

Employment Agreements

            The five most senior officers of the Company (the "Principal
Officers") have employment agreements with the Company (the "Employment
Agreements").  The Employment Agreement of each of Messrs. S. Scheiwe, Howe,
C. Scheiwe and Weisner was initially for a period of two years commencing on
September 29, 1999.  Mr. Settelmayer's employment commenced on January 17,
2000.  On September 28, 2000, each of these agreements was amended to extend
the term to September 29, 2002.

          The Employment Agreements all provide the same terms, other than
salary and position, for each of the Principal Officers. Steven D. Scheiwe's
Employment Agreement defines his position as Chief Executive Officer, Vice
President, General Counsel and Secretary of the Company and provides for a
salary of $210,000 per annum. Alan B. Howe's Employment Agreement defines his
position as Chief Financial Officer and Vice President of Finance and Corporate
Development of the Company and provides for a salary of $174,000 per annum.
Steven M. Settelmayer's Employment Agreement defines his position as Vice
President of Sales and provides for a salary of $174,000 per annum. Charles A.
Schiewe's employment agreement defines his position as Controller and provides
for a salary of $140,400 per annum. Kenneth A. Weisner's Employment Agreement
defines his position as Vice President of Customer Operations of the Company and
provides for a salary of $174,000 per annum.

          In addition to base compensation, the Employment Agreements also
provide that each Principal Officer is eligible for a bonus, which shall be
established by the Compensation Committee of the Board of Directors and shall be
based on target performance objectives set by the Compensation Committee. The
Employment Agreements also grant each of Messrs. S. Scheiwe, Howe, C. Scheiwe
and Weisner options to purchase 75,000 shares of common stock of the Company and
Mr. Settelmayer options to purchase 30,000 shares of common stock of the
Company, all pursuant to the Company's stock option plan, which is described
below.


                                       54
<PAGE>

          The Employment Agreements contain a provision stating that in the
event that the employee is terminated other than for cause and/or in the event
that all or a majority of the stock or the assets are sold to a purchaser, he
shall be entitled to severance compensation equal to the lesser of (i) one
year's base salary or (ii) the amount of the base salary for the remaining term
of his employment agreement. The Employment Agreements also include a
confidentiality provision that survives the employee's term of employment for
three years. The Employment Agreements also contain a non-competition provision
that remains in effect for a period of two years after the employee's
termination.

401(k) Plan

          The Company maintains a 401(k) Savings Plan for its full-time
employees that permits employee contributions up to 15% of annual compensation
to the plan on a pre-tax basis. In addition, the Company may make a matching
contribution of up to 50% of each participating employee's annual compensation,
not to exceed $1,000, before taxes. The Company may also make additional
discretionary contributions to the plan in any plan year up to the annual 401(k)
plan contribution limits as defined in the Internal Revenue Code of 1986, as
amended. The plan is administered by the Compensation Committee.

          For the plan year ended December 31, 2000, the Company has accrued an
aggregate of approximately $106,000 for matching contributions to the plan in
2000.

Stock Option Plan

          In connection with the Reorganization, on September 29, 1999, the
Company adopted the 1999 Stock Option and Restricted Stock Purchase Plan (the
"Plan") in order to provide incentives to attract, retain and motivate highly
competent persons as officers, non-employee directors and key employees of the
Company by providing them with options to purchase new common stock of the
Company. Additionally, the Plan is intended to assist in further aligning the
interests of the Company's directors, officers, key employees and consultants to
those of its stockholders. The Plan provides for the granting of "non-qualified
stock options" and "incentive stock options" to acquire common stock of the
Company and the granting of rights, or "awards" to purchase common stock of the
Company subject to certain restrictions.

          The Plan is administered by the Compensation Committee of the Board of
Directors of the Company, which has the sole authority under the Plan to: (i)
select the employees who will be granted options or awards to purchase common
stock, (ii) designate whether options will be granted as incentive stock options
or as non-qualified stock options; (iii) establish the number of shares of
common stock that may be issued under each option or award; (iv) determine the
time and the conditions subject to which options may be exercised in whole or in
part and awards may be made; (v) determine the amount and the form of the
consideration that may be used to purchase shares of common stock upon exercise
of an option or award; (vi) impose restrictions and/or conditions with respect
to shares of common stock acquired upon exercise of an option or award; (vii)
determine the circumstances under which shares of common stock acquired upon
exercise of any option or award may be subject to repurchase by the Company;
(viii) determine the circumstances and conditions subject to which shares
acquired upon exercise of an option or award may be sold or transferred; (ix)



                                       55
<PAGE>


establish a vesting provision for any option or award relating to the time or
circumstance when an option or award may be exercised; (x) accelerate the time
when outstanding options may be exercised; and (xi) establish any other terms,
restrictions and/or conditions applicable to any option or award not
inconsistent with the provisions of the Plan.

          The purchase price of common stock upon exercise of incentive stock
options must not be less than the fair market value of the common stock at the
date of the grant or, in the case of incentive stock options issues to holders
of more than 10% of the outstanding common stock, 110% of the fair market value.
The maximum term of the incentive stock options is ten years, or five years in
the case of 10% shareholders. The aggregate fair market value, on the date of
the grant, of the common stock for which incentive stock options are exercisable
for the first time by an employee during any calendar year may not exceed
$100,000. Options granted under the Plan are generally nontransferable by the
optionee and must be exercised by the optionee during the period of the
optionee's employment or service with the Company and within the optionee's
lifetime or within a specified period following termination of employment or
service or the optionee's death.

          The Company is currently authorized to issue an aggregate 1,500,000
shares under the Plan and has reserved 1,346,071 shares for issuance pursuant to
the exercise of nonqualified and incentive stock options.

          The exercise price of the options is $0.16 and was determined based on
the equity valuation of the Company during the Reorganization. As of December
31, 2000, options to purchase 1,246,750 shares were granted, and 167,750
forfeited, leaving options to purchase 1,079,000 shares outstanding.

Item 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          The following table sets forth the information regarding the
beneficial ownership of the Company's common stock, par value $0.01 per share,
as of December 31, 2000 by (i) certain stockholders or groups of related
stockholders who, individually or as a group, are the beneficial owners of 5% or
more of the common stock, (ii) the Chief Executive Officer of the Company, the
four other most highly compensated executive officers of the Company and the
directors of the Company and (iii) the executive officers and directors of the
Company as a group.

                                                  SHARES
                                                BENEFICIALLY     PERCENTAGE
NAME AND ADDRESS                                  OWNED (1)     OWNERSHIP (2)
-----------------                             ---------------   -------------

Principal Stockholders:

Aspen Partners .................................   2,602,544 (3)     24.4%
    1114 Avenue of the Americas, 38th Floor
    New York, NY 10036

Capital Research ...............................   2,586,580 (3)     24.2%
    135 South State College Blvd.


                                       56
<PAGE>



    Brea, CA 92821

Lutheran Brotherhood ...........................   1,583,620 (4)     15.2%
    625 Fourth Avenue South
    Minneapolis, MN 55415

Equitable Life Assurance Society ...............   1,003,112 (5)      9.6%
    1345 Avenue of the Americas, 37th Floor
    New York, NY 10105

TD Securities (USA) Inc ........................     848,787          8.5%
    31 West 52nd Street
    New York, NY 10019-6101

Miller, Lloyd I Funds ..........................     820,841 (6)      8.0%
    4550 Gordon Drive
    Naples, FL 34102

Bank of Montreal ...............................     633,449 (7)      6.2%
    115 S. LaSalle
    Chicago, IL  60603

Paul M. Albert, Jr. ............................      75,000 (8)       *

Mark E. Holliday ...............................      25,000 (8)       *

Neil Subin .....................................     230,221 (9)      2.3%

Steven D. Scheiwe ..............................      75,000 (8)       *

R. Ted Weschler ................................      75,000 (8)       *

Alan B. Howe ...................................      75,000 (8)       *

Steve M. Settelmayer ...........................      75,000 (8)       *

Charles A. Scheiwe .............................      75,000 (8)       *

Kenneth A. Weisner .............................      75,000 (8)       *

All Executive Officers and Directors as a Group
  (9 people)                                         780,221 (10)     7.4%


-------------
<TABLE>
<CAPTION>
<C>         <S>
<FN>

* Less than 1%.


(1)         Unless otherwise indicated, the entities and individuals identified
            in this table have sole voting and investment power with respect to
            all shares set forth in the table.

(2)         The percentages shown are based on 9,986,700 shares of common stock
            outstanding on December 31, 2000 (including 1,505,712 shares
            reserved for issuance upon settlement of claims in the reorganiza-
            tion).

(3)         Includes warrants to purchase an aggregate 696,100 shares of the
            Company's common stock.

(4)         Includes warrants to purchase an aggregate 426,184 shares of the
            Company's common stock.

(5)         Includes warrants to purchase an aggregate 501,556 shares of the
            Company's common stock.

(6)         Includes warrants to purchase an aggregate 220,905 shares of the
            Company's common stock.

(7)         Includes warrants to purchase an aggregate 170,474 shares of the
            Company's common stock.

(8)         Represents options to purchase shares of the Company's common stock.

(9)         Includes warrants to purchase an aggregate 77,842 shares of the
            Company's common stock and options to purchase an aggregate 25,000
            shares of the Company's common stock.

(10)        Includes warrants to purchase an aggregate 77,842 shares of the
            Company's common stock and options to purchase an aggregate 570,000
            shares of the Company's common stock.
</FN>
</TABLE>


Item 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

            None.


Item 14.    EXHIBITS, FINANCIAL STATEMENTS
            AND REPORTS ON FORM 8-K


            (a)(1 and 2) Financial Statements.

            See Index to Consolidated Financial Statements herein.

            (3) Exhibits:


Exhibit
Number      Description

2.1         The Company's Second Amended Plan of Reorganization, dated as of
            August 4, 1999 and effective as of September 29, 1999 (incorporated
            by reference to Exhibit 2.2 to the Company's Current Report on Form
            8-K filed on September 30, 1999).


                                       57
<PAGE>

3.1         Amended and Restated Certificate of Incorporation of the Company as
            filed with the Secretary of State of Delaware on September 29, 1999
            (incorporated by reference to Exhibit 3.1 to the Company's Current
            Report on Form 8-K filed on September 30, 1999).

3.2         By-laws of the Company adopted on September 29, 1999 (incorporated
            by reference to Exhibit 3.2 to the Company's Current Report on Form
            8-K filed on September 30, 1999).

4.1         Form of Indenture between the Company and HSBC Bank USA with respect
            to the 9% Note due 2004 (incorporated by reference to Exhibit 4.1 to
            the Company's Current Report on Form 8-K filed on September 30,
            1999).

4.2         Form of 9% Note Due 2004 (incorporated by reference to Exhibit 4.2
            to the Company's Current Report on Form 8-K filed on September 30,
            1999).

4.3         Form of Deferred Interest Note (incorporated by reference to Exhibit
            4.3 to the Company's Current Report on Form 8-K filed on September
            30, 1999).

4.4         Form of Senior Secured Note and Class A Warrant Purchase Agreement
            among the Company and the several Purchasers named in Schedule I
            thereto (incorporated by reference to Exhibit 4.4 to the Company's
            Current Report on Form 8-K filed on September 30, 1999).

4.5         Form of 10% Senior Secured Note due 2000 (incorporated by reference
            to Exhibit 4.5 to the Company's Current Report on Form 8-K filed on
            September 30, 1999).

4.6         Form of Class A Stock Purchase Warrant (incorporated by reference to
            Exhibit 4.6 to the Company's Current Report on Form 8-K filed on
            September 30, 1999).

4.7         Form of Security Agreement between the Company and the several
            purchasers on the signature page thereto (incorporated by reference
            to Exhibit 4.7 to the Company's Current Report on Form 8-K filed on
            September 30, 1999).

4.8         The Company and its Subsidiaries 1999 Stock Option and Restricted
            Stock Purchase Plan (incorporated by reference to Exhibit 4.9 to the
            Company's Current Report on Form 8-K filed on September 30, 1999).

4.9         Form of Class B Stock Purchase Warrant (incorporated by reference to
            Exhibit 4.10 to the Company's Current Report on Form 8-K filed on
            September 30, 1999).

4.10        Form of Supplemental Indenture between the Company. and HSBC Bank
            USA (incorporated by reference to Exhibit 4.1 to the Company's
            Current Report on Form 8-K filed March 6, 2001).

10.1        Mobile Data Terminal Purchase Agreement, dated as of February 8,
            1996, between Micronet, Inc. and the Company (incorporated by
            reference to Exhibit 10.1 to the Company's Annual Report on Form
            10-K filed March 30, 2000).


                                       58
<PAGE>

*10.2       Amendment to Mobile Data Terminal Purchase Agreement, dated
            September 20, 1999, between Micronet, Inc. and the Company
            (incorporated by reference to Exhibit 10.2 to the Company's Annual
            Report on Form 10-K filed March 30, 2000).

10.3        Employment Agreement, dated as of September 29, 1999, between Steven
            D. Scheiwe and the Company (incorporated by reference to Exhibit
            10.3 to the Company's Annual Report on Form 10-K filed March 30,
            2000).

10.4        Employment Agreement, dated as of September 29, 1999, between Alan
            Howe and the Company (incorporated by reference to Exhibit 10.4 to
            the Company's Annual Report on Form 10-K filed March 30, 2000).

10.5        Employment Agreement, dated as of September 29, 1999, between
            Charles Scheiwe and the Company (incorporated by reference to
            Exhibit 10.5 to the Company's Annual Report on Form 10-K filed March
            30, 2000).

10.6        Employment Agreement, dated as of September 29, 1999, between
            Kenneth Weisner and the Company (incorporated by reference to
            Exhibit 10.6 to the Company's Annual Report on Form 10-K filed March
            30, 2000).

10.7        Letter agreement, dated as of September 28, 2000, amending and
            extending the Employment Agreement between Steven D. Scheiwe and the
            Company.

10.8        Letter agreement, dated as of September 28, 2000, amending and
            extending the Employment Agreement between Alan Howe and the
            Company.

10.9        Letter agreement, dated as of September 28, 2000, amending and
            extending the Employment Agreement between Charles Scheiwe and the
            Company.

10.10       Letter agreement, dated as of September 28, 2000, amending and
            extending the Employment Agreement between Kenneth Weisner and the
            Company.

10.11       Employment Agreement, dated as of January 17, 2000, between Steven
            Settelmayer and the Company.

10.12       Letter agreement, dated as of September 28, 2000, amending and
            extending the Employment Agreement between Steven Settelmayer and
            the Company.

10.13       Agreement and Plan of Merger, dated as of February 23, 2001, by and
            among Trafficmaster plc, TT merger Sub, Inc., Teletrac, Inc. and
            Steven D. Scheiwe, as Stockholder Representative (incorporated by
            reference to Exhibit 2.1 to the Company's Current Report on Form 8-K
            filed March 6, 2001).

21.1        Subsidiaries of the Registrant.

-----------
*           Certain confidential portions have been omitted from this Exhibit
            and filed separately with the Commission pursuant to a confidential
            treatment request under Rule 24b-2


                                       59
<PAGE>

            (b) Reports on Form 8-K filed during the last quarter of the fiscal
year ended December 31, 2000:

            None.



                                       60
<PAGE>

                                   SIGNATURES

            Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

Date:  March 22, 2001                       TELETRAC, INC.
                                            By:    /s/ STEVEN D. SCHEIWE
                                               ---------------------------------
                                               Steven D. Scheiwe
                                               Chief Executive Officer,
                                               General Counsel and Director


            Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signature                      Title                            Date
---------------                -----                            ----

/s/ ALAN B. HOWE            Chief Financial Officer, Vice-      March 22, 2001
-----------------------     President of Finance and
Alan B. Howe                Corporate Development



/s/ CHARLES SCHEIWE         Controller                          March 22, 2001
-----------------------
Charles Scheiwe

/s/ KENNETH A. WIESNER      Vice-President of Customer          March 22, 2001
-----------------------     Relations
Kenneth A. Wiesner


/s/ PAUL M. ALBERT, JR.     Director                            March 22, 2001
-----------------------
Paul M. Albert, Jr.


/s/ MARK E. HOLLIDAY        Director                            March 22, 2001
-----------------------
Mark E. Holliday

/s/ NEIL SUBIN              Director                            March 22, 2001
-----------------------
Neil Subin

/s/ R. TED WESCHLER         Director                            March 22, 2001
-----------------------
R. Ted Weschler


                                       61