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

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   -----------

                                   FORM 10-QSB

(MARK ONE)




 [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
       EXCHANGE ACT OF 1934


       FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002

                                       OR


 [ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
       ACT OF 1934


       FOR THE TRANSITION PERIOD FROM              TO
                                      ------------    ------------

                        COMMISSION FILE NUMBER 000-25205

                                 CELLPOINT INC.
                                 --------------
                 (Name of small business issuer in its charter)

                  NEVADA                                   52-2032380
                  ------                                   ----------
     (State or other jurisdiction of                    (I.R.S. Employer
      incorporation or organization)                   Identification No.)

          3000 HILLSWOOD DRIVE,
         HILLSWOOD BUSINESS PARK,
   CHERTSEY, SURREY KT16 ORS, ENGLAND
   ----------------------------------                        ----------
(Address of principal executive offices)                     (Zip Code)

                                 44-1932 895 310
                                 ---------------
                (Issuer's telephone number, including area code)

      Securities registered under Section 12(b) of the Exchange Act: None.
         Securities registered under Section 12(g) of the Exchange Act:

                                                   NAME OF EACH EXCHANGE
               TITLE OF EACH CLASS                  ON WHICH REGISTERED
               -------------------                  -------------------
          Common Stock, $.001 par value            NASDAQ National Market

                                   -----------

         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 past 90 days. Yes |X| No |_|

     (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING THE PAST FIVE YEARS)

         Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: As of May 15, 2002,
18,605,924 shares of Common Stock, par value $.001 per share.

Transitional Small Business Disclosure Format (check one): Yes [ ]  No [X]


<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

         The financial statements for the Company's third fiscal quarter ended
March 31, 2002 are attached to this Report, commencing on page F-1.

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

         The following discussion and analysis of our consolidated financial
condition and consolidated results of operations should be read in conjunction
with our consolidated financial statements and related notes thereto in our
Annual Report on Form 10-KSB for the fiscal year ended June 30, 2001.

RECENT DEVELOPMENTS

UNWIRE AB AND TELEMATICS OPERATIONS IN CELLPOINT SOUTH

         On May 19, 2001, the Company approved the disposal of the telematics
business segment of the Company and committed to a plan to dispose of the
business. Accordingly, the telematics business segment was presented as a
discontinued operations in the balance sheet as of June 30, 2001 and the related
statements of operations and cash flows for the six months ended December 31,
2001. At June 30, 2001, the Company had accrued approximately $1,100,000 for
additional losses expected from the discontinued operations through the expected
date of disposition. For the nine months ended March 31, 2002, upon disposition
of the subsidiaries operating in the telematics business the Company has
recorded the reversal of the cumulative translation adjustment in the amount of
approximately $1,526,000 relative to these discontinued operations that had
previously been recorded as a component of Stockholders' Equity. Additionally,
the Company reversed certain reserves totaling approximately $658,000 related to
the liquidated telematics subsidiaries deemed no longer necessary. The Company
does not anticipate any further significant losses in connection with the
disposal of this segment and the segment is no longer a part of the Company. Net
sales for Telematics were approximately $264,000 and $195,037 for the six months
ended December 31, 2001 and 2000, respectively.

         On October 9, 2001, the Company's subsidiary, Unwire AB, filed for
protection under the bankruptcy courts in Sweden. As a result of the filing, the
Company has ceased all funding of Unwire operations. The bankruptcy courts have
appointed a Trustee to oversee the disbursement of Unwire's assets and the
Company now has no control over the operations or decision-making capabilities
of Unwire. As a result, Unwire is no longer included in the consolidated
financial statements of the Company.


<PAGE>


         In November 2001 CellPoint Systems SA ("Systems SA"), the Company's
South African subsidiary, filed for liquidation under the laws of South Africa.
Systems SA operated a research and development facility for the Company. The
telematics portion of Systems SA has already been included in the discontinued
operations for financial reporting purposes. The results of the location
services portion of Systems SA is not included in discontinued operations, and
those functions are to be continued within the Company's Swedish operating
subsidiary. Costs of closing this subsidiary, primarily the write-off of the net
receivable from Systems SA, were accrued in the June 30, 2001 financial
statements.

BUSINESS DEVELOPMENTS

         On November 8, 2001, Management announced results of an extensive
performance testing program for the Company's network-based location services
platform, Mobile Location System (MLS). Stringent tests were carried out on an
entry-level location platform configuration to measure and capture the
performance data that is most important to GSM carriers. MLS was loaded to
simulate 2,500 users doing 504,000 requests over a 60-minute period. This load
reflects a capacity of 140 location transactions per second. Management also
announced the Company was ready to accept challenges by any location platform
vendor in any GSM environment.

         On November 26, 2001, Management announced that E-Plus had ordered
CellPoint's Mobile Location Broker (MLB) as its location middleware platform.
The MLB will be used for external access to location data, empowering Mobile
Virtual Network Operators, independent Service Providers, and other partners
when creating value added services. MLB is an integral component enabling new
revenue streams for mobile operators and their Service Provider partners to
deliver location-specific mobile Internet services. CellPoint's Mobile Location
Server (MLS) was already installed at E-Plus and can position users irrespective
of whether they are actively engaged in a call or not; MLB completes the full
solution for location service provision.

On March 4, 2002, Management announced that Mobile Location Broker had been
selected and installed for the European i-mode portal architecture. The
combination of the mobile location capability provided by CellPoint's location
platforms coupled with the new European i-mode Portal, with its more than 60
major content providers, is expected to open new revenue streams for mobile
operators throughout Europe.

On March 25, 2002, Management announced the launch of the world's first
commercial location-based services across a live General Packet Radio Service
(GPRS) or `2.5G' network. Using commercially available GPRS handsets from NEC
with CellPoint's Mobile Location System (MLS) platform and Mobile Location
Broker (MLB) middleware, these new services were launched at CeBIT2002 in
Hanover and are available to consumers as part of the successful introduction of
i-mode(TM) by E-Plus and NTT DoCoMo in Germany.

CHANGE IN OUR MANAGEMENT

         On March 18, 2002, the Company announced changes in its management and
Board of Directors. Jan Rynning replaces Peter Henricsson as Chairman of the
Board. Mr. Rynning is a Swedish lawyer, specializing in company reconstructions
and has extensive experience in working as a board member in turn-around
situations. Mr. Henricsson, who has been the Chairman and CEO since inception in
1997, will continue as a working board member full time and concentrate his work
over the next period on the Swiss financing and new strategic partners. Stephen
Childs, President of CellPoint, will take on the role as Chief Executive
Officer. Mr. Childs has been a member of the board of CellPoint since May 2000
and the President since October 2001.

RESTRUCTURING PROGRAM

         On March 14, 2002 the Company concluded preliminary agreements to
eliminate short-term debt held by Castle Creek Technology Partners and all other
debt holders. The terms negotiated with all the major debt holders, half of the
principal and interest on each outstanding debt, which equates to $5.5 million,
will be converted to equity at 78 cents per share. The Company is required to
obtain stockholder approval to authorize a new class of convertible preferred
stock to effectuate this aspect of this Agreement with Castle Creek. There is no
assurance that the Company will be able to obtain authorization from its
stockholders for this new class of convertible preferred stock. The remaining
$5.5 million in debt has been restructured as long-term debt and is not due
until March 2004. Castle Creek as the senior debt holder will have the right to
match any financing the Company would do at a price significantly below 78 cents
by converting that same

<PAGE>


portion of their notes, dollar for dollar, into common stock at the same time
and at the same price, but with no warrant coverage. These agreements with the
debt holders are subject to a settlement being negotiated in parallel with the
rest of the Company's creditors, discussed below, and the Company's ability to
raise additional capital in the short term.

         Following the Loan Restructuring Agreement, CellPoint Inc. and its
Swedish subsidiary, CellPoint Systems AB, entered into `voluntary composition'
for settlement payments with all existing creditors. On April 3, 2002 the
Company proceeded with 'official composition' to complete the financial
reconstruction of CellPoint Systems AB, under the Swedish Company Reconstruction
Act. The voluntary composition agreements were completed in CellPoint Inc. on
April 21, 2002.

         On April 29, 2002, the subsidiary's voluntary composition was
inadvertently converted to a formal bankruptcy in the District Court of
Stockholm, Sweden, by the apparent failure of a consultant to file a notice with
the Court relating to the ongoing reconstruction. Negotiations are ongoing with
the Trustee in bankruptcy, and a definitive agreement with the Trustee is
expected to be reached during the week of May 20, 2002. There is no assurance
that the Company will be able to secure the necessary investments to make the
payments to be required under the definitive agreement with the Trustee so as to
permit us to purchase the assets of the subsidiary (which include all of our
patents and technology) from this bankruptcy proceeding.

LONG-TERM DEBT

         On December 6, 2000, the Company entered into an agreement whereby it
issued to Castle Creek Technology Partners LLC ("Castle Creek") convertible
notes in the aggregate principal amount of $10,000,000, which were originally
due and payable on September 30, 2002. Interest on the debt is 6% per annum,
compounded semi-annually and payable semi-annually on each June 30 and December
31. Prior to June 5, 2001, the notes were convertible, in whole or in part, at a
fixed conversion price of $25 per share at the option of the holder of the debt
and could be converted in exchange for all or part of the outstanding debt plus
the accrued interest at the conversion date. Subsequent to June 5, 2001, the
notes were convertible at the lower of $25 or 90% of the average of the five
lowest volume weighted average prices during the period of twenty consecutive
trading days ending on the trading day immediately prior to the date of
determination. The conversion of the notes contained certain limitations as set
forth in the agreement. The Company has reserved 2,000,000 shares for the
purpose of possible future conversions.

         In connection with the convertible notes, the Company issued a warrant
that was immediately exercisable and which expires on December 5, 2005. The
warrant grants granted Castle Creek the right to purchase 210,526 shares of the
Company's common stock at an exercise price per share of $11.40, subject to
adjustment.

         On July 25, 2001, the Company entered into a note purchase,
modification and forebearance agreement with Castle Creek concerning the above
mentioned notes. Under the agreement, the outstanding notes were to be
repurchased by the Company. The Company agreed to buy back the outstanding
principal of the notes over 90 days for 86% of the remaining principal, plus
accrued interest, and issued a warrant with 500,000 shares issuable upon
exercise of the warrant at an exercise price of $3.14 per share and exercisable
after one year for a period of four years (subject to specified anti-dilution
adjustments). In addition, the Company granted to Castle Creek a security
interest in its assets (including the assets of its subsidiaries), including its
intellectual property. Castle Creek agreed not to trade in the Company's stock
effective July 25, 2001 until the note repurchase is completed, in consideration
for which Castle Creek was paid $1,000,000 as a non-refundable deposit against
the final note purchase payment. The fixed conversion price of the Notes was
changed to $4.00 with no floating conversion price if the notes are purchased on
a timely basis and the Company complies with all its other obligations to Castle
Creek in all material respects. The Company also agreed to certain limitations
on the terms of future debt and equity financings, which limitations would not
apply to a financing that provided the proceeds for the final purchase of the
Notes.

         On September 26, 2001, the Company and Castle Creek entered into an
amendment of the July 25, 2001 agreement, wherein the outstanding convertible
notes were to be repurchased at 100% of the remaining principal and subject to a
fixed conversion price of $4.00. The Company paid $2,250,000 to Castle Creek on
September 26, 2001 for principal and accrued interest and was scheduled to make
a final payment on October 1, 2002 for $6,105,100 plus accrued interest (subject
to specified adjustments upon a material breach by the Company). The outstanding
notes are

<PAGE>

prepayable in part or in whole at any time without penalty. However, if the
Company is in non-compliance of the limitations on the terms of future debt and
equity financing, there will be a $2,000,000 penalty and the notes will become
convertible at the lower of 1) the average closing price during the ten day
period beginning five days prior to the date of the non-compliance event or (2)
the lowest price of common stock or common stock equivalents sold from September
25, 2001 to the non-compliance event. The July agreement, except as modified by
the amendment and the Stipulation and Order discussed below, remains in effect.

         On November 15, 2001, the Company was served with a suit by Castle
Creek, and on December 13, 2001, Castle Creek filed an amended complaint, to
have its debt of in excess of $6.1 million principal plus interest declared due
and payable, for a default payment of $2 million and other damages and relief.
The principal issue in dispute in the litigation was the antidilution adjustment
applicable to the number of shares that Castle Creek is entitled to purchase
under the warrant issued in the July 25, 2001 restructuring with Castle Creek to
purchase 500,000 shares of common stock (see "Legal Proceedings").

         On December 19, 2001, the Company entered into a Stipulation and Order
with Castle Creek providing that Castle Creek agreed to stay prosecution of this
case until February 28, 2002, provided that the Company makes required
prepayments on its Notes to Castle Creek of $200,000 by January 31, 2002, which
payment was timely made, and an additional $550,000 by February 28, 2002 and
provided, further, that the Company does not breach its agreements and
instruments with Castle Creek subsequent to the date of the Stipulation and
Order. In addition, the Stipulation and Order specified an adjustment in the
exercise price of the December 2000 warrant from $11.40 to $7.75 and the July
2001 warrant that carried anti-dilution provisions was amended to give Castle
Creek the right to purchase 1,500,000 shares at an adjusted exercise price of
$1.20 per share. 50% of the 1,500,000 shares are exercisable immediately and the
balance are exercisable beginning July 25, 2002 with all shares expiring on July
25, 2006. The anti-dilution feature was further modified such that the number of
shares that Castle Creek is entitled to purchase under the July 2001 Warrant was
fixed at 1,500,000 (subject to adjustment for stock splits, stock dividends and
combinations of shares, and like events, but not subject to adjustment due to a
decrease in the exercise price of the warrant). Procedures clarifying the manner
of calculating the manner of the calculating adjustments to the exercise price
of the July 2001 Warrant were incorporated in the Stipulation and Order. The
Company is also required to make prepayments of the Notes in an amount equal to
25% of the gross proceeds of each financing the Company closes; provided, that
the maximum aggregate amount of prepayments that the Company is required to make
under the Stipulation and Order prior to October 1, 2002 (the due date of the
Notes) is $3,000,000.

         On January 31, 2002 the Company made payment of $200,000 to Castle
Creek for principal and accrued interest in accordance with the December 19,
2001 Stipulation and Order.

         On February 28, 2002, the Company satisfied the second required payment
of $550,000, in accordance with the Stipulation and Order, through the delivery
of 705,128 shares of our common stock to Castle Creek, who agreed that this was
in accordance with the Stipulation and Order and therefore withdrew its lawsuit
without prejudice.

         On March 13, 2002 the Company entered into a Loan Restructuring
Agreement with Castle Creek pursuant to which one-half (50%) of the then
outstanding principal amount of Castle Creek's convertible note (approx. $5.4
million), plus interest of approximately $400,000, or approximately $2.9 million
in total, would be converted into shares of convertible preferred stock of
CellPoint, each share of which would be convertible into common stock (the
reference conversion price for the principal amount and interest so converted is
$.78 per share of common stock). The only anti-dilution adjustments applicable
to the preferred stock would be for stock splits, stock dividends and the like.
To restructure one-half of Castle Creek's short-term debt into equity, the
Company is required to obtain stockholder approval to authorize a new class of
convertible preferred stock to effectuate this aspect of this Agreement with
Castle Creek. There is no assurance that the Company will be able to obtain
authorization from its stockholders for this new class of convertible preferred
stock. At CellPoint's annual meeting of stockholders, held on December 12, 2001,
the Company's proposal to authorize a new class of preferred stock did not
receive the necessary number of stockholder votes for authorization.

         The other 50% of the outstanding principal amount of the convertible
note (approximately $2.9 million) would be represented by a new convertible
note, due April 2004, with interest at the rate of 6% per annum, no principal or
interest payments under which would be due until maturity. CellPoint can prepay
at any time all or part of the amounts

<PAGE>


outstanding under the new convertible note, without premium or penalty. The new
convertible note would be convertible into common stock at a conversion price of
$.78. The only anti-dilution adjustments applicable to the new convertible note
would be for stock splits, stock dividends and the like, except that (1) if any
portion of the first $950,000 raised by CellPoint is at a price less than $.50
per share for common stock (without reference to any warrants issued in the
financing), Castle Creek will have the right to convert the same principal
amount of the new convertible note into common stock at that price within five
(5) days of when they are notified of the closing of the financing; and (2) if
any subsequent financings by CellPoint are at a price less than $.70 per share
for common stock (without reference to any warrants issued in the financing),
Castle Creek will have the right to convert the same principal amount of the new
convertible note into common stock at that price within five (5) days of when
they are notified of the closing of the financing. CellPoint would covenant not
to issue equity or equity-equivalent securities at a discount of more than
twenty (20%) percent of the lesser of: (i) the closing market price on the
NASDAQ of the CellPoint common stock on the trading day immediately preceding
the date of issuance of such equity or equity-equivalent securities or (ii) the
average of the daily volume weighted average prices for the preceding five (5)
trading days immediately preceding the date of issuance of such equity of
equity-related securities.

         As of March 31, 2002, Castle Creek had converted $1,275,000 of the
notes into 975,720 shares. Subsequent to March 31, 2002, Castle Creek has
converted $300,000 principal amount of its notes into an aggregate of 417,564
shares of common stock.

         Following each of the debt modifications, the Company applied the rules
of Emerging Issues Task Force ("EITF") 96-19: "Debtor's Accounting for a
Modification or Exchange of Debt Instruments." Based on the provisions of EITF
96-19 it was determined that through December 19, 2001 there was not a
substantial change from the original debt agreement and as such, the modified
debt continues to be presented at fair value using the new effective interest
rate. Legal fees associated with the modifications were expensed in the periods
in which they were incurred. Since the modifications related to the March 13,
2002 amendment have not been finalized, the related accounting effect has not
been determined.

         Due to the beneficial conversion features associated with the
financing, the Company applied EITF 00-27: Application of EITF No. 98-5
"Accounting for Convertible Securities with Beneficial Conversion Features or
Contingently Adjustable Conversion Ratios", to the convertible instruments. In
accordance with EITF 00-27 the value of the beneficial conversion feature was
recorded as a reduction to the carrying amount of the convertible debt and an
addition to paid-in-capital. The fair value of the warrants granted in
connection with the financing and the amendments thereto was calculated using
the Black Scholes pricing model and recorded as a further reduction to the
carrying amount and an addition to paid-in-capital.

         As a result of the private placements at the end of the first quarter
the anti-dilution provision attached to the warrants issued on July 25, 2001
became effective. As such, the Company recalculated and adjusted the exercise
price and therefore adjusted the number of shares issuable upon exercise of the
warrants. This resulted in an adjusted exercise price of $1.42 and additional
shares of 608,235 issuable upon exercise of the warrants. The adjustment to the
exercise price of the warrants increased the value of the warrants recorded as
debt discount by $263,553. The terms of this warrant were further modified by
the Stipulation and Order discussed above. As a result of the changes provided
by the Stipulation and Order, a further discount of $370,256 was recorded. The
effects of the proposed terms set out in the March 13, 2002 amendment have not
yet been determined.

         The Company has therefore recorded a total debt discount of
approximately $4,148,000 and is amortizing the discount over the term of the
debt. Amortization is accelerated when necessary for conversions of the debt
principal. Amortization for the three and nine months periods ended March 31,
2002 and 2001 was approximately $567,000 and $2,171,000, $384,000 and $511,000,
respectively, and is recorded as a component of financial items.

RECENT SALE OF SECURITIES

         As a result of the private placements which took place in September,
2001 the Company recorded approximately $859,000 as Stock subscriptions
receivable in Stockholders' equity at September 31, 2001 and December 31, 2001.
In the quarter ended March 31, 2002, the Company ascertained that the Stock
subscription receivable was not collectible and thus the Company has written off
the receivable. This write-off has no effect on the Company's income statement
or total stockholders' equity.

<PAGE>


         On January 31, 2002, the Company closed a private placement for Common
Stock and Warrants, pursuant to which it issued an aggregate of 848,939 shares
of Common Stock for proceeds of $665,000. In addition, the Company issued in
this placement warrants to purchase 424,072 shares of Common Stock at an
exercise price of $1.50 per share for a term of two years.


RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2002

         The results of continuing operations are reported herein for the
Company's location services business. The Company's telematics division is
reported as "discontinued operations".

         Revenues. In the fiscal quarter ended March 31, 2002 (the "Current
Quarter"), the Company's gross revenues from continuing operations were
$473,663, as compared to revenues from continuing operations of $1,890,662 for
the fiscal quarter ended March 31, 2001 (the "Comparable Quarter"). All of the
Company's revenues came from the European market. The decrease in revenues is
considered to be a result of poor market conditions and financial uncertainty in
the Company, though the Company is currently engaged in several negotiations to
close further contracts.

         Cost of Revenues. Costs incurred by the Company in producing revenues
in the Current Quarter were mainly the amortization of capitalized research and
development costs. Costs in the Comparable Quarter were mainly costs of
supplying hardware in conjunction with the sale of the previous generation of
software platforms. The Company began amortizing capitalized research and
development costs in November 2001 when MLS 5.0 was declared ready for general
release. Hardware costs continued to decrease substantially since the Company
began limited delivery of the MLS platform in March 2001. During the Current
Quarter, cost of revenues were $185,205 as compared to $41,921 in the Comparable
Quarter. The Company's capitalized research and development costs are being
amortized over three years and thus the costs will increase as MLS 5.0 sales
increase.

         Gross Profit. For the Current Quarter, the Company recorded a gross
profit of $288,458 as compared to $1,848,741 gross profit in the Comparable
Quarter. This decrease in gross profit is attributable to the decrease in
revenues and the amortization of capitalized research and development costs in
the Current Quarter.

         Selling, General and Administrative Expenses. The Company's selling,
general and administrative expenses decreased by $1,156,544 to $1,049,998 in the
Current Quarter from $2,206,542 in the Comparable Quarter. The decrease in
selling, general and administrative expenses in the Company's continuing
operations is a result of the restructuring program launched by the Company in
the summer of 2001. Recurring selling, general and administrative expenses are
expected to decrease from this level in future periods since the last month in
the Current Quarter has lower selling, general and administrative costs compared
to the first month in the Current Quarter.

         Research and Development Expenses. The Company's research and
development expenses decreased by $1,379,158 to $Nil in the Current Quarter from
$1,379,158 in the Comparable Quarter. The decrease in research and development
expenses is explained by the capitalization of $852,864 in the Current Quarter
related to the MLS 6.0 and MLB 1.0 projects. The projects reached technological
feasibility during the three months ended March 31, 2002 and thus have been
capitalized in accordance with Statement of Financial Accounting Standards No.
86. Total research and development costs decreased by $526,294 including
capitalized costs in the Current Quarter.

         Professional Fees. Professional fees decreased by $23,842 to $266,775
in the Current Quarter from $290,617 in the Comparable Quarter. The effect of
the settlement with the Company's former legal counsel is not included in the
Current Quarter results. Professional fees in the Current Quarter are primarily
related to costs incurred in connection with regulatory compliance and the
filing of registration statements.

         Depreciation and Amortization Expense. Depreciation and amortization
expense increased by $211,114 to $849,879 in the Current Quarter from $638,735
in the Comparable Quarter. Depreciation and amortization is primarily

<PAGE>


related to purchased technology. The amortization of the positioning technology
acquired in connection with the Unwire acquisition and retained by the
continuing operations amounts to $386,879 and $386,879 and the amortization of
the original core technology amounts to $418,048 and $492,984 for the three
months ended March 31, 2002 and 2001, respectively.

         Financial Items. Financial items resulted in an expense of $1,025,580
in the Current Quarter compared to a net expense of $633,797 in the Comparable
Quarter. Interest expense was $750,766 in the Current Quarter, compared to
interest expense of $726,982 in the Comparable Quarter. The increase in interest
expense was attributable to the $10,000,000 of convertible notes issued in
December 2000 and the amortization of the debt discount recorded in relation to
those notes and the subsequent amendments to the terms thereof resulting in
non-cash expense in the Current Quarter of $566,899. Interest expense in the
Current Quarter consisted of non-cash expense of $566,899, interest of $73,367
to Castle Creek and interest of $112,500 to M&S Trust. In the Current Quarter,
the Company had realized foreign exchange losses aggregating $72,344 whereas in
the Comparable Quarter, the Company had net realized foreign exchange gain of
$0. These items result primarily from exchange rate fluctuations in the
currencies of the United States, England and Sweden.

         Loss from Continuing Operations. Loss from continuing operations for
the Current Quarter was ($2,903,774) versus ($3,300,108) in the Comparable
Quarter. The decrease in loss from continuing operations in the Current Quarter
was mainly a result of the restructuring of the Company.

         Income from Discontinued Operations. On July 25, 2001, the Company
publicly announced its intention to sell its telematics division. On October 9,
2001, Unwire filed for bankruptcy protection under the laws of Sweden. Under
accounting principles generally accepted in the United States, the results of
operations for the telematics division, are presented under "Loss from
Discontinued Operations" for the Comparable Quarter. The loss from "discontinued
operations" of $3,696,666 represents the operating losses of the telematics
division for the comparable quarter. This amount includes depreciation and
amortization of $2,615,794 whereas the Current Quarter's income from
discontinued operations of $658,404 is a result of the reversal of unused
reserves related to the liquidation of telematics subsidiaries. The loss for the
discontinued operations prior to October 9, 2001 was taken as a cost in the
fiscal year-end 2001. Results subsequent to October 9, 2001 are no longer a part
of the Company's consolidated financial statements.

         Net Loss and Loss Per Share. As a result of the above, net loss for
continuing operations for the Current Quarter was ($2,903,774) for the Current
Quarter and including discontinued operations was increased to ($2,245,370).
Loss per share from continuing operations was ($0.17) based on weighted average
shares outstanding of 17,129,841, while the Comparable Quarter loss per share
from continuing operations was ($0.28) based upon a weighted average of
10,609,015 shares outstanding. Loss from operations including discontinued
operations was ($0.13). The net loss for the Comparable Quarter was ($6,996,774)
including the loss from discontinued operations of ($3,696,666).

NINE MONTHS ENDED MARCH 31, 2002

         The results of continuing operations are reported herein for the
Company's location services business. The Company's telematics division is
reported as "discontinued operations".

         Revenues. In the nine months ended March 31, 2002 (the "Current
Period"), the Company's gross revenues from continuing operations were
$1,065,420, as compared to revenues from continuing operations of $3,620,632 for
the nine months ended March 31, 2001 (the "Comparable Period"). All of the
Company's revenues came from the European market. The decrease in revenues is
considered to be a result of poor market conditions and financial uncertainty in
the Company, though the Company is currently engaged in several negotiations to
close further contracts.

         Cost of Revenues. Costs incurred by the Company in producing revenues
in the Current Period were mainly the amortization of capitalized research and
development costs. Costs in the Comparable Period were mainly costs of supplying
hardware in conjunction with the sale of the previous generation of software
platforms. The Company began amortizing capitalized research and development
costs in November 2001 when MLS 5.0 was declared ready for general release.
Hardware costs continued to decrease substantially since the Company began
limited delivery of the MLS platform in March 2001. During the Current Period
cost of revenues were $220,888 as compared to $398,320 in the Comparable Period.
The Company's capitalized research and development costs are being amortized
over three years and thus the costs will increase as MLS 5.0 sales increase.

<PAGE>


         Gross Profit. For the Current Period, the Company recorded a gross
profit of $844,532 as compared to $3,222,312 gross profit in the Comparable
Period. This decrease in gross profit is attributable to the decrease in
revenues and the amortization of capitalized research and development costs in
the Current Period.

         Selling, General and Administrative Expenses. The Company's selling,
general and administrative expenses decreased by $1,597,139 to $3,531,754 in the
Current Period from $5,128,893 in the Comparable Period. The decrease in
selling, general and administrative expenses in the Company's continuing
operations is a result of the restructuring program launched by the Company in
the summer of 2001 Recurring selling, general and administrative expenses are
expected to decrease from this level in future periods due to the restructuring
program.

         Research and Development Expenses. The Company's research and
development expenses decreased by $806,215 to $2,442,928 in the Current Period
from $3,249,143 in the Comparable Period. The decrease in research and
development expenses is explained by the capitalization of $1,023,278 in the
Current Quarter related to the MLS 6.0 and MLB 1.0 projects. The projects
reached technological feasibility during the three months ended March 31, 2002
and thus have been capitalized in accordance with Statement of Financial
Accounting Standards No. 86. Total research and development costs increased by
$217,063 including capitalized costs in the Current Quarter.

         Professional Fees. Professional fees decreased by $54,908 to $918,036
in the Current Period from $972,944 in the Comparable Period. The effect of the
settlement with the Company's former legal counsel is not included in the
Current Period. Professional fees in the Current Period are primarily related to
costs incurred in connection with regulatory compliance and the filing of
registration statements.

         Depreciation and Amortization Expense. Depreciation and amortization
expense increased by $351,015 to $2,835,011 in the Current Period from
$2,483,996 in the Comparable Period. Depreciation and amortization is primarily
related to purchased technology. The amortization of the positioning technology
acquired in connection with the Unwire acquisition and retained by the
continuing operations amounts to $1,192,236 and $1,160,637 and the amortization
of the original core technology amounts to $1,309,708 and $1,487,147 for the
nine months ended March 31, 2002 and 2001, respectively.

         Financial Items. Financial items resulted in an expense of $3,311,307
in the Current Period compared to a net expense of $1,386,785 in the Comparable
Period. Interest expense was $2,765,342 in the Current Period, compared to
$1,642,865 in the Comparable Period. The increase in interest expense was
attributable to the $10,000,000 of convertible notes issued in December 2000 and
the amortization of the debt discount recorded in relation to those notes and
the subsequent amendments to the terms thereof resulting in non-cash expense in
the Current Period of $2,171,148. Interest expense in the Current Period
consisted of non-cash expense of $2,171,148 on the Castle Creek debt discount,
interest of $301,694to Castle Creek and interest of $292,500 to M&S Trust. In
the Current Period, the Company had realized foreign exchange losses aggregating
$322,378whereas in the Comparable Period, the Company had net realized foreign
exchange gain of $0. These items result primarily from exchange rate
fluctuations in the currencies of the United States, England and Sweden.

         Loss from Continuing Operations. Loss from continuing operations for
the Current Period was ($12,194,504) versus ($10,341,734) in the Comparable
Period. Excluding the non-cash item related to the Castle Creek amortization of
the debt discount, the increase in loss from continuing operations in the
Current Period was mainly a result of the restructuring of the Company.

         Income from Discontinued Operations. On July 25, 2001, the Company
publicly announced its intention to sell its telematics division. On October 9,
2001, Unwire filed for bankruptcy protection under the laws of Sweden. Under
accounting principles generally accepted in the United States of America, the
results of operations for the telematics division, are presented under "Loss
from Discontinued Operations" for the Comparable Period. The loss from
"discontinued operations" of $9,684,642 represents the operating losses of the
telematics division for the Comparable Period. This amount includes depreciation
and amortization of $7,109,499 whereas the Current Periods' income from
discontinued operations of $2,184,074 is a result of the reversal of the
cumulative translation adjustment in the amount of approximately $1,526,000
relative to the discontinued operations that had previously been recorded as a
component of

<PAGE>


Stockholders' Equity. Additionally, the Company reversed certain reserves
totaling approximately $658,000 related to the liquidated telematics
subsidiaries deemed no longer necessary. The loss for the discontinued
operations prior to October 9, 2001 was taken as a cost in the fiscal year-end
2001. Results subsequent to October 9, 2001 are no longer a part of the
Company's consolidated financial statements.

         Net Loss and Loss Per Share. As a result of the above, net loss was
($10,010,430) for the Current Period. Loss per share from continuing operations
was ($0.94) based on weighted average shares outstanding of 12,970,793, while
the Comparable Period loss per share from continuing operations was ($.88) based
upon a weighted average of 10,511,861 shares outstanding. The net loss for the
Comparable Period was ($20,026,376) including the loss from discontinued
operations of ($9,684,642).


LIQUIDITY AND CAPITAL RESOURCES

         Working Capital. At March 31, 2002, the Company had $626,896 in current
assets. Cash and cash equivalents amounted to $35,503. Current liabilities were
$5,789,933 at March 31, 2002. At June 30, 2001, the Company had $4,993,093 in
current assets, of which $687,151 consisted of cash and cash equivalents.
Working capital deficit at the end of the Current Quarter was ($5,163,037), as
compared to ($2,408,779) at the end of Fiscal 2001. The decrease in working
capital is attributable mainly to the decreased level of accounts receivables
and the increased current liabilities, excluding current liabilities related to
discontinued operations. The positive impact of the financial reconstruction and
voluntary settlements processes, initiated in March 2002, is not reflected in
the current liabilities at the end of March 31, 2002.

         Accounts payable of $2,658,839 includes approximately $500,000 invoiced
from the Company's former legal counsel which was settled in April 2002.

         Long-term liabilities were $9,556,383 whereof $725,750 is included as a
related party note. Long-term loans of $ 8,830,633 were comprised of $5,444,256
note due to Castle Creek and $4,500,000 note due to M&S Trust. The long-term
loan balance is decreased by $1,113,623 related to the unamortized Castle Creek
debt discount.

         Cash Flow from Operations. For the Current Period, the Company used net
cash in operating activities from continuing operations of $2,998,174 as
compared to $8,346,775 for the Comparable Period. Net cash used in operating
activities from discontinued operations was $1,094,378 in the Current Period, as
compared to $3,004,753 in the Comparable Period. The decrease in net cash used
is primarily a result of decreased operating loss before depreciation and
amortization and non-cash expense related to the amortization of the debt
discount in connection with convertible notes. For the current fiscal year,
total operating expenses are expected to continue to decrease on a quarterly
basis.

         On July 25, 2001, CellPoint publicly announced the planned sale of
Unwire. The Company was unable to identify a purchaser for Unwire and on October
9, 2001, Unwire filed for bankruptcy protection under the laws of Sweden. The
Company does not anticipate any further significant charges in relation to this
bankruptcy.

         Cash Flow from Investing Activities. For the Current Period, the
Company had a net cash outflow from investing activities from continuing
operations of $1,143,254 versus a net cash outflow of $732,264 in the Comparable
Period whereof the $1,143,254 is primarily due to ongoing research and
development expenses. . The Company does not currently have any commitments for
capital expenditures during the current fiscal year, but the Company may make
such expenditures if an opportunity consistent with the Company's business
strategy presents itself.

         Cash Flow from Financing Activities. For the Current Period, the
Company had a net cash inflow from financing activities from continuing
operations of $3,955,277 versus a net cash inflow from financing activities of
continuing operations of $10,149,800 in the Comparable Period. The Company
received net proceeds of approximately $5,985,280 from sales of equity through
private placements in the Current Period. Proceeds were used to repay long-term
debt of $3,255,753 and for working capital.

         Restructuring and Bankruptcy. In March 2002, the Company initiated a
process to renegotiate its long term and short term notes payable as well as
accounts payable. This process resulted in agreements reached regarding the
notes payable subject to certain other restructuring of the Company's
liabilities . The Company approached all of its short term

<PAGE>

creditors, the majority of whom agreed in April to accept 25% of their balances
owed in order to avoid a formal bankruptcy proceeding. By April 22, the
voluntary settlement agreements were completed in CellPoint Inc. On April 3,
2002, the Company announced it was proceeding with 'official composition' to
complete the financial reconstruction of its Swedish subsidiary, CellPoint
Systems AB, under the Swedish Company Reconstruction Act. The 'official
composition' may be used if a majority of the creditors accept the composition
which forces the minority of the creditors to accept the settlement payments
offered.

         However, on May 2, 2002, CellPoint Systems AB ("Systems AB"), the
primary operating subsidiary of the Company, was placed into bankruptcy by a
creditor and on May 10, 2002, the Trustee denied the Company's appeal to put
aside the formal bankruptcy in favor of allowing the Company to proceed with its
formal restructuring under Swedish Bankruptcy Law instead of under the Swedish
Reconstruction Act. As a result of the formal bankruptcy proceeding, the Company
no longer owns or controls Systems AB. As of May 17, 2002 the Trustee has
determined that the tangible and intangible assets of Systems may be repurchased
by the Company. The Company is in negotiations with the Trustee for a mutually
acceptable price.

         As of March 31, 2002, unaudited summarized financial information of
Systems AB prior to the bankruptcy proceeding was approximately as follows:

         Current assets                                      $  790,000
         Intangible assets                                    1,568,000
         Property and equipment                                 546,000
                                                             ----------
              Total assets                                   $2,904,000
                                                             ----------

         Current liabilities                                 $2,345,000
         Net amounts due to the Company                         116,000
                                                             ----------
              Total liabilities                              $2,462,000
                                                             ----------

         Restructuring in CellPoint Inc As part of the voluntary restructuring
process the Company had also approached the creditors of CellPoint Inc., the
majority of whom had also accepted a 75% reduction in their balances as part of
the restructuring. By April 22, the voluntary settlement agreements were
completed with all creditors in CellPoint Inc.

         On March 13, 2002 the Company and Castle Creek entered into a
preliminary Loan Restructuring Agreement, wherein one-half of the outstanding
principal amount of the convertible note (approximately $4,500,000), plus
interest will be converted into convertible preferred stock and the remaining
principal and interest will represent a new convertible note due in April 2004.
Each preferred share will be convertible into common stock and subject to a
fixed conversion price of $0.78 per share and the Company will need stockholder
approval to increase the number of authorized Preferred Stock in order to
satisfy the provisions of the Loan Restructuring Agreement. However, if any
portion of the first $950,000 of the initial financing raised by the company
subsequent to completion of restructuring (if more than $950,000 is raised, then
Castle Creek will be entitled to convert such amount in excess of $950,000 at
the same rate) is a price less than $.50 per share for common stock (without
reference to any warrants issued in the financing), Castle Creek will have the
right to convert the same principal amount of the new convertible note into
common stock at that same price. Additionally, if any subsequent financings by
the Company are at a price less than $.70 per share for common stock (without
reference to any warrants issued in the financing), Castle Creek will have the
right to convert the same principal amount of the new convertible note into
common stock at that same price.

         On March 13, 2002 the Company and M&S Trust entered into a preliminary
Loan Restructuring Agreement, wherein one-half (50%) of the outstanding
principal amount, plus outstanding interest will be converted into common stock
subject to a fixed price of $0.78 per share. The remaining principal and
interest will be transferred to a convertible debenture, maturing on April 1,
2004. Interest on the debt of 9% per annum will be reduced to 6 % per annum,
compounded semi-annually.

         None of the above transactions or events have been recorded in the
financial statements as of and for the periods ended March 31, 2002

<PAGE>


         The Company will require additional capital to implement its business
strategies, including cash for (i) payment of operating expenses such as
salaries for employees, and (ii) further implementation of those business
strategies. Such additional capital may be raised through additional public or
private financing, as well as borrowings and other resources. To the extent that
additional capital is raised through the sale of equity or equity-related
securities, the issuance of such securities could result in dilution to the
Company's stockholders. No assurance can be given, however, that the Company
will have access to the capital markets in the future, or that financing will be
available on acceptable terms to satisfy the Company's cash requirements to
implement its business strategies. If the Company is unable to access the
capital markets or obtain acceptable financing, its future results of operations
and financial condition could be materially and adversely affected. The Company
may be required to raise substantial additional funds through other means. If
adequate funds are not available to the Company, it may be required to curtail
operations significantly or to obtain funds through entering into arrangements
with collaborative partners or others that may require us to relinquish rights
to certain of its technologies or product candidates that the Company would not
otherwise relinquish. While the Company has begun to receive commercial
revenues, there can be no assurances that its existing commercial agreements
will provide adequate cash to sustain its operations. If the Company decides to
expand its business faster, or to geographic areas outside of Europe during the
next twelve months, it may need to raise further capital.

EFFECT OF RECENT ACCOUNTING PRONOUNCEMENTS

         In June 2001, the Financial Accounting Standards Board ("FASB")
finalized FASB Statements No. 141, Business Combinations (SFAS No. 141), and No.
142, Goodwill and Other Intangible Assets (SFAS No. 142). SFAS No. 141 requires
the use of the purchase method of accounting and prohibits the use of the
pooling-of-interests method of accounting for business combinations initiated
after June 30, 2001. SFAS No. 141 also requires that the Company recognize
acquired intangible assets apart from goodwill if the acquired intangible assets
meet certain criteria. SFAS No. 141 applies to all business combinations
initiated after June 30, 2001and for purchase business combinations completed on
or after July 1, 2001. It also requires, upon adoption of SFAS No. 142 that the
Company reclassify the carrying amounts of intangible assets and goodwill based
on the criteria in SFAS No. 141.

         SFAS No. 142 requires, among other things, that companies no longer
amortize goodwill, but instead test goodwill for impairment at least annually.
In addition, SFAS No. 142 requires that the Company identify reporting units for
the purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS No. 142. SFAS No. 142 is required to be
applied in fiscal years beginning after December 15, 2001 to all goodwill and
other intangible assets recognized at that date, regardless of when those assets
were initially recognized. Early adoption is permitted in the first quarter of
fiscal years beginning after December 15, 2000. SFAS No. 142 requires the
Company to complete a transitional goodwill impairment test six months from the
date of adoption. The Company is also required to reassess the useful lives of
other intangible assets within the first interim quarter after adoption of SFAS
No. 142. The Company is still assessing the impact SFAS No. 142 will have on its
financial position and results of operations and thus was unable to early adopt
SFAS No. 142. The Company will thus adopt SFAS No. 142 on July 1, 2002.

<PAGE>


         In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS No. 144"). This statement
supercedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of" ("SFAS No. 121") and Accounting
Principles Board Opinion No. 30, "Reporting Results of Operations -Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions". SFAS No. 144 retains the
fundamental provisions of SFAS No. 121 for recognition and measurement of
impairment, but amends the accounting and reporting standards for segments of a
business to be disposed of. SFAS No.144 is effective for fiscal years beginning
after December 15, 2001, and interim periods within those fiscal years, with
early application encouraged. The provisions of SFAS No. 144 generally are to be
applied prospectively. The Company believes that the adoption of SFAS No. 144
will not have a material impact on the Company's financial position or results
of operations.

GENERAL

Critical Accounting Policies and Estimates

     Financial Reporting Release No. 60, which was recently released by the
Securities and Exchange Commission, requires all companies to include a
discussion of critical accounting policies or methods used in the preparation of
financial statements. Note 1 of the consolidated financial statements, included
in the Company's annual report on Form 10-K, includes a summary of the
significant accounting policies and methods used in the preparation of the
Company's consolidated financial statements.

     The Company believes the following critical accounting policies affect the
significant judgments and estimates used in the preparation of the Company's
financial statements:

Revenue Recognition

         Revenues from sales of hardware, software, licenses and support
services are recognized when the products are delivered or the services are
rendered. For products and services for which customer acceptance is required,
revenue is recorded upon receipt of such acceptance.

MANAGEMENT'S ESTIMATES

      The discussion and analysis of the Company's financial condition and
results of operations are based upon the Company's consolidated financial
statements. The preparation of these financial statements requires the Company
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. On an ongoing basis, the Company evaluates estimates, including
those related to sales provisions, as described above, bad debts, intangible
assets and contingencies. The Company bases it estimates on historical data,
when available, experience, and on various other assumptions that are believed
to be reasonable under the circumstances, the combined results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates.

Software development costs

Software development costs for products and certain product enhancements are
capitalized subsequent to the establishment of their technological feasibility
(as defined in Statement of Financial Accounting Standards ("SFAS") No. 86)
based upon the existence of working models of the products which are ready for
initial customer testing. Costs incurred prior to such technological feasibility
or subsequent to a product's general release to customers are expensed as
incurred. Capitalized software development costs are amortized on a
product-by-product basis. The annual amortization is the greater of the amount
computed using (a) the ratio that current gross revenues for a product bear to
the total of current and anticipated future gross revenues for that product or
(b) the straight-line method over the remaining estimated economic life.
Amortization starts when the product is available for general release to
customers.

<PAGE>


DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

         Certain statements contained in this Report contain "forward looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. These are statements that do not relate strictly to
historical or current facts. Although the Company believes that its plans,
intentions and expectations reflected in such forward looking statements are
reasonable, it can give no assurance that such plans, intentions or expectations
will be achieved. Such forward-looking statements involve known and unknown
risks and uncertainties. The Company's actual actions or results may differ
materially from those discussed in the forward-looking statements. These risk
factors are set forth below. All forward looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the cautionary statements set forth below:

         o    Our limited operating history makes evaluation of our business and
              prospects difficult;

         o    We have a history of losses and we anticipate significant future
              losses:

         o    Our business and prospects must be considered in light of the
              risks, uncertainties, expenses and difficulties frequently
              encountered by companies in their early stages of development,
              particularly companies in new and rapidly evolving markets, such
              as the market for location services;

         o    Our subsidiary in Sweden is in bankruptcy, and we will be required
              to purchase the assets of the subsidiary (which include our
              patents and technology) from this bankruptcy. There is no
              assurance that we will be able to raise the necessary capital to
              make this payment. If we are not able to make this payment, our
              operations will cease, since our patents and technology could or
              would be sold to third parties.

         o    Our sales cycles are long and our revenue is unpredictable;

         o    Although we have restructured our short-term debt, we may not be
              able to complete our restructuring with Castle Creek or obtain
              stockholder approval to issue a new class of preferred stock per
              the agreement with Castle Creek;

         o    We will need additional financing in the next twelve months and
              our ability to secure additional financing on acceptable terms, as
              and when necessary;

         o    Our ability to improve our technology to keep up with customer
              demand for new services;

         o    We depend heavily on our key personnel, and our inability to
              retain them and to attract new key management could materially
              adversely affect our business;

         o    We depend heavily on our board of directors, and our inability to
              retain them could materially adversely affect our business;

         o    The development cycle for new products may be significantly longer
              than expected, resulting in higher than anticipated development
              costs;

         o    The ability of our systems and operations to connect and manage a
              substantially larger number of customers while maintaining
              adequate performance, which could place a strain on managerial and
              operational resources;

         o    Our ability to expand customer service, billing and other related
              support systems;

         o    Our ability to effect and retain appropriate patent, copyright and
              trademark protection of our products;

         o    Despite the implementation of security measures, our computer
              networks and web sites may be vulnerable to unauthorized access,
              computer viruses and other disruptive problems, and any such
              occurrence could result in the expenditure of additional resources
              necessary to protect our assets;

<PAGE>


         o    Increased competition in the field of location services;

         o    We may not be able to maintain our listing on the NASDAQ National
              Market.

         Our ability to continue to meet the listing requirements of The Nasdaq
         National Market. On April 1, 2002, we received a staff delisting notice
         from The Nasdaq National Market, as to which a hearing was held May 16,
         2002, in response to our appeal of the delisting notice. We expect a
         decision on the issues raised in the delisting notice and considered at
         the hearing by the end of May 2002. The open issues being considered by
         the hearing panel are the price of our common stock, our stockholders'
         equity (as to which we believe we are now in compliance following our
         financial restructuring initiated in March 2002), and our alleged
         failure to obtain stockholder approval for two financing transactions
         in December 2000 and July 2001 (as to which we do not believe the
         Nasdaq Marketplace Rules require such approval).

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

                  None.

PART II

ITEM 1.  LEGAL PROCEEDINGS

                            PENDING LEGAL PROCEEDING

         The Company's subsidiary in Sweden, CellPoint Systems AB, is party to a
formal bankruptcy proceeding in the District Court, Stockholm, Sweden. We plan
to submit an offer to the Trustee for the purchase of the assets of this
subsidiary (which include all of our patents and technology) during the week of
May 20, 2002.

         In December 2001, CellPoint had filed a malpractice lawsuit against its
former legal counsel , which lawsuit was settled in April 2002.

ITEM 2.  CHANGES IN SECURITIES

         (a)      None.

         (b)      None.

         (c)      Recent Sales of Securities.

                  In late September and early October, 2001, the Company closed
                  three private Placements of its common stock and warrants to
                  purchase common stock: the first placement was for $3.25
                  million, pursuant to which the Company issued 3,250,000 shares
                  of Common Stock plus 1,625,000 warrants to purchase shares of
                  Common Stock at an exercise price of $2.25 per share,
                  exercisable for two years. The units were sold to accredited
                  investors pursuant to Regulation 506 under the Securities Act
                  of 1933, as amended (the "Securities Act"). The proceeds from
                  the sale of these units were used to repurchase a portion of
                  the convertible notes held by Castle Creek. The second
                  placement was an offering pursuant to Regulation S under the
                  Securities Act, in which non-U.S. Persons (as such term is
                  defined in Regulation S), purchased 1,568,144 shares of Common
                  Stock and 784,071 warrants to purchase shares of Common Stock,
                  exercisable at $2.36 per share for two years. The proceeds
                  from the Regulation S offering aggregated $2,071,130, and were
                  for working capital. The third placement was for shares of
                  Common Stock and warrants to purchase Common Stock for
                  $1,300,000. Such offering was made to accredited investors
                  pursuant to Regulation 506 under the Securities Act. In
                  connection with such offering, the Company issued 1,238,096
                  shares of Common Stock, and 619,048 warrants to purchase
                  shares of Common Stock, half of which are exercisable at $3.50
                  per share for twelve months and the other half of which are
                  exercisable at $5.00 per share for twenty-four months.

<PAGE>


                  On January 31, 2002, the Company closed a private placement
                  for Common Stock and Warrants, pursuant to which it issued an
                  aggregate of 848,939 shares of Common Stock for proceeds of
                  $665,000. In addition, the Company issued in this placement
                  warrants to purchase 424,072 shares of Common Stock at an
                  exercise price of $1.50 per share for a term of two years.

         (d)      None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

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

         None.

ITEM 5.  OTHER INFORMATION

         None.

ITEM 6.  EXHIBITS, LIST AND REPORTS ON FORM 8-K

         (a)      Exhibits

         (b)      Reports on Form 8-K

                  Current Reports on Form 8-K were filed on July 31, 2001,
                  October 5, 2001, December 21, 2001 and on March 13, 2002.


<PAGE>




                         CELLPOINT INC. AND SUBSIDIARIES

CONTENTS

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------
                                                                                                             PAGE:
<S>                                                                                                           <C>
------------------------------------------------------------------------------------------------------------------
Consolidated balance sheets as of March 31, 2002 (Unaudited) and June 30, 2001 (Audited) ..................   F-1
------------------------------------------------------------------------------------------------------------------
Consolidated statements of operations for the nine months ended March 31, 2002 and 2001 ...................   F-2
------------------------------------------------------------------------------------------------------------------
Consolidated statements of comprehensive loss for the nine months period ended March 31, 2002 and 2002 ....   F-3
------------------------------------------------------------------------------------------------------------------
Consolidated statements of cash flows for the nine months period ended March 31, 2002 and 2002 ............   F-4
------------------------------------------------------------------------------------------------------------------
Notes to consolidated financial statements ................................................................   F-5
------------------------------------------------------------------------------------------------------------------

</TABLE>




<PAGE>


                         CELLPOINT INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (AMOUNTS IN USD)

<TABLE>
<CAPTION>

                                                                                           NOTE    MARCH 31,            JUNE 30,
                                                                                                     2002                 2001
ASSETS                                                                                            (unaudited)           (audited)
<S>                                                                                        <C>   <C>                  <C>
CURRENT ASSETS ...........................................................................
   Cash and cash equivalents .............................................................       $      35,503        $     687,151
   Accounts receivable ...................................................................              14,853            1,366,641
   Unbilled receivables ..................................................................              76,692              792,443
   Prepaid expenses and other current assets .............................................             258,979              383,578
   Other receivables .....................................................................             240,869              402,132
   Current assets of discontinued operations .............................................  2               --            1,361,148
                                                                                                 -------------        -------------
TOTAL CURRENT ASSETS .....................................................................             626,896            4,993,093

LONG-TERM ASSETS .........................................................................
   Restricted cash .......................................................................  7          385,560              184,216
   Acquired technology, net of accumulated amortization of $7,691,328 and
      $5,411,604, respectively ...........................................................          13,291,277           15,571,001
   Other intangible assets, net of accumulated amortization of $880,562 and
      $1,311,830, respectively ........................................................... 10        1,568,400            1,107,201
   Property and equipment, net of accumulated depreciation of $1,139,185 and
      $480,345, respectively .............................................................             549,248              885,780
Non-current assets of discontinued operations ............................................  2               --              521,401
                                                                                                 -------------        -------------
TOTAL LONG-TERM ASSETS ...................................................................          15,794,485           18,269,599
                                                                                                 -------------        -------------
TOTAL ASSETS .............................................................................       $  16,421,381        $  23,262,692
                                                                                                 -------------        -------------

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES ......................................................................
   Accrued expenses and other current liabilities ........................................       $   3,131,094        $   2,337,066
   Accounts payable ......................................................................           2,658,839            2,082,257
    Current liabilities of discontinued operations .......................................                  --            2,982,549
                                                                                                 -------------        -------------

TOTAL CURRENT LIABILITIES ................................................................           5,789,933            7,401,872
DUE TO RELATED PARTIES ...................................................................  9          725,750                   --
LONG-TERM DEBT (net of debt discount of $1,113,623 and $1,914,490
   respectively)..........................................................................  3        8,830,633           11,785,510
                                                                                                 -------------        -------------

TOTAL LIABILITIES ........................................................................          15,346,316           19,187,382
                                                                                                 =============        =============

MINORITY INTEREST ........................................................................                  --               48,464
COMMITMENTS AND CONTINGENCIES ............................................................  3
STOCKHOLDERS' EQUITY......................................................................
Preferred shares ($0.001 par value; authorized 3,000,000 shares, nil issued
   and outstanding) ......................................................................                  --                   --
   Common shares ($0.001 par value; authorized 50,000,000 shares, 17,871,312
      shares and 10,824,503 shares issued and outstanding,
      respectively) ......................................................................              17,872               10,824
   Additional paid in capital ............................................................         107,040,758           98,692,254
   Cumulative foreign currency translation adjustment ....................................            (699,425)             597,478
    Accumulated deficit ..................................................................        (105,284,140)         (95,273,710)
                                                                                                 -------------        -------------

TOTAL STOCKHOLDERS' EQUITY ...............................................................           1,075,065            4,026,846
                                                                                                 -------------        -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...............................................       $  16,421,381        $  23,262,692
                                                                                                 =============        =============

</TABLE>


         See accompanying notes to the consolidated financial statements


<PAGE>



                         CELLPOINT INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                (AMOUNTS IN USD)

<TABLE>
<CAPTION>


                                                                     THREE MONTHS ENDED                   NINE MONTHS ENDED
                                                                  MARCH 31,         MARCH 31,        MARCH 31,         MARCH 31,
                                                        NOTE        2002              2001              2002             2001
                                                                 (unaudited)       (unaudited)      (unaudited)       (unaudited)
<S>                                                      <C>    <C>               <C>               <C>               <C>
Revenues ..............................................         $    473,663      $  1,890,662      $  1,065,420      $  3,620,632
Cost of revenues ......................................             (185,205)          (41,921)         (220,888)         (398,320)
                                                                ------------      ------------      ------------      ------------
Gross profit ..........................................              288,458         1,848,741           844,532         3,222,312

Selling, general and administrative expense ...........   5       (1,049,998)       (2,206,542)       (3,531,754)       (5,128,893)
Research and development expense ......................  10               --        (1,379,158)       (2,442,928)       (3,249,143)

Professional fees .....................................             (266,775)         (290,617)         (918,036)         (972,944)
Depreciation and amortization .........................             (849,879)         (638,715)       (2,835,011)       (2,483,996)
                                                                ------------      ------------      ------------      ------------
          TOTAL OPERATING EXPENSES ....................           (2,166,652)       (4,515,052)       (9,727,729)      (11,834,976)
                                                                ------------      ------------      ------------      ------------
LOSS FROM OPERATIONS ..................................           (1,878,194)       (2,666,311)       (8,883,197)       (8,612,664)
Loss on sale on investment ............................                   --                --                --          (342,285)
Finanancial items, net ................................   8       (1,025,580)         (633,797)       (3,311,307)       (1,386,785)
                                                                ------------      ------------      ------------      ------------

LOSS FROM CONTINUING OPERATIONS .......................           (2,903,774)       (3,300,108)      (12,194,504)      (10,341,734)
                                                                ------------      ------------      ------------      ------------

INCOME/(LOSS) FROM DISCONTINUED
   OPERATIONS .........................................   2          658,404        (3,696,666)        2,184,074        (9,684,642)
                                                                ------------      ------------      ------------      ------------
NET LOSS ..............................................         $ (2,245,370)     $ (6,996,774)     $(10,010,430)     $(20,026,376)
                                                                ============      ============      ============      ============

Weighted average number of shares
      outstanding, basic and diluted ..................           17,129,841        10,609,015        12,970,793        10,511,861
                                                                ------------      ------------      ------------      ------------

Net income/(loss) per common share basic and diluted:
    Continuing operations .............................         $      (0.17)     $      (0.28)     $      (0.94)     $       (.88)
    Discontinued operations ...........................                 0.04      $      (0.38)             0.17      $      (1.03)
    Net loss per share ................................         $      (0.13)     $      (0.66)     $      (0.77)     $      (1.91)

</TABLE>


         See accompanying notes to the consolidated financial statements

<PAGE>

                         CELLPOINT INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                                (AMOUNTS IN USD)

<TABLE>
<CAPTION>


                                                                    THREE MONTHS ENDED                    NINE MONTHS ENDED
                                                                MARCH 31,          MARCH 31,          MARCH 31,          MARCH 31,
                                                                  2002               2001               2002               2001
                                                               (unaudited)        (unaudited)        (unaudited)        (unaudited)
<S>                                                           <C>                <C>                <C>                <C>

Net loss ...............................................      $ (2,245,370)      $ (6,996,774)      $(10,010,430)      $(20,026,376)
Other comprehensive loss, cumulative foreign
      exchange translation
      adjustments ......................................           (30,794)          (390,143)        (1,296,903)          (525,384)
                                                              ------------       ------------       ------------       ------------
Comprehensive loss for the period ......................      $ (2,276,164)      $ (7,386,917)      $(11,348,127)      $(20,551,760)
                                                              ============       ============       ============       ============

</TABLE>


         See accompanying notes to the consolidated financial statements



<PAGE>


                         CELLPOINT INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (AMOUNTS IN USD)

<TABLE>
<CAPTION>


NOTE 6                                                                                   NINE MONTHS        NINE MONTHS
                                                                                            ENDED              ENDED
                                                                                        MARCH 31, 2002     MARCH 31, 2001
                                                                                         (unaudited)        (unaudited)
<S>                                                                                      <C>                <C>

CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss ...........................................................................  $(10,010,430)      $(20,026,376)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
   (Income) /loss from discontinued operations ........................................    (2,184,074)         9,684,642
   Depreciation and amortization ......................................................     3,020,082          2,483,996
   Provision for allowance on accounts receivables ....................................            --            (36,732)
   Non-cash financing costs ...........................................................     2,171,148            510,544
   Reversal of cumulative translation adjustment related to liquidated subsidiaries ...      (127,506)                --
   Reversal of unused reserves related to liquidated subsidiaries .....................       658,404                 --
   Loss on disposal of investment in affiliated company ...............................            --            342,285
CHANGES IN OPERATING ASSETS AND LIABILITIES:
   Increase in restricted cash ........................................................      (201,344)                --
   Decrease/(increase) in accounts receivable .........................................     1,351,788           (298,037)
   Decrease/(increase) in unbilled receivables ........................................       715,751                 --
   Decrease/(increase) in prepaid expenses ............................................       124,599         (1,360,677)
   Decrease/(increase) in other receivables ...........................................       161,263           (305,067)
   Increase in accrued expenses and other current liabilities .........................       794,027            302,205
   Increase in accounts payable .......................................................       528,118            412,359
   Decrease in due to affiliate .......................................................            --            (55,917)
                                                                                         ------------       ------------
NET CASH USED IN OPERATING ACTIVITIES FROM CONTINUING OPERATIONS: .....................    (2,998,174)        (8,346,775)
NET CASH USED IN OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS: ...................    (1,094,378)        (3,004,753)
                                                                                         ------------       ------------
NET CASH USED IN OPERATING ACTIVITIES: ................................................    (4,092,552)       (11,351,528)
CASH FLOWS FROM INVESTING ACTIVITIES
   Capital expenditures ...............................................................    (1,143,254)          (889,979)
   Proceeds from disposal of investment in affiliated company .........................            --            157,715
                                                                                         ------------       ------------
NET CASH USED IN INVESTING ACTIVITIES FROM CONTINUED OPERATIONS: ......................    (1,143,254)          (732,264)
NET CASH USED IN INVESTING ACTIVITIES FROM DISCONTINUED OPERATIONS: ...................        (3,429)           (95,217)
                                                                                         ------------       ------------
NET CASH USED IN INVESTING ACTIVITIES: ................................................    (1,146,683)          (827,481)
CASH FLOWS FROM FINANCING ACTIVITIES:
   Repayment of note payable ..........................................................    (3,255,753)                --
   Proceeds from notes payable ........................................................            --         10,000,000
   Net proceeds from private placements ...............................................     5,985,280                 --
   Proceeds from issuance of shares ...................................................            --            149,800
   Due to related party ...............................................................       725,750                 --
   Advances of bank loans .............................................................       500,000                 --
                                                                                         ------------       ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES FROM CONTINUING OPERATIONS: .................     3,955,277         10,149,800
                                                                                         ------------       ------------
Effects of exchange rate changes on cash ..............................................       634,502           (172,969)
Effects of exchange rate changes on cash from discontinued operations .................        (2,192)           (11,241)
                                                                                         ------------       ------------
Increase/(decrease) in cash and cash equivalents ......................................      (651,648)        (2,213,419)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ......................................       687,151          6,624,662
                                                                                         ------------       ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ............................................  $     35,503       $  4,411,243
                                                                                         ------------       ------------

</TABLE>

         See accompanying notes to the consolidated financial statements


<PAGE>



                         CELLPOINT INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                (AMOUNTS IN USD)


1        BASIS OF PRESENTATION

         NATURE OF REPORT. The consolidated balance sheet at the end of the
preceding fiscal year has been derived from the audited consolidated balance
sheet contained in the Company's Annual Report on Form 10-KSB, on file with the
Securities and Exchange Commission, and is presented for comparative purposes.
All other financial statements are unaudited. The unaudited financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States of America for interim financial information and with the
instructions to Item 310 of Regulation S-B. Accordingly, they do not include all
of the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements. The
financial information included in the quarterly report should be read in
conjunction with the Company's audited financial statements and related notes
thereto for the fiscal year ended June 30, 2001. In the opinion of management,
all adjustments necessary to present fairly the financial position, results of
operations and changes in cash flows, for all periods presented, have been made.
The results of operations for interim periods are not necessarily indicative of
the operating results for the full year.

         GOING CONCERN. The consolidated financial statements have been prepared
on a going concern basis, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. The Company has
recurring losses from operations and operating cash constraints that raise
substantial doubt about the Company's ability to continue as a going concern. In
addition, subsequent to March 31, 2002 the Company's operating subsidiary was
placed into bankruptcy (See Note 11).

         ESTIMATES AND UNCERTAINTIES. The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America 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 dates of the financial statements and the reported
amounts of revenues and expenses during the reporting periods. Actual results
could differ from those estimates.

         RECLASSIFICATIONS. Certain amounts relating to the six-months ended
December 31, 2000 have been reclassified to conform to the current period
presentation.

         EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS. In June 2001, the
Financial Accounting Standards Board ("FASB") finalized FASB Statements No. 141,
"Business Combinations" (SFAS No. 141), and No. 142, "Goodwill and Other
Intangible Assets" (SFAS No. 142). SFAS No. 141 requires the use of the purchase
method of accounting and prohibits the use of the pooling-of-interests method of
accounting for business combinations initiated after June 30, 2001. SFAS No. 141
also requires that the Company recognize acquired intangible assets apart from
goodwill if the acquired intangible assets meet certain criteria. SFAS No. 141
applies to all business combinations initiated after June 30, 2001 and for
purchase business combinations completed on or after July 1, 2001. It also
requires, upon adoption of SFAS No. 142 that the Company reclassify the carrying
amounts of intangible assets and goodwill based on the criteria in SFAS No. 141.

         SFAS No. 142 requires, among other things, that companies no longer
amortize goodwill, but instead test goodwill for impairment at least annually.
In addition, SFAS No. 142 requires that the Company identify reporting units for
the purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS No. 142. SFAS No. 142 is required to be
applied in fiscal years beginning after December 15, 2001 to all goodwill and
other intangible assets recognized at that date, regardless of when those assets
were initially recognized. The Company is also required to reassess the useful
lives of other intangible assets within the first interim quarter after adoption
of SFAS No. 142. The Company has not completed its assessment of the impact SFAS
No. 142 will have on its financial position and results of operations.

         In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". This statement supercedes SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-

<PAGE>


Lived Assets to Be Disposed Of" ("SFAS No. 121") and Accounting Principles Board
Opinion No. 30, "Reporting Results of Operations - Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions". SFAS No. 144 retains the fundamental
provisions of SFAS No. 121 for recognition and measurement of impairment, but
amends the accounting and reporting standards for segments of a business to be
disposed of. SFAS No.144 is effective for fiscal years beginning after December
15, 2001, and interim periods within those fiscal years, with early application
encouraged. The provisions of SFAS No. 144 generally are to be applied
prospectively. The Company believes that the adoption of SFAS No. 144 will not
have a material impact on the Company's financial position or results of
operations.

2        DISCONTINUED OPERATIONS

         On May 19, 2001, the Company approved the disposal of the telematics
business segment of the Company and committed to a plan to dispose of the
business. In October and November 2001, the two subsidiaries that contained the
telematics business segment filed for protection under the bankruptcy court. As
a result of the filings the Company ceased all funding of the telematics
business segment and relinquished to the respective bankruptcy courts control
over the operations and decision-making capabilities of the former subsidiaries
(See also Note 5). Accordingly, the telematics business segment was presented as
a discontinued operation in the balance sheet as of June 30, 2001. The
statements of operations and cash flows for the six months ended March 31, 2001,
have been restated to conform with this presentation. At June 30, 2001, the
Company had accrued approximately $1,100,000 for additional losses expected from
the discontinued operation through the expected date of disposition. For the
nine months ended March 31, 2002 ,upon disposition of the subsidiaries operating
in the telematics business the Company has recorded the reversal of the
cumulative translation adjustment in the amount of approximately $1,526,000
relative to these discontinued operations that had previously been recorded as a
component of Stockholders' Equity. Additionally, the Company reversed certain
reserves totaling approximately $658,000 related to the liquidated telematics
subsidiaries deemed no longer necessary. The Company does not anticipate any
further significant losses related to this segment. From the time the business
ceased to be under the control of the Company, its financial statements have
ceased to be included in the Company's consolidated financial statements. Losses
through the date at which control was relinquished are included in the Company's
Accumulated Deficit.

         The continuing operations of the Company now constitute the only
reportable business segment.

         The components of assets (liabilities) of discontinued operations
included in the Company's Consolidated Balance Sheet at June 30, 2001 are as
follows:


<TABLE>
<CAPTION>


                                                                                                JUNE 30,
                                                                                                  2001
         <S>                                                                                  <C>
         Current assets:
            Cash and cash equivalents ..............................................          $        --
            Accounts receivable ....................................................              262,504
            Prepaid expenses and other current assets ..............................                   --
            Other receivables ......................................................              482,423
            Inventory ..............................................................              429,432
            Other current assets ...................................................              186,789
         Non-current assets:
            Other long-term assets .................................................              521,401
         Current liabilities:
            Accounts payable, accrued expenses and other current liabilities .......           (2,982,549)
                                                                                              -----------
         Net liabilities of discontinued operations ................................          $(1,100,000)
                                                                                              -----------

</TABLE>


<PAGE>


3        LONG TERM DEBT

                                                March 31,            June 30,
                                                  2002                 2001

             M&S Trust (a)                     $ 4,500,000          $ 4,000,000
             Castle Creek (b)                    4,330,633            7,785,510
                                               -----------          -----------
                                               $ 8,830,633          $11,785,510
                                               -----------          -----------

(a) M & S Trust

         On March 13, 2002 the Company and M&S Trust entered into a preliminary
Loan Restructuring Agreement, wherein one-half (50%) of the outstanding
principal amount, plus outstanding interest will be converted into common stock
subject to a fixed price of $0.78 per share. The remaining principal and
interest will be transferred to a convertible debenture, maturing on April 1,
2004. Interest on the debt of 9% per annum will be reduced to 6 % per annum,
compounded semi-annually.

         The Loan Restructuring Agreement is subject to a complete finalization
of the Company's debt negotiations (See (b) below) and completion of certain
financing transactions. As of March 31, 2002, the Company had not completed the
debt negotiations and the financing transactions and thus the effects of the
Loan Restructuring Agreement have not been reflected in these financial
statements.

(b) Castle Creek.

          On December 6, 2000, the Company entered into an agreement whereby it
issued to Castle Creek Technology Partners LLC ("Castle Creek") convertible
notes in the aggregate principal amount of $10,000,000, which were originally
due and payable on September 30, 2002. Interest on the debt is 6% per annum,
compounded semi-annually and payable semi-annually on each June 30 and December
31. Prior to June 5, 2001, the notes were convertible, in whole or in part, at a
fixed conversion price of $25 per share at the option of the holder of the debt
and could be converted in exchange for all or part of the outstanding debt plus
the accrued interest at the conversion date. Subsequent to June 5, 2001, the
notes were convertible at the lower of $25 or 90% of the average of the five
lowest volume weighted average prices during the period of twenty consecutive
trading days ending on the trading day immediately prior to the date of
determination. The conversion of the notes contained certain limitations as set
forth in the agreement. The Company has reserved 2,000,000 shares for the
purpose of possible future conversions.

         In connection with the convertible notes, the Company issued a warrant
that was immediately exercisable and which expires on December 5, 2005. The
warrant grants granted Castle Creek the right to purchase 210,526 shares of the
Company's common stock at an exercise price per share of $11.40, subject to
adjustment.

         On July 25, 2001, the Company entered into a note purchase,
modification and forebearance agreement with Castle Creek concerning the above
mentioned notes. Under the agreement, the outstanding notes were to be
repurchased by the Company. The Company agreed to buy back the outstanding
principal of the notes over 90 days for 86% of the remaining principal, plus
accrued interest, and issued a warrant with 500,000 shares issuable upon
exercise of the warrant at an exercise price of $3.14 per share and exercisable
after one year for a period of four years (subject to specified anti-dilution
adjustments). In addition, the Company granted to Castle Creek a security
interest in its assets (including the assets of its subsidiaries), including its
intellectual property. Castle Creek agreed not to trade in the Company's stock
effective July 25, 2001 until the note repurchase is completed, in consideration
for which Castle Creek was paid $1,000,000 as a non-refundable deposit against
the final note purchase payment. The fixed conversion price of the Notes was
changed to $4.00 with no floating conversion price if the notes are purchased on
a timely basis and the Company complies with all its other obligations to Castle
Creek in all material respects. The Company also agreed to certain limitations
on the terms of future debt and equity financings, which limitations would not
apply to a financing that provided the proceeds for the final purchase of the
Notes.

         On September 26, 2001, the Company and Castle Creek entered into an
amendment of the July 25, 2001 agreement, wherein the outstanding convertible
notes were to be repurchased at 100% of the remaining principal and subject to a
fixed conversion price of $4.00. The Company paid $2,250,000 to Castle Creek on
September 26, 2001 for principal and accrued interest and was scheduled to make
a final payment on October 1, 2002 for $6,105,100 plus accrued interest (subject
to specified adjustments upon a material breach by the Company). The outstanding
notes are prepayable in part or in whole at any time without penalty. However,
if the Company is in non-compliance of the limitations on the terms of future
debt and equity financing, there will be a $2,000,000 penalty and the notes will
become convertible at the lower of 1) the average closing price during the ten
day period beginning five days prior to the date of

<PAGE>


<PAGE>

the non-compliance event or (2) the lowest price of common stock or common stock
equivalents sold from September 25, 2001 to the non-compliance event. The July
agreement, except as modified by the amendment and the Stipulation and Order
discussed below, remains in effect.

         On November 15, 2001, the Company was served with a suit by Castle
Creek, and on December 13, 2001, Castle Creek filed an amended complaint, to
have its debt of in excess of $6.1 million principal plus interest declared due
and payable, for a default payment of $2 million and other damages and relief.
The principal issue in dispute in the litigation was the antidilution adjustment
applicable to the number of shares that Castle Creek is entitled to purchase
under the warrant issued in the July 25, 2001 restructuring with Castle Creek to
purchase 500,000 shares of common stock (see "Legal Proceedings").

         On December 19, 2001, the Company entered into a Stipulation and Order
with Castle Creek providing that Castle Creek agreed to stay prosecution of this
case until February 28, 2002, provided that the Company makes required
prepayments on its Notes to Castle Creek of $200,000 by January 31, 2002, which
payment was timely made, and an additional $550,000 by February 28, 2002 and
provided, further, that the Company does not breach its agreements and
instruments with Castle Creek subsequent to the date of the Stipulation and
Order. In addition, the Stipulation and Order specified an adjustment in the
exercise price of the December 2000 warrant from $11.40 to $7.75 and the July
2001 warrant that carried anti-dilution provisions was amended to give Castle
Creek the right to purchase 1,500,000 shares at an adjusted exercise price of
$1.20 per share. 50% of the 1,500,000 shares are exercisable immediately and the
balance are exercisable beginning July 25, 2002 with all shares expiring on July
25, 2006. The anti-dilution feature was further modified such that the number of
shares that Castle Creek is entitled to purchase under the July 2001 Warrant was
fixed at 1,500,000 (subject to adjustment for stock splits, stock dividends and
combinations of shares, and like events, but not subject to adjustment due to a
decrease in the exercise price of the warrant). Procedures clarifying the manner
of calculating the manner of the calculating adjustments to the exercise price
of the July 2001 Warrant were incorporated in the Stipulation and Order. The
Company is also required to make prepayments of the Notes in an amount equal to
25% of the gross proceeds of each financing the Company closes; provided, that
the maximum aggregate amount of prepayments that the Company is required to make
under the Stipulation and Order prior to October 1, 2002 (the due date of the
Notes) is $3,000,000.

         On January 31, 2002 the Company made payment of $200,000 to Castle
Creek for principal and accrued interest in accordance with the December 19,
2001 Stipulation and Order.

         On February 28, 2002, the Company satisfied the second required payment
of $550,000, in accordance with the Stipulation and Order, through the delivery
of 705,128 shares of our common stock to Castle Creek, who agreed that this was
in accordance with the Stipulation and Order and therefore withdrew its lawsuit
without prejudice.

         On March 13, 2002 the Company entered into a Loan Restructuring
Agreement with Castle Creek Technology Partners LLC ("Castle Creek") pursuant to
which one-half (50%) of the then outstanding principal amount of Castle Creek's
convertible note (approx. $5.4 million), plus interest of approximately
$400,000, or approximately $2.9 million in total, would be converted into shares
of convertible preferred stock of CellPoint, each share of which would be
convertible into common stock (the reference conversion price for the principal
amount and interest so converted is $.78 per share of common stock). The only
anti-dilution adjustments applicable to the preferred stock would be for stock
splits, stock dividends and the like. To restructure one-half of Castle Creek's
short-term debt into equity, the Company is required to authorize a new class of
convertible preferred stock to effectuate this aspect of this Agreement with
Castle Creek. There is no assurance that the Company will be able to obtain
authorization from its stockholders for this new class of convertible preferred
stock. At CellPoint's annual meeting of stockholders, held on December 12, 2001,
the Company's proposal to authorize a new class of preferred stock did not
receive the necessary number of stockholder votes for authorization.

         The other 50% of the outstanding principal amount of the convertible
note (approximately $2.9 million) would be represented by a new convertible
note, due April 2004, with interest at the rate of 6% per annum, no principal or
interest payments under which would be due until maturity. CellPoint can prepay
at any time all or part of the amounts outstanding under the new convertible
note, without premium or penalty. The new convertible note would be convertible
into common stock at a conversion price of $.78. The only anti-dilution
adjustments applicable to the new convertible note would be for stock splits,
stock dividends and the like, except that (1) if any portion of the first
$950,000 raised by CellPoint is at a price less than $.50 per share for common
stock (without reference to any warrants issued in the financing), Castle Creek
will have the right to convert the same principal amount of the new convertible
note into common stock at that price within five (5) days of when they are
notified of the closing of the financing; and (2) if any

<PAGE>

subsequent financings by CellPoint are at a price less than $.70 per share for
common stock (without reference to any warrants issued in the financing), Castle
Creek will have the right to convert the same principal amount of the new
convertible note into common stock at that price within five (5) days of when
they are notified of the closing of the financing. CellPoint would covenant not
to issue equity or equity-equivalent securities at a discount of more than
twenty (20%) percent of the lesser of: (i) the closing market price on the
NASDAQ of the CellPoint common stock on the trading day immediately preceding
the date of issuance of such equity or equity-equivalent securities or (ii) the
average of the daily volume weighted average prices for the preceding five (5)
trading days immediately preceding the date of issuance of such equity of
equity-related securities.

         As of March 31, 2002, Castle Creek had converted $1,275,000 of the
notes into 975,720 shares. Subsequent to March 31, 2002, Castle Creek has
converted $300,000 principal amount of its notes into an aggregate of 417,564
shares of common stock.

         The Loan Restructuring Agreement is subject to a complete finalization
of the Company's debt negotiations and completion of certain financing
transactions. Additionally, the Company will need stockholder approval to
increase the number of authorized Preferred Stock in order to satisfy the
provisions of the Loan Restructuring Agreement. As of March 31, 2002, the
Company had not completed the debt negotiations and the financing transactions
and thus the effects of the Loan Restructuring Agreement have not been reflected
in these financial statements.

         Following each of the debt modifications, the Company applied the rules
of Emerging Issues Task Force ("EITF") 96-19: "Debtor's Accounting for a
Modification or Exchange of Debt Instruments." Based on the provisions of EITF
96-19 it was determined that through December 19, 2001 there was not a
substantial change from the original debt agreement and as such, the modified
debt continues to be presented at fair value using the new effective interest
rate. Legal fees associated with the modifications were expensed in the periods
in which they were incurred. Since the modifications related to the March 13,
2002 amendment have not been finalized, the related accounting effect has not
been reflected in the financial statements.

         Due to the beneficial conversion features associated with the
financing, the Company applied EITF 00-27: Application of EITF No. 98-5
"Accounting for Convertible Securities with Beneficial Conversion Features or
Contingently Adjustable Conversion Ratios", to the convertible instruments. In
accordance with EITF 00-27 the value of the beneficial conversion feature was
recorded as a reduction to the carrying amount of the convertible debt and an
addition to paid-in-capital. The fair value of the warrants granted in
connection with the financing and the amendments thereto was calculated using
the Black Scholes pricing model and recorded as a further reduction to the
carrying amount and an addition to paid-in-capital.

         As a result of the private placements at the end of the first quarter
the anti-dilution provision attached to the warrants issued on July 25, 2001
became effective. As such, the Company recalculated and adjusted the exercise
price and therefore adjusted the number of shares issuable upon exercise of the
warrants. This resulted in an adjusted exercise price of $1.42 and additional
shares of 608,235 issuable upon exercise of the warrants. The adjustment to the
exercise price of the warrants increased the value of the warrants recorded as
debt discount by $263,553. The terms of this warrant were further modified by
the Stipulation and Order discussed above. As a result of the changes provided
by the Stipulation and Order, a further discount of $370,256 was recorded. The
effects of the proposed terms set out in the March 13, 2002 amendment have not
yet been determined.

The Company has therefore recorded a total debt discount of approximately
$4,148,000 and is amortizing the discount over the term of the debt.
Amortization is accelerated when necessary for conversions of the debt
principal. Amortization for the three and nine months periods ended March 31,
2002 and 2001 was approximately $567,000 and $2,171,000, $384,000 and $511,000,
respectively, and is recorded as a component of financial items.
See also Note 9.

4        EQUITY FINANCING

         As a result of the private placements which took place in September,
2001 the Company recorded approximately $859,000 as Stock subscriptions
receivable in Stockholders' equity at September 31, 2001 and December 31, 2001.
In the quarter ended March 31, 2002, the Company ascertained that the Stock
subscription receivable was not collectible and thus the Company has written off
the receivable. This write-off has no effect on the Company's income statement
or total stockholders' equity.

<PAGE>


         On January 31, 2002 the Company completed the closing of a private
placement of Common Stock and warrants pursuant to which it issued an aggregate
of 848,939 shares of Common Stock for proceeds of $655,000. In addition, the
Company issued warrants to purchase 424,472 shares of the Company's Common
Stock, exercisable at $1.50 per share for two years.

5        LIQUIDATION OF SUBSIDIARIES

         In October 2001, the Company's subsidiary, Unwire, filed for protection
under the bankruptcy courts in Sweden. As a result of the filing the Company
ceased all funding of Unwire operations. The bankruptcy courts have appointed a
Trustee to oversee the disbursement of Unwire's assets and the Company now has
no control over the operations or decision-making capabilities of Unwire. As a
result, effective October 9, 2001,Unwire is no longer included in the
Consolidated financial statements. Results of operations and the financial
position of Unwire in prior periods have been presented as discontinued
operations.

         The Company's South African subsidiary, CellPoint Systems SA (Pty) Ltd
("Systems SA"), also filed for bankruptcy protection under the laws of South
Africa in November 2001. Systems S.A. operated a research and development
facility for the Company. The telematics portion of Systems SA had already been
recorded within the amounts presented as discontinued operations. The location
services portion of Systems SA is not included in discontinued operations, and
those functions will continue to be performed by the Company's Swedish
subsidiary. Costs of closing this subsidiary, primarily the write-off of the
intercompany net receivable from Systems SA, were accrued in the June 30, 2001
financial statements.

         On November 2, 2001 the Company's subsidiary in England, CellPoint
Europe Ltd.("CellPoint Europe"), filed for liquidation by the appointed
liquidator. The functions performed by CellPoint Europe are now performed by the
Swedish subsidiary CellPoint Systems AB and its branch office in the United
Kingdom.

         The assets, liabilities and results of operations of Systems SA and
CellPoint Europe were immaterial to the financial statements of the Company for
all periods presented.

         On April 3 the Company's dormant subsidiary, Micronet MLS AB in Sweden,
was liquidated through bankruptcy. All of the Company's operations in Sweden are
now maintained by CellPoint Systems AB, which was placed in bankruptcy on May 2,
2002 (See Note 11).


6        SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>


                                                                           NINE MONTHS ENDED
                                                                          MARCH 31,    MARCH 31,
                                                                            2002         2001
         <S>                                                             <C>          <C>

         Cash paid during the year for:
         Interest related to continuing operations ....................  $  389,703   $  191,959
         Interest related to discontinued operations ..................       4,796       11,458


         Non-cash transactions relating to investing and financing
           activities:
         Discount on debt issued ......................................   1,370,272    2,807,942
         Conversion of convertible debt to common stock ...............   1,000,000           --

</TABLE>

<PAGE>

7        RESTRICTED CASH

Certain cash is restricted in accordance with bank performance guarantees
whereby in the event the Company does not fulfill certain contracts, the cash
will be disbursed to the related customer. As of March 31, 2002, the Company has
two bank performance guarantees amounting to approximately $386,000, one of
which for approximately $193,000 expires on December 31, 2004 but will
automatically be reduced by approximately $138,000 on January 1, 2003. The
second performance guarantee for approximately $193,000 expires on October 30,
2002.

8        FINANCIAL ITEMS, NET

<TABLE>


                                                                    THREE MONTHS ENDED             NINE MONTHS ENDED
                                                                MARCH 31,       MARCH 31,       MARCH 31,       MARCH 31,
                                                                  2002            2001            2002            2001
         <S>                                                   <C>             <C>             <C>             <C>

         Interest income ..................................    $     4,954     $    93,185     $    13,936     $   256,080

         Interest expense .................................       (750,766)       (726,982)     (2,765,342)     (1,642,865)
         Other financial expense  (Net) ...................       (207,426)                             --               ()
         Realized foreign exchange gains/(loss) (*) .......        (72,344)             --        (322,378)
                                                               -------------------------------------------     -----------
         Financial items, net .............................    $(1,025,580)    $  (633,797)    $(3,311,307)     (1,386,785)
                                                               ---------------------------

</TABLE>

(*) Includes a gain of $127,506 for the nine months ended March 31, 2002 related
to cumulative translation adjustments recorded in prior periods relative to
foreign subsidiaries now liquidated (See Note 5).

9        DUE TO RELATED PARTY

Bank debt of $725,750 to finance group operations had been personally guaranteed
by certain stockholders of CellPoint Inc. CellPoint Inc. agreed to reimburse
these shareholders for amounts paid by these shareholders if the guarantee was
called by the bank. These shareholders have agreed to defer the repayment of
this amount which the bank claimed in the quarter ended December 31, 2001 until
April 15, 2003. The parties further agreed that no interest will be charged. As
a result, the amount payable to these shareholders has been classified as a
long-term liability in the accompanying financial statements.

         The shareholders have also agreed to restructure their debt in terms
similar to the preliminary Loan Restructuring Agreements agreed to by the
Company's other debt holders. The Loan Restructuring Agreement is subject to a
complete finalization of the Company's debt negotiations and completion of
financing necessary to address current needs without resort to bankruptcy. As of
March 31, 2002, the Company had not completed the debt negotiations and the
financing and thus the effects of the Loan Restructuring Agreement have not been
reflected in these financial statements.

10       OTHER INTANGIBLE ASSETS


                                                        MARCH 31,    June 30,
                                                           2002        2001

         Acquired franchising concept, net of
                 amortization of $1,000,000
                 and $777,780                          $       --   $  222,220
         Capitalized software development costs, net
         of amortization of $244,452
         and $Nil (a)                                   1,568,400      789,574
         Patents, net of amortization of $95,407
         and $91,060                                           --       95,407
                                                       ----------   ----------
                                                       $1,568,400   $1,107,201
                                                       ----------   ----------

(a)      Capitalization of software development costs

         Software development costs for products and certain product
enhancements are capitalized subsequent to the establishment of their
technological feasibility (as defined in Statement of Financial Accounting
Standards No. 86) based upon the existence of working models of the products
which are ready for initial customer testing. Costs incurred prior to

<PAGE>


such technological feasibility or subsequent to a product's general release to
customers are expensed as incurred. During three and nine months ended March 31,
2002 and 2001, the Company capitalized costs of approximately $853,000 and
$1,023,000 and $Nil and $Nil, respectively primarily attributable to the MLS 6.0
and MLB 1.0 projects. Amortization starts when the product is available for
general release to customers. Amortization expense for the three and nine months
ended March 31, 2002 and 2001 is approximately $145,000 and $244,000 and $Nil
and $Nil, respectively. Amortization expense is primarily related to MLS 5.0
which was released in November 2001.

11       SUBSEQUENT EVENTS

(a) Lawsuit settlement:

In April 2002, the Company reached a settlement of its malpractice lawsuit
against its former legal counsel which will result in income in the fourth
quarter. The net effects of the total settlement have not been reflected in the
accompanying financial statements.

         (b) Restructuring:

In March 2002, the Company initiated a process to renegotiate its long term and
short term notes payable as well as accounts payable. This process resulted in
agreements reached regarding the notes payable subject to certain other
restructuring of the Company's liabilities (See Note 3). The Company approached
all of its short term creditors, the majority of whom agreed in April to accept
25% of their balances owed in order to avoid a formal bankruptcy proceeding. By
April 22, the voluntary settlement agreements were completed in CellPoint Inc.
On April 3, 2002, the Company announced it was proceeding with 'official
composition' to complete the financial reconstruction of its Swedish subsidiary,
CellPoint Systems AB, under the Swedish Company Reconstruction Act. The
'official composition' can be used if a majority of the creditors accept the
composition which forces the minority of the creditors to accept the settlement
payments offered.

However, on May 2, 2002, CellPoint Systems AB ("Systems AB"), the primary
operating subsidiary of the Company, was placed into bankruptcy by a creditor
and on May 10, 2002, the Trustee denied the Company's appeal to put aside the
formal bankruptcy in favor of allowing the Company to proceed with its formal
restructuring under Swedish Bankruptcy Law instead of under the Swedish
Reconstruction Act. As a result of the formal bankruptcy proceeding, the Company
no longer owns or controls Systems AB. As of May 17, 2002 the Trustee has
determined that the tangible and intangible assets of Systems may be repurchased
by the Company. The Company is in negotiations with the Trustee for a mutually
acceptable price.

 As of March 31, 2002, unaudited summarized financial information of Systems AB
prior to the bankruptcy proceeding was approximately as follows:

         Current assets                                      $  790,000
         Intangible assets                                    1,568,000
         Property and equipment                                 546,000
                                                             ----------
              Total assets                                   $2,904,000
                                                             ----------

         Current liabilities                                 $2,345,000
         Net amounts due to the Company                         116,000
                                                             ----------
              Total liabilities                              $2,462,000
                                                             ----------

As part of the voluntary restructuring process the Company had also approached
the creditors of CellPoint Inc., the majority of whom had also accepted a 75%
reduction in their balances as part of the restructuring. By April 22, the
voluntary settlement agreements were completed with all creditors in CellPoint
Inc. None of the above transactions or events have been recorded in the
financial statements as of and for the periods ended March 31, 2002

<PAGE>


                                    SIGNATURE


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

                     CELLPOINT INC.


                     By:     /s/ Lynn Duplessis
                         -------------------------------
                                 Lynn Duplessis
                            Executive Vice President



Date: May 20, 2002