~~Table of Contents~~UNITED STATES

~~UNITED STATES~~ SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~May~~ March 31, ~~2005,~~ 2009.

o ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the period from ~~________________~~ to ~~_________________~~

Commission file number 0-26140

REMOTE DYNAMICS, INC. (Exact name of registrant as specified in its charter)

(Exact name of registrant as specified in its charter)

Delaware		51-0352879
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Delaware (State or other jurisdiction of incorporation or organization)		51-0352879 (I.R.S. Employer Identification No.)
400 CHISHOLM PLACE, SUITE 411 PLANO, TEXAS		75075
1155 Kas Drive, Suite 100, Richardson, Texas (Address of principal executive offices)		75081 (Zip Code)
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (~~972~~214) ~~301-2000~~ 440-5200

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

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

Indicate by check mark whether the ~~Registrant~~registrant ishas ansubmitted ~~accelerated~~electronically ~~filer~~and ~~(as~~posted ~~defined~~on its incorporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule ~~12b~~ 405 of Regulation S-2T (Section 232.405 of this chapter) during the ~~Exchange~~preceding ~~Act). Yes~~12 omonths No(or þfor such shorter period that the registrant was required to submit and post such reports).

~~APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS;~~ Yes x No ¨

Indicate by check mark whether the registrant ~~has~~is ~~filed~~a ~~all~~large ~~documents~~accelerated ~~and~~filer, ~~reports required by~~an ~~Sections 12~~accelerated filer, 13a non-accelerated filer, or ~~15(d)~~a ofsmaller ~~the~~reporting ~~Securities~~company. ~~Exchange~~See the ~~Act~~definitions of ~~1934~~“large ~~subsequent~~accelerated tofiler,” ~~the~~“accelerated ~~distribution~~filer” ofand “smaller ~~securities~~reporting ~~under~~company” ain ~~plan~~Rule ~~confirmed~~12b-2 byof athe ~~court~~Exchange Act. ~~Yes~~(Check ~~þ No o~~ one):

~~Indicate~~Large ~~the~~Accelerated ~~number~~Filer of¨ ~~shares~~Accelerated ~~outstanding~~Filer of¨ ~~each~~Non-accelerated ofFiler ~~the~~¨ ~~registrant’s~~Smaller ~~classes~~reporting ofcompany ~~common stock, as of the latest practicable date.~~ x

	Number of Shares Outstanding as of
Title of each class	July 14, 2005
Common Stock, $.01 par value		7,325,937

(Do not check if a smaller reporting company)

~~REMOTE~~Indicate by ~~DYNAMICS,~~check ~~INC.~~mark ~~AND~~whether ~~SUBSIDIARIES~~the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

~~Form 10-Q~~ Yes ¨ No x

~~INDEX~~APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

		PAGE
		NUMBER
PART I.	FINANCIAL INFORMATION
Item 1	Condensed Consolidated Financial Statements:
	Condensed Consolidated Balance Sheets at May 31, 2005 (Unaudited) and August 31, 2004		3
	Condensed Consolidated Statements of Operations (Unaudited) for the three and nine months ended May 31, 2005 and 2004		4
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended May 31, 2005 and 2004		5
	Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited) for the nine months ended May 31, 2005		6
	Notes to Condensed Consolidated Financial Statements		7-31
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		31
Item 3	Quantitative and Qualitative Disclosures About Market Risk		43
Item 4	Controls and Procedures		43
PART II.	OTHER INFORMATION
Item 1	Legal Proceedings		43
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		46
Item 6	Exhibits		50
Signatures			51
EXHIBITS:
Certification Pursuant to Section 302
Certification Pursuant to Section 302
Certification Pursuant to Section 906
Certification Pursuant to Section 906

Indicate by check mark whether the registrant has filed all documents and reports required by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

2 Yes x No ¨

~~Table~~APPLICABLE ONLY ofTO ~~Contents~~CORPORATE ISSUERS

~~REMOTE~~State ~~DYNAMICS,~~the number ~~INC.~~of ~~AND~~shares ~~SUBSIDIARIES~~outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)

Title of each class		Number of Shares Outstanding as of May 13, 2009
Common Stock, $.0001 par value		5,157,670,279

	Unaudited
	May 31,			August 31,
	2005			2004
ASSETS
Current assets:
Cash and cash equivalents	$	1,973		$	1,312
Restricted cash		—			439
Accounts receivable, net		2,903			2,700
Inventories		658			674
Deferred product costs — current portion		829			980
Lease receivables and other current assets		865			987
Total current assets		7,228			7,092
Property and equipment, net		3,925			4,283
Deferred product costs — non-current portion		813			1,085
Goodwill		19,724			19,724
License right, net		888			1,207
Other intangibles, net		474			1,085
Lease receivables and other assets, net		816			1,280
Total assets	$	33,868		$	35,756
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,626		$	2,167
Deferred product revenues — current portion		2,003			2,374
Note payable — SDS		1,750			—
Accrued expenses and other current liabilities		2,190			5,335
Total current liabilities		7,569			9,876
Deferred product revenues — non-current portion		2,070			3,174
Note payable — HFS		2,000			2,000
Other notes payable		521			741
Other non-current liabilities		320			466
Total liabilities		12,480			16,257
Redeemable preferred stock — Series A		3,542			—
Stockholders’ equity:
Common stock		83			75
Treasury stock		(1,860	)		(1,860	)
Additional paid-in capital		25,064			22,297
Deferred stock compensation		(814	)		(472	)
Accumulated deficit		(4,627	)		(541	)
Total stockholders’ equity		17,846			19,499
Total liabilities, redeemable preferred stock and stockholders’ equity	$	33,868		$	35,756

REMOTE DYNAMICS, INC. AND SUBSIDIARIES

~~See accompanying notes to condensed consolidated financial statements.~~Form 10-Q

3 INDEX

		PAGE
		NUMBER

PART I. FINANCIAL INFORMATION

Item 1	Financial Statements (unaudited)

	Consolidated Balance Sheets (Unaudited) at March 31, 2009
	and December 31, 2008	3

	Consolidated Statements of Operations (Unaudited)
	for the three months ended March 31, 2009 and 2008	4

	Consolidated Statements of Stockholders’ Equity (Unaudited)
	for the three months ended March 31, 2009	5

	Consolidated Statements of Cash Flows (Unaudited)
	for the three months ended March 31, 2009 and 2008	6

	Notes to Unaudited Consolidated Financial Statements	7

Item 2	Management’s Discussion and Analysis of Financial Conditions
	and Results of Operations	23

Item 3	Controls and Procedures	27

PART II.	OTHER INFORMATION

Item 1	Legal Proceedings	27

Item 3	Defaults	28

Item 6	Exhibits	28

Signature		29

EXHIBITS:

EX – 31.1 Certification Pursuant to Section 302
EX – 32.1 Certification Pursuant to Section 906

~~REMOTE DYNAMICS, INC. AND SUBSIDIARIES~~ 2

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~ITEM ~~(UNAUDITED)~~1: FINANCIAL ~~(in thousands, except per share data)~~STATEMENTS

	Reorganized			Predecessor			Reorganized			Predecessor
	Company			Company			Company			Company
	Three Months			Three Months			Nine Months			Nine Months
	Ended May 31,			Ended May 31,			Ended May 31,			Ended May 31,
	2005			2004			2005			2004
Revenues:
Product	$	261		$	339		$	784		$	962
Ratable product		553			1,171			2,014			3,927
Service		3,430			3,764			10,256			13,169
Total revenues		4,244			5,274			13,054			18,058
Cost of revenues:
Product		294			97			652			662
Ratable product		317			537			939			1,869
Service		1,465			1,798			4,764			6,801
Total cost of revenues		2,076			2,432			6,355			9,332
Gross profit		2,168			2,842			6,699			8,726
Expenses:
General and administrative		1,268			1,612			3,901			5,262
Customer service		359			438			1,166			1,787
Sales and marketing		968			270			2,175			1,994
Engineering		305			584			940			1,453
Depreciation and amortization		693			1,052			2,009			3,270
Impairment loss on license right		—			28,759			—			28,759
		3,593			32,715			10,191			42,525
Operating loss		(1,425	)		(29,873	)		(3,492	)		(33,799	)
Interest income		61			96			204			325
Interest expense		(88	)		(3	)		(251	)		(904	)
Other income (expense)		(48	)		(23	)		(258	)		313
Loss before reorganization items		(1,500	)		(29,803	)		(3,797	)		(34,065	)
Reorganization items		(8	)		(1,827	)		(22	)		(2,190	)
Net loss		(1,508	)		(31,630	)		(3,819	)		(36,255	)
Preferred stock dividends		(101	)		—			(267	)		—
Net loss attributable to common shareholders	$	(1,609	)	$	(31,630	)	$	(4,086	)	$	(36,255	)
Basic and diluted loss per share:
Net loss per share	$	(0.24	)	$	(3.27	)	$	(0.64	)	$	(3.75	)
Weighted average number of shares outstanding:
Basic and diluted		6,596			9,672			6,398			9,671

REMOTE DYNAMICS, INC. AND SUBSIDIARIES

~~See accompanying notes to condensed consolidated financial statements.~~CONSOLIDATED BALANCE SHEETS

4(in thousands, except share amounts)

	March 31,			December 31,
	2009			2008
	(unaudited)
ASSETS

Current assets:
Cash and cash equivalents	$	76		$	-
Accounts receivable, net of allowance for doubtful accounts
of $66 and $85, respectively		650			803
Inventories, net of reserve for obsolescence of $7 and $7, respectively		157			153
Deferred product costs - current portion		586			580
Lease receivables and other current assets, net		230			246
Total current assets		1,699			1,782

Property and equipment, net of accumulated depreciation
and amortization of $228 and $212, respectively		92			102
Deferred product costs - non-current portion		349			352
Goodwill		616			616
Customer Lists, net		1,472			1,610
Software, net		459			502
Tradenames, net		40			44
Deferred financing fees, net		108			135
Lease receivables and other assets, net		22			22
Total assets	$	4,857		$	5,165

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Accounts payable	$	1,156		$	1,363
Accounts payable - related parties		164			110
Deferred product revenues - current portion		970			952
Series A convertible notes payable		3,045			3,646
Series B convertible notes payable (net of discount of $1,070 and $1,301, respectively)		5,879			5,834
Note payable - related parties		250			250
Accrued expenses and other current liabilities		2,619			2,392
Accrued expenses and other current liabilities - related parties		112			106
Total current liabilities		14,195			14,653

Deferred product revenues - non-current portion		584			588
Other non-current liabilities		30			34
Total liabilities		14,809			15,275
Commitments and contingencies
Redeemable Preferred Stock - Series B (3% when declared, $10,000 stated value,
650 shares authorized, 522 shares issued and outstanding at
March 31, 2009 and December 31, 2008, respectively (redeemable in
liquidation at an aggregate of $5,220,000 at March 31, 2009)		134			134
Redeemable Preferred Stock - Series C (8% cumulative, $1,000 stated value,
10,000 shares authorized, 5,379 and 5,274 shares issued and outstanding at
March 31, 2009 and December 31, 2008, respectively (redeemable in
liquidation at an aggregate of $5,379,000 at March 31, 2009)		-			-
Stockholders' deficit:
Common stock, $0.0001 par value, 5,000,000,000 shares authorized, 4,737,534,793
shares issued and 4,737,534,746 outstanding at March 31, 2009;
677,858,548 shares issued and 677,858,501 outstanding at December 31, 2008;		474			68
Treasury stock, 47 shares at March 31, 2009 and December 31, 2008,
respectively, at cost, retroactively restated		-			-
Additional paid-in capital		2,056			1,675
Accumulated deficit		(12,616	)		(11,987	)
Total stockholders' deficit		(10,086	)		(10,244	)
Total liabilities and stockholders' deficit	$	4,857		$	5,165

~~REMOTE~~The accompanying ~~DYNAMICS,~~notes ~~INC.~~are ~~AND~~an ~~SUBSIDIARIES~~integral part of these consolidated financial statements.

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)~~3

	Reorganized			Predecessor
	Company			Company
	Nine Months			Nine Months
	Ended May 31,			Ended May 31,
	2005			2004
Cash flows from operating activities:
Net loss	$	(3,819	)	$	(36,255	)
Adjustments to reconcile net loss to cash used in operating activities:
Reorganization expense		22			2,190
Impairment loss on license right		—			28,759
Depreciation and amortization		1,079			1,309
Amortization of license rights and other intangibles		930			1,961
Amortization of discount on notes payable		—			30
Provision for bad debts		201			878
Amortization of deferred service revenues		(39	)		(214	)
Loss on equipment retired or sold		179			207
Non-cash stock compensation		—			2
Non-cash expense on repricing of warrants		85			—
Changes in operating assets and liabilities:
Decrease in restricted cash		439			—
(Increase) decrease in accounts receivable		(271	)		1,467
Decrease in inventory		16			1,100
Decrease in deferred product costs		423			1,259
(Increase) decrease in lease receivables and other assets		705			(226	)
Decrease in accounts payable		(541	)		(1,535	)
Decrease in deferred product revenues		(1,475	)		(2,199	)
Increase (decrease) in accrued expenses and other liabilities		929			(7,769	)
Net cash used in operating activities before reorganization items		(1,137	)		(9,036	)
Reorganization items:
Reorganization expense		(22	)		(2,190	)
Reclassification of long-term debt subject to compromise		—			(14,303	)
(Decrease) increase in restructuring accruals		(2,954	)		2,081
Increase in liabilities subject to compromise		—			22,127
Net cash used in operating activities		(4,113	)		(1,321	)
Cash flows from investing activities:
Additions to property and equipment		(735	)		(339	)
Net cash used in investing activities		(735	)		(339	)
Cash flows from financing activities:
Proceeds from issuance of Series A preferred stock and warrants, net of offering costs		4,651			—
Proceeds from issuance of note payable to SDS		1,750			—
Dividends paid on preferred stock		(267	)		—
Payments on capital leases and other note payables		(625	)		(131	)
Proceeds from exercise of stock options		—			4
Proceeds from sale of assets		—			5
Net cash (used in ) provided by financing activities		5,509			(122	)
Increase (decrease) in cash and cash equivalents		661			(1,782	)
Cash and cash equivalents, beginning of period		1,312			5,105
Cash and cash equivalents, end of period	$	1,973		$	3,323
Supplemental cash flow information:
Interest paid	$	244		$	998
Non-cash investing and financing activities:
Discharge of debt and exchange of common stock under the plan of reorganization	$	1,311		$	—
Conversion of related party liability to capital contribution	$	—		$	2,066
Purchases of assets through capital leases and other note payables	$	489		$	63

REMOTE DYNAMICS, INC. AND SUBSIDIARIES

~~See~~CONSOLIDATED STATEMENTS ~~accompanying~~OF ~~notes~~OPERATIONS ~~to condensed consolidated financial statements.~~ (UNAUDITED)

5(In thousands, except per share amounts)

	Three months ended
	March 31,
	2009			2008
Revenues
Service	$	944		$	804
Ratable product		307			336
Product		38			65
Total revenues		1,289			1,205

Cost of revenues
Service		320			355
Ratable product		188			113
Product		4			13
Total cost of revenues		512			481
Gross profit		777			724
Expenses:
General and administrative		432			401
Sales and marketing		186			185
Engineering		177			226
Depreciation and amortization		201			203
Total expenses		996			1,015
Operating loss		(219	)		(291	)
Other income (expenses):
Interest income		5			15
Interest expense		(415	)		(825	)
Total other income (expenses)		(410	)		(810	)
Loss before income taxes		(629	)		(1,101	)
Income tax benefit		-			-
Net loss		(629	)		(1,101	)

Net loss per common share - basic and diluted	$	(0.00	)	$	(122.33	)
Weighted average number of common shares outstanding:
Basic and diluted		2,938,312			9

~~REMOTE~~The accompanying ~~DYNAMICS,~~notes ~~INC.~~are ~~AND~~an ~~SUBSIDIARIES~~integral part of these consolidated financial statements.

~~CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED) (in thousands, except share information)~~4

					Additional
	Common Stock				Paid-in			Deferred			Treasury Stock					Accumulated
	Shares		Amount		Capital			Comp.			Shares		Amount			Deficit			Total
Stockholders’ equity at August 31, 2004		7,450,000	$	75	$	22,297		$	(472	)		929,948	$	(1,860	)	$	(541	)	$	19,499
Issuance of common stock under plan of reorganization		393,568		4		1,307														1,311
Issuance of warrants in connection with Series A preferred stock offering						1,037														1,037
Issuance of Series A preferred stock dividends																	(267	)		(267	)
Repricing of warrants						85														85
Exercise of warrants		337,317		3		(3	)													—
Issuance of restricted stock		75,000		1		67			(68	)										—
Change in deferred stock compensation						274			(274	)										—
Net loss																	(3,819	)		(3,819	)
Stockholders’ equity at May 31, 2005		8,255,885	$	83	$	25,064		$	(814	)		929,948	$	(1,860	)	$	(4,627	)	$	17,846

REMOTE DYNAMICS, INC. AND SUBSIDIARIES

~~See~~CONSOLIDATED STATEMENTS ~~accompanying~~OF ~~notes~~STOCKHOLDERS' ~~to condensed consolidated financial statements.~~ DEFICIT

6FOR THE PERIOD JANUARY 1, 2008 THROUGH MARCH 31, 2009

~~Table~~(in thousands, ofexcept ~~Contents~~share information)

REMOTE DYNAMICS, INC. AND SUBSIDIARIES

					Additional
	Common Stock				Paid-in			Treasury Stock				Accumulated
	Shares		Amount		Capital			Shares		Amount		Deficit			Total

Balance, January 1, 2008		3,437	$	14	$	897			47	$	-	$	(9,304	)	$	(8,393	)

Common stock issued for services		894		-		14			-		-		-			14
Common stock issued as partial principal payments on Series A Notes		55,669,326		4		555			-		-		-			559
Common stock issued as partial principal payments on Series B Notes		17,873,879		2		267			-		-		-			269
Conversion of Series C preferred stock		604,310,965		48		(60	)		-		-		-			(12	)
Issuance of warrants in connection with Series B debt offering						2			-		-		-			2
Net loss		-		-		-			-		-		(2,683	)		(2,683	)

Balance, December 31, 2008		677,858,501	$	68	$	1,675			47	$	-	$	(11,987	)	$	(10,244	)

Common stock issued as partial principal payments on Series A Notes		3,011,738,755		301		300			-		-		-			601
Common stock issued as partial principal payments on Series B Notes		1,047,937,537		105		81			-		-		-			186
Net loss (unaudited)									-		-		(629	)		(629	)

Balance, March 31, 2009 (unaudited)		4,737,534,793	$	474	$	2,056			47	$	-	$	(12,616	)	$	(10,086	)

~~Notes~~The accompanying Tonotes ~~Condensed~~are ~~Consolidated~~an ~~Financial~~integral ~~Statements~~part of these consolidated financial ~~(Unaudited)~~statements.

~~1. Business Overview, Reorganization and Going Concern~~ 5

~~Business Overview~~REMOTE DYNAMICS, INC. AND SUBSIDIARIES

~~Remote~~CONSOLIDATED STATEMENTS ~~Dynamics,~~OF ~~Inc.,~~CASH aFLOWS ~~Delaware corporation~~ (~~the “Company”~~UNAUDITED) markets, sells and supports automatic vehicle location (“AVL”) and mobile resource management solutions targeting companies that operate private vehicle fleets. Management believes the growth potential for AVL and mobile resource management solutions is significant. The Company estimates that there are currently approximately 21 million commercial fleet vehicles in operation in the United States and only one million AVL units are installed. Of the one million currently installed units, most are used on the long haul trucking and public transit segments, which the Company estimates are 30% -50% penetrated. Based on research conducted by the Company, management believes the market for AVL products may grow approximately 20% per year over the next three years.

Management believes the marketplace of providers for AVL and mobile resource management solutions is fragmented with few players that are able to offer a high capacity platform, flexible software solutions and proven coast-to-coast service and support such as that provided by the Company. The Company believes to take advantage of the marketplace, it must bring to market new AVL and mobile resource management solutions that utilize wireless Internet protocol networks such as General Packet Radio System (“GPRS”) that provide the information, mapping and management reporting via a web-based and service bureau-based environment. Anticipated marketplace needs include; 1) ability for the AVL mobile device to function as a communications hub for personal computers and handheld devices, 2) ability to communicate with WiFi hotspots, 3) ability to integrate with a variety of in~~-vehicle sensors and 4) ability to integrate the AVL information into~~ ~~existing customer legacy applications.~~ thousands)

The Company commercially launched its new product offering, REDIview™ , during January 2005. REDIview is an Internet and service bureau-based software application that provides an extensive array of real-time and accurate mapping, trip replay, and vehicle activity reports. REDIview includes a series of exception-based reports designed to highlight inefficiencies in the operations of a vehicle fleet. Utilizing GPRS technology and the Company’s proven, high-capacity network service center, customers may access their information securely through the Internet from any personal computer or certain other devices. REDIview incorporates technologies that allow for fast and effective integration into legacy applications operated by companies with vehicle fleets and mobile workers. This design allows companies to easily extend their existing supply chain management systems to the mobile workforce for transaction processing and customer fulfillment. REDIview was also designed to be hardware and network agnostic to provide the maximum flexibility in designing solutions that best fit the customer’s specific needs.

	Three Months Ended March 31,
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(629	)	$	(1,101	)
Adjustments to reconcile net loss to cash used in
operating activities
Depreciation and amortization		16			18
Amortization of customer lists and other intangibles		185			185
Amortization of debt discount		3			2
Amortization of deferred financing fees		27			24
Accretion of Series A notes		-			392
Accretion of Series B notes		228			183
Provision for bad debt		63			25
Common stock issued for services		-			14
Changes in operating assets and liabilities:
Accounts receivable		134			(78	)
Due from related parties		-			71
Inventory		(4	)		(43	)
Deferred product costs		(3	)		(52	)
Lease receivables and other assets		(29	)		56
Deferred product revenue		14			(44	)
Accounts payable		(207	)		182
Accounts payable - related parties		(52	)		(33	)
Accrued expenses and other liabilities		224			74
Accrued expenses and other liabilities - related parties		6			22
Net cash used in operating activities		(24	)		(103	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Payments made to acquire property and equipment		(6	)		(6	)
Net cash used in investing activities		(6	)		(6	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit		130			-
Payment of line of credit		(24	)		(69	)
Net cash provided by (used in) financing activities		106			(69	)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		76			(178	)
CASH AND CASH EQUIVALENTS, beginning of year		-			228
CASH AND CASH EQUIVALENTS, end of year		76			50

	Three Months Ended March 31,
	2009			2008
Supplemental Cash Flow Information:
Interest paid	$	2		$	2
Taxes paid	$	-		$	-

Non-Cash Financing & Investing Activities:

Common stock issued for partial principal payment on Series A Notes	$	601		$	124
Common stock issued for partial principal payment on Series B Notes		186			57
Common stock issued for services					14

The ~~REDI 2000™ mobile data logging unit combines global positioning system (GPS) technologies~~ ~~along~~accompanying ~~with~~notes ~~the~~are ~~latest~~an inintegral ~~wireless,~~part ~~Internet protocol-based communications to deliver, throughout the day, real-time location, speed, and other conditions~~ of ~~the~~these ~~vehicle~~consolidated ~~on a minute-by-minute~~financial ~~basis~~statements. ~~In addition, the units may be configured to accept additional sensor inputs regarding operations of the vehicle and vehicle equipment.~~

The Company believes introduction of these new products and associated web-based architecture will provide substantial savings in wireless transmission costs over the GSM circuit-switched data Vehicle Management InformationTM (“VMI”) product and will further allow the Company to substantially reduce its customer support and maintenance costs by avoiding costly maintenance visits to customer premises to service the command and control center component of the VMI system. These new products form the basis of management’s business plan for the 2005 fiscal year and beyond and will be the foundation for expected growth in revenues and ultimately anticipated profitability for the Company. In addition, these products are designed to allow the Company to move to a recurring revenue model for the AVL marketplace, an important and necessary change to the Company’s revenue model to achieve overall sustained revenue growth and cash flow positive operations. 6

~~Voluntary~~REMOTE DYNAMICS, ~~Bankruptcy~~INC. ~~Filing~~AND ~~and Reorganization~~ SUBSIDIARIES

OnNotes February 2, 2004, (the “Commencement Date”), the Company and two of its wholly-owned subsidiaries, Caren (292) Limited (“Caren”) and Minorplanet Systems USA Limited (“Limited”) (the Company, Caren and Limited shall hereinafter collectively be referred to ~~as the “Debtors”) filed~~ ~~voluntary~~Consolidated ~~petitions~~Financial ~~for relief under Chapter 11 of the~~ Statements

7 (Unaudited)

~~Table~~1. ofORGANIZATION, ~~Contents~~BUSINESS OVERVIEW, AND GOING CONCERN

~~United States~~Organization Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Texas Dallas Division (the “Bankruptcy Court”), in order to facilitate the restructuring of their debt, trade liabilities, and ~~other obligations. During the pendency of the bankruptcy, the Debtors~~Business remained in possession of their assets and operated as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and applicable court orders. On February 24, 2004, the United States Trustee appointed an official committee of unsecured creditors (the “Committee”) consisting of representatives of five (5) of the twenty (20) largest unsecured creditors. Overview

~~Under Section 362 of the Bankruptcy Code, the filing of the bankruptcy petition automatically~~The ~~stayed~~consolidated ~~most~~financial ~~actions~~statements ~~against~~presented ~~the~~are ~~Debtors~~those ~~including most actions to collect pre-petition indebtedness or exercise control over the property~~ of ~~the~~Remote ~~Debtors’~~Dynamics, ~~estate~~Inc. ~~The Bankruptcy Court established~~ ~~April 9, 2004 as the bar date for creditors~~ and ~~other~~its ~~parties~~wholly-~~in-interest~~owned ~~(other~~subsidiaries, ~~than~~BounceGPS, ~~governmental entities) to file their proofs of claims and proofs of interest~~Inc. ~~The~~(formerly ~~bar~~known ~~date~~as ~~for governmental~~Huron ~~entities to file their proofs of claims and proofs of interest was May 10~~Holdings, ~~2004~~Inc.) Onand ~~June 15,~~HighwayMaster ~~2004, the Bankruptcy Court entered an order approving the Debtors’ motion for substantive consolidation~~ of ~~the estates of the Company~~Canada, ~~Caren and Limited~~LLC.

OnRemote Dynamics, ~~May 24~~Inc., ~~2004~~a Delaware Corporation, ~~the~~(“Remote ~~Bankruptcy~~Dynamics”, ~~Court~~“Company” ~~entered~~and/or “We”) anwas ~~order~~originally ~~approving~~incorporated ~~the~~on ~~Debtors’~~February ~~Second~~3, ~~Amended~~1994. We market, ~~Disclosure~~sell ~~Statement~~and support automatic vehicle location (“~~Disclosure Statement~~AVL”) ~~for~~and ~~use~~mobile toresource management ~~solicit~~solutions ~~the~~targeting ~~vote~~companies ofthat ~~creditors~~own and ~~equity~~operate private vehicle ~~interest~~fleets, ~~holders~~construction onequipment, ~~the~~and ~~acceptance~~unpowered orassets ~~rejection~~such ofas ~~the~~containers ~~Debtors’~~and trailers. Our ~~plan~~AVL ofsolutions ~~reorganization.~~are ~~The Bankruptcy~~designed ~~Court~~for ~~also~~diverse ~~set~~industry vertical ~~the~~markets ~~record~~such ~~date~~as ~~for~~construction, ~~purposes~~field ofservices, ~~voting~~distribution, onlimousine, electrical/plumbing, ~~the~~waste ~~Debtors’~~management, ~~plan~~and ofgovernment. Our core ~~reorganization~~technology, astelematics, ~~May 21~~combines wireless communications, ~~2004~~GPS location technology, ~~approved~~geospatial ~~solicitation/voting~~solutions ~~procedures~~and ofvehicle ~~the~~data ~~plan~~integration ofwith a ~~reorganization,~~web-accessible ~~and~~application ~~set~~that ~~hearing~~aids onin the ~~confirmation~~optimization of remote business solutions. We believe our fleet management solution contributes to increased operator efficiency by improving the ~~plan~~productivity of ~~reorganization.~~mobile workers through real-time position reports, route-traveled information, and exception based reporting designed to highlight mobile workforce inefficiencies. This in-depth reporting enables our customers to correct those inefficiencies and deliver cost savings to their bottom line.

OnOur REDIview ~~June 17,~~product ~~2004,~~line forms the ~~Debtors~~basis ~~and~~of our current business plan. We expect this product line to provide the ~~Committee~~foundation ~~reached~~for a growth ~~settlement~~in ~~agreement~~revenues onand, ~~several~~if our revenues grow as we anticipate, ultimately ~~matters~~profitability. We ~~regarding~~do ~~the~~not ~~plan~~expect ofto ~~reorganization~~achieve ~~subject~~profitability or positive cash flow for 2009. Our plans for 2009 include growing our subscriber base through direct sales to ~~bankruptcy~~new ~~court~~and ~~approval~~existing ~~(the~~customers ~~“Committee~~and ~~Settlement”)~~continuing to control our operating costs. However, ~~The~~there ~~material~~can ~~terms~~be ofno assurance ~~the~~that ~~Committee~~we ~~Settlement~~will ~~were~~achieve asour ~~follows:~~sales targets for 2009. Failure to do so may have a material adverse effect on our business, financial condition and results of operations. Moreover, despite actions to increase revenue, control operating costs, and to improve profitability and cash flow, our operating losses and net operating cash outflows will continue through 2009.

•August ~~For~~2008 ~~purposes~~Reverse of the Debtors’ plan of reorganization, the Debtors and Committee agreed that the value of the Debtors shall be equal to $25.3 million, such that holders of allowed unsecured claims under the plan of reorganization shall receive 75%, and prior equity holders shall receive 25%, of the 7,000,000 shares of new common stock issued upon confirmation of the plan of reorganization. • The Debtors and the Committee reached agreement on the composition of the Board of Directors of the Company upon emergence from bankruptcy; • The Debtors and the Committee reached agreement on the general terms and conditions of new employment agreements for senior management of the Company. • The Debtors and the Committee reached agreement on the general terms and conditions under which restricted shares would be issued to senior management of the Company. • The Debtors, HFS Minorplanet Funding LLC (“HFS”) and the Committee agreed to amend the April 15, 2004 letter agreement so that the price per share at which HFS may convert the unpaid principal and accrued interest due under the $1.575 million promissory note (later amended and increased to $2.0 million) into common stock of the Company, shall be set at $3.62 per share of common stock, provided that such amount shall be reduced (i) by twenty percent (20%) if such unpaid principal and accrued interest is converted within one (1) year after the date the promissory note was issued or (ii) by fifteen percent (15%) if such unpaid principal and accrued interest is converted more than one (1) year after the date the promissory note was issued.Stock Split

~~The~~On ~~Committee~~August 13, ~~further~~2008, ~~agreed~~we ~~that~~amended itour ~~would~~Amended ~~not object to,~~ and ~~both~~Restated ~~the~~Certificate ~~Committee~~of ~~and~~Incorporation ~~the~~to ~~Debtors,~~(i) ~~using~~effect ~~their~~a ~~best~~one-for-four ~~efforts,~~hundred ~~would~~reverse ~~affirmatively~~stock ~~support~~split ~~approval~~ of ~~the~~our ~~Debtors’~~common ~~plan~~stock ofand ~~reorganization,~~(ii) ~~settlement~~authorize ~~and~~(after ~~confirmation~~giving ofeffect to the ~~Debtors’~~reverse ~~plan~~stock ofsplit) ~~reorganization~~5, ~~in the form as~~000,000,000 ~~modified~~authorized byshares ~~the~~of ~~terms~~our ~~hereof.~~common Onstock ~~June 22,~~having ~~2004,~~a ~~the~~par ~~Debtors~~value ~~filed~~of ~~their~~$0.0001 ~~Third Amended Joint Plan of~~per ~~Reorganization~~share. All toequity ~~incorporate~~transactions ~~the~~have ~~settlement~~been ~~terms~~retroactively ~~reached~~restated ~~with~~to reflect ~~the~~these ~~Committee~~changes.

OnApril ~~June 29,~~2009 ~~2004,~~Increase ~~the Bankruptcy Court entered an order confirming the Debtors’ Third Amended~~in Joint Plan of Reorganization, as Modified (the “Plan”). The Bankruptcy Court also approved the Settlement Agreement between the Debtors and the Committee. The Bankruptcy Court further set the enterprise value of the Company at $25.3Authorized ~~million for purposes of distributions of new common stock~~Common ~~under the Plan. The effective date of the Plan was set by the Debtors pursuant to the Plan as Friday, July 2, 2004 (the “Effective Date”). The Plan was substantially consummated on July 8, 2004.~~ Stock

8On April 17, 2009, we amended our Amended and Restated Certificate of Incorporation to increase our authorized shares of our common stock to 15,000,000,000.

~~Table~~Share ~~of Contents~~Exchange Agreement

InHuron ~~general~~Holdings, ~~pursuant~~Inc., a Nevada Corporation, (“HHI”) was originally incorporated on December 15, 1999. HHI provided local courier delivery services to commercial and residential locations in the ~~Plan,~~Phoenix asarea. HHI utilized a fleet of ~~the~~delivery ~~Effective~~vans ~~Date:~~to perform these services on a contract basis for international based shipping and logistics companies. On June 30, 2006, HHI purchased certain assets (referred to as “BounceGPS”) from DataLogic International, Inc. On July 17, 2006, HHI changed its name to BounceGPS, Inc. (“BounceGPS”).

• Holders of allowed administrative and priority claims will be paid in cash in the ordinary course as they come due or on such other terms as the parties may agree. Holders of allowed priority tax claims will receive periodic payments as provided under section 1129(a)(9)(C) of the Bankruptcy Code, unless the parties agree to other terms for the payment of such claims. • Holders of allowed secured claims shall receive, at the election of the Debtors, either (i) payment in cash in an amount equivalent to the full amount of such holder’s allowed secured claim; (ii) deferred cash payments over a period of five (5) years after the initial distribution date totaling the amount of such holder’s allowed secured claim, with interest; (iii) the return of the collateral securing such allowed secured claim in full satisfaction of such claim, or (iv) such other treatment as may be agreed to in writing by such holder and the Debtors. • Holders of allowed general unsecured claims received their pro rata share of seventy-five percent (75%) of seven million (7,000,000) shares of the new common stock of the Company on or as soon as practicable after the Effective Date. • Each holder of an allowed convenience claim received cash in an amount equal to fifty percent (50%) of their allowed claims, up to an aggregate maximum of one hundred fifty thousand dollars ($150,000) for all such claims paid as soon as practicable after the Effective Date. • All existing equity interests in the Debtors were extinguished as of the Effective Date. Each holder of an equity interest in the Company that was attributable to existing common stock received a pro rata share of twenty-five percent (25%) of seven million (7,000,000) shares of the new common stock that was not issued to holders of allowed general unsecured claims. The holders of equity interests in the Company, Limited and Caren, other than common stock, did not receive or retain any property under the Plan. • The new common stock and the restricted shares were issued and distributed in accordance with the terms of the Plan without further act or action under applicable law, regulation, order or rule and are exempt from registration under applicable securities law pursuant to section 1145(a) of the Bankruptcy Code. • The Debtors initially distributed 7,000,000 shares of new common stock to satisfy holders of allowed general unsecured claims and holders of equity interests in the Company that were attributable to existing common stock. The initial distribution of 7,000,000 shares of new common stock resulted in the satisfaction of approximately $17.6 million of allowed general unsecured claims. Subsequently, certain rejection claims and other disputed claims were settled and allowed by the bankruptcy court resulting in the issuance of an additional 393,568 shares of common stock during the 2005 fiscal year.

~~Caren~~On November ~~and~~30, ~~Limited~~2006, asRemote aDynamics ~~matter~~entered ofinto ~~law,~~a ~~were~~Share ~~merged~~Exchange Agreement with Bounce ~~and~~Mobile ~~into~~Systems, Inc. (“BMSI”). Pursuant to the ~~Company~~Share Exchange Agreement, ~~ceasing~~Remote Dynamics agreed to ~~exist as~~acquire ~~separate~~from ~~entities~~BMSI as100% of the ~~Effective~~capital ~~Date.~~stock of InBounceGPS, ~~addition~~a provider of mobile asset management solutions, in exchange for 5,000 shares of Remote Dynamics’ newly authorized series C convertible preferred stock, a Series B Note in the principal amount of $660,000, a Series B OID Note in the principal amount of $264,000, an E-7 Warrant to purchase 1,547 shares of Remote Dynamics’ common stock, and a F-4 Warrant to purchase 1,547 shares of Remote Dynamics’ common stock.

•As ~~the~~a ~~Company’s~~result ~~certificate~~ of ~~incorporation~~the ~~was~~securities ~~amended~~issued to ~~and~~BMSI ~~restated~~in tothe ~~change~~Share ~~the~~Exchange ~~Company’s~~Agreement ~~corporate~~and ~~name~~Note toand ~~Remote~~Warrant ~~Dynamics~~Purchase Agreement transactions, ~~Inc.~~BMSI onobtained ~~the~~and ~~Effective~~currently ~~Date;~~has •effective ~~the~~control ~~size~~ of ~~the~~Remote Dynamics’ board ~~was~~of ~~increased to seven (7)~~ directors, ~~with~~management, ~~four~~96.0% ~~(4)~~of ~~new directors being appointed by~~ the ~~Official~~voting ~~Unsecured~~power ~~Creditors’ Committee on behalf~~ of ~~the~~Remote Dynamics’ ~~unsecured~~common ~~creditors~~stock outstanding, and ~~three~~beneficial ~~(3)~~ownership ~~directors~~of toapproximately 62.2% beof ~~appointed~~Remote byDynamics’ ~~the~~common ~~Debtors;~~stock •(on a ~~new~~as-converted, ~~restricted~~fully ~~stock~~diluted basis). Accordingly, ~~plan for key executive officers was approved; •~~ the ~~Company~~acquisition ~~entered~~has ~~into~~been ~~two~~treated ~~(2)~~as ~~year~~a reverse ~~term~~merger ~~employment~~in ~~agreements~~accordance with ~~the~~FAS ~~following~~141 ~~key~~“Accounting ~~executive~~for ~~officers~~Business ~~which~~Combinations” with ~~included~~BounceGPS ~~restricted~~considered ~~stock~~the ~~grants~~accounting ~~to each officer:~~acquirer.

o Dennis R. Casey – President and Chief Executive Officer o J. Raymond Bilbao – Senior Vice President, General Counsel & Secretary o W. Michael Smith – Executive Vice President, Chief Operating Officer, Chief Financial Officer & TreasurerGoing Concern

~~The~~We ~~Plan~~have ~~received~~incurred ~~overwhelming~~significant operating ~~acceptance~~losses ~~with~~since ~~approximately~~our ~~98.6%~~inception, ofand these losses will continue for the near ~~existing~~future. We may not ever achieve profitability. Even if we do achieve ~~stockholders~~profitability, ~~actually~~we may not be able to sustain or increase profits on a quarterly or annual basis. For 2008 and 2007, our independent registered public accounting firm issued an opinion on our financial statements which included an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern.

9 We do not expect to achieve profitability or positive cash flow for 2009. Our plans for 2009 include growing our subscriber base through direct sales to new and existing customers and continuing to control our operating costs. However, there can be no assurance that we will achieve our sales targets for 2009. Failure to do so may have a material adverse effect on our business, financial condition and results of operations.

~~Table~~Critical success offactors ~~Contents~~in our plans to achieve positive cash flow from operations include:

~~voting~~· onAbility ~~the Plan, of which approximately 99.9% voted~~ to ~~accept~~increase ~~the~~sales ~~Plan. Additionally, approximately 75%~~ of the ~~unsecured~~REDIview ~~creditors,~~product ~~who received their prorata share of 75% of the new common stock issued under the Plan, voted to accept the Plan~~line. Under the Plan, holders of the Company’s 13.75% Interest Senior Notes due 2005 and holders of the Company’s common stock as of the close of trading on Friday, July 2, 2004 were entitled to receive their prorata distributions of new common stock under the Plan.

~~Pursuant~~· toSignificant ~~Section 365~~market acceptance of ~~the~~our ~~Bankruptcy~~product ~~Code,~~offerings ~~the~~from ~~Company~~new ~~assumed~~customers, ~~assumed~~including asour ~~modified~~REDIview ~~or rejected~~product ~~certain pre-petition executory contracts and unexpired leases upon the Effective Date. With respect to executory contracts assumed~~line, ~~the~~in ~~Company was required to cure all pre-petition defaults, monetary and otherwise. With respect to executory contracts rejected,~~ the ~~Company~~United is excused from further performance under such agreement and the Bankruptcy Code treats the rejected contract as if it were breached by the Company immediately prior to the Company’s filing of bankruptcyStates. ~~The other contracting party was entitled to a prepetition, general unsecured claim for the damages sustained as a result of the “breach of contract” caused by the rejection.~~

~~Going~~· ~~Concern~~ Maintaining and expanding our direct sales channel.

~~Historically,~~· ~~much~~Training ~~of the Company’s revenues have been derived from products~~ and ~~services~~development ~~sold to the long-haul trucking industry, small to medium-sized companies through its VMI product line and to member companies~~ of ~~SBC~~new Communications, Inc. (“SBC”). The Company expects revenues from these legacy customers to decline substantially during 2005, and for the Company to sustain ongoing business operations and ultimately achieve profitability, it must substantially increase its sales ~~and~~ ~~penetration into the marketplace with competitive products and services such as its REDIview product line~~staff.

~~The~~There ~~Company~~can ~~believes~~be ~~that~~no ~~the~~assurances ~~potential~~that ~~market opportunity for automatic vehicle location~~any ~~products~~of inthese ~~the~~success ~~United~~factors ~~States, such as its GPRS-based REDIview product is significant. The Company currently believes that it~~ will be ~~positioned~~realized ~~with~~or ~~its telematics product lines and proven operations support to take advantage of the significant market potential~~maintained.

OnWe ~~May 31,~~had ~~2005, the Company consummated~~ a ~~bridge~~working ~~loan~~capital ~~and~~deficit ~~security agreement with SDS Capital~~of ~~Group~~$3.6 ~~SPC~~million, ~~Ltd.~~excluding ~~(“SDS”) in which~~ the ~~Company~~gross ~~issued~~outstanding aamount ~~promissory~~of ~~note~~our insecured ~~the~~convertible notes ~~amount~~ of $110.75 0 million to, ~~SDS.~~as ~~The bridge note is secured by the assets~~ of ~~the~~March ~~Company~~31, ~~bears~~2009. We ~~interest~~believe atthat 8%we ~~per annum and~~will ishave ~~due~~sufficient ~~and~~capital ~~payable~~to onfund ~~Sept.~~our ~~30,~~ongoing ~~2005.~~operations ~~The~~through ~~bridge~~2009, ~~note automatically exchanges into a common stock~~assuming ~~purchase~~that ~~warrant~~we ~~with~~are aable ~~5-year term~~ to ~~purchase~~meet ~~1,666,667~~our ~~shares~~sales oftargets ~~common~~and ~~stock~~operating atcost anreduction ~~exercise~~plans ~~price of $0.01 per share~~ and ato ~~common~~negotiate ~~stock~~acceptable ~~purchase~~payment ~~warrant~~arrangements with aour ~~5-year~~senior ~~term to purchase 700,000~~security ~~shares~~holders, ofvendors ~~common~~and ~~stock~~other ~~at an exercise price of $1~~creditors.75 The ~~per~~sufficiency ~~share, subject to approval~~ of ~~the~~our cash ~~Company’s~~resources ~~stockholders.~~depends ~~The Company intends~~ to ~~seek~~a ~~stockholder~~certain ~~approval~~extent ~~for~~on ~~the~~general ~~exchange~~economic, ~~of the~~financial, ~~bridge~~competitive ~~note~~or ~~into~~other ~~the~~factors ~~common~~beyond ~~stock~~our ~~purchase warrants at its annual meeting of stockholders to be held in August of 2005~~control.

~~Management~~We ~~currently~~do ~~does~~ not ~~expect~~currently tohave ~~achieve profitability during the 2005 calendar year~~any ~~since~~arrangements ~~the~~for ~~Company~~additional ~~will~~financing ~~be expanding its sales force~~ and ~~building~~we amay ~~base~~not ofbe ~~customers~~able ~~that~~to ~~purchase~~secure ~~information~~additional ~~and~~debt ~~data~~or ~~services~~equity ~~from~~financing ~~the Company~~ on aterms ~~monthly~~acceptable ~~recurring basis. Key~~ to ~~achieving profitability~~us, isor toat ~~obtain~~all, aat ~~REDIview customer base that provides monthly recurring revenues and~~the ~~corresponding~~time ~~gross~~when ~~margins~~we ~~that~~need ~~exceed~~such ~~operating~~financing. ~~costs~~Further, ~~and~~our ~~expenses~~ability to ~~support~~secure ~~the~~certain ~~REDIview~~types ~~customer~~of ~~base.~~additional ~~Based~~financings onis ~~the~~restricted ~~Company’s~~under ~~latest revised pricing structure, management currently estimates that for~~ the ~~Company~~terms ~~to achieve profitability, it will need to have approximately 74,000~~ of ~~its~~our ~~REDIview~~existing ~~products in service~~financing arrangements. ~~While~~There ~~there~~ can be no ~~assurances,~~assurance ~~based upon the initial market acceptance of the REDIview product line as evidenced by the sales orders received since the launch of the REDIview product line, management currently anticipates~~ that itwe will ~~achieve~~be ~~the REDIview~~able ~~sales~~to ~~results~~consummate ~~forecasted~~a transaction ~~in its revised business plan~~ for ~~the~~additional ~~2005 calendar year. Management further expects that the achievement of REDIview sales targets as forecasted in its revised business plan will provide the Company with sufficient~~ capital prior to ~~fund~~substantially ~~its~~depleting ~~ongoing~~our ~~operations.~~available ~~However~~cash reserves, ~~there can be no assurances that the Company will achieve its REDIview sales targets~~ and ~~the~~our ~~Company’s~~ failure to do so may ~~have~~force aus ~~material~~to ~~adverse~~restructure, file ~~effect~~for ~~upon the Company’s business~~bankruptcy, ~~financial~~sell ~~condition~~assets ~~and~~or ~~results~~cease of operations.

~~SBC~~We ~~has~~have failed ~~selected~~to ancomply ~~alternate~~with ~~vendor~~certain toof ~~supply~~our ~~its~~other ~~next~~obligations ~~generation~~relating ~~AVL~~to ~~product.~~our ~~Although SBC~~secured ~~began~~convertible ~~deactivating~~notes, ~~its~~including ~~units~~our ~~during~~failure ~~the~~to ~~second~~make ~~calendar~~scheduled ~~quarter~~principal ~~of 2005, management currently~~payments ~~believes~~and ~~that~~to ~~SBC~~register ~~will~~for ~~likely~~resale ~~delay deactivating~~ the ~~majority~~shares of ~~its~~common ~~units~~stock ~~for~~underlying ~~several~~the ~~months~~notes and ~~that~~warrants ~~the~~issued ~~deactivation~~in ~~of these units will conclude by~~ the ~~end~~related ofprivate ~~calendar year 2005~~placements. The ~~During the~~notes ~~three~~provide ~~and~~for ~~nine~~a ~~months~~default ~~ended~~interest ~~May 31,~~rate ~~2005,~~of ~~SBC~~10% ~~accounted~~per ~~for~~annum ~~approximately~~on ~~65%~~the ~~and~~outstanding principal ~~61%~~amount of the ~~Company’s~~ ~~total~~notes ~~revenues.~~for ~~Management~~periods ~~currently~~in ~~believes~~which ~~that~~certain ~~under~~specified ~~its~~events ~~revised business plan the~~of ~~Company~~default ~~has~~occur ~~sufficient~~and ~~cash~~are tocontinuing ~~maintain~~and ~~its~~for ~~ongoing~~liquidated ~~operations~~damages ~~without~~for ~~obtaining additional capital~~non-compliance ~~resources.~~with ~~However,~~our ~~the~~registration ~~timing~~obligations. As of ~~the~~March ~~deactivations~~31, by2009, ~~SBC as well as the ability of the Company~~we tohave ~~meet~~accrued ~~its~~$1,901,340 ~~REDIview~~in ~~sales~~default interest and ~~gross~~liquidated ~~margin~~damages ~~projections~~under ~~heavily influence the capital requirements~~our ofsecured ~~the~~convertible ~~Company~~notes.

10 8

~~Table~~Our non-compliance with the terms of ~~Contents~~the notes also exposes us to the risk that our note holders could seek to exercise prepayment or other remedies under the notes. We have received one outstanding notice of default from a holder of our Series A Notes. The notice demands immediate payment in cash of $287,500. To date, we have made no payment in respect of the note holder demand and it remains outstanding

IfIn ~~the~~March, 2008, ~~Company~~we ~~fails~~resumed tomaking ~~achieve~~payments ~~its~~to ~~current~~certain ~~sales~~of ~~and~~our ~~gross~~note ~~margin~~holders ~~projections~~of asamounts ~~forecasted~~due inunder ~~its~~the ~~revised~~notes ~~business plan~~by ~~and/or~~issuing ~~SBC~~shares ~~deactivates~~of ~~the~~our ~~Company’s~~common ~~units~~stock ~~sooner~~under ~~than~~the isterms ~~currently~~of ~~anticipated in~~ the ~~Company’s~~notes. In ~~projections,~~ the ~~Company~~first ~~may~~quarter beof ~~required~~2009, towe ~~raise~~issued ~~additional~~3,011,738,755 ~~capital~~shares of ~~funding.~~common ~~Currently, management~~stock ~~believes~~as ~~that~~partial ~~should~~principal ~~additional~~payments ~~funding~~on bethe ~~obtained,~~Series itA ~~will~~Notes bein satisfaction ~~raised~~of ~~through~~$601,381 ~~issuance~~ of ~~debt~~obligations ordue ~~equity~~under ~~securities~~the notes. ~~However~~ Additionally, ifduring ~~additional~~the ~~capital~~first ~~funding~~quarter isof ~~required~~2009, ~~there~~we ~~can be no~~issued ~~assurance~~1,047,937,537 ~~that~~shares ~~the~~of ~~Company~~common ~~will~~stock beas ~~able~~partial topayments ~~raise~~on the ~~funds~~Series ~~necessary~~B toNotes in ~~sustain~~satisfaction of $185,961 of obligations due under the ~~Company’s~~notes. We ~~operations~~expect ~~until~~to ~~revenues~~issue ~~from~~additional ~~sales~~shares of ~~REDIview~~our ~~are~~common ~~sufficient~~stock toin ~~sustain~~payment ~~the~~of ~~Company’s~~amounts ~~operations~~due ~~and~~under the ~~failure~~notes toduring dothe soremainder ~~may~~of ~~have~~2009 aand ~~material~~thereafter. In general, ~~adverse~~the ~~effect~~shares ~~upon~~issued ~~the~~are ~~Company’s~~available ~~business,~~for ~~financial~~immediate resale by the holders in ~~condition~~accordance ~~and~~with ~~results~~Rule 144 under the Securities Act of ~~operations.~~1933, as amended.

~~Critical~~We ~~success~~do ~~factors~~not currently inhave ~~management’s~~the ~~plans~~cash on hand to ~~achieve~~repay ~~positive~~amounts ~~cash~~due ~~flow~~under ~~from~~our ~~operations~~secured ~~include:~~convertible notes if the note holders elect to exercise their repayment or other remedies. If our efforts to restructure or otherwise satisfy our obligations under the notes are unsuccessful, and we are unable to raise enough money to cover the amounts payable under the notes, we may be forced to restructure, file for bankruptcy, sell assets or cease operations.

•2. ~~Significant~~Basis ~~market acceptance~~ of ~~REDIview~~Presentation ~~in the United States. • Maintaining~~ and ~~expanding~~Significant ~~the~~Accounting Company’s direct sales channel and expanding into new markets not currently served by the Company. New salespersons will require training and time to become productive. In addition, there is significant competition for qualified salespersons, and the Company must continue to offer attractive compensation plans and opportunities to attract qualified salespersons. • Maintaining and expanding indirect distribution channels. • Securing and maintaining adequate third party leasing sources for customers who purchase the Company’s products. • Ability to achieve and maintain the product and service margins forecasted in the Company’s revised business plan.Policies

~~There can be no assurances that any of these success factors will be realized or maintained.~~Basis ~~It is possible that because~~ of operating performance or other factors, the Company may not be able to continue as a going concern. Accordingly, the Company urges that extreme caution be exercised with respect to existing and future investments in any of the Company’s securities. Should the Company not continue as a going concern, it may be unable to realize its assets and discharge its liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability of the recorded assets or the amounts and classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. Presentation

2The unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q. Accordingly, ~~Fresh~~they ~~Start~~do ~~Accounting~~not include all footnote disclosures required by accounting principles generally accepted in the United States of America. These consolidated financial statements should be read in conjunction with our audited consolidated financial statements and ~~Restructuring~~notes ~~Expenses~~thereto in our Annual Report on Form 10-K for the year ended December 31, 2008. The accompanying consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods in accordance with accounting principles generally accepted in the United States of America. The results for any interim period are not necessarily indicative of the results for the entire fiscal year. Certain prior year amounts have been reclassified to conform to current year presentation.

~~In accordance with the provisions of Statement of Position 90-7 “Financial Reporting by~~Principles ~~Entities in Reorganization Under the Bankruptcy Code” (“SOP 90-7”), the Company adopted “fresh start” accounting upon emergence from bankruptcy because holders~~ of existing voting shares immediately before confirmation of the Plan received less than 50% of the voting shares of the emerging entity and its reorganization value was less than its postpetition liabilities and allowed claims as shown below (in thousands): Consolidation

Postpetition liabilities and allowed claims	$	32,841
Reorganization value (net of $2 million exit financing)		(23,333	)
Excess of liabilities over reorganization value	$	9,508

Our consolidated financial statements include our accounts and those of our wholly owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.

~~The Company’s Plan was confirmed by the Bankruptcy Court on June 29, 2004 and the Effective~~Estimates ~~Date~~Inherent ofin the ~~Plan~~Preparation ~~was July 2, 2004. The Company adopted fresh start accounting as~~ of ~~June 30,~~Financial 2004 as the Company determined that its selection of June 30, 2004 versus June 29, 2004 was more convenient for financial reporting purposes and that the results for the period from June 29, 2004 to June 30, 2004 were immaterial to the consolidated financial statements. All results for periods prior to July 1, 2004 are referred to as those of the Predecessor Company (the “Predecessor Company”) and all results for periods including and subsequent to July 1, 2004 are referred to as those of the Reorganized Company (the “Reorganized Company”). Statements

The preparation ~~reorganization value~~ of ~~the~~consolidated ~~Company~~financial ~~was~~statements ~~determined~~in toconformity bewith ~~$25.3 million based on a~~accounting ~~discounted~~principles ~~cash~~generally ~~flow~~accepted ~~analysis~~in ~~utilizing~~the ~~cash~~United ~~flow~~States ~~projections~~of ~~from~~America ~~the Company’s five-year business~~requires ~~plan~~management ~~including~~to amake ~~terminal~~estimates ~~value,~~ and ~~after~~assumptions ~~extensive~~that ~~negotiations~~affect ~~among~~the ~~parties~~reported inamounts ~~interest. The~~of ~~reorganization~~assets ~~value~~and ~~allocated~~liabilities, todisclosure ~~the~~of ~~Company’s~~contingent ~~net~~ assets ~~pursuant~~and toliabilities ~~SOP~~at ~~90-7 was $23.3 million,~~the ~~which~~date ~~is net~~ of the ~~$2 million~~consolidated ~~exit~~financial ~~financing~~statements ~~received~~and ~~from HFS after~~ the ~~Company~~reported ~~emerged~~amounts ~~from~~of ~~bankruptcy~~revenues ~~(this~~and ~~exit~~expenses ~~financing~~during ~~was~~the ~~contemplated~~reporting inperiod. Significant estimates include the ~~discounted~~collectibility ~~cash~~of ~~flow~~accounts ~~model~~receivable ~~utilized~~and ~~to determine~~lease receivables, the valuation ~~$25.3~~of ~~reorganization~~goodwill ~~value).~~and ~~The~~intangibles, ~~$23.3 million~~the ~~allocated~~valuation toof ~~net~~common ~~assets~~and ~~also excluded~~preferred ~~$1.4 million~~stock, inthe ~~pre-petition~~valuation ~~liabilities~~of ~~for~~convertible ~~disputed~~notes ~~claims~~payable, ~~that~~and ~~were~~the ~~not~~valuation ~~discharged~~allowance of ~~with~~ the ~~initial~~ ~~issuance~~deferred oftax ~~stock~~asset. Actual toresults ~~creditors~~could ~~upon~~differ ~~confirmation~~from ofthose estimates.

11Revenue Recognition

~~Table~~We recognize revenue when earned in accordance with the applicable accounting literature including: EITF No. 00-21, “Revenue Arrangements With Multiple Deliverables”, Statement of ~~Contents~~Position 97-2, “Software Revenue Recognition”, and Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements”, as amended by Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial Statements”. Revenue is recognized when the following criteria are met: there is persuasive evidence that an arrangement exists, delivery has occurred and all obligations under such arrangement have been fulfilled, the price is fixed and determinable and collectibility is reasonably assured.

the Plan. The reorganization value was allocated to the Company’s tangible and identifiable intangible assets in conformity with the procedures specified by Financial Accounting Standards Board in Statement of Accounting Standards No. 141, “Business Combinations ” (“FAS 141”) and liabilities were recorded at their net present values. The Company used the results of an independent financial advisory firm’s fair market valuation to value its property and equipment. Inventory and certain software were valued at estimated replacement cost. An independent financial advisory firm was also utilized to value the Company’s intangible assets. 9

~~The~~Initial ~~excess~~sale ~~reorganization~~proceeds ~~value~~received ~~not attributable to specific tangible or identified intangible~~under ~~assets~~multiple-element ofsales ~~$19.7 million~~arrangements ~~was~~that ~~recorded~~require asus ~~goodwill~~to indeliver ~~accordance~~products ~~with SOP 90-7~~ and ~~Statement of~~ ~~Financial~~services ~~Accounting~~over ~~Standards~~a ~~No. 142~~period ~~“Goodwill~~of time and ~~Other~~which ~~Intangible~~are ~~Assets”~~not ~~(“FAS~~determined ~~142~~by ~~”).~~us ~~The~~to meet ~~Company’s~~certain ~~business~~criteria ~~plan~~are ~~assumes~~deferred. All sales ~~significant~~proceeds ~~changes~~related to ~~including~~delivered ~~ongoing~~products ~~development~~are ofdeferred ~~next generation~~and ~~products~~recognized ~~and~~over ~~services~~the ~~and~~contract alife ~~fundamental~~that typically ~~change~~ranges tofrom ~~move~~one to afive ~~recurring~~years. Product ~~revenue~~sales ~~model.~~proceeds ~~The~~recognized ~~Company’s~~under ~~products~~this ~~and~~method ~~services~~are ~~that~~portrayed ~~existed~~in ~~as of~~ the ~~June 30,~~accompanying ~~2004~~Consolidated Statement ~~fresh~~of ~~start~~Operations ~~accounting date~~as ~~are~~“Ratable ~~not~~product ~~expected~~revenues.” toThe ~~provide~~related ~~significant~~deferred revenue ~~cash~~is ~~flows~~classified ~~within~~as ~~the~~a ~~Company’s~~current and long term ~~business plan.~~liability ~~While~~in the ~~Company~~Consolidated Balance ~~had~~Sheets ~~begun~~under the ~~development~~captions of“Deferred ~~its REDIview AVL~~ product asrevenues of– ~~June 30,~~current ~~2004,~~portion” ~~the~~and “Deferred product ~~was~~revenues ~~substantially~~non-current ~~incomplete~~portion.” If ~~Thus,~~the ascustomer relationship ofis terminated prior to the ~~date~~end of the ~~Company~~customer ~~adopted~~contract ~~fresh~~term, ~~start~~such ~~accounting,~~deferred ~~the~~sales ~~Company’s~~proceeds ~~primary~~are ~~value~~recognized ~~was~~as ~~encompassed~~revenue in ~~its~~the ~~experience~~period ~~and existing~~of ~~infrastructure~~termination. Under ~~that~~sales ~~could~~arrangements, ~~allow~~which initially meet the earnings ~~Company~~criteria todescribed ~~take~~above, ~~advantage~~revenues ofare ~~anticipated~~recognized ~~growth~~upon inshipment ~~the~~of ~~AVL~~the ~~marketplace.~~products ~~This~~or ~~strategic~~upon ~~position~~customer isacceptance ~~not~~of ~~contractually~~the ordelivered ~~legally~~products ~~based~~if ~~and~~terms ~~cannot~~of ~~be separated~~the ~~from~~sales ~~the~~arrangement ~~business;~~give ~~therefore,~~the ~~such~~customer ~~value~~the isright ~~reflected~~of ~~in goodwill~~acceptance.

~~The~~Service ~~effects~~revenue ofgenerally ~~the Plan and the application of fresh start accounting as defined by SOP 90-7~~commences onupon ~~the~~product ~~Predecessor~~installation ~~Company’s unaudited consolidated balance sheet through June 30, 2004 is set forth below. It reflects the pro forma effect of the initial discharge of debt~~ and ~~exchange~~customer ~~of stock~~acceptance ~~under the Plan, cancellation of the Predecessor Company’s equity,~~ and ~~application~~is ofbilled ~~fresh start accounting. The unaudited pro forma balance sheet should be reviewed in conjunction with the audited consolidated financial statements~~ and ~~notes thereto in the Company’s Annual Report on Form~~recognized ~~10-K~~during ~~and Form 10-K/A for~~ the ~~fiscal~~period ~~year~~such ~~ended~~services ~~August 31,~~are ~~2004~~provided.

	Predecessor			Debt Discharge						Reorganized
	Company			and Exchange			Fresh Start			Company
	June 30, 2004			of Stock (a)			Adjustments (b)			June 30, 2004
ASSETS
Current assets:
Cash and cash equivalents	$	2,626								$	2,626
Restricted cash		439									439
Accounts receivable, net		2,762									2,762
Inventories		783									783
Deferred product costs — current portion		1,153						(36	)		1,117
Lease receivables and other current assets, net		973			(69	)					904
Total current assets		8,736			(69	)		(36	)		8,631
Property and equipment, net		2,797						259			3,056
Deferred product costs — non-current portion		1,410						(264	)		1,146
Goodwill		—						19,724			19,724
License right, net		2,707						(1,429	)		1,278
Other intangible assets		—						1,220			1,220
Lease receivables and other assets, net		1,206			(40	)					1,166
Total assets	$	16,856		$	(109	)	$	19,474		$	36,221
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities not subject to compromise:
Accounts payable	$	137		$	2,283					$	2,420
Deferred product revenues — current portion		2,757						(107	)		2,650
Accrued expenses and other current liabilities		3,309			2,061						5,370
Total current liabilities not subject to compromise		6,203			4,344			(107	)		10,440
Liabilities subject to compromise		22,315			(22,315	)					—
Long-term liabilities not subject to compromise:
Deferred product revenues — non-current portion		4,066						(750	)		3,316
Other non-current liabilities		257			309						566
Total long-term liabilities not subject to compromise		4,323			309			(750	)		3,882
Total liabilities		32,841			(17,663	)		(857	)		14,322
Total stockholders’ equity (deficit)		(15,985	)		17,554			20,331			21,900
Total liabilities and stockholders’ equity	$	16,856		$	(109	)	$	19,474		$	36,221

We provide lease financing to certain customers of our REDIview and legacy products. Leases under these arrangements are classified as sales-type leases or operating leases. These leases typically have terms of one to five years, and all sales type leases are discounted at interest rates ranging from 14% to 18% depending on the customer’s credit risk. The net present value of the lease payments for sales-type leases is recognized as product revenue and deferred under our revenue recognition policy described above. Income from operating leases is recognized ratably over the term of the leases.

~~(a) To record the discharge or reclassification of prepetition obligations related to long-term debt, other liabilities,~~ Shipping and ~~equity~~Handling ~~and~~Fees ~~the issuance of 7,000,000 shares of new common stock to creditors~~ and ~~old equity holders. Also~~Costs

12We record amounts billed to customers for shipping and handling and related costs incurred for shipping and handling as components of “Product revenues” and “Cost of product revenues” respectively.

~~Table~~Deferred Product ~~of Contents~~Costs

~~includes~~We ~~the~~defer ~~issuance~~certain product costs (generally consisting of ~~350,000~~the ~~shares~~direct cost of ~~restricted~~product ~~stock~~sold and installation costs) for our sales contracts determined to ~~executives~~require ~~approved~~deferral accounting. The ~~under~~deferred ~~the~~costs ~~Plan,~~are classified as a current and long -term asset on the ~~write~~balance ~~off~~sheet ofunder the ~~remaining~~captions ~~unamortized~~“Deferred ~~prepaid~~product ~~loan~~costs ~~fees~~– current portion” and ~~debt~~“Deferred ~~discount~~product ~~related~~costs tonon-current portion”. Such ~~the~~costs ~~discharged~~are ~~long-term~~recognized ~~debt.~~over ~~The~~the ~~cancellation~~longer of the ~~Company’s~~term ~~pre-reorganization~~of the ~~equity~~service ~~includes~~contract or the ~~reversal~~estimated life of the ~~$20.3~~customer ~~million~~relationship ~~gain~~and onare portrayed in the ~~fresh~~accompanying ~~start~~Consolidated ~~adjustment~~Statements of ~~assets~~Operations ~~and~~as ~~liabilities~~“Ratable product costs.” Such terms range from one to ~~fair~~five years. If ~~value~~the ascustomer ~~well~~relationship asis terminated prior to the ~~reversal~~end of the ~~$0.2~~estimated ~~million~~customer ~~gain~~relationship onperiod, ~~discharge~~such ofcosts ~~liabilities~~are ~~subject~~recognized toin ~~compromise~~the period of termination.

(b) To record fresh start adjustments to reflect assets and liabilities at fair value. Management used an expected present value technique, in which multiple cash flow scenarios that reflect the range of possible outcomes and a risk-free rate are used, to estimate the fair value of the VMI license right. Deferred product revenue and the related deferred product costs were adjusted to fair value based on present value calculations utilizing appropriate current interest rates. As discussed above, the results of an independent financial advisory firm’s fair market valuation was utilized to value property and equipment. Inventory and certain software were valued at estimated replacement cost. An independent financial advisory firm was also utilized to value the Company’s intangible assets.Financial Instruments

~~Pursuant~~We toconsider ~~SOP~~all 90liquid interest-7,bearing ~~the~~investments ~~Company’s~~with ~~consolidated~~a ~~financial~~maturity ~~statements~~of ~~for~~ninety ~~periods~~days ~~including and~~or ~~subsequent~~less toat the ~~Chapter 11~~date of ~~petition~~purchase ~~filing~~to ~~distinguish~~be ~~transactions~~cash ~~directly~~equivalents. Short-term ~~associated~~investments ~~with~~mature ~~the~~between ~~reorganization~~ninety ~~from~~days ~~the~~and ~~ongoing~~one ~~operations~~year offrom the ~~business~~purchase date. The ~~Certain~~Company maintains ~~expenses,~~its ~~realized~~cash ~~gains and~~balances ~~losses~~at ~~and~~credit-worthy ~~provisions~~financial ~~for~~institutions ~~losses~~that ~~resulting~~are insured ~~from~~by the ~~reorganization~~Federal ~~and~~Deposit ~~restructuring~~Insurance ofCorporation ~~the~~("FDIC") up to ~~business~~$250,000. The ~~are~~carrying ~~reported~~amount ~~separately~~of ascash ~~reorganization~~and ~~items.~~cash ~~Total~~equivalents, ~~reorganization~~accounts receivable, ~~expenses~~notes payable, accounts payable and ~~losses incurred~~accrued byliabilities ~~the~~approximates fair ~~Company~~value ~~are~~because asof ~~follows~~their ~~(in~~short-term ~~thousands):~~ maturity.

	Reorganized		Predecessor		Reorganized			Predecessor
	Company		Company		Company			Company
	For the three		For the three		For the nine			For the nine
	months ended		months ended		months ended			months ended
	May 31,		May 31,		May 31,			May 31,
	2005		2004		2005			2004
Professional fees	$	3	$	813	$	90		$	1,176
Provision for probable losses on rejection of executory contracts, unexpired leases and other claims		—		948					948
Other net restructuring expenses and losses		5		66		(68	)		66
Total restructuring expenses and losses	$	8	$	1,827	$	22		$	2,190

Allowance for Doubtful Accounts

3.We ~~Basis~~use ofestimates ~~Presentation~~in determining the allowance for doubtful accounts based on historic collection experience, current trends and ~~Significant~~a ~~Accounting~~percentage ~~Policies~~of the accounts receivable aging categories. In determining these percentages we review historical write-offs, including comparisons of write-offs to provisions for doubtful accounts and as a percentage of revenues and monitor collections amounts and statistics.

Basis of Presentation

	March 31,			December 31,
	2009			2008
Beginning balance	$	85		$	54
Additions		22			121
Deductions		(41	)		(90	)
Ending balance	$	66		$	85

On July 2, 2004, the Effective Date, the Company’s name was changed from Minorplanet Systems USA, Inc. to Remote Dynamics, Inc. As a result of the application of fresh start accounting as of June 30, 2004, the Company’s financial results for the three and nine-month periods ended May 2005 and 2004 include two different bases of accounting. The Reorganized Company’s financial statements are not comparable with those of the Predecessor Company. 10

~~The Predecessor Company’s unaudited condensed consolidated financial statements presented~~Business ~~herein include those of Remote Dynamics Inc., formerly known as Minorplanet Systems USA, Inc.,~~ and ~~its~~ ~~wholly~~Credit owned subsidiaries: HighwayMaster of Canada, LLC, Caren (292) Limited and Minorplanet Systems USA Limited. Caren (292) Limited and Minorplanet Systems USA Limited were merged into Remote Dynamics, Inc. on the Effective Date of the Plan and cease to exist as separate entities. The Reorganized Company’s unaudited condensed consolidated financial statements presented herein include those of Remote Dynamics Inc., and its wholly owned subsidiaries: HighwayMaster of Canada, LLC and RD Technologies, Inc. which was newly formed upon emergence from bankruptcy. All significant intercompany accounts and transactions have been eliminated in consolidation. Concentrations

~~The~~We continuously ~~unaudited~~monitor ~~condensed~~collections ~~consolidated~~and ~~financial~~payments ~~statements~~from ~~have~~our ~~been~~customers ~~prepared~~and inmaintain ~~accordance~~a ~~with~~provision ~~the~~for ~~instructions~~estimated toaccounts ~~Form~~receivable ~~10-Q~~that ~~and~~may ~~Article 10~~eventually ofbecome uncollectible ~~Regulation S-X~~based upon historical experience and specific customer information. There ~~Accordingly,~~is ~~they~~no doguarantee ~~not~~that we will continue to ~~include~~experience ~~all~~the ~~footnote~~same ~~disclosures~~credit ~~required~~loss byhistory ~~accounting~~in ~~principles~~future ~~generally~~periods. If ~~accepted~~a significant change in the ~~United~~liquidity or financial condition of a large customer ~~States~~or group of ~~America.~~customers ~~These~~were ~~condensed~~to ~~consolidated~~occur, ~~financial~~it ~~statements~~could ~~should~~have bea ~~read~~material inadverse ~~conjunction with~~affect on the ~~Company’s~~collectibility ~~audited~~of ~~consolidated~~our ~~financial~~accounts ~~statements~~receivable and future operating results.

13AT&T provides GSM/GPRS data services to its REDIview customers pursuant to a data reseller agreement and a messaging agreement. The data reseller agreement and messaging agreement each automatically renew for successive one year terms unless either party provides the other party with written notice of termination at least 30 days prior to the end of the initial term or any renewal term. However, the data reseller agreement and the messaging agreement may be terminated by AT&T or the Company for convenience upon 90 days prior written notice.

~~Table~~If AT&T terminates the data reseller agreement and messaging agreement and ceases to provide GSM/GPRS services to the Company for resale to its customers, the REDIview units in the Company’s base of ~~Contents~~installed REDIview customers would no longer be able to send or receive data messages until the Company could reach an agreement with another provider and retrofit such units to utilize the GSM/GPRS service of such alternative provider. There can be no assurances that the Company would be able to reach an agreement with another wireless carrier for GSM/GPRS service and/or retrofit its existing REDIview customer base to utilize the GSM/GPRS service of such alternative provider the failure to do so would have a material adverse effect on the Company’s business, financial condition and results of operations.

notes thereto in its Annual Report on Form 10-K and Form 10-K/A for the year ended August 31, 2004. The accompanying condensed consolidated financial statements reflect all adjustments (all of which are of a normal recurring nature), which are, in the opinion of management, necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods in accordance with accounting principles generally accepted in the United States of America. The results for any interim period are not necessarily indicative of the results for the entire fiscal year. Inventories

~~Estimates~~Inventories ~~Inherent~~consist inprimarily of component parts and finished products that are valued at the ~~Preparation~~lower of ~~Financial~~cost ~~Statements~~or market. Cost is determined using the first-in, first-out (FIFO) method. The Company records a write-down for excess and obsolete inventory based on usage history and specific identification criteria. There is a risk we will forecast demand for our products and market conditions incorrectly and maintain excess inventories. Therefore, there can be no assurance that we will not maintain excess inventory and incur inventory lower or cost or market charges in the future.

~~The preparation of financial statements in conformity with accounting principles generally~~Property ~~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 date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Equipment

~~Revenue~~Property ~~Recognition~~and equipment is stated at cost and depreciated on a straight-line basis over the estimated useful lives of the various classes of assets, which generally ranged from two to seven years. After the reverse merger transaction and the associated purchase accounting, the new fair value of Remote Dynamic’s property and equipment is being depreciated on a straight-line basis over the estimated applicable remaining useful lives which generally ranged from one to five years. Maintenance and repairs costs are expensed as incurred.

~~The Company recognizes revenue when earned in accordance with the applicable accounting~~Research ~~literature including: EITF No. 00-21, “Revenue Arrangements With Multiple Deliverables”, Statement of Position 97-2, “Software Revenue Recognition”,~~ and ~~Staff~~Development Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements”, as amended by Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial Statements”. Revenue is recognized when the following criteria are met: there is persuasive evidence that an arrangement exists, delivery has occurred and all obligations under such arrangement have been fulfilled, the price is fixed and determinable and collectibility is reasonably assured. Costs

~~Initial~~We ~~sale~~expense ~~proceeds~~research ~~received under multiple-element sales arrangements that require the Company to deliver products~~ and ~~services over a period of time and which are not determined by the~~development ~~Company~~costs to meet certain criteria are deferred. All REDIview and VMI sales proceeds related to delivered products are deferred and recognized over the contract life that typically ranges from one to five years. Product sales proceeds recognized under this method are portrayed in the accompanying Condensed Consolidated Statement of Operations as ~~“Ratable product revenues~~incurred.” During ~~The related deferred revenue is classified as a current and long term liability on~~ the ~~Condensed Consolidated~~three ~~Balance~~months ~~Sheets~~ended ~~under~~March ~~the~~31, ~~captions~~2009 ~~“Deferred product revenues – current portion”~~ and ~~“Deferred product revenues non-current portion.” If the customer relationship is terminated prior to the end of the customer contract term~~2008, ~~such~~we ~~deferred~~incurred ~~sales~~$354 ~~proceeds~~and ~~are recognized as revenue in the period of termination. Under sales arrangements~~$1,435, ~~which initially meet the earnings criteria described above~~respectively, ~~revenues are recognized upon shipment~~ of ~~the~~research ~~products or upon customer acceptance of the delivered products if terms of the sales arrangement give the customer the right of acceptance. Sales arrangements recognized upon initial delivery~~ and ~~acceptance relate primarily to~~development ~~products delivered under the service vehicle contract with SBC.~~ costs

~~Service revenue generally commences upon product installation and customer acceptance and is~~Valuation ~~billed~~of ~~and~~Long-Lived ~~recognized during the period such services are provided.~~ Assets

~~VMI~~We ~~License~~evaluate ~~Right~~the recoverability of our long-lived assets under Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”). SFAS 144 requires us to review for impairment of our long-lived assets, whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable and exceeds its fair value. Impairment evaluations involve our estimates of asset useful lives and future cash flows. When such an event occurs, we estimate the future cash flows expected to result from the use of the asset and its eventual disposition. If the undiscounted expected future cash flows are less than the carrying amount of the asset and the carrying amount of the asset exceeds its fair value, an impairment loss is recognized. We utilize an expected present value technique, in which multiple cash flow scenarios that reflect the range of possible outcomes and a risk-free rate are used, to estimate fair value of the asset.

In June of 2001, the Company received a 99-year exclusive license right to market, sell and operate Minorplanet Systems PLC’s, a United Kingdom public limited company (“Minorplanet UK”), VMI technology in the United States, Canada and Mexico. The license covered rights to existing technologies of Minorplanet UK as well as any future developments. In addition, the Company agreed to pay an annual fee of $1,000,000 to aid in funding research and development of future products covered by the license rights. Based on the Company’s evaluation of the useful life of the existing technology, probability of future developments to bring new products to market and projected cash flows from these products, the license right was initially being amortized over a 15-year life. 11

~~Management~~We ~~accounts~~assess ~~for~~ the ~~VMI~~impairment ~~license right~~ in ~~accordance~~value ~~with Statement of Financial~~to ~~Accounting~~our ~~Standards~~long-lived ~~No. 142,~~assets ~~“Goodwill~~whenever ~~and~~events ~~Other~~or ~~Intangible~~circumstances ~~Assets”~~indicate ~~(“SFAS~~that ~~142”). The license right was acquired and valued in~~ the ~~accompanying Consolidated Balance Sheet as an asset purchase~~ atcarrying ~~an amount which reflected the fair~~ value ofmay ~~the~~not ~~common~~be ~~stock~~recoverable. Significant ~~issued~~factors, ~~by the Company based on the~~which ~~market~~would ~~price~~trigger ofan ~~the~~impairment ~~Company’s common stock on the date of consummation of the transaction ($1.60 per share on June 21~~review, ~~2001),~~include ~~plus~~ the ~~incremental direct costs incurred.~~ following:

In· ~~early~~significant ~~2003,~~negative ~~the~~industry Company requested that Minorplanet UK develop a GPRS-enabled VMI unit and modify the VMI software to be hosted in a web environment. Minorplanet UK initially scheduled delivery of the GPRS-enabled mobile unit and web-hosted software on or before September 2003. Howevertrends, ~~Minorplanet UK was unable to deliver a~~

14 · significant changes in technology,

~~Table~~· significant underutilization of ~~Contents~~the asset, and

~~commercially~~· ~~viable~~significant ~~GPRS-enabled~~changes ~~mobile~~in ~~unit~~how ~~and web-hosted~~the ~~software~~asset ~~and~~is ~~announced~~used ~~that~~or itis ~~had~~planned ~~elected~~ to ~~outsource the development of web-hosted software, which would not~~ be ~~available until mid-2005~~used.

~~Accordingly, the Company notified Minorplanet UK that it intended to reject the VMI license as~~Goodwill ~~part of its plan of reorganization~~ and ~~initiated~~Other negotiations with Minorplanet UK for a temporary use license to market and sell the VMI product. On June 14, 2004, the Bankruptcy Court approved a Compromise and Settlement Agreement (the “Agreement”) by and among the Company and Minorplanet Limited and Minorplanet UK regarding the license agreement for the VMI technology which allowed the Company to use, market and sell the VMI technology until December 31, 2004. Intangibles

~~The~~We ~~material~~test ~~terms~~our goodwill for impairment on an annual basis, or between annual tests if it is determined that a significant event or change in circumstances warrants such testing, in accordance with the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets”, (“SFAS 142”) which requires a comparison of the ~~VMI~~carrying ~~Settlement~~value ~~Agreement~~of goodwill to ~~include~~the fair value of the ~~following:~~reporting unit. If the fair value of the reporting unit is less than the carrying value of goodwill, an adjustment to the carrying value of goodwill is required. See Note 1 and Note 4 for further discussion on goodwill and other intangible assets impairment.

	(1)		On June 30, 2004, the VMI license agreement converted to a nonexclusive license until December 31, 2004 when it shall terminate.
	(2)		From the period beginning June 30, 2004 through December 31, 2004, the territory in which the Company may market, sell and use the VMI system shall be reduced to the following metropolitan areas: Los Angeles, California; Atlanta, Georgia; Dallas, Texas; and Houston, Texas.
	(3)		On July 31, 2004, the Company shall no longer use the name, “Minorplanet,” nor any derivative thereof, and shall remove and refrain from using any references to said name.
	(4)		The Company provided Minorplanet Limited, at no cost, 100 AEM 3000 VMI units to USA specifications with accompanying special tariff SIM’s for T-Mobile.
	(5)		Subsequent to December 31, 2004, the Company has the right to use the VMI software internally for the sole purpose of satisfying its warranty, service and support obligations to its existing VMI customer base.
	(6)		Minorplanet Limited was allowed a general unsecured claim in the amount of $1,000,000 in Limited’s bankruptcy case no. 04-31202-SAF-11. On the Effective Date, Minorplanet Limited released and waived its administrative claim and, as of such date, waived any future R&D fees due under Section 16.4 of the VMI license agreement.
	(7)		The Company provided to Minorplanet Limited and Minorplanet UK a general release of any and all claims which could have been asserted against Minorplanet Limited or Minorplanet UK by the Company.

Income Taxes

OnThe Company ~~January 6~~accounts for income taxes under the provisions of SFAS No. 109, ~~2005~~Accounting for Income Taxes. Under SFAS No. 109, ~~the~~deferred ~~Company~~tax assets and ~~Minorplanet~~liabilities are ~~Limited~~recognized ~~entered~~for ~~into~~future antax ~~Addendum~~benefits or consequences attributable to temporary differences between the financial statement carrying amounts of existing assets ~~Compromise~~and liabilities and ~~Settlement~~their ~~Agreement~~respective ~~(the~~tax ~~“Addendum”)~~bases. Deferred ~~which~~tax ~~granted~~assets and ~~the~~liabilities ~~Company~~are ~~the~~measured ~~right~~using enacted tax rates expected to ~~continue~~ ~~market~~apply ~~and~~to taxable ~~sell~~income in the ~~VMI~~years ~~product~~in ~~line~~which tothose ~~the~~temporary ~~Company’s~~differences ~~existing~~are ~~VMI~~expected ~~customers~~to be recovered or settled. A ~~Although the~~valuation ~~Company~~allowance ~~has~~is ~~ceased~~provided ~~actively~~for significant ~~marketing~~deferred ~~and~~tax ~~selling~~assets ~~the~~when ~~VMI~~it ~~product,~~is ~~the~~more ~~Addendum~~likely ~~allows~~than ~~the Company~~not tothat ~~fulfill~~such ~~VMI~~assets will ~~product~~not ~~orders~~be ~~from~~realized ~~existing~~through ~~VMI~~future ~~customers~~operations.

~~SFAS 144 requires management of the Company to review for impairment of its long~~Stock-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable and exceeds its fair value. Thus, management used an expected present value technique, in which multiple cash flow scenarios that reflect the range of possible outcomes and a risk-free rate are used, to estimate the fair value of the VMI license right and recognized an impairment loss of $28.8 million during the third quarter of fiscal 2004. Based ~~on updated sales~~ and cash flow forecasts, the Company later recorded a $1.4 million fresh start accounting adjustment to reflect the fair value of the license right at $1.3 million at June 30, 2004. This new fair value of the license right is being amortized over a three-year life. Compensation

~~Goodwill~~In December of 2004, the Financial Accounting Standards Board (“FASB”) issued FAS 123R, which applies to transactions in which an entity exchanges its equity instruments for goods or services and ~~Other~~also ~~Intangibles~~applies to liabilities an entity may incur for goods or services that are based on the fair value of those equity instruments. For any unvested portion of previously issued and outstanding awards, compensation expense is required to be recorded based on the previously disclosed FAS 123 methodology and amounts. Prior periods presented are not required to be restated. We adopted FAS 123R as of January 1, 2006 and applied the standard using the modified prospective method. Remote Dynamics extinguished all prior stock options upon emergence from bankruptcy effective July 2, 2004 and have not issued any new stock options beyond that date.

~~Upon implementation of fresh start accounting as of June 30, 2004, the Reorganized Company~~Beneficial ~~recorded~~Conversion goodwill and other intangible assets and therefore applied provisions of SFAS 142 that requires that goodwill not be amortized but reviewed annually (or more frequently if impairment indicators arise) for impairment. Intangible assets that are not deemed to have indefinite lives are amortized over their estimated useful lives. Feature

~~Stock~~From ~~Based~~time to ~~Awards~~time, the Company has debt with conversion options that provide for a rate of conversion that is below market value. This feature is normally characterized as a beneficial conversion feature ("BCF"), which is recorded by the Company pursuant to Emerging Issues Task Force (“EITF”) Issue No. 98-5 ("EITF 98-5"), Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, and EITF Issue No. 00-27, Application of EITF Issue No. 98-5 to Certain Convertible Instruments. If a BCF exists, the Company records it as a debt discount. Debt discounts are amortized to interest expense over the life of the debt on a straight-line basis, which approximates the effective interest method.

~~The Predecessor Company applied the intrinsic value method~~ Issuance of ~~Accounting~~Shares ~~Principles~~for ~~Board (“APB”)~~Non-Cash ~~Opinion~~ Consideration

15The Company accounts for the issuance of equity instruments to acquire goods and/or services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more reliably determinable. The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of EITF Issue No. 96-18, Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services and EITF Issue No. 00-18, Accounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employees. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.

~~Table of Contents~~12

~~No. 25, “Accounting for Stock Issued to Employees,” and related interpretations, in~~Earnings ~~accounting~~Per for its stock option plans. Accordingly, compensation expense was recorded at the date of grant only if the current market price of the underlying stock exceeded the exercise price. All pre-existing common stock and other equity interests (including but not limited to warrants, stock options and anti-dilutive rights), outstanding as of the Effective Date of the Plan were extinguished. As of May 31, 2005, the Reorganized Company had issued no stock options. Share

~~Statement~~The Company ofadopted ~~Financial~~the ~~Accounting~~provisions ~~Standards~~of SFAS No. ~~123~~ 128, Earnings Per Share (“"EPS"). SFAS ~~123”),~~No. ~~“Accounting~~128 provides for ~~Stock-Based Compensation,”~~the ~~established~~calculation ~~accounting~~of basic and diluted ~~disclosure~~earnings ~~requirements~~or ~~using~~loss aper ~~fair~~share. Basic ~~value-based~~loss ~~method~~per share ofincludes ~~accounting~~no ~~for~~dilution ~~stock-based~~and ~~employee~~is ~~compensation~~computed ~~plans.~~by Asdividing ~~allowed~~income byor ~~SFAS~~loss ~~123,~~available to common stockholders by the ~~Predecessor Company~~weighted ~~elected~~average tonumber ~~continue~~of tocommon ~~apply~~shares outstanding for the ~~intrinsic-value~~period. Diluted ~~based~~loss ~~method~~per ofshare ~~accounting~~reflects ~~described~~the potential ~~above,~~dilution ~~and~~of ~~adopted~~securities that could share in the ~~disclosure~~earnings ~~requirements~~or losses of ~~SFAS 123~~the entity. Such Inamounts ~~accordance~~include ~~with~~shares potentially issuable pursuant to the ~~provisions~~Notes ofand the attached warrants and the convertible preferred stock (see ~~SFAS~~Note No6). ~~148,~~ For ~~“Accounting~~the ~~for~~three ~~Stock-Based~~months ~~Compensation~~ended –March ~~Transition~~31, 2009 and ~~Disclosure~~2008,” ~~pro forma net~~basic ~~loss~~ and ~~net~~diluted loss per share ~~disclosures,~~are ~~as if~~ the ~~Company~~same ~~recorded~~as ~~compensation~~the ~~expense~~potentially ~~based~~dilutive onshares were ~~the~~excluded ~~fair~~from ~~value~~diluted ofloss ~~stock-based~~per ~~awards,~~share ~~are~~as ~~presented~~their ~~below~~effect ~~(in~~would ~~thousands,~~be ~~except~~anti-dilutive ~~per~~for the ~~share~~year ~~data):~~ then ended.

	Reorganized			Predecessor			Reorganized			Predecessor
	Company			Company			Company			Company
	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	May 31, 2005			May 31, 2004			May 31, 2005			May 31, 2004
Net loss attributable to common shares, as reported	$	(1,609	)	$	(31,630	)	$	(4,086	)	$	(36,255	)
Add: Stock-based employee compensation expense included in reported net income					(9	)					2
Deduct: Stock-based employee compensation expense determined under fair value based method for all awards					(137	)					(417	)
Net loss, pro forma	$	(1,609	)	$	(31,776	)	$	(4,086	)	$	(36,670	)
Net loss per share — basic and diluted As reported	$	(0.24	)	$	(3.27	)	$	(0.64	)	$	(3.75	)
Pro-forma	$	(0.24	)	$	(3.29	)	$	(0.64	)	$	(3.79	)

The securities listed below were not included in the computation of diluted earnings per share as the effect from their conversion would have been antidilutive:

Restricted Stock

	For the Three Months Ended March 31,
	2009		2008
Convertible notes payable		85,299,736,567		10,559,866
Convertible preferred stock		100,816,375,614		12,587,423
Outstanding warrants to purchase common stock		634,738		351,525

~~On July 2, 2004, in accordance with the plan of reorganization, the Company adopted the~~Stock ~~Restated~~warrants 2004 Management Incentive Plan (the “Incentive Plan”). The Incentive Plan allows for the issuance of up to 700,000 restricted shares of common stock to management. As of May 31, 2005, 525,000 shares of restricted stock had been issued ~~to certain members of the senior management for the Company. These grants vest based on the achievement of specific corporate performance targets over a three-year period~~ and ~~are~~outstanding ~~subject~~total ~~to forfeiture if such performance targets are not achieved. These restricted shares are accounted for in accordance with variable plan accounting~~634, ~~which~~738 ~~requires~~at ~~that~~March the fair value of the shares be measured and charged to the income statement upon determination that the fulfillment of the performance criteria has been met or is probable. The Company did not record any compensation expense associated with these restricted shares during the three and nine-month periods ended May 31, ~~2005 as no vesting had occurred~~2009.

The Company is currently assessing the potential impact of the recently issued Statement of Financial Accounting Standards (SFAS) No. 123 (Revised 2004), “Share-based Payment” (“FAS 123R”), effective June 15, 2005, on the accounting for its outstanding restricted stock (see “Recent Accounting Pronouncements” below).

	March 31,
	2009			2008
	(in thousands, except
	per share amounts)

NET LOSS (Numerator)	$	(629	)	$	(1,101	)

BASIC AND FULLY DILUTED
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING (Denominator)		2,938,312			9

BASIC AND FULLY DILUTED LOSS
PER COMMON SHARE	$	(0.00	)	$	(122.33	)

~~Business Concentrations~~Recent Accounting Pronouncements

~~During~~Financial ~~the~~Accounting ~~three~~Standards ~~and~~No. 161 ~~nine~~(“FAS ~~months~~161”) In ~~ended~~March ~~May 31~~2008, ~~2005,~~the ~~SBC~~FASB ~~and~~issued ~~Geologic~~SFAS ~~Solutions~~No. 161, ~~Inc.~~"Disclosures ~~f/k/a Aether~~about ~~Systems,~~Derivative ~~Inc.~~Instruments and Hedging Activities" (~~“Geologic”~~"FAS 161"). FAS ~~combined~~161 is intended to ~~account~~improve ~~for~~financial ~~approximately~~reporting ~~75%~~about derivative instruments and ~~76%~~hedging ofactivities ~~the~~by requiring enhanced disclosures ~~Company’s~~to ~~total~~enable ~~revenues.~~investors ~~During~~to ~~the~~better ~~three~~understand ~~and~~their ~~nine~~effects ~~months~~on ~~ended~~an ~~May 31,~~entity's ~~2004~~financial position, ~~SBC~~financial performance, and ~~Geologic~~cash flows. The provisions of ~~combined~~FAS to161 ~~account~~are effective for ~~approximately~~the ~~68%~~quarter ~~and~~ending ~~70%~~March 31, 2009. The Company is currently evaluating the impact of the ~~Company’s~~provisions ~~total~~of ~~revenues.~~FAS 161.

~~Recent Accounting Pronouncements~~ 13

InFinancial ~~December~~Accounting ofStandards ~~2004~~No. 162 (“FAS 162”) In May 2008, the FASB issued Statement of Financial Accounting Standards ~~Board~~No. 162, "The Hierarchy of Generally Accepted Accounting Principles"(~~“FASB”~~"FAS 162"). ~~issued~~ FAS ~~123R which~~162 is effective ~~for~~60 ~~reporting~~days ~~periods~~following ~~beginning~~the SEC's ~~after~~approval ~~June 15~~of the Public Company Accounting Oversight Board Auditing amendments to AU Section, ~~2005~~411 The Meaning of "Present Fairly in Conformity with Generally Accepted Accounting Principles". ~~FAS~~The ~~123R~~statement ~~applies~~is intended to improve ~~transactions~~financial reporting by identifying a consistent hierarchy for selecting accounting principles to be used in ~~which~~preparing anfinancial ~~entity~~statements ~~exchanges~~that ~~its~~are presented in conformity with U.S. generally accepted accounting principles (GAAP). The Company has not completed its evaluation of the effects, if any, that FAS 162 may have on its consolidated financial position, results of operations and cash flows.

16In June 2008, the Financial Accounting Standards Board ("FASB") Emerging Issues Task Force ("EITF") reached a consensus on EITF Issue No. 07-5, "Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity's Own Stock" ("EITF 07-5"). We adopted EITF 07-5 on January 1, 2009. The adoption of ETIF 07-5 did not have a material impact to our consolidated financial statements.

~~Table~~3. ~~of Contents~~Inventories

~~equity~~Inventories ~~instruments~~consist ~~for goods or services and also applies to liabilities an entity may incur for goods or services that are based on the fair value~~ of ~~those equity instruments. The Company will adopt FAS 123R in~~ the ~~required period and apply the~~following standard using the modified prospective method, which requires compensation expense to be recorded for new and modified awards. For any unvested portion of previously issued and outstanding awards, compensation expense is required to be recorded based on the previously disclosed FAS 123 methodology and amounts. Prior periods presented are not required to by restated. FAS 123R may require the Company to reflect the tax savings resulting from tax deductions (in ~~excess of expense reflected in its financial statements as a financing cash flow. FAS 123R may have a material impact on the Company’s future consolidated financial statements.~~ thousands):

In June of 2005, the FASB issued Statement of Financial Accounting Standards No. 154, (“SFAS 154”), “Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20, “Accounting Changes” and FASB Statement No. 3, “Reporting Accounting Changes in Interim Financial Statements.” SFAS 154 applies to all voluntary changes in accounting principle and changes the requirements for accounting for and reporting a change in accounting principle. SFAS 154 requires the retrospective application to prior periods’ financial statements of the direct effect of a voluntary change in accounting principle unless it is impracticable. APB No. 20 required that most voluntary changes in accounting principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. FASB stated that SFAS 154 improves financial reporting because its requirements enhance the consistency of financial information between periods. Unless early adoption is elected, SFAS 154 is effective for fiscal years beginning after December 15, 2005. Early adoption is permitted for fiscal years beginning after June 1, 2005. SFAS 154 does not change the transition provisions of any existing accounting pronouncements, including those that are in a transition phase as of the effective date of this statement. The Company does not believe that the adoption of SFAS 154 will have a material effect on our results of operations or financial position.

	March 31,			December 31,
	2009			2008

Complete systems	$	88		$	89
Component parts		76			71
Reserve for obsolescence - systems		(1	)		(2	)
Reserve for obsolescence - parts		(6	)		(5	)
	$	157		$	153

4. ~~Securities~~Goodwill ~~Purchase~~and ~~Agreement~~Other —Intangible ~~Sale of Series A Convertible Redeemable Preferred Stock~~ Assets

~~Summary~~Goodwill ofand ~~terms~~other intangible assets consist of the following (in thousands):

On October 4, 2004, the Company announced that it had closed the sale of 5,000 shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”), with each preferred share having a face value of $1,000, for a total purchase price of $5,000,000, on October 1, 2004. Net cash proceeds received by the Company were $4,651,000 after payment of expenses. The Series A Preferred Stock is convertible into shares of the Company’s common stock (“Common Stock”) at a conversion price of $2.00 per share. The Company sold the Series A Preferred Stock to SDS Capital Group SPC, Ltd (“SDS”) pursuant to that certain Securities Purchase Agreement (the “Securities Purchase Agreement”), dated October 1, 2004, by and between the Company and SDS. The Series A Preferred Stock was issued to SDS pursuant to the exemption from the registration requirements of the Securities Act of 1933 as amended, provided by Regulation D promulgated thereunder.

												Remaining
	Balance at									Balance at		Amortization
	December 31,									March 31,		Period
	2008		Addition		Amortization			Impairment		2009		(in months)
Goodwill	$	616	$	-	$	-		$	-	$	616		n/a

Other intangibles:
Customer lists		1,610		-		(138	)				1,472		32
Software		502		-		(43	)				459		32
Tradenames		44		-		(4	)				40		32
	$	2,772	$	-	$	(185	)	$	-	$	2,587

~~In addition to the above pricing and number of the securities sold, the Securities Purchase~~Total ~~Agreement~~amortization ~~also~~expense ~~provides that the Company shall use the proceeds from this offering only~~ for ~~general corporate purposes and working capital. The Company further agreed to (i) timely file~~ the ~~with~~other ~~SEC all~~intangible ~~reports~~assets ~~required to be filed by it under the Securities Exchange Act of 1934, (ii) reserve 5,000,000 shares of Common Stock~~ for ~~issuance upon conversion of~~ the ~~Series A~~three Preferred Stock and upon exercise of the warrants described below, (iii) use commercially reasonable efforts to maintain the listing of the Common Stock on the Nasdaq SmallCap Market, and (iv) not redeem, repurchase or declare or pay any cash dividend on any shares of capital stock. The Company further granted SDS the right to participate in the future issuance of equity or equity- linked securities of the Company for a period of 12 months ~~after the closing of the Series A~~ended ~~Preferred~~March ~~Stock issuance. The Company also agreed to indemnify SDS from damages it incurs (A) as a result of any breach of the representations~~31, ~~warranties~~2009 and ~~covenants~~2008 ~~contained~~was inapproximately the Securities Purchase Agreement or in the related transaction documents by the Company or (B) as a result of a cause of action brought by a third-party resulting from (1) the execution of the transaction documents$185,000, ~~(2) any transaction financed by the use of proceeds or (3) the status of SDS as a holder of the Company’s securities.~~ respectively

~~The~~Estimated aggregate ~~terms~~amortization ofexpense ~~the~~for ~~Series A~~each ~~Preferred Stock are set forth in the Certificate~~ of ~~Designation, Preferences and Rights,~~ the ~~most~~five ~~significant~~succeeding offiscal ~~which~~years ~~are~~ is as follows:

Ranking. The Series A Preferred Stock ranks senior to the Company’s Common Stock with respect to payment of dividends and amounts upon any liquidation, dissolution or winding up of the Company.

		2009				2010				2011				2012				2013
Amortization Expense		$	554			$	739			$	678			$	-			$	-

~~Dividends~~5. ~~Dividends~~ACCRUED ~~accrue~~EXPENSES ~~from~~AND ~~the~~OTHER ~~date~~CURRENT ~~of issuance of the Series A Preferred Stock through October 1, 2006, and will be cumulative from such date, whether or not in any dividend period or periods such dividends are declared.~~ LIABILITIES

17Accrued expenses and other current liabilities consist of the following (in thousands):

~~Table of Contents~~14

Holders of shares of Series A Preferred Stock will be entitled to receive out of funds legally available therefore, cumulative cash dividends payable in an amount equal to 8% per year. During the nine months ended May 31, 2005, the Company paid cash dividends in the amount of $267,000.

	March 31,		December 31,
	2009		2008
Capital leases - current portion		23		29
Property, franchise, and other taxes payable		50		54
Accrued warranty costs		44		60
Accrued vacation		51		37
Accrual for Series A & B default penalty and interest		1,901		1,761
Legal, accounting, interest and other accruals		550		451
	$	2,619	$	2,392

~~Conversion Rights~~6. ~~Each~~Notes ~~holder~~Payable of& ~~Series A~~Securities ~~Preferred~~Purchase Stock has the right to convert its shares of Series A Preferred Stock into shares of the Company’s Common Stock at a conversion price of $2.00 per share of Common Stock. The conversion price shall be adjusted in the event of stock splits, stock dividends and similar distributions and events affecting all of the Company’s common stockholders on a pro rata basis so that the conversion price is proportionately increased or decreased to reflect the event. In addition, if there is a change of control (as discussed below), then each holder of Series A Preferred Stock has the right to receive upon conversion, in lieu of Common Stock otherwise issuable, such shares of stock, securities or other property as would have been issued or payable in such change of control with respect to the number of shares of Common Stock which would have been issuable upon conversion had such change of control not taken place (subject to appropriate revisions to preserve the economic value of the Series A preferred shares before the change of control). The Company has to give 10 days notice to the holders of our Series A Preferred Stock before it may effect any “Change of Control” (as defined below). In no event can any holder of Series A Preferred Stock beneficially own or have the right to vote more than 4.99% of the Company’s outstanding shares of common stock at any given time regardless of how the holder of the Series A Preferred Stock obtained such shares. Agreements

~~For purposes of the Series A Preferred Stock, a “Change of Control” means any sale, transfer~~DataLogic orNote other disposition of all or substantially all of the Company’s assets, the adoption of a liquidation plan, any merger or consolidation where the Company is not the surviving entity with the Company’s capital stock unchanged, any share exchange where all of the Company’s shares of Common Stock are converted into other securities or property, any sale or issuance by the Company granting a person the right to acquire 50% or more of the Company’s outstanding Common Stock, any reclassification of the Company’s Common Stock, and the first day on which the current members of the Company’s Board of Directors cease to represent at least a majority of the members of the Company’s Board of Directors then serving. Payable

~~Redemption~~On ~~Rights~~June of30, ~~the~~2006, ~~Company.~~BounceGPS Ifissued a $250,000 atnote ~~any~~to ~~time~~DataLogic ~~after October 1~~International, ~~2005~~Inc. ~~and~~in ~~before~~conjunction ~~October 1,~~with the ~~2008,~~acquisition ~~during~~described in Note 1. The note has a ~~period~~term of at2 ~~least~~years ~~twenty~~with an ~~(20) consecutive~~annual ~~trading~~interest ~~days~~rate ~~(a) the~~of ~~closing~~9%. Principal ~~trading price~~payments of ~~the~~$31,250 ~~Company’s~~were scheduled ~~Common~~to ~~Stock~~commence isOctober at1, ~~least~~2006 ~~200%~~and ofquarterly thereafter. Interest ~~the~~is ~~conversion~~payable ~~price~~quarterly. BounceGPS ~~then~~is currently in ~~effect~~default as principal and ~~(b) the~~interest ~~trading~~payments ~~volume~~have ~~and~~not ~~trading~~been ~~price~~made ofin accordance with the note agreement. The Company’s ~~Common~~has ~~Stock~~accrued ~~result~~$72,099 of ininterest aexpense ~~product~~as of atMarch ~~least~~ 31, 2009. The $~~350~~250,000 onprincipal balance ~~each~~has ~~trading~~been ~~day,~~classified ~~then~~as ~~the~~current ~~Company~~on ~~shall~~the ~~have~~accompanying ~~the~~consolidated ~~right~~balance sheet due to ~~redeem~~the ~~all~~default ~~shares~~mentioned ofabove. Keith ~~Series~~Moore, Director Aand ~~Preferred~~Audit ~~Stock~~Committee ~~then~~Chair ~~outstanding~~of atthe aCompany, ~~price~~was ~~per~~previously ~~share~~the ~~equal~~CEO toand ~~200%~~Chairman of DataLogic ~~the~~International, ~~face~~Inc. BounceGPS ~~amount~~has ofdisputed ~~such~~the ~~shares,~~obligation ~~plus~~to ~~all~~make ~~accrued~~any ~~and~~payments ~~unpaid~~under ~~dividends~~the ~~thereon~~note. See ~~through~~Note ~~the~~9 ~~closing~~for further ~~date~~discussion ofon ~~such~~related ~~redemption~~party transactions.

~~Voting Rights and Limitations. Except as otherwise provided in the Certificate of Designation and as otherwise required by the Delaware General Corporation Law, each holder of~~ Series ~~A Preferred~~ Stock has the right to vote on all matters before the common stockholders on an as-converted basis voting together with the common stockholders as a single class. This voting right is subject to the limitation that in no event may a holder of shares of Series A ~~Preferred~~Note Stock (or warrants discussed below) have the right to convert shares of Series A Preferred Stock into shares of the Company’s Common Stock or to dispose of any shares of Series A Preferred Stock to the extent that such right to effect such conversion or disposition would result in the holder and its affiliates together beneficially owning or having the power to vote more than 4.99% of the Company’s then outstanding shares of Common Stock. The holders of a majority of the Series A Preferred Stock also have the right to appoint one representative to the Company’s Board of Directors and are entitled to designate one observer to the meetings of the Company’s Board of Directors and its committees. Financing

~~Warrants~~On February ~~Issued~~24, 2006, Remote Dynamics closed a Note and Warrant Purchase Agreement with certain institutional investors pursuant to ~~Holder~~which Remote Dynamics sold $5.75 million of its series A senior secured convertible notes and original issue discount series A notes (collectively, “Series A ~~Preferred~~Notes”) ~~Stock.~~in Ina ~~connection~~private placement ~~with~~transaction. In the ~~issuance~~private placement, Remote Dynamics received proceeds of approximately $4.1 million in cash (after ~~shares~~deducting brokers’ commission but before payment of ~~Series A~~legal ~~Preferred~~and ~~Stock~~other professional fees, the ~~Company~~15% ~~also~~original ~~issued~~issue todiscount of $750,000 and the ~~Series A~~tendering ~~Preferred~~of ~~Stock~~50 ~~holder~~shares ~~two~~of ~~warrants~~their to650 ~~purchase~~ shares ofSeries ~~the~~B ~~Company’s~~preferred ~~common~~convertible stock. with an aggregate face value of $500,000 by our sole series B preferred convertible stockholder).

~~With~~The Series ~~respect~~A toNotes ~~the~~are ~~first~~secured ~~warrant~~by ~~(the~~substantially ~~“Structured~~all ~~Warrant”),~~of the ~~holder~~Company’s ~~has~~assets. ~~the~~The Series ~~right~~A ~~to purchase~~Notes upmature to24 ~~1,000,000~~months ~~shares~~from issuance and are convertible at the option of the ~~Company’s~~holder ~~Common~~into ~~Stock~~our atcommon anstock ~~initial~~at ~~exercise~~a conversion price ~~equal~~of to $0.~~909~~000117 per share., ~~The~~subject ~~exercise~~to ~~price~~adjustment ~~per~~for ~~share~~stock ~~may~~splits beand ~~adjusted~~combinations, ifcertain dividends ~~SBC~~and ~~Services~~distributions, ~~Inc.~~reclassification, ~~and/~~exchange or ~~its~~substitution, ~~affiliates~~reorganization, domerger, ~~not~~consolidation ~~award~~or ~~the~~sales ~~Company~~of aassets; ~~contract~~issuances ~~pursuant~~of additional toshares ~~the~~of ~~Request~~common ~~for~~stock, ~~Quotation~~and ~~for~~issuances ~~the~~of common stock ~~provision~~equivalents. Beginning ofon ~~VTS~~September ~~equipment~~1, 2006 and continuing ~~service~~thereafter ~~with~~on ~~(a) a~~the ~~minimum~~first ~~term~~business day of ~~one~~each ~~year~~month, ~~through~~Remote ~~which the~~Dynamics ~~Company~~must ~~will~~pay ~~receive~~an aamount ~~minimum~~to each holder of ~~$10,000,000~~a inSeries ~~annual~~A ~~gross~~Note ~~revenues~~equal ~~(determined~~to in1/18th ~~accordance~~of the ~~with~~original ~~U.S.~~principal ~~generally~~payment ~~accepted~~of ~~accounting~~the ~~principles)~~note; ~~and~~provided, ~~which~~that ~~contract~~if ~~contemplates~~on any principal payment date the ~~renewal~~outstanding ~~by SBC~~principal ~~for~~amount atof ~~least~~the ~~one~~note ~~additional~~is ~~year,~~less orthan ~~(b) a~~such principal ~~minimum~~installment ~~term~~amount, ofthen ~~two~~Remote ~~years~~Dynamics ~~through~~must ~~which~~pay to the ~~Company~~holder of the ~~will~~note ~~receive~~the alesser ~~minimum~~amount. ofRemote ~~$10,000,000~~Dynamics inmay ~~annual~~make ~~gross~~such ~~revenues~~principal ~~(determined~~installment amounts in ~~accordance~~cash ~~with~~or ~~GAAP) (collectively~~in ~~referred~~registered toshares asof ~~the~~its ~~“SBC~~common ~~Condition”)~~stock. If ~~the~~paid ~~SBC~~in ~~Condition~~common stock, iscertain ~~not~~conditions ~~satisfied~~must ~~by November 15,~~be ~~2004~~satisfied, ~~then~~and the ~~exercise~~number ~~price~~of ~~shall~~registered shares to be paid to the holder must be an amount equal to 75the principal installment amount divided by eighty percent (80%) of the average ~~trading~~of ~~price for~~ the ~~Company’s~~closing ~~Common~~bid ~~Stock~~ price for the ten (10) trading ~~day~~days ~~period~~ immediately preceding ~~November 15,~~the principal payment date.

18 15

~~Table~~The purchasers of ~~Contents~~the Series A Notes (and the placement agent in the transaction) received the following common stock purchase warrants:

~~2004.~~· IfSeries ~~the~~A-7 ~~SBC~~warrants ~~Condition~~to ispurchase ~~not satisfied by January 15~~1,031 ~~2005,~~shares ~~then~~in the ~~exercise~~aggregate ~~price~~of ~~shall~~common ~~again~~stock ~~be adjusted~~at soan ~~that~~initial itexercise isprice ~~equal~~of to$8,000 ~~75%~~per ofshare ~~the~~subject ~~average~~to ~~trading~~adjustment ~~price~~ for ~~the~~stock ~~Company’s~~splits ~~Common~~and ~~Stock~~combinations, ~~for the~~certain ~~ten~~dividends ~~trading~~and ~~day~~distributions, ~~period~~reclassification, ~~immediately~~exchange ~~preceding~~or ~~January 15~~substitution, ~~2005.~~reorganization, Asmerger, ~~the~~consolidation ~~Company~~or ~~was~~sales ~~unable~~of ~~to sign~~assets; aissuances ~~contract~~of ~~with~~additional ~~SBC~~shares inof ~~satisfaction~~common ofstock, ~~the~~and ~~SBC~~issuances ~~Condition,~~of ~~the~~common $0stock equivalents.~~909~~ ~~per~~The ~~share~~ exercise price ~~for~~ ~~the Structured Warrant issued to the holder~~ of the ~~Series~~ series A-7 ~~Preferred~~warrants ~~Stock~~ was ~~reduced~~$0.000117 ~~to equal~~as ~~75%~~ of ~~the~~March ~~average~~31, ~~closing~~2009. ~~price~~The ofseries ~~the~~A-7 ~~Company’s~~warrants ~~common~~can ~~stock~~be ~~for~~exercised ~~the~~on 10a ~~trading~~cashless ~~day~~basis ~~period immediately~~beginning ~~prior~~one toyear ~~November 15,~~after ~~2004,~~issuance orif ~~$0.667~~(i) the per share, ~~and~~market ~~was~~value ~~not further adjusted on January 15, 2005 to equal 75%~~ of ~~the~~a ~~average~~share ~~closing price~~ of ~~the~~our ~~Company’s~~ common stock ~~for~~(either the ~~10 trading~~volume ~~day period immediately prior to January 15, 2005 because this would have resulted in an increase in~~ the ~~exercise~~weighted average price ~~not~~or ~~allowed under~~ the ~~terms~~fair ofmarket ~~the~~value ~~Structured~~as ~~Warrant.~~determined Inby ~~addition, the right of the selling stockholder to maintain~~ an ~~investment~~independent ~~oversight~~appraiser) ~~committee~~is togreater ~~monitor~~than ~~and approve~~ the ~~expenditure~~warrant ofprice; ~~the~~and ~~net~~(ii) ~~proceeds~~a ~~from~~registration ~~the~~statement ~~sale~~for of the ~~Series A~~warrant ~~Preferred~~stock ~~Stock~~is ~~shall remain~~not then in effect ~~indefinitely~~. The ~~Structured~~series ~~Warrant~~A-7 ~~may~~warrants beare ~~exercised~~exercisable atfor ~~any time until October 1, 2009. The Structured Warrant contains~~ a ~~provision~~seven-year ~~that~~period ~~prevents any holder~~ from ~~exercising~~ the ~~Structured~~ ~~Warrant~~date toof ~~the~~issuance ~~extent~~(95 ~~that such exercise would result in such holder beneficially owning or having the right to vote more than 4.99%~~ of ~~the~~these ~~Company’s~~warrants ~~outstanding~~are ~~shares~~exercisable ofover ~~common~~5 ~~stock~~years).

~~The~~· ~~second~~Series ~~warrant~~B-4 ~~(the~~warrants ~~“Incentive Warrant”)~~ to purchase ~~625,000~~688 shares ofin the ~~Company’s~~ aggregate of common stock ~~was issued to the selling stockholder~~ at ~~the~~an ~~same~~initial exercise price ~~and~~of ~~adjustment~~$18,000 ~~terms as~~per ~~the~~share ~~Structured~~subject ~~Warrant~~to ~~described~~adjustment ~~above,~~for ~~and~~stock ~~the~~splits ~~Incentive~~and ~~Warrant’s~~combinations, ~~remaining~~certain ~~terms~~dividends ~~are identical~~and ~~except:~~distributions, ~~(i) the~~reclassification, ~~Incentive~~exchange ~~Warrant~~or ~~is only exercisable from September 1~~substitution, ~~2005 through September 1~~reorganization, ~~2010~~merger, ~~and~~consolidation ~~(ii) the~~or ~~Company~~sales ~~has~~of ~~the~~assets; ~~right~~issuances toof ~~repurchase~~additional ~~the~~shares ~~warrant~~of incommon ~~full~~stock, ~~for~~and aissuances ~~total price~~ of ~~$10.00~~common ~~provided~~stock ~~that~~equivalents. ~~(A) the~~The ~~trading~~exercise price of the ~~common~~series ~~stock~~B-4 ~~exceeds~~warrants was $70.50000117 ~~(subject~~as ~~to adjustment~~of ~~for~~March ~~stock splits~~31, ~~etc~~2009.) ~~for~~The 10series ~~consecutive~~B-4 ~~trading~~warrants ~~days~~can atbe ~~anytime~~exercised ~~during~~on ~~the~~a ~~period beginning~~cashless ~~January 1,~~basis ~~2005~~beginning ~~and~~one ~~ending~~year ~~June 30,~~after ~~2005,~~issuance ~~and~~if (Bi) the ~~Company’s~~per ~~gross~~share ~~revenue~~market ~~exceeds $9,999,999~~value ~~for~~of ~~the~~a ~~six-month~~share ~~period~~of ~~ending~~our ~~June 30,~~common ~~2005.~~stock As(either the ~~Company~~volume ~~failed~~the toweighted ~~satisfy~~average price or the ~~SBC Condition~~fair ~~contained~~market invalue ~~the~~as ~~Incentive~~determined ~~Warrant,~~by ~~the~~an ~~same~~independent ~~price~~appraiser) ~~adjustment~~is ~~made~~greater tothan the ~~Structured Warrant~~warrant ~~discussed~~price; ~~above~~and ~~has~~(ii) ~~also~~a ~~been~~registration ~~made~~statement tofor ~~this~~the ~~Incentive~~warrant ~~Warrant~~stock ~~thereby~~is ~~further~~not ~~increasing~~then ~~the dilution~~in ~~to common stockholders~~effect. The ~~Incentive~~series ~~Warrant~~B-4 ~~also~~warrants ~~contains~~are aexercisable ~~provision~~for ~~that~~a ~~prevents~~four-year ~~any holder~~period ~~from~~beginning ~~exercising~~on the ~~Incentive~~date ~~Warrant~~a toresale ~~the~~registration ~~extent~~statement ~~that~~for ~~such~~the ~~exercise~~shares ~~would~~underlying ~~result~~the inwarrants ~~such holder~~is ~~beneficially~~declared ~~owning~~effective orby ~~having~~ the ~~right~~Securities toand ~~vote~~Exchange ~~more~~Commission ~~than~~(65 ~~4.99%~~ of ~~the~~these ~~Company’s~~warrants ~~outstanding shares~~are ofexercisable ~~common~~over ~~stock~~5 years).

~~Anti~~· Series C-~~Dilution~~3 ~~Rights.~~warrants ~~The~~to ~~Structured~~purchase ~~Warrant~~1,375 ~~and~~shares ~~Incentive~~in ~~Warrant~~the ~~each~~aggregate ~~contain~~of ~~certain anti-dilution~~common stock at an initial exercise price ~~protections~~of $4,200 per share subject to ~~approval~~adjustment byfor astock ~~majority~~splits and combinations, certain dividends and distributions, reclassification, exchange or substitution, reorganization, merger, consolidation or sales of ~~the~~assets; ~~Company’s~~issuances ~~stockholders~~of additional shares of common stock, in and issuances of common stock equivalents. The exercise price of the ~~event~~series C-3 warrants was $0.000117 as of March 31, 2009. The series C-3 warrants can be exercised on a ~~dilutive~~cashless ~~stock~~basis beginning one year after issuance if (ini) ~~addition~~the toper ~~anti-dilution~~share ~~protections~~market ~~for~~value of a share of our common stock ~~splits~~ ~~and~~(either ~~other~~the ~~similar~~volume ~~pro~~the ~~rata~~weighted ~~events).~~average ~~The~~price ~~anti-dilution~~or ~~protections~~the ~~contained~~fair inmarket value as determined by an independent appraiser) is greater than the ~~Structured~~ ~~Warrant~~warrant price; and ~~Incentive~~(ii) ~~Warrant~~a ~~were~~registration ~~approved~~statement byfor the ~~Company’s~~warrant ~~stockholders~~stock atis not then in effect. The series C-3 warrants are exercisable for a three-year period from the ~~December 15,~~ ~~2004~~date ~~special~~of ~~meeting~~issuance (125 of ~~the~~these ~~Company’s~~warrants ~~stockholders~~are exercisable over 5 years).

~~Registration~~· ~~Rights Agreement. In connection with the issuance of~~ Series A ~~Preferred~~D-1 ~~Stock and~~warrants ~~Structured~~(callable ~~Warrant~~only ~~and~~at ~~Incentive~~our ~~Warrant~~option) to ~~the~~purchase ~~Series A~~963 ~~Preferred~~shares ~~Stock~~in ~~holder,~~ the ~~Company entered~~aggregate ~~into~~of acommon ~~Registration~~stock ~~Rights~~at ~~Agreement,~~an ~~dated~~exercise ~~October 1,~~price ~~2004,~~per ~~with~~share ~~the~~equal ~~Series A Preferred Stock holder, whereby the Company granted certain registration rights~~ to the ~~Series A~~lesser ~~Preferred Stock~~of: ~~holder.~~(a) ~~On December 3~~$7,000 ~~2004, the Securities~~ and ~~Exchange~~(b) ~~Commission~~90% ~~declared~~of ~~effective~~ the ~~Company’s~~ ~~Registration~~average ~~Statement on Form S-3 covering 5,000,000 shares~~ of the ~~Company’s~~5 ~~Common Stock~~day ~~that~~volume ~~the~~weighted ~~Series A~~average ~~Preferred~~price ~~Stock~~of ~~holder~~our ~~may~~common ~~acquire~~stock ~~upon~~on ~~conversion of~~ the ~~Series A Preferred~~OTC ~~Stock~~Bulletin orBoard ~~upon~~preceding ~~exercise~~the ofcall ~~the~~notice, ~~Structured~~as ~~Warrant~~defined ~~and~~in the ~~Incentive Warrant~~warrant.

~~The~~· ~~Series A~~Warrants ~~Preferred~~issued ~~Stock~~to ~~holder also has~~ the ~~right~~placement toagents ~~piggy-back~~in ~~on to~~ the ~~registration statements~~financing ~~filed~~to bypurchase ~~the~~125 ~~Company registering~~ shares of ~~the~~common ~~Company’s~~stock ~~Common~~at ~~Stock~~an ~~(other~~exercise ~~than~~price ~~Form S-8~~per ~~and~~share ~~Form~~equal ~~S-4 registration statements filed by the Company), subject~~ to ~~share~~$0.000117 ~~cut-backs~~with bya ~~the underwriters~~term ~~(if an underwritten public offering), provided that at least 25%~~ of ~~the~~5 ~~shares~~years ~~requested~~following ~~for inclusion in~~ the ~~registration statement by the Series A Preferred Stock holder must be included in such underwritten public offering~~closing.

~~Redemption~~Under ~~Rights~~the of Series A ~~Preferred~~Note ~~Stock.~~and ~~The~~Warrant Purchase ~~holders~~Agreement, Remote Dynamics made certain covenants to the investors, including, as long as any notes or warrants remain outstanding, to have authorized and reserved for issuance 120% of the aggregate number of shares of ~~Series A~~the ~~Preferred~~Company’s common stock needed for issuance upon ~~Stock~~conversion ~~shall~~of ~~have~~the notes and exercise of the ~~right~~warrants. The Company also agreed to prepare ~~cause~~and file resale registration statements with the SEC for the shares of common stock underlying the notes and warrants. If the registration statements are not filed or declared effective within specified time frames or the Company fails to ~~redeem~~meet ~~any~~other orspecified ~~all~~deadlines, ofthe ~~its~~investors ~~shares~~are atentitled ato ~~price~~monetary liquidated damages equal to ~~115~~1.5% of ~~face~~the ~~value~~total ~~(150~~amount invested by such investor in the private placement, plus an additional 1.5% liquidated damages for each 30-day period thereafter. The Company is obligated to maintain the effectiveness of the ~~face~~registration ~~value~~statements ifuntil the ~~redemption~~earlier ~~event~~of is (a) ~~Change~~the ofdate ~~Control~~when ~~event~~the ~~discussed~~underlying ~~below),~~securities ~~plus~~have ~~accrued~~been ~~but~~sold ~~unpaid~~or ~~dividends~~(b) inthe date on which the ~~following~~underlying shares ~~events:~~of common stock can be sold without restriction under Rule 144(k).

	•		the Common Stock is suspended from trading or is not listed for trading on at least one of, the New York Stock Exchange, the American Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap Market for an aggregate of 10 or more trading days in any twelve-month period;
	•		the initial registration statement required to be filed by the Company pursuant to the Registration Rights Agreement has not been declared effective by January 29, 2005 or such registration statement, after being

We have failed to comply with certain of our other obligations relating to the Series A Notes, including our failure to make scheduled principal payments and to register for resale the shares of common stock underlying the notes and warrants issued in the Series A private placement. The Series A Notes provide for a default interest rate of 10% per annum on the outstanding principal amount of the notes for periods in which certain specified events of default occur and are continuing and liquidated damages for non-compliance with our registration obligations. As of March 31, 2009, we have accrued $992,660 in default interest and liquidated damages under the Series A Notes.

19 16

~~declared~~In ~~effective~~March, 2008, ~~cannot~~we beresumed ~~utilized~~making bypayments ~~the~~to ~~holders~~certain of ~~Series~~our Anote ~~Preferred~~holders ~~Stock for the resale~~ of ~~all~~amounts ofdue under ~~their registrable securities for an aggregate of more than 15 days in~~ the ~~aggregate;~~notes •by ~~the~~issuing ~~Company fails to remove any restrictive legend on any certificate or any~~ shares of ~~Common~~our ~~Stock~~common ~~issued~~stock tounder the ~~holders~~terms of ~~Series A Preferred Stock upon conversion of~~ the notes. In ~~Series A Preferred Stock as and when required and such failure continues uncured for five business days; •~~ the ~~Company~~first ~~provides~~quarter ~~written notice (or otherwise indicates) to any holder~~ of ~~Series A Preferred Stock~~2009, orwe ~~states~~issued ~~by way of public announcement distributed via a press release~~3, ~~at any time~~011, ~~of its intention not to issue~~738,755 ~~or otherwise refuses to issue,~~ shares of ~~Common~~common ~~Stock~~stock toas ~~any~~partial ~~holder~~principal ofpayments ~~Series~~on ~~A Preferred Stock upon conversion in accordance with~~ the ~~terms of the Certificate of Designation for the~~ Series A ~~Preferred~~Notes ~~Stock;~~in satisfaction ~~• the Company or any subsidiary~~ of ~~the Company shall make an assignment for the benefit of creditors~~$601,381 ~~or apply for or consent to the appointment~~ of aobligations ~~receiver~~due orunder ~~trustee for~~ the ~~Company~~notes. We expect orto ~~for~~issue aadditional ~~substantial~~shares ~~part~~ of ~~the~~our ~~Company’s~~common ~~property~~stock or business; • bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of Company shall be instituted by or against the Company or any subsidiary which shall not be dismissed within 60 days of their initiation; • the Company shall: • sell, convey or dispose of all or substantially all of its assets; • merge or consolidate with or into, or engage in ~~any~~payment ~~other business combination with, any other person or entity, in any case which results in either (i) the holders~~ of ~~the~~amounts ~~voting~~due under ~~securities of~~ the ~~Company~~notes ~~immediately~~during ~~prior to such transaction holding or having~~ the ~~right~~remainder ~~to direct the voting~~ of ~~fifty~~2009 ~~percent~~and (50%) or less of the total outstanding voting securities of the Company or such other surviving or acquiring person or entity immediately following such transaction or (ii) the members of the Board of Directors or other governing body of the Company comprising fifty percent (50%) or less of the members of the board of directors or other governing body of the Corporation or such other surviving or acquiring person or entity immediately following such transaction; • either (i) fail to paythereafter. In general, ~~when due, or within any applicable grace period, any payment with respect to any indebtedness of~~ the ~~Company~~shares inissued ~~excess~~are ofavailable ~~$250,000~~for ~~due~~immediate toresale ~~any third party, other than payments contested~~ by the ~~Company~~holders in accordance ~~good~~with ~~faith,~~Rule or144 ~~(ii) suffer to exist any other default~~ under ~~any agreement binding~~ the ~~Company~~Securities ~~which~~Act ~~default or event~~ of ~~default would or is likely to have a material adverse effect on the business~~1933, operations, properties, prospects or financial condition of the Company; • have fifty percent (50%) or more of the voting power of its capital stock owned beneficially by one person, entity or “group”; • experience any other Change of Control not otherwise addressed above; or • the Company otherwise shall breach any material term under the private placement transaction documents, and if such breach is curable, shall fail to cure such breach within 10 business days after the Company has been notified thereof in writing by the holder;as amended.

~~Actions~~The following ~~Requiring~~table ~~Approval~~summarizes ~~of Holder of a Majority of~~ the ~~Company’s~~ Series A ~~Preferred~~Notes ~~Stock. So long~~ as ~~any shares~~ of ~~Series A~~March ~~Preferred Stock are outstanding~~31, ~~the Company shall not take any~~2009 ~~of the following corporate actions~~ (~~whether by merger, consolidation or otherwise~~000’s) ~~without first obtaining the approval of the majority holders of Series A Preferred Stock~~:

(i) alter or change the rights, preferences or privileges of the Series A Preferred Stock, or increase the authorized number of shares of Series A Preferred Stock;

				Less		Carrying
	Principal			Discount		Amount

Total Series A Notes - December 31, 2008	$	3, 646		$	0	$	3,646

Partial Principal Payments	$	(601	)	$	-	$	(601	)

Total Series A Notes - March 31, 2009	$	3, 045		$	0	$	3,045

~~(ii) amend~~Series ~~its~~B ~~certificate of incorporation or bylaws;~~Note Financing

~~(iii) issue~~On November ~~any~~30, ~~shares~~2006, ofthe ~~Series A~~Company ~~Preferred~~entered ~~Stock~~into a Note and Warrant Purchase Agreement with BMSI and other ~~than~~accredited ~~pursuant~~investors. Pursuant to the ~~Securities~~ Note and Warrant Purchase Agreement;, the Company received $1,691,500 in gross proceeds from the sale of up to (i) $1,691,500 principal amount of its series B subordinated secured convertible promissory notes, (ii) $1,278,200 principal amount of its original issue discount series B subordinated secured convertible promissory notes, (iii) series E-7 warrants to purchase 306,963 shares of the Company’s common stock and (iv) series F-4 warrants to purchase 306,963 shares of the Company’s common stock.

20The series B subordinated secured convertible promissory notes and the series B original issue discount series B subordinated secured convertible promissory notes (collectively, the “Series B Notes”) are secured by all of the Company’s assets, subject to existing liens, are due on dates ranging from December 4, 2009 to May 2011 and began scheduled amortization of principal (in nine quarterly installments) on dates ranging from August 1, 2007 to May 2011. The Company may make principal installment payments in cash or in registered shares of its common stock. If paid in common stock, certain conditions must be satisfied, and the number of registered shares to be paid to the holder must be an amount equal to the principal installment amount divided by the lesser of (i) $1.00 and (ii) 90% of the average of the volume weighted average trading prices of the common stock for the ten trading days immediately preceding the principal payment. The Series B Notes are convertible into the Company’s common stock at a conversion price of $0.000124 per share (as of March 31, 2009), subject to adjustment for stock splits and combinations, certain dividends and distributions, reclassification, exchange or substitution, reorganization, merger, consolidation or sales of assets; issuances of additional shares of common stock, and issuances of common stock equivalents.

~~Table~~Upon the occurrence of ~~Contents~~specified events of default under the Series B Notes, the holders may (a) demand prepayment of the notes as described below, (b) demand that the principal amount of the notes then outstanding be converted into shares of the Company’s common stock; and/or (c) exercise any of the holder’s other rights or remedies under the transaction documents or applicable law. If the holders require the Company to prepay all or a portion of the notes, the prepayment price would equal to 120% of the principal amount of the notes. The holders would also recover all other costs or expenses due in respect of the notes and the other transaction documents.

~~(iv) redeem, repurchase or otherwise acquire, or declare or pay any cash dividend or distribution on, any junior securities;~~ 17

~~(v) increase~~As part of the ~~par~~Series ~~value~~B ofNote financing, the ~~Common~~Company ~~Stock;~~ agreed:

· pursuant to the terms of "most favored nations" rights granted to the Series A note holders investors, to issue in exchange for $1,013,755 principal amount of the Series A Notes, an additional (vii) ~~sell~~ ~~all~~$1,146,755 orprincipal ~~substantially~~amount ~~all~~of Series B Notes, (ii) $458,702 principal amount of ~~its~~Series ~~assets~~B orOID Notes, (iii) series E-7 warrants to purchase 3,860 shares of the Company’s common stock and (iv) series F-4 warrants to purchase 3,860 orshares ~~consolidate~~of orthe ~~merge~~Company’s ~~with another~~common ~~entity;~~ stock. The Company has not received and will not receive any additional proceeds from the exchange. As of March 31, 2009 and December 31, 2008, the Company had issued (i) $1,003,394 principal amount of Series B Notes, (ii) $401,357 principal amount of Series B OID Notes, (iii) series E-7 warrants to purchase 2,352 shares of the Company’s common stock and (iv) series F-4 warrants to purchase 2,352 shares of the Company’s common stock, in exchange for $901,144 principal amount of the Series A Notes. The exchange was completed as of December 31, 2007.

· to issue, in exchange for 50 shares of the Company’s Series B convertible preferred stock with an aggregate face value of $500,000 (~~vii~~held by SDS) ~~enter~~ ~~into~~an oradditional ~~permit~~(i) $700,000 principal amount of Series B Notes, (ii) series E-7 warrants to ~~occur~~purchase ~~any~~1,172 ~~Change~~shares of ~~Control~~the ~~transaction;~~ Company’s common stock and (iii) series F-4 warrants to purchase 1,172 shares of the Company’s common stock. As of December, 31, 2007, this exchange was completed in its entirety.

· to pay to the placement agent for the transaction consideration consisting of (~~viii~~a) ~~sell~~ a cash sales commission of $150,480 ~~transfer~~(b) orwarrants ~~encumber~~to ~~technology~~purchase 822 shares of the Company’s common stock at an exercise price of $0.000124 per share (as of March 31, ~~other~~2009) ~~than~~and ~~licenses~~being ~~granted~~exercisable infor ten years, (c) series E-7 warrants to purchase 617 shares of the ~~ordinary course~~Company’s common stock, and (d) series F-4 warrants to purchase 617 shares of ~~business;~~ the Company’s common stock. The Company also paid $60,000 to Strands Management Company, LLC for consulting work as well as $59,816 in legal counsel fees as part of the private placement.

~~(ix) liquidate,~~The Company ~~dissolve~~has failed to comply with certain of its other obligations relating to the Series B Notes, ~~recapitalize~~including orthe ~~reorganize;~~Company’s failure to make scheduled principal payments and to register for resale the shares of common stock underlying the notes and warrants issued in the Series B private placement. The Series B Notes provide for a default interest rate of 10% per annum on the outstanding principal amount of the notes for periods in which certain specified events of default occur and are continuing and liquidated damages for non-compliance with our registration obligations. As of March 31, 2009, the Company has accrued $908,680 in default interest and liquidated damages under the Series B Notes.

~~(x) authorize,~~The Company’s ~~reserve,~~non-compliance ~~or issue Common Stock~~ with ~~respect to any plan or agreement that provides for~~ the ~~issuance~~terms of ~~equity~~the ~~securities~~notes toalso ~~employees,~~exposes ~~officers,~~the ~~directors~~Company orto ~~consultants~~the ofrisk that the ~~Corporation~~note inholders ~~excess~~could ofexercise ~~250,000~~their ~~shares~~prepayment ofor ~~Common~~other ~~Stock;~~remedies under the notes.

~~(xi) change~~In March, 2008, the Company commenced making payments to certain of its ~~principal~~Series ~~business;~~B note holders of amounts due under the notes by issuing shares of the Company’s common stock under the terms of the notes. Through the first three months of 2009, the Company issued 1,047,937,537 shares of common stock as partial payments on the Series B Notes in satisfaction of $185,961 of obligations due under the notes. The Company expects to issue additional shares of its common stock in payment of amounts due under the notes during the remainder of 2009 and thereafter.

~~(xii) issue~~The Company ~~shares~~does ofnot ~~Common~~currently ~~Stock,~~have ~~other~~the ~~than~~cash ason ~~contemplated~~hand ~~herein~~to repay amounts due under its Series B Notes if the note holders elect to exercise their repayment or byother remedies. If the ~~Incentive~~Company’s efforts to restructure or otherwise ~~Warrant~~satisfy its obligations under the notes are unsuccessful, and ~~Structured~~the ~~Warrant;~~Company is unable to raise enough money to cover the amounts payable under the notes, the Company may be forced to restructure, file for bankruptcy, sell assets or cease operations.

~~(xiii) increase the number of members of the Board of Directors to more than 7 members, or,~~BounceGPS ~~if no Series A director has been elected, increase the number of members of the Board to more than 6 members;~~ Acquisition

~~(xiv) alter~~On November or30, ~~change~~2006, Remote Dynamics entered into a Share Exchange Agreement with BMSI. Pursuant to the Share ~~rights~~Exchange Agreement, ~~preferences~~the orCompany ~~privileges~~agreed ofto ~~any~~acquire from BMSI 100% of the capital stock of ~~the~~BounceGPS, Inc., a provider of mobile asset management ~~Corporation~~solutions. As sopart asof the consideration for the acquisition, the Company issued to ~~affect~~BMSI ~~adversely~~a Series B Note in the principal amount of $660,000 and a Series A ~~Preferred~~B ~~Stock;~~OID Note in the principal amount of $264,000. See Note 1 for a more detailed description of the acquisition

~~(xv) create or issue any senior securities or pari passu securities to the Series A Preferred Stock;~~ 18

~~(xvi) except~~The following ~~for~~table summarizes the ~~issuance~~Series ofB ~~debt~~Notes ~~securities~~as ~~to, or incurrence~~ of ~~indebtedness~~March ~~from~~31, a2009 ~~recognized financial institution in an aggregate amount not exceeding $5,000,000~~ (~~or such additional amount as the Board and the majority holders of the Company~~000’s ~~Series A Preferred Stock agree is reasonably necessary for the Company to perform its obligations under a contract with SBC Communications, Inc.~~) and which, in the case of debt securities, are not convertible securities or purchase rights, issue any debt securities or incur any indebtedness that would have any preferences over the Series A Preferred Stock upon liquidation of the Company, or redeem, repurchase, prepay or otherwise acquire any outstanding debt securities or indebtedness of the Company, except as expressly required by the terms of such securities or indebtedness; :

(xvii) make any dilutive issuance;


Total Series B Notes - December 31, 2008	$	7,134		$	1,301		$	5,834

Partial Principal Payments		(186	)		-			(186	)

Amortization of debt discount and beneficial conversion feature		-			(4	)		4

Accretion of Series B Notes		-			(226	)		226

Total Series B Notes - March 31, 2009	$	6,948		$	1,070		$	5,879

~~(xviii) enter~~Accounting for ~~into~~Series ~~any~~B ~~agreement,~~Notes ~~commitment,~~and ~~understanding~~Warrant orPurchase ~~other arrangement to take any of the foregoing actions; or~~ Agreement

~~(xix) cause~~In connection orwith ~~authorize~~the ~~any~~convertible ~~subsidiary~~Series ofB Notes and OID Notes, we issued warrants to the ~~Company~~Note holders to ~~engage~~purchase inapproximately ~~any~~231.9 million shares of our common stock at exercise prices noted above. The fair value of the ~~foregoing~~warrants was ~~actions~~estimated to be approximately $399,000 using the Black-Scholes pricing model. The fair value of the warrants allocated to the warrants on a relative fair value basis was determined to be approximately $262,000 and was recorded as additional paid-in-capital and a debt discount. The debt discount will be amortized to interest expense over the terms of the notes.

~~Notwithstanding~~Additionally, the Series B Notes and OID Notes were considered to have a beneficial conversion feature because they permitted the ~~foregoing,~~holders ~~after~~to ~~such~~convert ~~time~~their asinterest in the Series ~~SBC~~B ~~Condition~~Notes isand ~~satisfied,~~OID noNotes ~~such~~into shares of our common stock at a deemed ~~approval~~effective fair value conversion price of ~~the~~$0.70 ~~majority~~per ~~holders~~share, which on the date of issuance, was lower than the ~~Company’s~~price ~~Series A~~of ~~Preferred~~our ~~Stock~~common ~~shall~~stock ~~generally~~of be$0.75 per share. The ~~required~~total ~~with~~amount ~~respect~~of tothe ~~subparagraphs~~beneficial ~~(i)~~conversion —feature ~~(xiii)~~was approximately $51,000. This ~~and~~amount ~~(xviii)~~was —recorded ~~(xix) if~~as ~~such~~additional ~~action~~paid-in-capital ~~is approved~~and bywill ~~the~~be ~~affirmative~~amortized ~~vote~~to interest expense from the date of atissuance ~~least~~to ~~two-thirds~~the earlier of the ~~Company’s~~maturity ~~Board~~of the Series B Notes or to the date of ~~Directors.~~the conversion.

~~Accounting~~We recorded $264,934 of transaction costs as deferred financing fees. We also recorded $62,169 as deferred financing fees for ~~Sale~~the fair value of ~~Series A~~the placement ~~Convertible~~agent ~~Redeemable~~warrants ~~Preferred~~which ~~Stock~~were valued using the Black-Scholes pricing model. The deferred financing fees will be amortized to interest expense from the date of the Series B Notes to the earlier of the maturity of the Series B Notes or the date of conversion. During the three months ended March 31, 2009, $27,000 of the deferred financing fees was amortized to interest expense.

~~The net cash proceeds received by the Company from the sale of the 5,000 shares of Series A Preferred Stock were $4,651,000~~7. ~~Approximately $1,037,000 of the net proceeds were allocated to~~ STOCKHOLDERS’ the Structured Warrant and Incentive Warrant based on their relative fair value as computed using the Black-Scholes pricing model and approximately $3,542,000 of the remaining proceeds, net of $72,000 in additional transaction costs, were allocated to the Series A Preferred Stock. EQUITY

~~As discussed above, the holders of the Series A Preferred~~ Common Stock have the right to require the Company to redeem any or all of its outstanding preferred shares upon a change of control or certain other contingent events that could be outside the control of the Company. Thus, the Series A Preferred Stock is carried outside of permanent equity in the mezzanine section of the Company’s balance sheet.

21As of December 31, 2008 we had 5,000,000,000 shares of common stock authorized with a par value of $0.0001. We had 677,858,548 common stock shares issued and 677,858,501 shares outstanding.

~~Table~~As of March ~~Contents~~31, 2009 we had 5,000,000,000 shares of common stock authorized with a par value of $0.0001. We had 4,737,534,793 common stock shares issued and 4,737,534,746 shares outstanding.

OnIn ~~November 15~~the first quarter of 2009, ~~2004~~we ~~the~~issued ~~exercise~~3,011,738,755 ~~price~~shares of common stock as partial principal payments on the ~~Structured~~Series ~~Warrant~~A ~~and~~Notes ~~Incentive~~in ~~Warrant~~satisfaction ~~was~~of $601,381 of ~~adjusted~~obligations ~~downward~~due ~~from~~under $0the notes.~~909~~ Additionally, ~~per~~during ~~share~~the tofirst quarter ~~$0.667~~of ~~per~~2008, ~~share~~we ~~pursuant~~issued to1,047,937,537 shares of common stock as partial payments on the ~~terms~~Series B Notes in satisfaction of ~~the~~$185,961 ~~warrants~~of obligations due asunder the ~~Company~~notes. We ~~was~~expect ~~unable~~ to ~~sign~~issue aadditional ~~contract~~shares ~~with~~of ~~SBC~~our common stock in ~~satisfaction~~payment of amounts due under the ~~SBC~~notes ~~Condition~~during the remainder of 2009 and thereafter. In ~~Thus~~general, the ~~Company~~shares ~~recorded~~issued anare ~~expense~~available offor ~~approximately~~immediate resale ~~$85,000~~by tothe ~~reflect~~holders in accordance with Rule 144 under the ~~additional~~Securities ~~benefit~~Act ~~created~~of ~~for~~1933, ~~SDS~~as amended.

~~Structured~~On February ~~Warrant~~28, ~~Exercise~~2009, we issued 105 shares of series C convertible preferred stock to BMSI in satisfaction of our dividend obligations under our outstanding series C convertible preferred stock for the period ended February 28, 2009. The shares have a face amount of $1,000 per share.

On April ~~25, 2005, the Company received a warrant exercise notice from SDS whereby SDS~~ ~~irrevocably exercised its right to purchase 500~~17,~~000~~ ~~shares of the Company’s common stock via a cashless exercise under the Structured Warrant. As a result of the cashless exercise~~2009, ~~SDS~~we ~~utilized 162,683~~amended ~~shares~~our ofAmended ~~common~~and ~~stock~~Restated ~~issuable~~Certificate ~~upon exercise~~ of ~~the~~Incorporation ~~Structured Warrant~~ to ~~pay for the~~ ~~exercise~~increase ~~price.~~our ~~Thus,~~authorized onshares ~~April 26, 2005, the Company issued the net amount~~ of ~~337,317~~our ~~shares of~~ common stock to ~~SDS. Following this warrant exercise, SDS has the remaining option to purchase~~ ~~500~~15,000 ~~shares of common stock of the Company under the Structured Warrant~~,000,000.

~~5. Securities Purchase Agreement – Proposed Sale of Series B Convertible Redeemable Preferred Stock~~ 19

OnFrom April 1, 2009 to May 31 13, ~~2005~~2009, ~~the~~we ~~Company~~made ~~entered~~payments ~~into~~to acertain ~~Securities~~holders ~~Purchase~~of ~~Agreement~~our secured ~~with~~convertible ~~SDS~~notes ~~for~~of amounts due under the ~~proposed~~ ~~sale~~notes by issuing shares of our ~~$6.5 million~~common stock in accordance with the terms of the notes. For the Series B ~~convertible~~A ~~preferred~~notes, ~~stock~~these ~~and~~payments ~~common~~were ~~stock~~in ~~purchase~~the form of 175,000,000 shares of our ~~warrants~~common stock in asatisfaction ~~private~~of ~~placement~~$17,500 ~~transaction~~of (obligations due under the “Series B ~~Convertible~~A notes, ~~Preferred~~representing ~~Stock”)~~an issuance price $.0001 ~~The~~per share. For the Series B ~~Convertible~~notes, ~~Preferred~~these ~~Stock~~payments ~~would~~were bein ~~issued~~the toform ~~SDS~~of ~~pursuant~~245,135,486 toshares ~~the~~of ~~exemption~~our common ~~from~~stock ~~the registration~~in ~~requirements~~satisfaction of ~~the~~$27,578 ~~Securities~~of ~~Act~~obligations ofdue ~~1933~~under the Series B notes, asrepresenting ~~amended~~an ~~provided~~issuance byprice ~~Regulation D promulgated~~of ~~thereunder~~$.000113 per share (for the Series B Notes).

The Company would receive a portion of the proceeds from the sale of the Series B Convertible Preferred Stock in the form of $5 million of Series A Convertible Preferred Stock held by SDS, which will be exchanged for the Series B Convertible Preferred Stock, resulting in net proceeds to the Company of $750,000 from the proposed sale of the Series B Convertible Preferred Stock. The proposed Series B Convertible Preferred Stock would be convertible to common stock of the Company, par value $0.01 per share (“Common Stock”), at a minimum conversion price of $1.55 per share of Common Stock. As per the proposed transaction, SDS would also receive a common stock purchase warrant with a 5-year term to purchase 2 million shares of Common Stock at an exercise price of $1.75 per share (the “Series B Warrant”), pursuant to that certain Stock Purchase Warrant Agreement. The closing of the Series B Convertible Preferred Stock sale and the Series B Warrant is subject to customary closing conditions, including Nasdaq clearance and stockholder approval. The Company intends to obtain the approval of its stockholders to consummate the sale of the Series B Convertible Preferred Stock and the Series B Warrant at its 2005 annual meeting of stockholders to be held in August of 2005. Warrants

AsA ~~per the terms~~ summary of ~~the~~our ~~proposed~~warrants ~~sale~~as of ~~the~~March ~~Series B~~31, ~~Convertible~~2009 ~~Preferred Stock~~ and ~~the transactions contemplated thereby~~2008, ~~SDS~~and ~~would have as-converted voting rights limited to 9.99% of~~ the ~~outstanding~~changes ~~common~~during ~~stock~~2009 ~~of the Company. Additionally, SDS would not be able to convert the~~and ~~preferred~~2008 ~~stock~~are topresented common nor exercise the warrants to the extent that such conversions or exercises would result in the SDS beneficially owning more than 9.99% of the Company’s common stock. SDS would also have the right to designate one voting director to the Company’s board of directors and one non-voting observation director. below:

In addition to the above pricing and number of the securities sold, the Securities Purchase Agreement also provides that the Company would use the proceeds from this offering only for general corporate purposes and working capital. The Company further agreed to (i) timely file with the SEC all reports required to be filed by it under the Securities Exchange Act of 1934, (ii) reserve 10,000,000 shares of Common Stock for issuance upon conversion of the Series B Convertible Preferred Stock and upon exercise of the Series B Warrants and the Bridge Note Warrants described below, (iii) use commercially reasonable efforts to maintain the listing of the Common Stock on the Nasdaq SmallCap Market, and (iv) not redeem, repurchase or declare or pay any cash dividend on any shares of capital stock. The Company further granted SDS the right to participate in the future issuance of equity or equity-linked securities of the Company for a period of 12 months after the closing of the Series B Convertible Preferred Stock issuance. The Company also agreed to indemnify SDS from damages it incurs (A) as a result of any breach of the representations, warranties and covenants contained in the Securities Purchase Agreement or in the related transaction documents by the Company or (B) as a result of a cause of action brought by a third-party resulting from (1) the execution of the transaction documents, (2) any transaction financed by the use of proceeds or (3) the status of SDS as a holder of the Company’s securities.

				Weighted
	Number of			Average
	options			Exercise Price
Outstanding at January 1, 2008		636,113		$	8.32
Granted		-			-
Exercised		-			-
Expired		-			-
Outstanding at December 31, 2008		636,113			0.00
Granted		-			-
Exercised		-			-
Expired		(1,375	)		0.00
Outstanding at March 31, 2009		634,738		$	0.00

The ~~terms~~fair value of ~~the~~each ~~proposed~~warrant ~~Series B~~has ~~Convertible~~been ~~Preferred~~estimated ~~Stock~~as ~~are set forth in a Certificate~~ of ~~Designation~~March 31, ~~Preferences~~2009 ~~and~~using ~~Rights. The Series B Preferred Stock would bear a dividend for~~ the ~~first~~Black-Scholes ~~two~~option ~~years~~valuation itmodel, ~~remains~~using ~~outstanding~~the following assumptions:

	Risk Free Interest Rate
6 Month		0.43	%
2 Year		0.81	%
3 Year		1.15	%
5 Year		1.67	%

Variance of Returns		591.7	%
Standard Deviation of Returns		243.2	%
Average Expected Term		3

~~Table of Contents~~20

atWarrants outstanding ~~a rate of 8% per year for the first year~~ and 3%exercisable ~~per~~as ~~annum for~~of ~~the~~March ~~second~~31, ~~year.~~ 2009 are:

The holders of shares of Series B Convertible Preferred Stock would have the right to cause the Company to redeem any or all of its shares at a price equal to 115% of face value, plus accrued but unpaid dividends in the following events:

Warrants Outstanding								Warrants Exercisable
				Weighted
				Average		Weighted				Weighted
				Remaining		Average				Average
Exercise		Number		Contractual		Exercise		Number		Exercise
Price		Outstanding		Life (Years)		Price		Exercisable		Price
$	200		83		1.42	$	200		83	$	200
	843		1,453		1.42		843		1,453		843
	35,000		100		1.42		35,000		100		35,000
	0.000117		1,031		3.90		0.000117		1,031		0.000117
	0.000117		688		2.90		0.000117		688		0.000117
	0.000117		963		0.40		0.000117		963		0.000117
	0.000117		125		1.90		0.000117		125		0.000117
	0.000117		314,839		4.68		0.000117		314,839		0.000117
	0.000117		314,839		1.68		0.000117		314,839		0.000117
	0.000117		617		2.68		0.000117		617		0.000117
			634,738						634,738

~~- the Common Stock is suspended from trading or is not listed for trading on at least one of~~8. ~~(i) the~~Other ~~New~~Commitments ~~York~~and ~~Stock Exchange, (ii) the American Stock Exchange, (iii) the Nasdaq National Market or (iv) the Nasdaq SmallCap Market for an aggregate of 10 or more trading days in any twelve-month period;~~ Contingencies

~~- the initial registration statement required to be filed by the Company pursuant to the~~Product ~~Registration~~Warranty Rights Agreement has not been declared effective by the one hundred twentieth (120th) day following the Closing or such registration statement, after being declared effective, cannot be utilized by the holders of Series B Preferred Stock for the resale of all of their registrable securities for an aggregate of more than 15 days in the aggregate; Guarantees

-We ~~the~~provide ~~Company~~a ~~fails~~limited towarranty ~~remove~~on ~~any~~all REDIview ~~restrictive~~product ~~legend~~sales, onat ~~any~~no ~~certificate~~additional orcost ~~any~~to ~~shares~~the ofcustomer, which provides ~~Common~~for ~~Stock~~replacement ~~issued~~of todefective parts for one year after the ~~holders~~product ofis sold. We ~~Series B~~provide ~~Convertible~~a ~~Preferred~~limited ~~Stock~~warranty ~~upon~~on ~~conversion~~all VMI product sales, at no additional cost to the customer, which provides for replacement of defective parts during the ~~Series B~~contract ~~Preferred~~term, ~~Stock~~typically asranging ~~and~~from ~~when~~one ~~required~~to ~~and~~five years. We ~~such~~establish ~~failure~~an ~~continues~~estimated ~~uncured~~liability for expected future ~~five~~warranty ~~business~~commitments ~~days;~~based on a review of historical warranty expenditures associated with these products and other similar products. The product warranty liability, which is included in “Accrued expenses and other current liabilities” and “Other non-current liabilities” in the accompanying Consolidated Balance Sheets, totaled approximately $44,000 at March 31, 2009.

~~- the Company provides written notice (or otherwise indicates) to any holder of Series B~~Other ~~Convertible~~Purchase Preferred Stock, or states by way of public announcement distributed via a press release, at any time, of its intention not to issue, or otherwise refuses to issue, shares of Common Stock to any holder of Series B Convertible Preferred Stock upon conversion in accordance with the terms of this Certificate of Designation; Commitments

-As ~~the Company or any subsidiary~~ of March ~~the~~31, ~~Company~~2009, ~~shall~~we ~~make~~had anapproximately ~~assignment for the benefit of creditors~~$84,000 orin ~~apply~~primarily ~~for or consent to the appointment of a receiver or trustee for it or for~~inventory-related apurchase ~~substantial part of its property or business;~~ commitments.

- bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or against the Company or any subsidiary which shall not be dismissed within 60 days of their initiation; Litigation

-In March 2008, Teletouch Communications, Inc. brought a lawsuit against the Company alleging ~~shall:~~the Company was liable for payment of a $5.8 million default judgment obtained by Teletouch against DataLogic International, Inc., based on corporate alter ego and other claims (Teletouch Communications, Inc. dba Teletouch v. Remote Dynamics, Inc., Collin County, Texas District Court). The Company believes that Teletouch’s claims are without merit.

-From ~~sell~~time to time, ~~convey~~we ormay ~~dispose~~be subject to legal proceedings and claims that arise in the ordinary course of ~~all~~business. We ordo ~~substantially~~not ~~all~~believe that any claims other than those described above exist where the outcome of ~~its~~such ~~assets;~~matters would have a material adverse affect on our consolidated financial position, operating results or cash flows. However, there can be no assurance such legal proceedings will not have a material impact on future results.

~~- merge or consolidate with or into, or engage in any other business combination~~9. Related ~~with,~~Party any other person or entity, in any case which results in either (i) the holders of the voting securities of the Company immediately prior to such transaction holding or having the right to direct the voting of fifty percent (50%) or less of the total outstanding voting securities of the Company or such other surviving or acquiring person or entity immediately following such transaction or (ii) the members of the board of directors or other governing body of the Company comprising fifty percent (50%) of less of the members of the board of directors or other governing body of the Corporation or such other surviving or acquiring person or entity immediately following such transaction; Transactions

-In ~~either~~June, ~~(i) fail~~2006, ~~to pay~~BounceGPS, ~~when~~our ~~due~~wholly owned subsidiary, orissued ~~within~~a ~~any~~$250,000 ~~applicable~~note ~~grace~~to ~~period~~DataLogic International, ~~any~~Inc. in ~~payment~~conjunction with ~~respect~~the toacquisition ~~any indebtedness~~ of ~~the~~certain ~~Company~~assets. Keith inMoore ~~excess~~(a member of ~~$250,000~~our ~~due~~Board ~~to any~~of ~~third party~~Directors), ~~other~~was ~~than payments contested by~~ the ~~Company~~CEO inand ~~good~~Chairman ~~faith,~~of ~~or (ii)~~DataLogic ~~suffer~~International, toInc. ~~exist~~at ~~any~~the ~~other~~time ~~default~~the ~~under~~note ~~any~~was ~~agreement~~issued. Mr. ~~binding~~Moore ~~the Company which~~was ~~default~~not ora ~~event~~member of ~~default~~our ~~would~~Board orof isDirectors ~~likely~~or tothe ~~have~~board aof ~~material~~directors ~~adverse~~of ~~effect~~BounceGPS onat the ~~business,~~time ~~operations,~~the ~~properties,~~note ~~prospects~~was orissued. Mr. ~~financial~~Moore ~~condition~~is not a member of the board ~~Company;~~ of directors of BounceGPS.

~~- have fifty percent (50%) or more of the voting power of its capital stock owned beneficially by one person, entity or “group”;~~ 21

-On ~~experience~~May ~~any~~1, 2007, we entered into a Support Services Agreement with Strands. David Walters, our Chairman, and Keith Moore, our director, each are members of, and each own 50% of the ownership interests in Strands. Under the Support Services Agreement, Strands provides us with financial management services, facilities and administrative services, business development services, creditor resolution services and other ~~change~~services as agreed by the parties. We pay to Strands monthly cash fees of $22,000 ~~control~~for ~~not~~the ~~otherwise~~services. In ~~addressed~~addition, ~~above;~~Strands will receive fees equal to (a) 6% of the revenue generated from any business development transaction with a customer or partner introduced to us by Strands and (b) 20% of the savings to us from any creditor debt reduction resolved by Strands on our behalf. The initial term of the Support Services Agreement expires on May 1, 2009. Fees paid to Strands totaled $66,000 and $70,000 for the three months ended March 31, 2009 and 2008, respectively. The Company had an outstanding balance due to Strands of $0 as of March 31, 2009.

-On ~~the~~May ~~Company~~1, ~~otherwise~~2007, ~~shall~~we ~~breach~~entered ~~any~~into ~~material~~a Placement ~~term~~Agency ~~hereunder~~and orAdvisory ~~under~~Services ~~the~~Agreement with Monarch Bay Associates, ~~transaction~~LLC ~~documents~~(“MBA”). (MBA is a FINRA registered firm.) David Walters, our Chairman, and ifKeith ~~such~~Moore, ~~breach~~our isdirector, ~~curable~~each are members of, ~~shall~~and each ~~fail~~owns 50% of the ownership interests in MBA. Under the agreement, MBA acts as our placement agent on an exclusive basis with respect to ~~cure~~private ~~such~~placements of ~~breach~~our capital stock and as our exclusive advisor with respect to acquisitions, ~~within~~mergers, ~~ten~~joint ~~business~~ventures ~~days~~and ~~after~~similar transactions. MBA will receive fees equal to (a) 9% of the ~~Company~~gross ~~has~~proceeds ~~been~~raised ~~notified~~by ~~thereof~~us in ~~writing~~any private placement (plus warrants to purchase 9% of the number of shares of common stock issued or issuable by us in connection with the private placement) and (b) 3% of the ~~holder;~~total consideration paid or received by us or our stockholders in an acquisition, merger, joint venture or similar transaction. The initial term of the Placement Agency and Advisory Services Agreement expired on May 1, 2008. The new agreement was entered into effective December 1, 2008 under the same terms as the prior agreement. No fees were paid to MBA in 2008 or 2009.

23On November 14, 2007, BounceGPS loaned $21,875 to BMSI. Interest accrued at an annual rate of 10%. David Walters, Chairman, is also the Chairman and Chief Executive Officer of BMSI and beneficially owns a majority of the outstanding common stock of BMSI. We received payment in full, including interest of $729 in March 2008.

~~Table~~On December 26, 2007, BounceGPS loaned $22,000 to Monarch Staffing, Inc. and $25,000 to a subsidiary of ~~Contents~~Monarch Staffing, Inc. Interest accrued at an annual rate of 10%. David Walters (our Chairman) is also the Chairman of Monarch Staffing and beneficially owns 41% of the outstanding common stock of Monarch Staffing. David Walters (a member of our Board of Directors) is also a director of Monarch Staffing and beneficially owns 41% of the outstanding common stock of Monarch Staffing. Keith Moore (a Director) is also a Director of Monarch Staffing and beneficially owns 41% of the outstanding common stock of Monarch Staffing. We received payment in full, including interest of $1,175 in March 2008.

AsOn ~~per the proposed Certificate of Designation~~June 13, ~~as long as any shares of Series B Convertible Preferred Stock are outstanding~~2008, the Company ~~would~~borrowed ~~not~~$20,000 befrom ~~able~~Strands toManagement ~~take~~Company ~~any~~to ofcover ~~the~~short-term ~~following~~working ~~corporate~~capital ~~actions~~needs. This ~~(whether~~amount bywas ~~merger,~~repaid ~~consolidation~~on orJune ~~otherwise) without~~18, ~~first~~2008 ~~obtaining~~with ~~the~~interest ~~approval~~ of ~~the~~10% ~~majority~~per ~~holders of Series B Convertible Preferred Stock:~~ annum.

-On ~~alter~~September or16, ~~change~~2008 ~~the~~and ~~rights~~September 12, 2008, ~~preferences~~we orentered ~~privileges~~into working capital line of ~~the~~credit ~~Series B~~promissory ~~Convertible~~notes with Gary ~~Preferred~~Hallgren, ~~Stock~~our Chief Executive Officer, orand ~~increase~~Strands ~~the~~Management Company, LLC, an entity owned by our directors David Walters and Keith Moore. Our Board of Directors has authorized ~~number~~borrowings of ~~shares~~up to $100,000 under the terms of ~~Series B~~the ~~Convertible~~promissory notes to meet our working capital funding ~~Preferred~~needs. The ~~Stock;~~promissory notes are unsecured, bear interest at an annual rate of 10% and are due and payable on demand by the lender.

On September 12, 2008, the Company borrowed $18,200 from Strands Management Company to cover short-term ~~amend~~working capital ~~its~~needs. This ~~certificate~~amount was repaid on September 22, 2008 with interest of ~~incorporation~~10% orper ~~bylaws;~~annum. On September 16, 2008, the Company borrowed $16,500 from Gary Hallgren, the CEO, to cover short-term working capital needs. This amount was repaid on September 19, 2008 with interest of 10% per annum.

-On ~~issue~~November ~~any~~6, ~~shares~~2008, ofwe ~~Series B~~amended ~~Convertible~~the working ~~Preferred~~capital ~~Stock~~line ~~other~~of ~~than~~credit ~~pursuant~~promissory tonote with Strands Management Company, increasing the ~~Securities~~authorized ~~Purchase~~borrowings ~~Agreement;~~ to $200,000.

-On January ~~redeem~~7, ~~repurchase~~2009, orwe ~~otherwise~~borrowed ~~acquire~~$66,000 orfrom ~~declare~~the orworking ~~pay~~capital ~~any~~line ~~cash~~of ~~dividend~~credit promissory ornote with Strands Management Company. On January 13, 2009, ~~distribution~~we onborrowed an additional $40,000 ~~any~~from ~~junior~~the ~~securities;~~working capital line. As of March 31, 2009, we had borrowed $106,000 against the note. Accrued interest under the note totaled $8,517 as of March 31, 2009.

-On ~~increase~~February ~~the~~25, ~~par~~2009, ~~value~~we ofborrowed $24,000 from Gary Hallgren, the ~~Common~~CEO, ~~Stock;~~to cover short-term working capital needs. This amount was repaid on February 27, 2009 with interest of 10% per annum.

~~- sell all or substantially all of its assets or stock, or consolidate or merge with another entity;~~ 22

-ITEM 2: MANAGEMENT’S ~~enter~~DISCUSSION ~~into~~AND orANALYSIS ~~permit~~OF FINANCIAL toCONDITIONS ~~occur~~AND ~~any~~RESULTS ~~change~~OF ~~of control transaction;~~ OPERATIONS

-The following ~~sell,~~discussion ~~transfer~~should orbe ~~encumber~~read ~~technology,~~in ~~other~~conjunction ~~than~~with ~~licenses~~our ~~granted~~consolidated financial instatements and related notes and the ~~ordinary~~other financial information ~~course~~included ofelsewhere ~~business;~~in this report and in our Annual Report on Form 10-K for the year ended December 31, 2008.

Information Regarding Forward-Looking ~~liquidate, dissolve, recapitalize or reorganize;~~ Statements

-Except for ~~authorize,~~the ~~reserve,~~historical orinformation ~~issue~~and ~~Common~~discussions ~~Stock~~contained ~~with~~herein, ~~respect to any plan or agreement~~statements ~~that~~contained ~~provides~~in ~~for~~this ~~the~~Form ~~issuance~~10-QSB ofmay ~~equity~~constitute ~~securities~~forward-looking tostatements ~~employees, officers,~~within ~~directors~~the ormeaning ~~consultants~~ of the ~~Corporation~~Private inSecurities ~~excess~~Litigation ofReform ~~250,000~~Act ~~shares~~ of ~~Common~~ ~~Stock;~~ 1995.

The forward-looking ~~change~~statements ~~its~~generally ~~principal~~include our management's plans and objectives for future operations, including plans, objectives and expectations relating to our future economic performance, business; prospects, revenues, working capital, liquidity, ability to obtain financing, generation of income and actions of secured parties not to foreclose on our assets. The forward-looking statements may also relate to our current beliefs regarding revenues we might earn if we are successful in implementing our business strategies. The forward-looking statements generally can be identified by the use of the words "believe," "intend," "plan," "expect," "forecast," "project,” "may," "should," "could," "seek," "pro forma," "estimate," "continue," "anticipate" and similar words. The forward-looking statements and associated risks may include, relate to, or be qualified by other important factors, including, without limitation:

-· ~~issue~~anticipated ~~shares~~trends ofin ~~Common~~our ~~Stock,~~financial ~~other~~condition ~~than~~and asresults ~~contemplated~~of ~~herein or by the Warrants~~operations;

-· ~~increase~~our ~~the~~ability ~~number of members of the Board~~ to ~~more~~finance ~~than~~our 7working ~~members,~~capital ~~or,~~and ifother ~~no Series B~~cash ~~director has been elected, increase the number of members of the Board to more than 6 members~~requirements;

-· ~~alter~~our orbusiness ~~change~~strategy ~~the~~for ~~rights,~~expanding ~~preferences~~our orpresence ~~privileges~~in ~~of any capital stock of~~ the ~~Corporation~~ somarkets aswe ~~to affect adversely the Series B Preferred Stock~~serve; and

-· ~~create~~our orability ~~issue~~to ~~any~~distinguish ~~Senior~~ourselves ~~Securities~~from orour ~~Pari~~current ~~Passu~~and ~~Securities;~~ future competitors.

-We ~~except~~do ~~for the issuance of debt securities on an unsecured basis, or incurrence of unsecured indebtedness from, a recognized financial institution in an aggregate amount~~ not ~~exceeding $5,000,000 and which, in the case of debt securities, are not~~ ~~Convertible~~undertake ~~Securities~~to ~~or Purchase Rights~~update, ~~issue~~revise ~~any debt securities~~ or ~~incur~~correct any ~~indebtedness~~ ~~that~~forward-looking ~~would~~statements. ~~have any preferences over the Series B Convertible Preferred~~The ~~Stock~~forward-looking ~~upon~~statements ~~liquidation~~are ofbased ~~the~~largely ~~Corporation,~~on orour ~~redeem,~~current ~~repurchase,~~expectations ~~prepay~~and orare ~~otherwise~~subject ~~acquire~~to ~~any~~a ~~outstanding~~number ~~debt securities or indebtedness~~ of ~~the Corporation,~~risks ~~except~~and asuncertainties. ~~expressly~~Actual ~~required~~results bycould ~~the~~differ materially ~~terms~~from ofthese ~~such~~forward-looking ~~securities or indebtedness;~~ statements.

-Important factors ~~make~~to ~~any~~consider ~~dilutive~~in ~~issuance;~~evaluating forward-looking statements include:

-· ~~enter~~changes ~~into~~in ~~any~~external ~~agreement,~~competitive ~~commitment,~~market ~~understanding~~factors or ~~other~~in ~~arrangement~~our tointernal ~~take any~~budgeting ofprocess ~~the~~that ~~foregoing~~might ~~actions;~~impact or trends in our results of operations;

-· ~~cause~~changes orin ~~authorize~~our ~~any~~business ~~subsidiary~~strategy ofor ~~the~~an ~~Corporation~~inability to ~~engage~~execute inour ~~any~~strategy ofdue to unanticipated changes in the ~~foregoing~~ ~~actions.~~ markets; and

~~If,~~· atvarious ~~any~~other ~~time~~factors ~~after~~that ~~the~~may ~~first~~prevent ~~anniversary~~us offrom ~~the~~competing ~~closing~~successfully of the Series B Convertible Preferred Stock sale (the “Closing”) and before the fourth anniversary of the Closing, during a period of at least twenty (20) consecutive trading days (a) the closing trading price of the Common Stock is at least 200% of the conversion price then in ~~effect and (b)~~ the trading volume and trading price of the Common Stock result in a value of at least $350,000 of Common Stock traded on each trading day, then the Company shall have the right to redeem all shares of Series B Preferred Stock then outstanding marketplace.

24Executive Summary

~~Table~~We market, sell and support automatic vehicle location (“AVL”) and mobile resource management solutions targeting companies that operate fleets of ~~Contents~~vehicles and equipment. Our AVL solutions are designed for fleets within diverse industry vertical markets such as construction, field services, distribution,, limousine, electrical/plumbing, waste management, and government. Our core technology, telematics, combines wireless communications, GPS location technology, geospatial solutions and vehicle data integration with a web-accessible application that aids in the optimization of remote business solutions. We believe our fleet management solution contributes to increased operator efficiency by improving the productivity of mobile workers through real-time position reports, route-traveled information, and exception based reporting designed to highlight mobile workforce inefficiencies. This in-depth reporting enables our customers to correct those inefficiencies and deliver cost savings to the bottom line.

atOur REDIview ~~price~~product ~~per~~line ~~share~~forms the basis of ~~Series B~~our ~~Convertible~~current ~~Preferred~~business ~~Stock~~plan ~~equal~~for 2009. We expect this product line to provide the foundation for a ~~product~~growth ofin ~~two~~revenues ~~multiplied~~and, byif ~~the~~our ~~sum~~revenues ofgrow ~~the~~as ~~Face~~we ~~Amount~~anticipate, ~~plus~~ultimately profitability. In ~~all~~implementing ~~accrued~~our business plan, we have completed a significant cost and ~~unpaid~~operational-based ~~Dividends~~restructuring, including rightsizing ~~thereon~~the ~~through~~workforce. We are focusing our efforts on enhancing the ~~closing~~existing REDIview ~~date~~product line by adding new functionality in the areas of ~~such~~dispatching, security, ~~redemption~~and maintenance.

InAs noshown in ~~event~~the ~~would~~tables ~~the~~below, ~~holder~~we ofhad ~~shares~~11,129 ofunits ~~Series B~~in ~~Convertible~~service ~~Preferred~~as ~~Stock~~of March 31, ~~Series B~~2009, ~~Warrants~~representing ora ~~Bridge~~9.3% ~~Note~~increase ~~Warrants~~from ~~have~~March ~~the~~31, ~~right~~2008 toand ~~convert~~a ~~shares~~0.1% ofdecrease ~~Series B Convertible Preferred~~since ~~Stock~~December ~~into~~31, ~~shares~~2008. While ofunits ~~Common~~were ~~Stock,~~added ~~exercise~~in the ~~Series B~~first ~~Warrants~~quarter ~~or Bridge Note Warrants or to~~of ~~dispose~~2009, ofwe ~~any~~experienced ~~shares~~contract ofdefaults ~~Series B~~at ~~Convertible~~a ~~Preferred~~higher ~~Stock~~rate tothan ~~the~~expected ~~extent~~due ~~that such right~~ to ~~effect~~economic ~~such~~conditions. 869 ~~conversion~~units orwere ~~disposition~~deactivated ~~would result~~ in the ~~holder~~first ~~thereof and its affiliates~~quarter ~~together~~of ~~beneficially~~2009 ~~owning~~compared ~~or having the power~~ to ~~vote~~384 ~~more~~units ~~than~~in ~~9.99% of~~ the ~~outstanding~~first ~~shares of~~quarter ~~Common Stock~~ of ~~the Company~~2008.

~~Registration Rights Agreement~~ 23

In connection with the proposed issuance of Series B Convertible Preferred Stock and the Series B Warrant, the Company proposes to enter into a Registration Rights Agreement with SDS whereby the Company would grant certain rights to SDS. Within 30 days of the Closing, the Company would be obligated to file a registration statement on Form S-3 covering 10,000,000 shares of Common Stock that SDS may acquire upon conversion of the Series B Convertible Preferred Stock or exercise of the Series B Warrants or the Bridge Note Warrants. The Company would face a liquidated damages claim by SDS if: (i) the initial registration statement was not declared effective by the SEC on or prior to the 120th day after the Closing, (ii) after the effectiveness of the registration statement, sales of Common Stock cannot be made by SDS due to a stop order by the SEC or the Company’s need to update the registration statement, or (iii) the Common Stock is not listed on Nasdaq, the New York Stock Exchange or the American Stock Market. The liquidated damages for the first 30 days would equal 3% of the purchase price of the Series B Convertible Preferred Stock and equal 1.5% for each 30 days thereafter of non-compliance. In addition to the liquidated damaged provision discussed above, SDS would require the redemption of its Series B Convertible Preferred Stock in certain default events.

March 31,		June 30,		September 30,		December 31,		March 31,
2008		2008		2008		2008		2009

	10,182		10,462		10,787		11,210		11,129

~~SDS would also have the right to piggy-back on to the registration statements filed by the~~Results ~~Company~~of ~~registering~~Operations ~~Common Stock (other than Form S~~-8 ~~and~~Three ~~Form~~Months ~~S-4~~Ended ~~registration~~March ~~statements filed by the Company)~~31, ~~subject~~2009 Compared to ~~cut-back~~Three byMonths ~~the underwriters (if an underwritten public offering) but at~~Ended ~~least~~March ~~25%~~31, ~~of the shares requested for inclusion in the registration statement shall be included in such underwritten public offering.~~ 2008

~~Bridge~~Total revenue ~~Note~~for &the ~~Security~~three ~~Agreement~~months ended March 31, 2009 totaled $1.29 million compared to $1.21 million during the three months ended March 31, 2008. In accordance with our revenue recognition policies, REDIview unit sales and the associated cost of sales are deferred and recognized over the customer’s contract life. Our future revenues will be solely dependent upon sales of our REDIview product line. The failure of the marketplace to accept our REDIview product line would have a material adverse effect on the Company’s business, financial condition and results of operations. Service revenue for the three months ended March 31, 2009 totaled $944,000 compared to $804,000 for the three months ended March 31, 2008. This 17% increase is primarily attributable to an increase in units in service. Average units in service increased 13%, from 9,871 units in the first quarter of 2008 to 11,170 in the first quarter of 2009. Ratable product revenue for the first quarter of 2009 was $307,000 compared to $336,000 for the comparable period in 2008. The 9% reduction is due to the completion of the amortization of the deferred performance obligation in 2008 which contributed to $138,000 of revenue in the comparable period of 2008 which was not included in the 2009 period. The amortization of the deferred performance obligation was complete as of December 31, 2008. This decrease was predominantly offset by an increase in ratable product revenue of $109,000.

~~In connection with the proposed sale of Series B preferred stock and Series B Warrant, the~~Total ~~Company~~gross ~~consummated~~profit amargin ~~bridge~~was ~~note~~60% ~~transaction~~for ~~with SDS whereby~~ the ~~Company~~three ~~issued~~months aended ~~promissory~~March ~~note in~~31, ~~the~~2009 ~~amount of $1.75 million to SDS pursuant to that certain Secured Promissory Note by~~ and ~~between~~ the three ~~Company~~months ~~and~~ended ~~SDS~~March ~~dated May~~ 31, ~~2005 (the “Bridge Note”)~~2008. Service ~~The~~margin ~~Bridge~~for ~~Note~~the ~~bears interest~~first atquarter 8%of ~~per~~2009 ~~annum~~was ~~and~~66% iscompared ~~due~~to ~~and~~56% ~~payable~~for onthe ~~September 30, 2005. The Bridge Note is secured by a~~ first ~~lien~~quarter ~~on all~~ of 2008. This ~~the~~increase ~~assets~~is ofprimarily ~~the~~attributable ~~Company pursuant~~ to ~~that~~reduced ~~certain~~costs ~~Security Agreement by and~~of ~~between~~airtime ~~SDS~~ and ~~the Company dated May 31, 2005~~mapping. ~~The~~Ratable ~~Bridge~~product ~~Note~~margin ~~automatically~~was ~~exchanges~~39% ~~into~~for ~~a common~~the ~~stock~~first ~~purchase~~quarter ~~warrants with a 5-year term to purchase 1,666,667 shares~~ of ~~Common Stock at~~ an2009 ~~exercise~~compared ~~price of $0.01 per share and a common stock purchase warrant with a 5-year term~~ to ~~purchase~~ ~~700,000~~66% ~~shares~~for ofthe ~~Common~~first ~~Stock~~quarter ~~at an exercise price~~ of $12008.75 Excluding ~~per share upon~~ the ~~Company~~ ~~obtaining~~amortization ~~the approval for such exchange from a majority~~ of ~~its stockholders (collectively~~ the ~~“Bridge~~ ~~Note~~deferred ~~Warrants”)~~performance ~~pursuant~~obligation, toratable ~~Stock~~product ~~Purchase~~margin ~~Warrants Agreements. The Company intends to~~in ~~seek stockholder approval for~~ the ~~exchange~~first ofquarter ~~the Bridge Note into the Bridge Note Warrants at its next annual meeting~~ of ~~stockholders~~2008 towould behave ~~held~~been ~~in August of 2005~~43%.

~~Upon~~Total ~~closing~~operating ofexpenses ~~the~~totaled ~~Series B~~$1.0 million ~~Convertible~~for ~~Preferred Stock transaction,~~ the ~~Company~~three ~~would receive~~months ~~net~~ended ~~proceeds~~March ~~of $750~~31,~~000~~ ~~which~~2009 ~~when~~and ~~combined with~~ the ~~Bridge~~three ~~Note~~months ~~proceeds would result in~~ended aMarch ~~total~~31, ~~of $2~~2008.~~5 million to be received by the Company. The Company intends to use the net proceeds to fund its business plan.~~

IfInterest expense ~~the~~totaled ~~Company’s~~$0.4 ~~stockholders~~million ~~fail~~for tothe ~~approve~~three ~~the~~months ~~exchange~~ended ofMarch ~~the~~31, ~~secured~~2009 ~~note~~compared to ~~into~~$0.8 million for the ~~common stock~~same ~~purchase~~period ~~warrants~~during ~~and~~2008. The ~~the~~current ~~Company~~period interest ~~was~~expense ~~required~~primarily toconsists ~~repay~~of the ~~secured~~accretion ~~note~~of onthe ~~September 30, 2005,~~Series ~~the~~B ~~Company~~Notes ~~may~~of $228,000 beas ~~forced~~well toas ~~raise~~$33,000 ~~additional~~of ~~capital~~accrued tointerest ~~repay~~on the ~~note~~Series ~~through~~A ~~the~~Notes, ~~issuance~~$109,000 of ~~additional~~accrued ~~debt~~interest oron ~~equity~~the ~~securities.~~Series ~~However~~B Notes, ~~there~~and ~~can~~$27,000 bein noamortization ~~assurance that the Company would~~of bedeferred ~~able~~financing tofees. The ~~raise~~$410,000 ~~sufficient~~decrease ~~funds~~in tointerest ~~repay~~expense since the ~~secured~~comparable ~~note~~period ~~and~~in ~~sustain~~2008 ~~business~~can ~~operations~~be ~~and~~primarily ~~its failure~~attributed to do$392,000 soof accretion ~~may~~of ~~have~~the aSeries ~~material~~A ~~adverse~~Notes, ~~effect~~as onthey ~~its~~were ~~business,~~fully ~~results~~accreted ofin ~~operations and~~February ~~financial condition~~2008.

~~If the Company’s stockholders fail to approve the exchange of the secured note into the common~~Adjusted ~~stock~~EBITDA purchase warrants, and the Company is unable to repay the secured note, SDS may exercise its rights under the Security Agreement including taking possession of the assets of the Company, disposing of such assets in a commercially reasonable sale and retaining such amount of the proceeds from the sale of assets to repay the secured note. The failure of the Company to Presentation

25EBITDA represents net income (loss) before interest, taxes, depreciation and amortization, and in the case of Adjusted EBITDA, before goodwill impairment, gains or losses on the extinguishment of debt and preferred stock, restructuring charges and other non-operating costs. EBITDA is not a measurement of financial performance under GAAP. However, we have included data with respect to EBITDA because we evaluate and project the performance of our business using several measures, including EBITDA. The computations of Adjusted EBITDA for the quarters ended March 31, 2009 and 2008 were as follows.

~~Table of Contents~~24

repay the secured note would have a material adverse effect on its business, results of operations and financial condition and could force its bankruptcy.

	Three Months Ended
	March 31,
	2009			2008
Net loss	$	(629	)	$	(1,101	)
Add non-EBITDA items included in net results:
Depreciation and amortization		201			203
Interest expense, net		410			810

Adjusted EBITDA	$	(18	)	$	(88	)

6We consider adjusted EBITDA to be an important supplemental indicator of our operating performance, particularly as compared to the operating performance of our competitors, because this measure eliminates many differences among companies in financial, capitalization and tax structures, capital investment cycles and ages of related assets, as well as certain recurring non-cash and non-operating items. ~~Related~~We ~~Party~~believe ~~Transactions~~that consideration of EBITDA should be supplemental, because EBITDA has limitations as an analytical financial measure. These limitations include the following: EBITDA does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; EBITDA does not reflect the effect of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations; and not all of the companies in our industry may calculate EBITDA in the same manner in which we calculate EBITDA, which limits its usefulness as a comparative measure.

OnManagement compensates ~~October 6,~~for ~~2003,~~these ~~Minorplanet~~limitations UKby ~~transferred~~relying ~~42.1 percent~~primarily ofon ~~the~~its ~~Company’s~~GAAP ~~outstanding~~results to ~~common~~evaluate ~~stock~~its tooperating ~~Erin~~performance ~~Mills~~and ~~Investment~~by ~~Corporation~~considering ~~(“Erin~~independently ~~Mills”),~~the ~~ending~~economic effects ~~Minorplanet~~of ~~UK’s~~the ~~majority ownership~~foregoing ~~position~~items inthat ~~the~~are ~~Company~~not reflected in EBITDA. As a result of these ~~February 28~~limitations, ~~2005~~EBITDA should not be considered as an alternative to net income (loss), ~~Minorplanet~~as UKcalculated ~~was~~in noaccordance ~~longer~~with generally accepted accounting principles, as a ~~related~~measure of operating performance, nor should it be considered ~~party.~~as ~~See~~an ~~further~~alternative ~~discussion~~to ~~under~~cash ~~“VMI~~flows ~~License~~as ~~Right”~~a inmeasure ~~Note~~of 3liquidity.

~~In connection with the Minorplanet UK share transfer to Erin Mills, the Company also obtained~~Liquidity an option to repurchase from Erin Mills up to 3.9 million shares of the Company’s common stock at a price of $0.05 for every 1,000 shares, pursuant to that certain Stock Repurchase Option Agreement between the Company and ~~Erin~~Capital Mills dated August 15, 2003. Gerry Quinn, the president of Erin Mills, currently serves on the Company’s Board of Directors. On July 1, 2004, prior to the extinguishment of the Company’s existing common stock in accordance with the Plan, the Company repurchased the 3.9 million shares of common stock from Erin Mills for a nominal sum. Resources

~~Prior to~~We ~~the~~have ~~bankruptcy~~incurred ~~reorganization, the Company paid Minorplanet Limited, the~~significant operating ~~subsidiary~~ oflosses ~~Minorplanet~~since ~~UK,~~our aninception ~~annual~~and ~~fee~~have oflimited ~~$1.0 million~~financial toresources ~~aid in~~until ~~funding~~such ~~research~~time ~~and development~~that ofwe ~~future~~are ~~products~~able ~~covered~~to bygenerate ~~the~~positive ~~license~~cash ~~rights~~flow from operations. We ~~During~~had ~~the three~~cash and ~~nine~~cash ~~month periods~~equivalents ~~ended~~of ~~May 31~~$76,000 ~~2004,~~as ~~total~~of ~~research~~March 31, ~~and~~2009, ~~development~~compared ~~costs~~to ~~incurred~~$0 ~~under~~as ~~this~~of ~~agreement~~December ~~were approximately $333~~31,~~000~~ ~~and $833,000 respectively~~2008.

OnNet ~~September 26,~~cash ~~2002,~~used ~~the~~by ~~Company~~operations ~~entered~~for ~~into~~the three amonths ~~letter~~ended ~~addendum~~March to31, ~~the~~2009 ~~exclusive~~was ~~license~~$24,000, ~~and distribution~~primarily ~~agreement~~due ~~with Minorplanet Limited~~ to ~~provide~~a ~~executive~~net ~~and~~loss ~~non-executive sales and~~of ~~marketing~~$0.6 ~~consulting~~million ~~services~~offset ~~for~~by ~~the~~amortization ~~six-month~~of ~~period~~intangibles ~~from~~of ~~August 23~~$185, ~~2002 to February 22~~000, ~~2003.~~accretion of ~~Under~~notes ~~terms~~payable of ~~the agreement~~$228,000, ~~the~~provision ~~Company~~for ~~was~~bad ~~not~~debt ~~required~~expense toof ~~pay the executive consulting fees incurred during this six-month period totaling~~ $~~1.76 million~~63,000 ~~unless~~ and ~~until the Company filed~~ a net ~~Form~~change ~~10-K~~of ~~reporting~~operating ~~net~~assets ~~income~~ and ~~positive~~liabilities ~~cash~~of ~~flow for the previous 12-month period~~$83,000. Net Ascash ofused ~~August 31,~~in ~~2003~~operations ~~a liability~~ for the ~~$1.76 million~~three inmonths ~~executive~~ended ~~consulting~~March ~~fees~~31, ~~payable~~2008 ~~to Minorplanet Limited,~~ was ~~included on the Company’s Condensed Consolidated Balance Sheets under “Other non-current liabilities.” On October 6~~$103, ~~2003~~000, ~~Minorplanet UK forever waived and discharged~~primarily ~~the~~due ~~$1.76 million~~to ~~executive~~a ~~consulting~~net ~~fees~~loss ~~owed~~of ~~by the Company. Thus, the~~ $1.76 1 million ~~liability was~~offset ~~reversed and effectively converted to a capital contribution~~ by ~~Minorplanet~~amortization UKof tointangibles ~~the Company.~~of ~~In addition~~$185,000, aaccretion ~~$0.3 million~~of ~~liability~~notes payable toof ~~Minorplanet~~$575,000, UKand ~~for~~an ~~non-executive~~increase ~~consulting~~in ~~costs~~accounts ~~was~~payable ~~converted~~of ~~to a capital contribution during the six months ended February 29~~$149, ~~2004~~000.

OnNet ~~July 20,~~cash ~~2004,~~provided ~~the~~by ~~Company~~operations ~~entered into and consummated the Third Amended Letter Agreement~~for ~~with HFS issuing a $2.0 million convertible promissory note to HFS with~~ the ~~principal~~three ~~balance being due 36~~ months ~~from~~ended ~~the~~March ~~date of funding~~31, ~~with~~2009 anwas ~~annual interest rate of 12 percent. Upon issuance of the Note, HFS provided the~~ $~~2 million funding to the Company less a commission in the amount of $80~~106,000 ~~representing~~due ~~four~~to ~~percent~~proceeds ~~(4%)~~ of the ~~loan proceeds. Accordingly, Stephen CuUnjieng, the~~line ~~President~~ of ~~HFS,~~credit ~~was appointed to the Company’s Board~~ of ~~Directors effective July 13~~$130,000 ~~2004.~~offset ~~Mr. CuUnjieng was employed~~ by ~~the~~payments ~~Company~~made ~~as Director~~ of Strategic Finance from January 30, 2004 through December 31, 2004 to assist the Company with further fund raising. Mr. CuUnjieng is a controlling partner in HFS. During the three and nine months ended May 31, 2005, the Company made interest payments to HFS totaling $6024,000 ~~and $180,000 respectively~~.

7.Net ~~Basic~~cash ~~and~~used ~~Diluted~~in ~~Net~~financing ~~Loss~~activities for ~~Per~~the ~~Share~~three months ended March 31, 2008 was $69,000 due to a re-payment of a line of credit.

~~Basic~~We ~~net~~do ~~loss~~not expect ~~per~~to ~~share~~achieve isprofitability ~~computed~~or bypositive ~~dividing~~cash ~~the~~flow ~~loss~~for ~~attributable~~2009. Our toplans for ~~common~~2009 ~~stockholders by~~include ~~the~~growing ~~weighted~~our ~~average~~subscriber ~~number~~base ofthrough ~~shares~~direct ofsales ~~common~~to ~~stock~~new ~~outstanding~~and existing ~~for~~customers ~~the~~and ~~period.~~continuing ~~Diluted~~to ~~loss per~~control ~~common~~our ~~share~~operating ~~reflects~~costs. However, there ~~the~~can ~~potential~~be ~~dilution~~no assurance that ~~could~~we ~~occur~~will ifachieve ~~securities~~our orsales ~~other~~targets ~~contracts~~for 2009. Failure to ~~issue~~do ~~common~~so ~~stock~~may ~~were~~have ~~exercised~~a ormaterial ~~converted~~adverse ~~into~~effect ~~common~~on ~~stock.~~our business, financial condition and results of operations.

~~The~~We ~~following~~had is a ~~reconciliation~~working capital deficit of $3.6 million, excluding the ~~denominators~~gross ~~used~~outstanding inamount ~~calculating~~of ~~basic~~our ~~and~~secured ~~diluted~~convertible ~~net~~notes ~~loss~~of ~~per~~$10.0 ~~share~~million, ~~(in~~as ~~thousands):~~of March 31, 2009. We believe that we will have sufficient capital to fund our ongoing operations through 2009, assuming that we are able to meet our sales targets and operating cost reduction plans and to negotiate acceptable payment arrangements with our senior security holders, vendors and other creditors. The sufficiency of our cash resources depends to a certain extent on general economic, financial, competitive or other factors beyond our control.

26 25

~~Table~~We do not currently have any arrangements for additional financing and we may not be able to secure additional debt or equity financing on terms acceptable to us, or at all, at the time when we need such financing. Further, our ability to secure certain types of ~~Contents~~additional financings is restricted under the terms of our existing financing arrangements. There can be no assurance that we will be able to consummate a transaction for additional capital prior to substantially depleting our available cash reserves, and our failure to do so may force us to restructure, file for bankruptcy, sell assets or cease operations.

	Reorganized			Predecessor			Reorganized			Predecessor
	Company			Company			Company			Company
	Three Months			Three Months			Nine Months			Nine Months
	Ended May 31,			Ended May 31,			Ended May 31,			Ended May 31,
	2005			2004			2005			2004
Net loss applicable to common stockholders:	$	(1,609	)	$	(31,630	)	$	(4,086	)	$	(36,255	)
Weighted average number of shares outstanding:
Weighted average number of shares outstanding, net of treasury shares — Basic EPS		6,596			9,672			6,398			9,671
Additional weighted average shares for assumed exercise or conversion of stock options and other securities into common stock (treasury stock method)					—						—
Weighted average number of shares outstanding, net of treasury shares — Diluted EPS		6,596			9,672			6,398			9,671
Net loss per common share applicable to common stockholders:
Basic and diluted EPS	$	(0.24	)	$	(3.27	)	$	(0.64	)	$	(3.75	)

We have failed to comply with certain of our other obligations relating to our secured convertible notes, including our failure to make scheduled principal payments and to register for resale the shares of common stock underlying the notes and warrants issued in the related private placements. The notes provide for a default interest rate of 10% per annum on the outstanding principal amount of the notes for periods in which certain specified events of default occur and are continuing and for liquidated damages for non-compliance with our registration obligations. As of March 31, 2009, we have accrued $1,901,340 in default interest and liquidated damages under our secured convertible notes.

~~During~~Our non-compliance with the ~~above-mentioned~~terms ~~periods,~~of the ~~Company~~notes ~~had~~also ~~securities~~exposes ~~outstanding~~us to the risk that ~~could~~our ~~potentially~~note ~~dilute~~holders ~~basic~~could ~~earnings~~seek ~~per~~to ~~share~~exercise inprepayment or other remedies under the notes. We ~~future,~~have ~~but~~received ~~which~~one ~~were~~outstanding ~~excluded~~notice of default from ~~the~~a ~~computation~~holder of ~~diluted~~our ~~net~~Series ~~loss~~A ~~per~~Notes. The ~~share~~notice demands immediate payment in ~~the~~cash ~~periods~~of ~~presented~~$287,500. To asdate, ~~their~~we ~~effect would~~ have ~~been antidilutive.~~made ~~Such~~no ~~outstanding~~payment ~~securities~~in ~~consist~~respect of the note ~~following~~holder ~~(in~~demand ~~thousands):~~ and it remains outstanding

	Reorganized		Predecessor
	Company		Company (a)
	Three and Nine		Three and Nine
	Months		Months
	Ended May 31,		Ended May 31,
	2005		2004
Restricted stock ( not vested)		525		—
Convertible note payable		690		—
Convertible series A preferred stock		2,500		—
Outstanding stock options		—		318
Outstanding warrants to purchase common stock		1,125		33

In March, 2008, we resumed making payments to certain of our note holders of amounts due under the notes by issuing shares of our common stock under the terms of the notes. In the first quarter of 2009, we issued 3,011,738,755 shares of common stock as partial principal payments on the Series A Notes in satisfaction of $601,381 of obligations due under the notes. Additionally, during the first quarter of 2009, we issued 1,047,937,537 shares of common stock as partial payments on the Series B Notes in satisfaction of $185,961 of obligations due under the notes. We expect to issue additional shares of our common stock in payment of amounts due under the notes during the remainder of 2009 and thereafter. In general, the shares issued are available for immediate resale by the holders in accordance with Rule 144 under the Securities Act of 1933, as amended.

~~(a)~~We ~~All~~do ~~equity~~not currently ~~interests~~have inthe cash on hand to repay amounts due under our secured convertible notes if the ~~Predecessor~~note ~~Company~~holders ~~(including~~elect ~~but~~to ~~not~~exercise ~~limited~~their repayment or other remedies. If our efforts to ~~warrants~~restructure or otherwise satisfy our obligations under the notes are unsuccessful, and ~~stock~~we ~~options)~~are ~~were~~unable ~~extinguished~~to raise enough money to cover the amounts payable under the notes, we may be forced to restructure, file for bankruptcy, sell assets or cease operations.

8.On ~~Other~~February ~~Commitments~~29, ~~and~~2009, ~~Contingencies~~we issued 105 shares of Series C Preferred Stock to BMSI in satisfaction of our dividend obligations under our outstanding Series C Preferred Stock for the period ending February 29, 2009.

~~Product~~We ~~Warranty~~expect to ~~Guarantees~~continue to issue additional shares of our common stock in payment of amounts due under our secured convertible notes and convertible preferred stock during the remainder of 2009 and thereafter. In general, the shares issued are available for immediate resale by the holders in accordance with Rule 144 under the Securities Act of 1933, as amended.

~~The Company provides a limited warranties on all product sales, at no additional cost to the~~Critical ~~customer,~~Accounting ~~that~~Policies provides for replacement of defective parts during the applicable warranty period typically ranging from one to five years. The Company establishes an estimated liability for expected future warranty commitments based on a review of historical warranty expenditures associated with these products and other similar products. Changes in the Company’s product warranty liability, which is included in “ Accrued expenses and other current liabilities” and “Other non-current liabilities” in the accompanying Consolidated Balance Sheets, are summarized below (in thousands). Estimates

27Management’s discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us 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, we evaluate our estimates, including those related to product returns, bad debts, inventories, income taxes, warranty obligations, maintenance contracts and contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the 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 under different assumptions or conditions.

~~Table of Contents~~26

	Reorganized
	Company
	Nine Months
	Ended
	May 31, 2005
Warranty product liability at beginning of period	$	375
Accruals for product warranties issued		28
Product replacements		(284	)
Adjustments to pre-existing warranty estimates		182
Warranty product liability at end of period	$	301

The significant accounting policies and estimates, which we believe to be the most critical to aid in fully understanding and evaluating reported financial results, are stated in Management’s Discussion and Analysis of Financial Condition and Results of Operations reported in our Annual Report on Form 10-K for our fiscal year ended December 31, 2008.

~~9. Segment Reporting~~ITEM 3: CONTROLS AND PROCEDURES

~~The~~We maintain ~~Company’s~~disclosure ~~reportable~~controls ~~segments~~and ~~offer~~procedures ~~different~~that ~~products~~are ~~and/or~~designed ~~services.~~to ~~Each~~ensure ~~segment also~~that ~~requires~~information ~~different~~required ~~technology~~to ~~and~~be ~~marketing~~disclosed ~~strategies.~~in ~~The~~our ~~Company’s~~reports ~~two~~made ~~reportable~~pursuant ~~segments~~to ~~are~~the ~~Network~~Securities ~~Service~~Exchange ~~Center~~Act ~~Systems~~of 1934, as amended (the “~~NSC~~Exchange ~~Systems~~Act”). is recorded, processed, summarized and ~~VMI~~reported within the timelines specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

~~Through~~As required ~~its~~by ~~NSC~~Rule 13a-15(b) ~~Systems~~under ~~segment,~~ the ~~Company~~Exchange ~~provides~~Act, ~~long-haul~~we ~~trucking~~carried ~~companies~~out ~~with a~~an ~~comprehensive~~evaluation, ~~package~~under ofthe ~~mobile~~supervision ~~communications~~ and ~~management~~with ~~information~~the ~~services,~~participation ~~thereby enabling~~of ~~its~~our ~~trucking~~management, including ~~customers~~our toChief ~~effectively~~Executive ~~monitor~~Officer ~~the~~and ~~operations~~Principal ~~and~~Financial ~~improve~~Officer, ~~the~~of ~~performance~~the effectiveness of ~~their~~the ~~fleets.~~design ~~The~~and ~~initial~~operation ~~product~~of ~~application~~our ~~was~~disclosure ~~customized~~controls and procedures ~~has~~as ~~been~~of ~~sold to and installed in~~ the ~~service~~end ~~vehicle fleets~~ of the ~~member~~period ~~companies~~covered ofby ~~SBC~~this ~~Communications, Inc~~report. OnBased ~~March 15,~~on the ~~2002~~foregoing, ~~the~~our ~~Company~~Chief ~~completed~~Executive ~~the~~Officer ~~Sale~~and toPrincipal ~~Aether~~Financial ~~Systems,~~Officer ~~Inc.~~concluded that ~~n/k/a~~our ~~Geologic~~disclosure ~~Systems,~~controls ~~Inc. (“Aether”)~~and ofprocedures ~~certain~~were ~~NSC~~effective ~~Systems~~as ~~assets~~of ~~and~~the ~~licenses~~end ~~related~~of period tocovered ~~the~~by ~~Company’s~~this ~~long-haul~~report ~~trucking and~~in ~~asset-tracking~~timely ~~businesses~~alerting ~~pursuant~~them to anmaterial ~~Asset~~information relating ~~Purchase~~to ~~Agreement~~Remote ~~effective~~Dynamics, asInc. ofrequired ~~March 15, 2002,~~to bybe ~~and~~disclosed ~~between~~in our periodic reports with the ~~Company~~Securities and ~~Aether~~Exchange Commission.

~~The Company’s REDIview product offering is also within the NSC Systems segment. REDIview is~~There anwere ~~Internet~~no ~~and~~changes ~~service~~in ~~bureau-based~~our ~~software~~internal ~~application~~controls ~~that~~over ~~provides~~financial anreporting ~~extensive~~(as ~~array~~such ofterm ~~real-time~~is ~~and~~defined ~~accurate~~in ~~mapping, trip replay and vehicle activity reports. REDIview includes a series of exception~~Rule 13a-~~based~~15(f) ~~reports~~under ~~designed to highlight inefficiencies in~~ the ~~operations~~Exchange ofAct) ~~a vehicle fleet. REDIview incorporates technologies~~ that ~~allow~~occurred ~~for fast and effective integration~~during ~~into legacy applications operated by companies with vehicle fleets and mobile workers. This design allows companies to easily extend their existing supply chain management systems to~~ the ~~mobile workforce~~quarter ~~for~~ended ~~transaction~~March 31, ~~processing~~2009, ~~and~~that ~~customer~~have ~~fulfillment.~~materially ~~REDIview~~affected, ~~was~~or ~~also designed to be~~are ~~hardware~~reasonably ~~and~~likely ~~network agnostic~~ to ~~provide~~materially ~~the~~affect, ~~maximum~~our ~~flexibility~~internal incontrols ~~designing~~over ~~solutions that best~~financial ~~fit the customer’s specific needs~~reporting.

~~VMI is designed to maximize the productivity of a mobile workforce as well as reduce vehicle~~PART ~~mileage~~II and fuel related expenses. The VMI technology consists of: (i) a data control unit that continually monitors and records a vehicle’s position, speed and distance traveled; (ii) a command and control center which receives and stores in a database information downloaded from the DCU’s; and (iii) software used for communication, messaging and detailed reporting. VMI uses the satellite-~~based~~ ~~global~~OTHER positioning system to acquire a vehicle location on a minute-by-minute basis and a global system for mobile communications based cellular network to transmit data between the DCU’s and the CCC. Although the Company has ceased actively marketing and selling the VMI product, the Company continues to fulfill VMI product orders from existing VMI customers. INFORMATION

~~Operating expenses are allocated to each segment based on management’s estimate of the~~ITEM ~~utilization~~1: LEGAL ~~of financial resources by each segment. The following tables set forth segment financial information (in thousands).~~ PROCEEDINGS

28 None.

~~Table~~ITEM 2: RECENT ofSALES ~~Contents~~OF UNREGISTERED SECURITIES

	Reorganized Company
	Three Months Ended May 31, 2005
							Reorganization
	NSC Systems			VMI			Items			Consolidated
Revenues	$	3,398		$	847		$	—		$	4,244
Operating loss		(1,148	)		(276	)		—			(1,425	)
Interest expense		(88	)		—			—			(88	)
Interest income		4			57			—			61
Depreciation and amortization		568			124			—			693
Impairment loss on license right		—			—			—			—
Net loss		(1,224	)		(276	)		(8	)		(1,508	)

In the first quarter of 2009 we made payments to certain holders of our secured convertible notes of amounts due under the notes by issuing shares of our common stock under the terms of the notes. For the Series A notes, these payments were in the form of 3,011,738,755 shares of our common stock in satisfaction of $601,381 of obligations due under the Series A notes, representing issuance prices ranging from $.000117 to $.000587 per share. For the Series B notes, these payments were in the form of 1,047,937,537 shares of our common stock in satisfaction of $185,961 of obligations due under the Series B notes, representing issuance prices ranging from $0.000124 to $.000477 per share (for the Series B Notes). We believe the issuance of the shares was exempt from registration under Sections 3(a)(9) and 4(2) of the Securities Act and pursuant to Regulation D under the Securities Act. All of the persons receiving shares were accredited investors.

	Predecessor Company
	Three Months Ended May 31, 2004
							Reorganization
	NSC Systems			VMI			Items			Consolidated
Revenues	$	3,699		$	1,575		$	—		$	5,274
Operating income (loss)		653			(30,526	)		—			(29,873	)
Interest expense		(3	)		—			—			(3	)
Interest income		2			94			—			96
Depreciation and amortization		357			695			—			1,052
Impairment loss on license right		—			28,759			—			28,759
Net income (loss)		652			(30,455	)		(1,827	)		(31,630	)

On February 28, 2009, we issued 105 shares of series C convertible preferred stock to BMSI in satisfaction of our dividend obligations under our outstanding series C convertible preferred stock for the period ended February 28, 2009. We believe the issuance of the shares was exempt from registration under Section 4(2) of the Securities Act and pursuant to Regulation D under the Securities Act. The entity receiving shares was an accredited investor.

	Reorganized Company
	Nine Months Ended May 31, 2005
							Reorganization
	NSC Systems			VMI			Items			Consolidated
Revenues	$	9,977		$	3,077		$	—		$	13,054
Operating loss		(2,702	)		(791	)		—			(3,492	)
Interest expense		(251	)		—			—			(251	)
Interest income		4			200			—			204
Depreciation and amortization		1,628			382			—			2,009
Impairment loss on license right		—			—			—			—
Net loss		(3,087	)		(711	)		(22	)		(3,819	)

	Predecessor Company
	Nine Months Ended May 31, 2004
							Reorganization
	NSC Systems			VMI			Items			Consolidated
Revenues	$	13,211		$	4,847		$	—		$	18,058
Operating income (loss)		2,855			(36,654	)		—			(33,799	)
Interest expense		(904	)		—			—			(904	)
Interest income		15			310			—			325
Depreciation and amortization		1,171			2,099			—			3,270
Impairment loss on license right		—			28,759			—			28,759
Net income (loss)		2,357			(36,422	)		(2,190	)		(36,255	)

ITEM 3: DEFAULTS UPON SENIOR SECURITIES

10We have failed to comply with certain of our other obligations relating to our secured convertible notes, including our failure to make scheduled principal payments and to register for resale the shares of common stock underlying the notes and warrants issued in the related private placements. The ~~Nasdaq~~notes provide ~~Delisting~~for ~~Notice~~a default interest rate of 10% per annum on the outstanding principal amount of the notes for periods in which certain specified events of default occur and are continuing and for liquidated damages for non-compliance with our registration obligations. As of March 31, 2009, we have accrued $1,901,340 in default interest and liquidated damages under our secured convertible notes.

OnOur non-compliance ~~October 1,~~with ~~2004,~~ the ~~Company~~terms ~~received~~of ~~notice~~the ~~from~~notes ~~Nasdaq~~also ~~stating~~exposes ~~that~~to ~~for~~ the ~~previous~~risk 30that our ~~days,~~note ~~its~~holders ~~common~~could ~~stock~~seek ~~had~~to ~~closed~~exercise ~~below~~prepayment ~~the~~or ~~minimum~~other ~~$1.00~~remedies ~~per~~under ~~share requirement for continued~~the ~~inclusion~~notes. We ~~under~~have ~~Nasdaq~~received ~~Marketplace~~one ~~Rule 4310(c)(4).~~outstanding Innotice ~~accordance~~of ~~with~~default ~~Marketplace Rule~~from ~~4310(c)(4),~~a ~~the~~holder ~~Company~~of ~~was~~our ~~provided~~Series ~~180~~A ~~calendar~~Notes. The ~~days,~~notice ordemands ~~until March 30, 2005, to regain~~immediate ~~compliance~~payment ~~under~~in ~~this~~cash ~~rule~~of $287,500. To ~~In order to regain compliance~~date, ~~the~~we ~~Company~~have ~~must~~made ~~demonstrate~~no apayment ~~closing~~in ~~bid~~respect ~~price for its common stock~~ of ~~$1.00~~the ~~per~~note ~~share~~holder ordemand ~~more~~and ~~for~~it aremains ~~minimum of 10 consecutive business days~~outstanding.

29We do not currently have the cash on hand to repay amounts due under our secured convertible notes if the note holders elect to exercise their repayment or other remedies. If our efforts to restructure or otherwise satisfy our obligations under the notes are unsuccessful, and we are unable to raise enough money to cover the amounts payable under the notes, we may be forced to restructure, file for bankruptcy, sell assets or cease operations.

~~Table~~ITEM 4: SUBMISSION ofOF ~~Contents~~MATTERS TO A VOTE OF SECURITY HOLDERS

~~The~~On ~~written notice further provided that if compliance with the $1.00 minimum bid price~~April ~~requirement cannot be demonstrated by the Company by March 30~~17, ~~2005~~2009, ~~Nasdaq~~our ~~will~~majority ~~grant~~stockholder ~~the~~gave ~~Company an~~its ~~additional~~signed ~~180~~written ~~calendar~~consent ~~days~~ to ~~regain compliance, if at that time, the Company meets The Nasdaq~~action ~~SmallCap~~without ~~Market~~a ~~initial~~meeting ~~listing requirements as set forth in Marketplace Rule 4310~~(ci), ~~except~~to ~~for the~~approve ~~$1.00~~an ~~minimum~~amendment ~~bid~~to ~~price~~our ~~requirement.~~Amended ~~The~~and ~~written notice provided that if the Company has not~~Restated ~~regained~~Certificate ~~compliance~~of ~~with~~Incorporation ~~the~~to ~~$1.00~~authorize ~~minimum bid price requirement during the second 180 day compliance period~~15, ~~but again satisfies The Nasdaq SmallCap Market initial listing requirements as set forth in Marketplace Rule 4310(c)~~000, ~~except for the $1.00 minimum bid price requirement at the end of such period~~000,000 ~~the~~authorized ~~Company~~shares ~~would be afforded an additional compliance period up to its next~~of ~~stockholder~~our ~~meeting~~common tostock ~~regain~~having ~~compliance, provided that it commit: (1) to seek stockholder approval for~~ a ~~reverse~~par ~~stock~~value ~~split~~of ~~at or before its next stockholder meeting and (2) to promptly thereafter effect the reverse stock split~~$0.0001 ~~Such~~per ~~shareholder meeting must occur within 2 years following October 1, 2004~~share. IfThis ~~the~~matter ~~Company fails to regain compliance with the $1.00 minimum bid requirement~~is ~~during~~described ~~the~~in ~~third~~our ~~compliance~~definitive ~~period~~Information ~~and~~Statement ison ~~not~~Schedule ~~eligible~~14C ~~for~~filed anwith ~~additional compliance period,~~ the ~~Nasdaq~~Securities ~~Staff would notify the Company at that time that its securities would be delisted~~ and ~~the Company~~Exchange ~~would~~Commission ~~have the right to appeal such delisting to the Nasdaq Listing Qualifications Panel which stays the effect of the delisting pending a hearing~~ on ~~the~~August ~~matter~~6, ~~before the Panel~~2008.

~~On December 29, 2004, the Company received written notice from the Nasdaq Listing~~ITEM ~~Qualifications~~5: OTHER Staff of the Nasdaq Stock Market that the Company had regained compliance with Nasdaq Marketplace Rule 4310(c)(4) as the closing bid price for the Company’s common stock has been at $1.00 per share or greater for at least 10 consecutive business days. Accordingly, the matter regarding the Company’s non-compliance with Marketplace Rule 4310(c)(4) was closed and the Company’s listing on the Nasdaq Small Cap Market was in good standing. INFORMATION

On February 15, 2005, the Company received notice from the Nasdaq Listing Qualifications Department that for the previous 30 days, the bid price for the Company’s common stock had closed below the minimum $1None.00 per share requirement for continued inclusion under Marketplace Rule 4310(c)(4). In accordance with Marketplace Rule 4310(c)(4), the Company was provided 180 calendar days, or until August 15, 2005, to regain compliance. In order to regain compliance, the Company must demonstrate a closing bid price for its common stock of $1.00 per share or more for a minimum of 10 consecutive business days.

~~The written notice further provided that if compliance with the $1.00 minimum bid price~~ITEM requirement cannot be demonstrated by the Company by August 15, 2005, the Nasdaq Staff will grant the Company an additional 180 calendar days to regain compliance, if at that time, the Company meets The Nasdaq SmallCap Market initial listing requirements as set forth in Marketplace Rule 4310(c), except for the $1.00 minimum bid price requirement. If the Company fails to regain compliance with the $1.00 minimum bid price requirement during the initial 180 day period and is not eligible for an additional 180 day compliance period, the Nasdaq Staff would notify the Company at that time that the Company’s securities would be delisted and the Company would have the right to appeal such delisting to the Nasdaq Listing Qualifications Panel which stays the effect of the delisting pending a hearing on the matter before the Panel. 6: EXHIBITS

OnSee ~~April 27, 2005,~~ the ~~Company~~attached ~~received~~Index ~~written notice from the Nasdaq Listing Qualifications~~to ~~Staff of the Nasdaq Stock Market that the Company had regained compliance with Nasdaq Marketplace Rule 4310(c)(4) as the closing bid price for the Company’s common stock has been at $1~~Exhibits.00 per share or greater for at least 10 consecutive business days. Accordingly, the matter regarding the Company’s non-compliance with Marketplace Rule 4310(c)(4) was closed and the Company’s listing on the Nasdaq Small Cap Market was in good standing.

~~11. Service Vehicle Contract with SBC~~ 28

On October 8, 2004, the term of the Company’s service vehicle contract with the SBC companies was extended through December 31, 2005. The SBC service vehicle contract does not require SBC to maintain a minimum number of mobile units activated for service during the remaining term of the contract. However, if the number of mobile units activated for service falls below 13,140 mobile units, the Company and SBC are required to negotiate an adjustment to the service rates for transmission and maintenance/repair based upon the lesser number of units in service. If SBC and the Company are unable to reach agreement on the adjusted rates within 30 days, the Company may terminate the SBC service vehicle contract immediately upon written notice. If SBC fails to maintain the minimum 13,140 mobile units activated for service, there can be no assurances that the Company and SBC will be able to reach agreement on adjustment of contract rates. SIGNATURE

In ~~late~~accordance ~~October 2004,~~with ~~SBC informed~~ the ~~Company that SBC had selected another vendor to provide~~requirements ~~vehicle~~of ~~tracking~~the ~~products~~Exchange ~~and services to SBC. Currently~~Act, the ~~Company~~registrant ~~receives~~caused ~~approximately~~this ~~$0.9 million~~report into ~~monthly~~be ~~revenues~~signed ~~from~~on ~~SBC representing approximately 64% of the total monthly revenues~~its ofbehalf ~~the~~by ~~Company. SBC began deactivating units during~~ the ~~second calendar quarter of 2005. However~~undersigned, ~~management~~thereunto ~~currently~~duly ~~believes that SBC will likely delay~~ authorized.

	REMOTE DYNAMICS, INC.


Date: May 13, 2009	By:	/s/ Gary Hallgren
		Gary Hallgren
		Chief Executive Officer
		(Principal Executive Officer)

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

deactivating the majority of its units for several months before completing the deactivation of its units by the end of the 2005 calendar year. Thus, management has revised its business plans and related forecasts taking into effect the expected declining revenue from SBC. Management believes that under its current business plan, the Company has sufficient cash to maintain its ongoing operations without obtaining additional capital resources. However, the timing of the deactivations by SBC as well as the ability of the Company to meet its REDIview sales projections heavily influence the capital requirements of the Company. Should SBC deactivate the Company’s units sooner than is currently anticipated in the Company’s projections, or the Company not meet its current sales projections, the Company may be required to raise additional capital funding. Currently, management believes that should additional funding be obtained, it will be raised through issuance of debt or equity securities. However, if additional capital funding is required, there can be no assurance that the Company will be able to raise the funds necessary to sustain the Company’s operations until revenues from sales of REDIview are sufficient to sustain the Company’s operations and the failure to do so may have a material adverse effect upon the Company’s business, financial condition and results of operations.

Signature	Title	Date

/s/ GARY HALLGREN	Chief Executive Officer	May 13, 2009
Gary Hallgren		May 13, 2009

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