CellPoint Inc. Reports Second Quarter and Six Months Results for the Period Ended December 31, 2001

CellPoint Inc. Reports Second Quarter and Six Months Results for the Period Ended December 31, 2001 Improved Visibility for Location Market in 2002 NEW YORK, February 15, 2002 - CellPoint Inc. (Nasdaq: CLPT), a global provider of mobile location software technology and platforms, announced the Company's unaudited results for the second fiscal quarter and six months ended December 31, 2001. Results for the Fiscal Quarter The Company reported revenues for the second quarter ending December 31, 2001 of $176,552 compared to $804,417 for the comparable period of 2000. No revenues were recorded during the quarter from the contract announced in December 2001 for the license sale of its Mobile Location Broker (MLB). Selling, general and administrative expenses were $599,929 for the second quarter compared to $1,869,623 in the comparable quarter. The Company's research and development expenses increased by $298,147 to $1,388,832 during the second quarter from $1,090,685 in the comparable quarter. The increase in research and development expenses in the Company's continuing operations was due to the research and development of the new generation of software platforms for location-based services. EBITDA (earnings before investment expenses, taxes, depreciation and amortization) for the current quarter was ($2,312,431) compared to ($2,744,286) in the comparable quarter. The Company incurred a net loss of $2,506,821 in the quarter including depreciation and amortization expenses of $974,912. Net loss in the comparable quarter was $7,919,926 including loss from discontinued operations of $3,299,030 representing the operating losses of the telematics division. The decrease in expenses from continuing operations in the current quarter was mainly a result of the reduction in overall operating expenses following the Company's restructuring work. In accordance with US GAAP, income from discontinued operations of $1,525,670 was recorded in the quarter due to the reversal of the cumulative translation adjustment relative to these discontinued operations. Loss per share was $0.16 based on weighted average shares outstanding of 16,301,713, while the loss per share in the comparable quarter of 2000 was $0.76 based upon a weighted average of 10,485,000 shares outstanding. Results for the First Fiscal Half The Company reported revenues for the first six months ending December 31, 2001 of $591,757 with receivables collected during the period of $2,172,941. The revenue from the comparable period in 2000 was$1,729,970. All of the Company's revenues came from the European market. For the six-month period, EBITDA was ($5,019,872) compared to ($4,403,142) in the comparable period. Selling, general and administrative expenses were $2,463,746 for the current period compared to $3,224,401 in the comparable period. The Company incurred a net loss of $7,765,059 in the current period including depreciation and amortization expenses of $1,985,131. This compares to a net loss of $13,267,224 for the equivalent period ending December 31, 2000 which included a loss from discontinued operations of $5,927,855 related to the telematics subsidiary. In accordance with US GAAP, income from discontinued operations of $1,525,670 was recorded in the quarter ended December 2001 due to the reversal of the cumulative translation adjustment relative to these discontinued operations. The net loss per share for the six-month period was $0.57 based on weighted average shares outstanding of 13,641,876, while the comparable period loss per share was $1.27 based upon a weighted average of 10,475,000 shares outstanding. CEO Commentary and Outlook Peter Henricsson, CellPoint's Chairman and CEO, commented, "During the start of 2002, the visibility for our market has improved significantly. A large number of the European and Asian mobile operators have told us the decision to invest in a location platform has been made and budgets are in place. Many will make their decisions public during the first half of the year and we expect to get our fair share of these orders. Henricsson continued, "The downturn in the telecoms market coupled with our legal and financial difficulties have delayed new orders. We are currently engaged in several negotiations to close further contracts and the results of the period do not record revenues for the sale of our Mobile Location Broker during the quarter. Over the past few years, we have built strong relationships with cellular providers. We have a proven technology, and have recently lowered server hardware costs to make it more affordable for operators to install our software in their networks. It has been a long wait, but now we believe we have the right products and the operators tell us these products are here at the right time for this emerging market. "We have stated earlier that we expect our first cash flow positive quarter this fiscal year, and we still believe we have a good chance to reach that but will require additional funding in the process to meet our current liabilities and patience from our creditors in the interim as we rebuild from the extremely difficult financial and legal challenges we have faced. We have reached our stated goal to cut our monthly costs to $750,000 and we are continuing to cut costs that are not essential for our focus on MLS, MLB and LDZ. For the current quarter ending March 31, 2002, we expect our monthly costs to go down to $650,000 per month - that means that we will reach cash flow break even by having sales of $2 million per quarter." Financing On January 31, 2002, the Company closed a private placement of Common Stock and warrants pursuant to which it issued an aggregate of 848,982 shares of Common Stock for proceeds of $665,000. In addition, the Company issued warrants to purchase 424,471 shares of Common Stock exercisable at $1.50 per share for two years. On December 20, 2001, the Company negotiated a $500,000 loan in addition to the $4 million loan already outstanding. The Company's focus now is to complete other financing transactions in process which are necessary to carry on business and meet current liabilities. Orders CellPoint announced in December that E-Plus ordered CellPoint's Mobile Location Broker (MLB) as its location middleware platform. MLB provides for secure communication between content providers' applications and a location determination platform such as CellPoint's MLS. MLB and MLS work in GSM, GPRS and UMTS/3G networks including network architectures supplied by mixed vendors. MLB is an Internet protocol-based platform and also works in TDMA and CDMA networks. Restructuring CellPoint executed an aggressive restructuring program during the fall that has reduced its monthly costs by $1 million per month to less than $750,000 per month. In addition to reducing costs and the ongoing reduction of expenses, operations have been streamlined to focus on bringing the Company's core technology to market. This consolidated the Company's operating headquarters in its office in Kista, Sweden. A branch office has been maintained in the UK to continue servicing existing and future customers, eliminating the need for the Company's UK subsidiary which was liquidated during the quarter ended December 31, 2001. Legal Proceedings CellPoint has filed a $100 million malpractice claim against its former legal counsel relating to work performed by them in the Company's agreements with Castle Creek Technology Partners LLC. The claim alleges that former counsel breached the duty of care owed to their client by failing to reasonably and competently represent CellPoint in the transactions associated with Castle Creek. The claim further alleges that their actions and omissions fall below the standards for reasonably competent attorneys in the preparation of documents consummating the agreements and the advice related thereto. Castle Creek filed a lawsuit against CellPoint in November 2001, the primary allegation of which was that CellPoint had not registered an adequate number of shares in its registration statement filed October 31, 2001, to cover shares issuable under a warrant issued to Castle Creek in July 2001. To settle this suit, the parties agreed in December to amend the existing agreements in several areas. The new agreement includes CellPoint continuing to pay down the outstanding notes. CellPoint will allocate 25% of the first $3,000,000 of funds raised over the next 10 months to paying down the notes and agreed to pay down a minimum of $200,000 by January 31, 2002 and an additional $550,000 by February 28, 2002. Subject to these payments being made on a timely basis, and CellPoint being otherwise in compliance with its agreements with Castle Creek, the lawsuit will be dismissed. CellPoint met the January payment on time. Technical leadership CellPoint carried out extensive performance testing for its network- based location services platform, Mobile Location System (MLS). The test aimed to quantify and clarify the current confusion in the location platform industry and for its customers regarding issues such as capacity, latency, active/idle-mode location, multi-vendor access and commercial availability. The Company is confident that MLS is the best- performing location platform available to GSM network operators. By going public with the tested performance measurements, CellPoint set the standard for the rest of the industry and is ready to accept challenges by any location platform vendor in any GSM environment. Henricsson concluded, "The highlight of this quarter is our technical progress. We have announced the data from comprehensive tests of our MLS. We believe we have the strongest product on the market, and are welcoming competitors to a benchmark test. With the quarter's order to E- Plus, we also have shown the commercial strength of our application platform product, the MLB." Recent Highlights · MLB Selected and Installed for New Ground-Breaking European Mobile Portal · Mobile Location Broker Ordered by E-Plus · CellPoint Establishes Corporate Facility in the United States · Mobile Location System (MLS) Handles Over Half a Million Location Requests per Hour in Tests · CellPoint Completes Restructuring and Executes Further Cost Savings Program, reduces monthly costs from $1.7 million to less than $750,000 per month · Location Developers' Zone Enhanced, Applications Catalog Introduced The Company's full report on Form 10QSB has been filed with the SEC and is available at www.cellpoint.com or www.freeedgar.com CellPoint Inc. (Nasdaq and Stockholmsbörsen: CLPT) is a leading global provider of location determination technology, carrier-class middleware and applications enabling mobile network operators rapid deployment of revenue generating location-based services for consumer and business users and to address mobile E911/E112 security requirements. CellPoint's two core products, Mobile Location System (MLS) and Mobile Location Broker (MLB), provide an open standard platform adapted for multi-vendor networks with secure integration of third-party applications and content. CellPoint's entry-level location platform handles over 500,000 location requests per hour and has a seamless migration path to GPRS and 3G. CellPoint's early entry and experience with European mobile operators has allowed the development of products and features that address key requirements such as active and idle mode positioning, international roaming, multiple location determination technologies and consumer privacy. CellPoint is a global company headquartered in Kista, Sweden. For more information, please visit www.cellpoint.com. For information, please contact: KCSA Public Relations Worldwide: Sarah Shepard / Madelene Glomsten Tel: (212) 896-1236 / (212) 896-1258 sshepard@kcsa.com / mglomsten@kcsa.com CellPointtm and CellPoint Systemstm are trademarks of CellPoint Inc. Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. Actual results may differ materially from those projected in any forward- looking statement. Investors are cautioned that such forward-looking statements involve risk and uncertainties which may cause actual results to differ from those described. 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