UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2001
or

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

For the transition period from ____________________ to _________________

Commission File Number 0-30175

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

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

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

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

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

Yes_X__ No ___.

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

Outstanding at
Class November 6, 2001
----- --------------

Common Stock, Par Value $.01 22,691,840

i3 MOBILE, INC.
FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS

PART I - Financial Information

Item 1. - Financial Statements (Unaudited)

Consolidated Balance Sheet as of September 30, 2001 and
December 31, 2000........................................................... 3

Consolidated Statement of Operations for the Three and Nine
Months Ended September 30, 2001 and 2000.................................... 4

Consolidated Statement of Cash Flows for the Nine
Months Ended September 30, 2001 and 2000.................................... 5

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

Item 2. - Management's Discussion and Analysis of Financial
Condition and Results of Operations............................... 7

Item 3. - Quantitative and Qualitative Disclosures about Market Risk.......... 10

Part II - Other Information

Item 2. - Changes in Securities and Use of Proceeds........................... 10

Item 6. - Exhibits and Reports on Form 8-K.................................... 10

Signatures.................................................................... 11

i3 MOBILE, INC.

CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)

September 30, December 31,
2001 2000
---- ----
(UNAUDITED) (NOTE)

ASSETS
Current assets:
Cash and cash equivalents ................................. $ 60,545 $ 84,900
Accounts receivable, net .................................. 682 536
Deferred advertising ...................................... 3,349 3,349
Prepaid expenses and other current assets ................. 1,089 416
--------- ---------
Total current assets ............................... 65,665 89,201

Fixed assets, net ........................................... 12,251 9,217
Deposits and other non-current assets ....................... 783 829
--------- ---------
Total assets ....................................... $ 78,699 $ 99,247
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable .......................................... $ 1,182 $ 2,019
Accrued liabilities ....................................... 4,181 3,969
Capital lease obligation, current portion ................. 653 801
--------- ---------
Total current liabilities .......................... 6,016 6,789
Capital lease obligation, less current portion .............. 103 568
--------- ---------
Total liabilities .................................. 6,119 7,357

Stockholders' equity:
Common stock; $.01 par value, 50,000,000 shares authorized,
24,773,640 and 24,706,440 shares issued ................. 248 247
Additional paid-in capital ................................ 167,550 168,007
Notes receivable from stockholders ........................ (500) (4)
Deferred compensation ..................................... (869) (1,724)
Accumulated deficit ....................................... (89,247) (70,406)
Treasury stock at cost, 2,056,500 and 1,885,000 shares .... (4,602) (4,230)
--------- ---------
Stockholders' equity ............................... 72,580 91,890
--------- ---------
Total liabilities and stockholders'
equity ........................................... $ 78,699 $ 99,247
========= =========

NOTE: The balance sheet at December 31, 2000 has been derived from the audited
consolidated financial statements at that date.

See accompanying notes to consolidated financial statements.

i3 MOBILE, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)

THREE MONTHS ENDED NINE MONTHS ENDED
------------------ -----------------
Sept.30, Sept.30, Sept.30, Sept.30,
2001 2000 2001 2000
---- ---- ---- ----

Net revenue ............................................ $ 989 $ 1,448 $ 3,671 $ 3,464
Cost of revenue(including stock compensation of $2, $3,
$6 and $8 respectively) ............................. 532 799 2,029 2,020
-------- -------- -------- --------
Gross profit ........................................... 457 649 1,642 1,444
-------- -------- -------- --------
Operating expenses:
Sales and marketing (including stock compensation of .
$49, $59, $143 and $159 respectively) ............... 1,807 3,655 4,529 6,339
Product development (including stock compensation of .
$23, $28, $67 and $75 respectively) ................. 1,574 778 5,013 2,403
General and administrative (including stock compensat-
ion of $70, $124, $221 and $319 respectively ........ 5,300 3,671 13,392 8,847
-------- -------- -------- --------
Operating expenses ..................................... 8,681 8,104 22,934 17,589
-------- -------- -------- --------
Operating loss ......................................... (8,224) (7,455) (21,292) (16,145)
Interest income, net ................................... (548) (1,632) (2,451) (3,304)
-------- -------- -------- --------

Net loss ............................................... (7,676) (5,823) (18,841) (12,841)

Dividends on mandatorily redeemable preferred stock .... -- -- -- (2,829)
-------- -------- -------- --------
Loss applicable to common stock ........................ $ (7,676) $ (5,823) $(18,841) $(15,670)
======== ======== ======== ========

Net loss per share - basic and diluted ................. $ (0.34) $ (0.26) $ (0.83) $ (0.93)
======== ======== ======== ========
Shares used in computing net loss per share ............ 22,729 22,807 22,775 16,797
======== ======== ======== ========

See accompanying notes to consolidated financial statements.

i3 MOBILE, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
(unaudited)

NINE MONTHS ENDED
-----------------
Sept 30, Sept 30,
2001 2000
---- ----

Cash flows from operating activities:
Net loss .................................................... $(18,841) $(12,841)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization ............................. 3,293 863
Stock compensation expense ................................ 437 561
Other ..................................................... -- 65
Changes in operating assets and liabilities:
(Increase) in accounts receivable ........................ (146) (793)
(Increase) in other current assets and other assets ...... (723) (503)
(Decrease) increase in accounts payable .................. (837) 246
Increase in accrued liabilities .......................... 212 1,219
-------- --------
Net cash used in operating activities ......................... (16,605) (11,183)
-------- --------
Cash flows from investing activities:
Purchase of fixed assets .................................. (6,327) (4,741)
-------- --------
Net cash used in investing activities ......................... (6,327) (4,741)
-------- --------
Cash flows from financing activities:
Payments on capital lease obligations ....................... (613) --
Proceeds from sale of common stock, net ..................... -- 80,675
Proceeds from exercise of stock options ..................... 58 143
Proceeds from repayment of notes receivable ................. 4 20
Issuance of note to stockholder ............................. (500) --
Treasury stock purchases .................................... (372) --
-------- --------
Net cash (used in) provided by financing activities ........... (1,423) 80,838
-------- --------
(Decrease) increase in cash and cash equivalents .............. (24,355) 64,914
Cash and cash equivalents at beginning of period .............. 84,900 28,241
-------- --------
Cash and cash equivalents at end of period .................... $ 60,545 $ 93,155
======== ========
Supplemental disclosures of cash flow and non cash
activities:
Accretion of mandatorily redeemable preferred stock dividends $ -- $ 2,829
Conversion of preferred to common stock ..................... $ -- $ 58,167

See accompanying notes to consolidated financial statements.

i3 MOBILE, INC.

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

NOTE 1 - OVERVIEW:

i3 Mobile, Inc., "i3" or the "Company", develops and distributes
premium information services for mobile telephone users. We distribute our
services on a subscription basis directly to consumers or through relationships
with wireless network operators and business partners. This distribution network
reaches substantially all major North American markets. The Company currently
provides information services in a variety of broad-based categories, including
news, finance, sports, weather, messaging, travel, entertainment and local
information.

In the fall 2001, the Company began to test market ProntoSM in select
geographic locations as a precursor to its launch. Pronto is the first easy to
use, flat menu, voice activated subscriber service that brings information and
critical communication tools to mobile phone users. Pronto is built around a
powerful voice recognition system, allowing users to simply ask a question and
get an answer. Pronto's mission is to provide a successful consumer experience
on every call, with live operators standing by 24/7 to help with more detailed
requests. Subscribers can configure their services on a branded web site, by
calling into a live operator or through an interactive voice response system and
then accessing the information from their mobile telephones or other devices.
Personalization of services is intended to enhance the user experience by
allowing subscribers to access only the information they want.

NOTE 2 - BASIS OF PRESENTATION:

The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information. Certain information
and note disclosures normally included in financial statements have been omitted
pursuant to Article 10 of Regulation S-X. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three and nine
month periods ended September 30, 2001 are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 2001.

For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report on Form 10-K for
the year ended December 31, 2000.

Certain reclassifications have been made for consistent presentation.

NOTE 3 - INITIAL PUBLIC OFFERING:

On April 6, 2000, the Company completed an initial public offering (the
"Offering") of 5,100,000 shares of common stock at a price of $16 per share,
generating net proceeds of $75,888,000. In connection with the Offering, the
Company granted to the underwriters an option to purchase up to 765,000
additional common shares at the initial public offering price less the
underwriting discounts and commissions, to cover any over-allotments. On May 10,
2000, the underwriters exercised this option and purchased an additional 522,500
shares. After deducting underwriting discounts and commissions, the Company
received $7,774,800 in net proceeds from the exercise of this option.

In addition, all outstanding preferred stock was converted into
11,316,765 shares of common stock upon completion of the Offering.

NOTE 4 - STOCK REPURCHASE PLAN:

On April 16, 2001, the Company announced that its Board of Directors
had authorized a share repurchase program to acquire up to 2.3 million shares of
its common stock. Pursuant to this repurchase program, such purchases will be
made from time to time in the open market and through privately negotiated
transactions, subject to general market and other conditions. The Company will
finance the repurchase program through existing cash resources. Shares acquired
pursuant to this repurchase program will become treasury shares and will be
available for reissuance for general corporate purposes. As of September 30,
2001, 171,500 shares have been repurchased by the Company at a weighted average
repurchase price of $2.17.

NOTE 5 - RELATED PARTY TRANSACTION:

On September 10, 2001, the company entered into a note agreement with
RMU Management, LLC, ("RMU"), an entity controlled by a member of the Company's
Board of Directors. Under the terms of the note agreement, the Company agreed to
lend RMU $500,000, for a period of one year, at an interest rate equal to the
prime rate plus two percent. The note is secured by 500,000 shares of the
Company's common stock owned by RMU.

NOTE 6 - RECENT ACCOUNTING PRONOUNCEMENTS:

In July 2001, the Financial Accounting Standards Board (FASB) issued
FASB statements Nos. 141 and 142 (FAS 141 and FAS 142), "Business Combinations"
and "Goodwill and Other Intangible Assets." FAS 141 replaces APB 16 and
eliminates pooling-of-interests accounting prospectively. It also provides
guidance on purchase accounting related to the recognition of intangible assets
and accounting for negative goodwill. FAS 142 changes the accounting for
goodwill from an amortization method to an impairment-only approach. Under FAS
142, goodwill will be tested annually and whenever events or circumstances occur
indicating that goodwill might be impaired. FAS 141 and FAS 142 are effective
for all business combinations completed after June 30, 2001. Companies are
required to adopt FAS 142 for fiscal years beginning after December 15, 2001.
The Company believes that the adoption of these standards will have no impact on
its results of operations and financial position.

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

The following discussion of our financial condition and results of
operations should be read together with our consolidated financial statements
and the related notes included in this document and with Management's Discussion
and Analysis of Financial Condition and Results of Operations and the audited
financial statements and notes thereto for the years ended December 31, 2000,
1999 and 1998 included in our annual report on Form 10-K for the year ended
December 31, 2000.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

This quarterly report contains forward-looking statements that involve
risks and uncertainties, including the statements in Liquidity and Capital
Resources regarding the adequacy of funds to meet funding requirements. Our
actual results may differ significantly from the results discussed in the
forward-looking statements. A number of uncertainties exist that could affect
our future operating results, including, without limitation, our history of
losses, our ability to develop and market new voice recognition products and
services and the overall market acceptance thereof, our ability to market this
product directly to consumers, our ability to form marketing relationships with
wireless carriers, our dependence on paying subscribers and third party call
centers, competition, our continuing ability to enhance Pronto programs and
services which generate consumer interest, and general economic factors. We have
incurred

significant operating losses since our inception. There can be no assurance that
we will be able to achieve or maintain profitability in the future.

OVERVIEW

We develop and distribute premium information services for mobile
telephone users. We distribute our services on a subscription basis directly to
consumers or through relationships with wireless network operators and business
partners. This distribution network reaches substantially all major North
American markets. We currently provide information services in a variety of
broad-based categories, including news, finance, sports, weather, messaging,
travel, entertainment and local information.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000

Net Revenue. Net revenue decreased 32% to $989,000 for the three months
ended September 30, 2001 from $1,448,000 for the three months ended September
30, 2000. The decrease from the prior year period is primarily attributable to
decreased non-recurring development revenues from our wireless alert legacy
products.

Cost of Revenue. Cost of revenue decreased 33% to $532,000 for the
three months ended September 30, 2001 from $799,000 for the three months ended
September 30, 2000. The decrease was primarily attributable to a decrease in
development initiatives and associated costs during the 2001 period.

Sales and Marketing Expenses. Sales and marketing expenses decreased by
51% to $1,807,000 for the three months ended September 30, 2001 from $3,655,000
for the three months ended September 30, 2000 due to a decrease in marketing
initiatives of our wireless alert legacy products during the 2001 period.

Product Development Expenses. Product development expenses increased by
102% to $1,574,000 for the three months ended September 30, 2001 from $778,000
for the three months ended September 30, 2000. This increase was primarily a
result of increased labor and related costs incurred to support the development
of Pronto, the Company's new wireless suite of services.

General and Administrative Expenses. General and administrative
expenses increased 44% to $5,300,000 for the three months ended September 30,
2001 from $3,671,000 for the three months ended September 30, 2000. The increase
was primarily due to increased compensation and related costs from the addition
of personnel and increased professional fees, rent and other related
infrastructure expenses.

Interest Income, Net. Interest income was $548,000 for the three months
ended September 30, 2001 as compared to $1,632,000 for the three months ended
September 30, 2000. The decrease in interest income is attributable to a
decrease in average cash balances outstanding as well as lower market interest
rates during the 2001 period.

NINE MONTHS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000

Net Revenue. Net revenue increased 6% to $3,671,000 for the nine months
ended September 30, 2001 from $3,464,000 for the nine months ended September 30,
2000. The

increase from the prior year period is primarily attributable to increased
subscription revenues from our wireless alert legacy products partially offset
by a decrease in non-recurring development revenues during the 2001 period.

Cost of Revenue. Cost of revenue remained relatively consistent at
$2,029,000 for the nine months ended September 30, 2001 vs. $2,020,000 for the
nine months ended September 30, 2000. The costs were primarily attributable to
the acquisition of content necessary to support the subscription revenue as well
as the cost of development efforts.

Sales and Marketing Expenses. Sales and marketing expenses decreased by
29% to $4,529,000 for the nine months ended September 30, 2001 from $6,339,000
for the nine months ended September 30, 2000 due to a decrease in marketing
initiatives of our wireless alert legacy products during the 2001 period.

Product Development Expenses. Product development expenses increased by
109% to $5,013,000 for the nine months ended September 30, 2001 from $2,403,000
for the nine months ended September 30, 2000. This increase was primarily a
result of increased labor and related costs incurred to support the development
of Pronto, the Company's new wireless suite of services.

General and Administrative Expenses. General and administrative
expenses increased 51% to $13,392,000 for the nine months ended September 30,
2001 from $8,847,000 for the nine months ended September 30, 2000. The increase
was primarily due to increased compensation and related costs from the addition
of personnel and increased professional fees, rent and other related
infrastructure expenses.

Interest Income, Net. Interest income was $2,451,000 for the nine
months ended September 30, 2001 as compared to $3,304,000 for the nine months
ended September 30, 2000. The decrease in interest income is attributable to a
decrease in average cash balances outstanding as well as lower market interest
rates during the 2001 period.

LIQUIDITY AND CAPITAL RESOURCES

Since our inception we have financed our operations primarily through
sales of our equity securities and the issuance of long-term debt, which has
resulted in aggregate cash proceeds of $130,069,000 through September 30, 2001.

Net cash used in operating activities was $16,605,000 for the nine
months ended September 30, 2001 and $11,183,000 for the nine months ended
September 30, 2000. The principal use of cash during each of these periods was
to fund our losses from operations.

Cash used in investing activities was $6,327,000 for the nine months
ended September 30, 2001 and $4,741,000 for the nine months ended September 30,
2000. Cash used in investing activities relates primarily to the purchase of
fixed assets and fixed asset related costs.

Net cash used in financing activities was $1,423,000 for the nine
months ended September 30, 2001 versus cash provided by financing activities of
$80,838,000 for the nine months ended September 30, 2000. The principal uses of
cash during the nine months ended September 30, 2001 was for the repayment of
capital lease obligations, the purchase of treasury stock under the Company's
stock repurchase plan and the issuance of a note to a shareholder. Cash provided
by financing activities in the period ended September 30, 2000 relates primarily
to net proceeds from our initial public offering on April 6, 2000.

As of September 30, 2001, we had cash and cash equivalents of
$60,545,000.

We believe that existing cash balances, cash equivalents and cash
generated from operations will be sufficient to meet our anticipated cash needs
for working capital and capital expenditures for at least the next 12 months.
However, the estimated levels of revenues and expenses may not prove to be
accurate. We may seek additional funding through public or private financings or
other arrangements prior to such time. Adequate funds may not be available when
needed or may not be available on favorable terms. If we raise additional funds
by issuing equity securities, dilution to existing stockholders will result. If
funding is insufficient at any time in the future, we may be unable to develop
or enhance our products or services, take advantage of business opportunities,

make strategic acquisitions of technologies or businesses complimentary to ours
or respond to competitive pressures, any of which could harm our business.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

As of September 30, 2001 we had no debt outstanding. We currently have
no plans to incur debt during the next twelve months. As such, changes in
interest rates will only impact interest income. The impact of potential changes
in hypothetical interest rates on budgeted interest income in 2001 has been
estimated at approximately $0.7 million or approximately 2% of budgeted net loss
for each 1% change in interest rates.

Part II - Other Information

Item 2. Changes In Securities and Use of Proceeds

On April 6, 2000, our Registration Statement on Form S-1 (Commission
File Number 333-94191) became effective. From the effective date of our
Registration Statement to September 30, 2001 we have used $20.0 million of the
net offering proceeds primarily to fund our losses from operations.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

None

(b) Reports on Form 8-K

None.

SIGNATURES

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

Dated: November 7, 2001

i3 MOBILE, INC.

By:/s/ Michael P. Neuscheler
-----------------------------------------
Executive Vice President and
Chief Financial Officer