GOAMERICA INC - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002
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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 0-29359
GOAMERICA, INC.
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(Exact Name of Registrant as Specified in Its Charter)

Delaware 22-3693371
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)

433 Hackensack Avenue, Hackensack, New Jersey 07601
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(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code (201) 996-1717
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of Each Exchange on Which Registered
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None
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Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 par value
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(Title of Class)

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

Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act).

Yes: No: X
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The aggregate market value of the voting common equity of the
registrant held by non-affiliates (for this purpose, persons and entities other
than executive officers, directors, and 5% or more shareholders) of the
registrant, as of the last business day of the registrant's most recently
completed second fiscal quarter (June 30, 2002), was $19,437,507.

Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of March 26, 2003:

Class Number of Shares
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Common Stock, $0.01 par value 54,073,420

The following documents are incorporated by reference into the Annual
Report on Form 10-K: Portions of the registrant's definitive Proxy Statement for
its 2003 Annual Meeting of Stockholders are incorporated by reference into Part
III of this Report.

TABLE OF CONTENTS
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Item Page
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PART I 1. Business of the Company................................................ 2
2. Properties............................................................. 16
3. Legal Proceedings...................................................... 16
4. Submission of Matters to a Vote of Security Holders.................... 17

PART II 5. Market for the Registrant's Common Equity and Related Stockholder
Matters........................................................... 18
6. Selected Consolidated Financial Data................................... 20
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................. 22
7A. Quantitative and Qualitative Disclosures About Market Risk............. 35
8. Financial Statements and Supplementary Data............................ 35
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.............................................. 35

PART III 10. Directors and Executive Officers of the Registrant..................... 36
11. Executive Compensation................................................. 36
12. Security Ownership of Certain Beneficial Owners and Management......... 36
13. Certain Relationships and Related Transactions......................... 36
14. Controls and Procedures................................................ 36

PART IV 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K....... 37

SIGNATURES............................................................................................ 38

EXHIBIT INDEX......................................................................................... 42

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE........................... F-1

FORWARD-LOOKING STATEMENTS

The statements contained in this Annual Report on Form 10-K that are
not historical facts are forward-looking statements (within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended) that involve
risks and uncertainties. Such forward-looking statements may be identified by,
among other things, the use of forward-looking terminology such as "believes,"
"expects," "may," "will," "should" or "anticipates" or the negative thereof or
other variations thereon or comparable terminology, or by discussions of
strategy that involve risks and uncertainties. These forward-looking statements,
such as statements regarding anticipated future revenues and expenses, capital
expenditures, subscriber base, profit margins and other statements regarding
matters that are not historical facts, involve predictions with risks and
uncertainties. Potential risks and uncertainties that could affect our future
operating results include, but are not limited to: (i) our limited operating
history; (ii) our reduced capital resources; (iii) the impact on our business
from our receiving a "going concern" opinion from our independent auditors; (iv)
our ability to successfully implement our strategic alliance with EarthLink; (v)
our dependence on EarthLink to provide billing, customer and technical support
to our subscribers; (vi) our ability to respond to the rapid technological
change of the wireless data industry and offer new services; (vii) our
dependence on wireless carrier networks; (viii) our ability to respond to
increased competition in the wireless data industry; (ix) our ability to
integrate acquired businesses and technologies; (x) our ability to leverage
strategic alliances to generate revenue growth; (xi) our ability to increase or
maintain gross margins, profitability, liquidity and capital resources; (xii)
our ability to manage expanded operations; and (xiii) our ability to fund our
operating needs through available cash reserves. Such risks and others are more
fully described in the Risk Factors set forth in Exhibit 99.1 to this Annual
Report. Our actual results could differ materially from the results expressed
in, or implied by, such forward-looking statements. Each reference in this
Annual Report to "GoAmerica," the "Company" or "We," or any variation thereof,
is a reference to GoAmerica, Inc. and its subsidiaries.

PART I

ITEM 1. BUSINESS OF THE COMPANY.

GENERAL

GoAmerica develops and distributes wireless data technology,
applications and software that address the productivity and communications needs
of enterprise customers and consumers. In the enterprise market, our solutions
are primarily based on our proprietary software technology called Go.Web(TM). By
utilizing Go.Web, corporations can improve the productivity of employees by
enabling secure wireless access to corporate data on many wireless computing
devices and over many wireless data networks. Our Go.Web technology can be
hosted and supported in a secure network operations center maintained by
GoAmerica or its third party outsourcing provider or installed behind an
enterprise's network security system, commonly know as the firewall. Customers
who opt to install the software do so by purchasing our proprietary Go.Web
Enterprise Server, formally known as Go.Web OnPrem(TM), technology. In the
consumer market, we primarily offer wireless data solutions that are designed

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for people who are deaf, hard of hearing or speech impaired. We market and
support these services through Wynd Communications, a wholly owned subsidiary of
GoAmerica.

Our revenues are primarily derived from the sale of our value-added
wireless data services, for which customers typically pay monthly recurring
fees. We derive additional revenue from the sale of wireless communications
devices and commissions from the acquisition of subscribers on behalf of various
wireless network providers and EarthLink, Inc. ("EarthLink"). During 2002, we
began generating a small portion of our revenue through licensing fees from
sales of our server software. We intend to increase our focus on growing revenue
associated with software and other technology licensing during 2003.

In September 2002 we announced that we were refining our business model
in order to focus on the technology development and distribution aspects of our
strategy. As part of this transition, we entered into a strategic alliance with
EarthLink with respect to several areas of our business:

Subscriber Purchase. EarthLink purchased our cellular digital
packet data (CDPD) network subscribers and a portion of our Cingular
and Motient network subscriber base. This transaction included an
upfront payment from EarthLink, which we received during the fourth
quarter of 2002, an additional payment, which was received in the first
quarter of 2003, and a final payment, which we expect to receive during
the second quarter of 2003 once the subscriber transfer is completed.
We also expect to continue receiving from EarthLink a portion of the
recurring revenue it generates by providing these subscribers with our
Go.Web service.

Outsourcing. We selected EarthLink as our preferred provider
of billing and collections, customer support, technical support,
wireless communication devices and wireless network connectivity. We
expect this aspect of our alliance to reduce our operating expenses,
including costs of wireless airtime, equipment, billing, customer care
and provisioning and to shift all collection risk to EarthLink. As its
service fee for performing this range of administrative and
provisioning services, EarthLink retains a portion of the recurring
Go.Web revenues it collects and then remits the balance to us.

Agency Agreement. We market and sell EarthLink's mobile
solutions through our direct sales force and other channel
partnerships. This agreement may further diversify our revenue mix as
EarthLink will pay us commissions for selling its wireless services and
other product offerings.

Technology Development and Distribution. Our alliance with
EarthLink supports our objective of increasing the distribution of our
wireless data technology as EarthLink has agreed to utilize Go.Web as a
key component for EarthLink's next-generation wireless Web offerings.
GoAmerica has also agreed to develop an EarthLink-branded wireless data
service for the consumer and small business markets. We expect these
agreements to contribute to our revenue through a combination of
licensing fees and development fees paid to us by EarthLink.

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Go.Web - Our proprietary Go.Web technology serves as the foundation of
our service offerings. Go.Web is a wireless enabling technology that reformats,
compresses, and encrypts data automatically and on a near immediate basis for
delivery over many wireless data networks to many wireless communication
devices. Go.Web Enterprise Server, formally known as Go.Web OnPrem, is the brand
name for our behind-the-firewall software that enables businesses and mobile
professionals to securely access corporate files and databases. Customers who
use our Go.Web technology have the ability to wirelessly access most Web-based
applications or Internet content, including corporate intranets, business
applications and corporate email.

In addition to providing secure data access, our suite of value-added
features improves productivity by enabling customers to open, edit, fax and
forward email attachments; remotely access and manage documents; send instant
messages; and queue requests to access or send information when a device is
outside of a wireless service area. We also offer tools that allow customers to
better manage wireless network time and expense by allowing the user to download
all or part of a document, convert a document to text, or fax a document to a
specified location.

Currently, GoAmerica customers have the ability to access our solutions
using most major wireless data networks in North America including networks that
operate on the code division multiple access (CDMA), CDPD, DataTAC, general
packet radio service (GPRS), Mobitex and ReFlex technologies. Our subscribers
are also able to use GoAmerica solutions with their choice of a wide variety of
leading mobile computing devices, including Research In Motion's, or RIM's,
BlackBerry and interactive handheld devices; Microsoft Pocket PC-based personal
digital assistants; Palm operating system-based handheld computing devices;
laptop computers; and certain Motorola two-way pagers. We also have engineered
our technology to operate with new versions of many other wireless devices.

Since our software and services are designed to inter-operate with
widely used technology standards, we are able to regularly and efficiently
upgrade our solutions to support new networks and devices. We believe that this
flexibility is a key strength of our product offering as it addresses the desire
of corporate technology officers to utilize "evergreen" solutions that can be
easily upgraded to meet their companies' evolving technology needs.

Our Wynd Communications subsidiary offers enhanced services known as
WyndTell(TM), which assist our deaf, hard-of-hearing or speech impaired
customers to communicate with almost anyone, virtually anywhere, at anytime.
Providing national wireless coverage for its services, WyndTell allows customers
essentially to send and receive email messages to or from any email service,
send and receive TTY/TDD messages and faxes, and access the Internet and Tripod
Captioning Film information. Through Wynd's partnership with the American
Automobile Association, WyndTell provides access to Emergency Roadside Services
for motorists who would otherwise have difficulty using a roadside call box.

Our principal office is located at 433 Hackensack Avenue, Hackensack,
New Jersey 07601, and our telephone number is (201) 996-1717. Our web site is
located at www.goamerica.net. We have not incorporated by reference into this
Form 10-K any of the information on our web site, and you should not consider it
to be a part of this document. Our web site address is included in this document
as an inactive textual reference only.

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The GoAmerica name and logo and the names of proprietary products and
services offered by GoAmerica are trademarks, registered trademarks, service
marks or registered service marks of GoAmerica.

CORPORATE HISTORY

GoAmerica Communications Corp. was incorporated in Delaware in 1996.
In December 1999, GoAmerica, Inc. was incorporated in Delaware and each of the
security holders of GoAmerica Communications Corp. exchanged all of their
outstanding securities for newly issued securities of GoAmerica, Inc. with
equivalent rights and preferences. As a result, GoAmerica Communications Corp.
became a wholly owned subsidiary of GoAmerica, Inc. GoAmerica, Inc. consummated
its initial public offering of its common stock in April 2000.

On June 28, 2000, we acquired Wynd Communications Corporation, a
California corporation, or Wynd. Wynd is a leading provider of wireless
telecommunications services for people who are deaf, hard of hearing or speech
impaired, a line of business that we have continued. In the acquisition, the
former stockholders of Wynd received an aggregate of 3,964,975 shares of our
common stock in exchange for all outstanding shares of Wynd capital stock. Such
aggregate amount equaled seven percent (7%) of the total fully-diluted issued
and outstanding shares of our common stock on the date of issue.

On August 31, 2000, we acquired Hotpaper.com, Inc., a Delaware
corporation, or Hotpaper. Hotpaper provided Web-based document automation
software, infrastructure and content, which was utilized as the basis for
developing components of our value-added suite of services. Pursuant to the
terms of the acquisition, the former stockholders of Hotpaper received an
aggregate of 1,006,111 shares of our common stock in exchange for a portion of
the outstanding shares of Hotpaper capital stock. In addition, one stockholder
of Hotpaper received a cash payment of $750,000 in exchange for a portion of his
shares of Hotpaper capital stock.

On November 7, 2000, we acquired substantially all the assets of Flash
Creative Management, Inc., a New Jersey corporation, or Flash. Flash provided
consulting services to business customers in the areas of business improvement,
strategy and redesign and in software development and integration, a line of
business which we are currently not pursuing. In consideration for the assets
purchased, we (i) paid an aggregate purchase price of $6,000,000 cash, (ii)
issued 466,302 shares of restricted common stock, and (iii) assumed certain
liabilities of Flash.

On November 13, 2001, we acquired OutBack Resource Group, Inc., a
California corporation, or OutBack. OutBack is a software development company
specializing in wireless and network management and technologies. Pursuant to
the terms of the acquisition, the former stockholders of OutBack received an
aggregate of 134,996 shares of our common stock and warrants to purchase, at an
exercise price of $3.00 per share, an additional aggregate of 67,500 shares of
our common stock, in exchange for all outstanding shares of OutBack capital
stock.

On September 25, 2002, we revised our business model by entering into a
strategic alliance with EarthLink relating to several areas of our business. See
"Business of the Company - General".

5

OUR BUSINESS

Businesses today face a daunting and complex array of choices when
contemplating wireless implementations. Our experience in the wireless data
industry, combined with our technology, enables GoAmerica to design
sophisticated solutions for our customers. By design, our solutions are highly
versatile and can be easily customized for the particular needs of a given
customer. Specifically, we offer customers:

Wireless Network Flexibility - Despite the many wireless network
advances, North America continues to be a region of disparate systems, each
having its own communications protocol, coverage patterns and unique features.
GoAmerica has developed its technology to operate over most major wireless data
network technologies in North America. Our customers have the choice of
subscribing to wireless plans offered by our preferred network services
partners, such as EarthLink, or adding our services and value-added features to
their current wireless service. In some circumstances, such as the delivery of
our WyndTell service, we directly provide our customers with wireless
connectivity through reseller agreements that we maintain with leading wireless
network operators.

By developing our technology to operate over a wide variety of wireless
networks, we increase the potential geographic area, also called a footprint, in
which our solutions can be utilized. In the business market, this flexibility
enables a corporate customer to use our technology in support of local, regional
or national wireless deployments. Maintaining this level of network flexibility
is a key aspect of our technology development strategy and we are continually
updating our solutions to incorporate new wireless standards such as 2.5G and 3G
technologies.

Device Choices - Advances in hardware and software technology have
contributed to an expanding variety of mobile computing devices. Due to this
diversity of hardware options, companies are faced with the new challenge of
procuring and supporting multiple devices. We help enterprises streamline these
processes by advising on the appropriate equipment that meets a company's needs
as well as actually offering the devices to the enterprise through one of our
preferred partners such as EarthLink.

Our technology and services are currently available on a wide variety
of wireless access devices including Research In Motion's, or RIM's, BlackBerry
and interactive handheld devices; Microsoft Pocket PC-based personal digital
assistants; Palm operating system-based computing devices; laptop computers; and
certain Motorola two-way pagers. We are able to offer our solutions on these
devices because we support a range of wireless networks and utilize our own and
third-party device software. This capability enables us to support our
technology on devices that we believe will achieve significant market acceptance
and penetration.

During 2002, we began upgrading our technology to leverage the
increased functionality and growing popularity of the new and expanding breed of
"converged" devices. These are mobile communications devices that combine the
functionality of a wireless phone with a handheld computer in a compact form
factor. In order to strengthen our development capabilities for converged

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devices, we acquired OutBack Resource Group in late 2001. OutBack is a software
company specializing in the development of applications based on Java, a
technology platform that is used to operate a growing number of converged
devices.

Customized Data Access - Whether a customer wants access to corporate
email systems, enterprise resource planning (ERP) systems, customer relationship
management (CRM) systems, field sales systems, intranets or other Web-based
information, we can provide that access and do so securely. By using our own and
third-party software, our solutions compress and encrypt data content from
broadband sources to enable faster and more cost-effective data delivery over
wireless networks. We support various wireless protocols, such as wireless
application protocol (WAP), wireless markup language (WML), handheld delimited
markup language (HDML), hypertext markup language (HTML), secure socket layer
(SSL), and Java.

In order to provide our customers with a high caliber of service,
we supplement our core wireless networking expertise with the expertise of
leading enterprise services and technology companies. Corporate wireless data
deployments are typically part of larger corporate technology initiatives. For
customers who require long-term professional services agreements, we typically
recommend one of several leading global systems integrators, such as IBM, with
whom we have entered into a strategic relationship. These strategic
relationships are designed to provide an optimal customer experience while
creating new revenue opportunities for GoAmerica and its alliance partners.

THE GOAMERICA STRATEGY

Our primary mission is to be a leader in development and distribution
of world-class wireless data technology and services. We seek to distinguish our
offerings with value-added solutions in order to deepen penetration among our
installed base and expand the breadth of our overall customer base. Our strategy
includes the following key elements:

Organic Growth by Penetrating Our Installed Base of Customers. Our
business solutions are currently being utilized by employees at several hundred
corporations and small to mid-sized businesses. Since the overall deployment of
wireless data technologies is currently at an early stage, our average account
size is still relatively small. We believe that the progress we have made at
`seeding' the market with users of our technology creates an opportunity for us
to generate additional growth by further proliferating the use of our services
within existing accounts. This strategy includes selling new value-added
features and technology products such as server software, wireless document
management applications and new wireless network and device offerings, as well
as growing the number of overall users of our solutions within an organization.

Focus New Account Growth Around Primary Strategic Alliances. A central
component our sales and marketing strategy is forming marketing and distribution
alliances with leading technology companies such as Dell, EarthLink and IBM. In
order to take advantage of these key relationships, we have structured our sales
organization into teams that work with these alliance partners to identify and
close new business opportunities. Strategic relationships range from joint
marketing initiatives to more comprehensive alliances resulting in technology
integration and joint product development. For example, in November 2002,
GoAmerica and IBM announced that we would offer our Go.Web server software in
conjunction with IBM's WebSphere Everyplace Access application platform.

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Focus Our Efforts on Core Areas of Expertise. Our strategic alliance
with EarthLink, entered into in September 2002, allows us to streamline our
business operations and focus on our core competencies. By eliminating the costs
associated with providing services to our CDPD and other subscribers and by
outsourcing billing, collections, customer support, technical support and other
related functions, we can focus our efforts on developing and marketing
technology to support the expansion of wireless opportunities.

Maintain a Stable and Steadily Growing Wynd Business. Wynd
Communications is currently the largest provider of wireless data services
designed for people who are deaf, hard of hearing or speech impaired. A premium
service tailored to meet the needs of Wynd's customer base, WyndTell, has the
potential to generate a high average revenue per user, or ARPU, high gross
margins and a low customer turnover rate. We believe that the potential market
for our WyndTell services is largely underserved, providing Wynd with ample
opportunities for additional growth. Subject to capital contstraints, we also
intend to leverage Wynd's brand leadership and extensive distribution alliances
to offer a wider portfolio of products and services that are targeted at or
useful to people who are deaf, hard of hearing or speech impaired

Grow Revenue By Licensing GoAmerica Technology. During 2002, we began
to generate revenue by selling software licenses for our Go.Web technology. As
part of our recent re-focusing of our business strategy, we intend to increase
our emphasis on generating revenue from sales of technology licenses. We feel
that by selling our technology as a software product we can generate higher
gross margins while maintaining lower costs of operations. Part of our licensing
strategy is to integrate our technology into the offerings of our strategic
alliance partners. For example, as part of our alliance with EarthLink, we
expect EarthLink to use Go.Web as a foundation for its next generation wireless
Web offering. We have also agreed to develop an EarthLink-branded wireless data
service targeted at the consumer market.

Acquisitive Growth and Differentiation Through Targeted Transactions.
Subject to our capital constraints, we intend to pursue additional alliances and
acquisitions that we believe will allow us to quickly increase the scale and
scope of our resources. In particular, we expect to seek acquisitions that will
expand our technology or engineering force, enable us to enter new markets or
industry sectors, expand our customer base, or provide new services. For
example, in March 2003, we purchased certain assets from Boundless Depot,
including their Deafwireless subscriber base.

CUSTOMERS

We sell and market to enterprise and individual customers. As of
December 31, 2002, we had approximately 91,300 end-users accessing our
solutions. We generally target our enterprise marketing and selling efforts
toward decision-makers within businesses with large numbers of mobile
professionals. These customers often have a wireless strategy and need
assistance with the implementation and maintenance of such strategy. Mobile
professionals typically have computer and Internet access, use a cellular phone

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or pager, and have a strong professional or personal need to stay in touch with
Web-based information. Most of our consumer marketing focuses on our WyndTell
service and other Wynd product offerings.

SALES AND MARKETING

Sales

We currently sell our services and solutions through two primary
channels of distribution: direct and indirect. As of April 1, 2003 we had 15
employees working in our sales department.

Direct Distribution. Direct distribution methods consist of those
channels in which our personnel take the order directly from the customers.
Within direct distribution, we capture new business through two primary methods:

Direct Sales Representatives - Our direct sales professionals focus
primarily on mid-sized to large corporate customers who are seeking to deploy
wireless data solutions for the associated gains in productivity and overall
return on investment.

Telesales Representatives - Our telesales professionals respond to
queries generated as a result of Web site visits and our marketing efforts which
usually list our toll-free sales telephone number.

Direct and telesales representatives collaborate on certain accounts in
order to maximize sales efforts and returns.

Indirect Distribution. Indirect distribution methods consist of those
channels where our distribution alliance partners take the order directly from
the customers or refer customers to one of our direct sales representatives.
With indirect distribution, we capture new business through several methods such
as:

Strategic Sales and Marketing Alliances - GoAmerica has created
strategic alliances that enable us to distribute our products and services
through the sales channels of several leading enterprise services and technology
companies including original equipment manufacturers (OEMs), wireless service
providers, independent software vendors and global systems integrators. These
relationships typically include co-marketing agreements and frequently
incorporate these companies into our GoAmerica Alliance Program as value-added
resellers and dealers.

Value-Added Resellers and Dealers - Through our GoAmerica Alliance
Program, we provide discounts and commissions to value-added resellers and
dealers.

Value-added resellers buy GoAmerica services at a discounted wholesale
price and then sell these services to their customers at a retail price.
Resellers are not paid a commission. Resellers are responsible for selling the
GoAmerica service and mobile devices, and billing and supporting the customer.
We are responsible for billing the reseller. For example, we have a reselling
relationship with EarthLink pursuant to which EarthLink resells our Go.Web
service through its distribution channels as a part of EarthLink's suite of
offerings to its customers.

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Dealers offer GoAmerica products and services to their customers and
are paid a commission for each sale. They are typically not responsible for
billing or supporting the customer, though they may assist the customer with
integration of their GoAmerica solution. For example, IBM offers our solutions
as a dealer and, in some circumstances, also installs our server software on the
customer's premise. Our Wynd subsidiary maintains relationships with a
nationwide network of dealers, each focused on products designed for people with
hearing loss.

Marketing

GoAmerica's greatest opportunity for new sales stems from customers
who already utilize our technology, and alliance partners that provide
substantial access to new prospects through established marketing vehicles.
Direct mail, electronic direct response, and other initiatives are designed to
provide a regular outreach to our existing customer base. Increased targeted
marketing within our distribution relationships raises GoAmerica's visibility
within these organizations and generates sales among their customer bases. As of
April 1, 2003, we had 7 employees working in our marketing department.

TECHNOLOGY AND OPERATIONS

Service Infrastructure

Wireless Internet Connectivity Center. In order to provide our
subscribers with reliable service, we operate a 7,000 square foot network
operations center in New York City. This facility is our primary Wireless
Internet Connectivity Center. This state-of-the-art facility was built to
provide high performance, reliable and secure wireless access to mission
critical data. This Wireless Internet Connectivity Center is connected to
multiple Tier-1 Internet backbone providers such as UUNET/MCI WorldCom, Sprint,
and AT&T via redundant high-capacity, high-speed leased T-1 telecommunications
lines as well as fixed location frame-relay circuits. These circuits connect to
our customers' data sources and to the wireless data networks we use. Our
Wireless Internet Connectivity Center is supported by a switched fiber optic
backbone provided by Cisco Systems. The center is equipped with proven, industry
standard equipment, including Cisco and Paradyne networking equipment, Sun Sparc
Enterprise UNIX servers, high-end clustered Compaq servers, Network Appliance
NFS Servers and Clarion Raid Arrays. We believe our Wireless Internet
Connectivity Center is capable of meeting the capacity demands and security
standards for services we have developed or are developing for our customers.
Our technical staff monitor network traffic, service quality, and security 24
hours a day, seven days a week.

In order to further reduce our costs, we are considering the
possibility of outsourcing this function to a third party provider. We cannot
assure you when or whether such outsourcing will occur.

Wireless Networks. Through our relationships with leading wireless
services providers, we are able to offer our customers the ability to use our
wireless solutions in most major metropolitan areas in the continental United
Stated and parts of Canada. We offer our customers wireless access as a dealer
for our preferred services partners, such as EarthLink or, in some cases, we
provide wireless services directly to our customers through reseller agreements

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with wireless network operators such as Cingular Interactive and Motient. This
type of wireless resale offering is primarily limited to our WyndTell services.

Our Software Technology

We have developed a proprietary wireless services platform, Go.Web,
that we believe is a competitive advantage because it enables our customers to
securely access most types of Web-based data from many leading wireless devices.
Go.Web also allows qualified developers to introduce standard Web-based
applications for many wireless devices and networks. As a result of our Go.Web
development efforts, our engineering staff has acquired substantial wireless and
Web formatting expertise, which enables us to develop solutions quickly as new
wireless devices are introduced. In addition, the Go.Web compression technology
and enhanced wireless transport protocol included in our software provide
bandwidth efficiency and maximize data transmission speeds. We also have
employed industry standard SSL, or secure sockets layer, and use Certicom's
cryptography within the Go.Web infrastructure.

Go.Web is based on a client and server architecture that enables
wireless access to desktop and Web-based content such as business applications,
intranets, the Internet and email. The Go.Web server, which can either be hosted
in our own network operations center or installed on a customer's premise, takes
Web-based content, such as WML, HDML and HTML, and reformats, encrypts and
compresses it so that it can be transmitted over wireless networks and displayed
on a variety of wireless devices. The Go.Web client, also called a browser,
receives the information and renders it in a usable format on the device itself.

The Go.Web Client (Browser). The Go.Web client is easily customized to
support the operating platforms of most major wireless computing devices. With
the newest 6.5 version of Go.Web, we now offer standardized features to all
supported device types:

o Java - Go.Web is now available for Java, which opens up a whole new
class and channel of devices for our award winning Go.Web client.

o Multi Language support - Go.Web provides a single interface for users
to access more Web sites, with support of WML, HDML and HTML.

o Mobile Clip Technology - Mobile Clips allow for local content storage
on the mobile device. Whether in or out of coverage, Mobile Clips
provide form and document access. Combined with WAP Push technology and
the Go.Web Queue Manager feature, this provides a solid platform for
wireless data access and retrieval.

o Push Alerts - The Go.Web client is able to receive WAP Push 1.2
compliant alerts. With this feature, developers are able to set up
applications that send alerts to users informing them of a change in
schedule, a new appointment or detailed customer contact information.
In addition, Mobile Clips can be dynamically pushed to the wireless
device.

o Go.Web Queue Manager - The Go.Web Queue Manager feature enables
applications to be used even when the users find themselves outside of
a coverage area. Queue Manager will queue HTTP requests and submit them
when the user is back in coverage.

11

o Desktop Sync - Users who are out of wireless coverage can now sync
their Queue Manager data through their desktop cradle connection,
eliminating the need to always be in wireless coverage.

The Go.Web Enterprise Server. With the Go.Web Enterprise Server,
corporations can deploy the same wireless technology and service as our Go.Web
Client with an increased level of security, control and flexibility. The Go.Web
Enterprise Server is deployed behind the corporate firewall and all encryption
and decryption of data occurs exclusively on-site at the enterprise. Data then
remains fully encrypted as it travels between the wireless device and enterprise
applications over the wireless networks and public Internet.

Licensed Software Technology

Cingular Interactive. The Cingular Interactive Paging Service, or IPS,
is based on server software that we have licensed. We are one of a limited
number of companies that have deployed an IPS gateway. This service provides
two-way messaging on devices such as the RIM interactive devices.

InfoClarus. The InfoClarus ActiveNet technology is a client- and server-
based software solution that we have licensed. The various ActiveNet products
provide file and document control features via mobile devices such as RIM or
Pocket PC.

Customer Service, Billing and Fulfillment

We provide corporate or individual customer billing for all
subscription fees, devices and modems, and other fees, primarily through Wynd.
Resellers such as EarthLink provide the majority of customer support and billing
for our services. This structure enables us to provide our customers with
best-in-class support while minimizing our own costs of operations. Within our
Wynd subsidiary, we do provide most of the support and billing functions
ourselves due to the specific needs and nature of Wynd's customer base. The
additional costs of providing these functions within Wynd are largely offset by
the higher gross margins generated by our WyndTell services.

Our customer service program provides our customers with the ability to
receive support via a toll free telephone number, the Web, or email. Through our
goamerica.net Web site, subscribers can access answers to Frequently Asked
Questions and information about our services 24 hours a day, seven days a week.

For product fulfillment within our Wynd subsidiary, we maintain an
inventory of mobile devices which we buy from third-party manufacturers and
resellers. We also continue to maintain a limited inventory of devices at our
headquarters to support specific product fulfillment orders for our business
customers. As part of our alliance with EarthLink, EarthLink has assumed the
majority of product fulfillment functions for our business solutions and, with
the exclusion of our Wynd subsidiary, we do not anticipate maintaining an
inventory of devices or providing any fulfillment services beyond the second
quarter of 2003.

12

As of April 1, 2003, we had 23 customer service and technical support
representatives who handle inquiries about our services, device features and
wireless communications.

COMPETITION

The market for our wireless data and Internet services is becoming
increasingly competitive. The widespread adoption of industry standards in the
wireless data communications market may make it easier for new market entrants
and existing competitors to introduce services that compete against ours. We
developed our solutions using standard industry development tools. Many of our
agreements with wireless carriers, wireless handheld device manufacturers and
data providers are non-exclusive. Our competitors may use the same products and
services in competition with us. With time and capital, it would be possible for
competitors to replicate our services. We expect that we will compete primarily
on the basis of the functionality, breadth, quality and price of our services.

Many of our existing and potential competitors have substantially
greater financial, technical, marketing and distribution resources than we do.
Additionally, many of these companies have greater name recognition and more
established relationships with our target customers. Furthermore, these
competitors may be able to adopt more aggressive pricing policies and offer
customers more attractive terms than we can. In the event such companies decide
to compete directly with us, such relationships will likely be terminated, which
may have a material adverse effect on our business and reduce our market share
or force us to lower prices to unprofitable levels.

RESEARCH AND DEVELOPMENT

Most of our product and service offerings are developed internally. We
also purchase and license technology. We continue to enhance the features and
performance of our existing products and services. In addition, we are
continuing to develop new products to meet our customers' expectations of
ongoing innovation and enhancement within our suite of products.

Our ability to meet our customers' expectations depends on a number of
factors, including our ability to identify and respond to emerging technological
trends in our target markets, develop and maintain competitive products, enhance
our existing products by adding features and functionality that differentiate
them from those of our competitors and bring products to market on a timely
basis and at competitive prices. Consequently, we have made, and we intend to
continue to make, investments in research and development.

INTELLECTUAL PROPERTY RIGHTS

We have not yet obtained patents on our technology that would preclude
or inhibit competitors from using our technology. In February 2001, we filed a
patent application on certain aspects of our Go.Web technology. The application
is presently pending in the United States Patent and Trademark Office and has
been filed internationally under the Patent Cooperation Treaty and in Argentina,
Venezuela, Chile, Taiwan and Thailand. We also acquired two patent applications
from Hotpaper relating to document generation over the Internet. These
applications are presently pending before the United States Patent and Trademark
Office and have been filed internationally under the Patent Cooperation Treaty
and in Argentina, Venezuela, Chile, Taiwan and Thailand. We acquired in 2001, a

13

perpetual, royalty-free, worldwide license under two patents owned by Geoworks
Corporation relating to wireless products and services. We rely on a combination
of patent, copyright, trademark, service mark, trade secret laws, unfair
competition law and contractual restrictions to establish and protect certain
proprietary rights in our technology and intellectual property. We have applied
for registration of our GoAmerica names and marks in the United States Patent
and Trademark Office and in trademark offices in jurisdictions throughout the
world, including but not limited to, U.S. federal trademark applications for the
marks "GoAmerica", "Go.Web" and "Law-on-the-Go"; however, we do not have any
U.S. federal trademark registrations for these trademarks. The steps taken by us
to protect our intellectual property may not prove sufficient to prevent
misappropriation of our technology or to deter independent third-party
development of similar technologies. In addition, the laws of certain foreign
countries may not protect our technologies or intellectual property rights to
the same extent as do the laws of the United States. We also rely on certain
technologies that we license from third parties. These third-party technology
licenses may not continue to be available to us on commercially attractive
terms. The loss of the ability to use such technology could require us to obtain
the rights to use substitute technology, which could be more expensive or offer
lower quality or performance, and therefore have a material adverse effect on
our business, financial condition or results of operations. Third parties could
claim infringement by us with respect to current or future technology. We expect
that we and other participants in our markets will be increasingly subject to
infringement claims as the number of services and competitors in our industry
segment grows. Any such claim, whether meritorious or not, could be time
consuming, result in costly litigation, cause service or installation
interruptions or require us to enter into royalty or licensing agreements. Such
royalty or licensing agreements might not be available on terms acceptable to us
or at all. As a result, any such claim could have a material adverse effect upon
our business, financial condition or results of operations. In January 2000, we
received an offer from NTP Incorporated to enter into negotiations to obtain a
license under one or more of NTP's patent properties relating to wireless email
systems. We have reviewed NTP's patents and do not believe that GoAmerica
requires a license under those patents. NTP has not pursued its license offer.

GOVERNMENT REGULATION

We are not currently subject to direct federal, state or local
government regulation, other than regulations that apply to businesses
generally. The wireless network carriers we contract with to provide airtime are
subject to regulation by the Federal Communications Commission. Changes in FCC
regulations could affect the availability of wireless coverage these carriers
are willing or able to sell to us. We could also be adversely affected by
developments in regulations that govern or may in the future govern the
Internet, the allocation of radio frequencies or the placement of cellular
towers. Also, changes in these regulations could create uncertainty in the
marketplace that could reduce demand for our services or increase the cost of
doing business as a result of costs of litigation or increased service delivery
cost or could in some other manner have a material adverse effect on our
business, financial condition or results of operations.

We currently do not collect sales or other taxes with respect to the
sale of services or products in states and countries where we believe we are not
required to do so. We do collect sales and other taxes in the states in which we
have offices and are required by law to do so. One or more jurisdictions have
sought to impose sales or other tax obligations on companies that engage in

14

online commerce within their jurisdictions. A successful assertion by one or
more jurisdictions that we should collect sales or other taxes on our products
and services, or remit payment of sales or other taxes for prior periods, could
have a material adverse effect on our business, financial condition or results
of operations.

Any new legislation or regulation, or the application of laws or
regulations from jurisdictions whose laws do not currently apply to our
business, could have an adverse effect on our business.

EMPLOYEES

As of April 1, 2003, we had a total of 102 full-time employees. None of
our employees are covered by a collective bargaining agreement. We believe that
our relations with our employees are good.

15

ITEM 2. PROPERTIES.

We own no real property. Our principal offices are located in
Hackensack, New Jersey. The premises located at 433 Hackensack Avenue consists
of approximately 22,458 square feet and the related lease expires on August 31,
2010. The premises located at 401 Hackensack Avenue consists of approximately
15,917 square feet, of which 10,712 square feet is subleased, effective April 1,
2003, at a lower rate than we are currently obligated to pay and the related
lease expires on May 14, 2007. In addition to the network operating facility at
our Hackensack office, we operate a network operating center in New York City
pursuant to a Facilities Maintenance Agreement with Data General, a division of
EMC Corporation, which operate a network operating center in New York City. The
initial term of the Facilities Maintenance Agreement shall run until February
29, 2004. The New York facility, consisting of approximately 7,000 square feet,
located at 55 Broad Street, is our primary network operating center. The offices
of Wynd are located in San Luis Obispo, California and consist of approximately
7,391 square feet. Our lease on the Wynd offices expires on January 31, 2004.
The offices of OutBack are located in San Luis Obispo, California and consist of
approximately 4,018 square feet pursuant to a lease expiring on July 31, 2004.
The offices of Hotpaper are located in San Francisco, California, consisting of
approximately 1,781 square feet, the lease for which space expires on May 31,
2003 and will not be extended. The Hotpaper operations will be combined with the
Wynd offices. We believe that our current facilities are adequate to support our
existing operations subject to any credit or liquidity matters discussed in
"Risk Factors".

ITEM 3. LEGAL PROCEEDINGS.

On February 15, 2002, Eagle Truck Lines Inc. (a/k/a Air Eagle, Inc.)
filed suit against GoAmerica, Inc. in the Superior Court of the State of
California for the County of Los Angeles seeking payment of $590,000, plus other
damages, expenses, interest and costs of suit. This action was removed to the
United States District Court for the Central District of California and
subsequently, pursuant to a motion brought by GoAmerica, transferred to the
District of New Jersey where GoAmerica has moved to have it consolidated with
the action described in the next paragraph. (This motion will be decided once a
decision in the various motions to dismiss is rendered in the Flash action
discussed below.) Air Eagle alleges that GoAmerica, as successor in interest to
Flash Creative Management, Inc. ("Flash"), failed to perform its obligations
under a consulting contract dated July 2, 1999 (the "Contract"), by and between
Flash and Air Eagle. Air Eagle alleges that GoAmerica assumed the rights and
liabilities under this Contract as a result of its purchase of substantially all
of the assets of Flash in November 2000. On June 3, 2002, GoAmerica filed an
amended answer and counterclaim, denying the allegations of the complaint and
seeking payment from Air Eagle of an amount not less than $589,993.60, plus
expenses, interest and costs of suit based on Air Eagle's failure to pay for
services rendered by Flash and GoAmerica under the Contract. The Company intends
to defend this action and pursue its counterclaim vigorously.

16

In a separate but related matter, on July 31, 2002, GoAmerica filed
suit against Flash and certain former officers and shareholders of Flash (the
"Flash Defendants") in the United States District Court for the District of New
Jersey for violations of federal and state securities law and common law fraud
in connection with the sale of the assets of Flash to GoAmerica. In October
2002, each of the Flash Defendants filed answers to GoAmerica's complaint
denying all of the Company's charges, with one of the Flash Defendants adding
counterclaims against the Company and certain named officers alleging, among
other things, fraudulent misrepresentation, violations of state securities law
and unjust enrichment in excess of $1 million. The other Flash Defendants have
been granted leave to amend their answer to include substantially similar
counterclaims against the Company and Company officer defendants. The Company
has filed a motion to dismiss the Flash Defendants' counterclaims, and the Flash
defendants have filed cross-motions for judgment on the pleadings and for
summary judgment seeking dismissal of the Company's claims against them. All
pending motions are briefed and have been submitted to the Court for decision.
The Company intends to vigorously pursue its claims against Flash and the other
named defendants in this action, and to defend the counterclaims asserted.

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

Not applicable.

17

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, AND RELATED STOCKHOLDER
MATTERS.

MARKET FOR OUR COMMON STOCK

Since our initial public offering in April 2000, our common stock has
traded on the Nasdaq National Market until August 28 2002, at which time our
listing moved to the Nasdaq Small Cap Market, where it continues to trade under
the symbol "GOAM."

The last reported price for our common stock on the Nasdaq SmallCap
Market on March 26, 2003 was $0.23. The following table sets forth the high and
low sales prices for our common stock for the quarters indicated as reported on
the Nasdaq National Market and Nasdaq SmallCap Market.

QUARTER ENDED HIGH LOW
- -------------------------------------------------------------------
March 31, 2001............... $7.25 $1.66
June 30, 2001................ $4.50 $1.69
September 30, 2001........... $2.15 $0.80
December 31, 2001............ $3.05 $0.66
March 31, 2002............... $2.60 $1.05
June 30, 2002................ $1.39 $0.25
September 30, 2002........... $0.59 $0.15
December 31, 2002............ $0.73 $0.20
- ------------

As of March 26, 2003, the approximate number of holders of record of
our common stock was 277 and the approximate number of beneficial holders of our
common stock was 17,975.

The market price of our common stock has fluctuated since the date of
our initial public offering and is likely to fluctuate in the future. Changes in
the market price of our common stock and other securities may result from, among
other things:

o Quarter-to quarter variations in operating results
o Operating results being less than analysts' estimates
o Changes in analysts' earnings estimates
o Announcements of new technologies, products and services or pricing
policies by us or our competitors
o Announcements of acquisitions or strategic partnerships by us or our
competitors
o Developments in existing customer or strategic relationships
o Actual or perceived changes in our business strategy
o Developments in pending litigation and claims
o Sales of large amounts of our common stock
o Changes in market conditions in wireless technology and wireless
telecommunication
o Changes in general economic conditions
o Fluctuations in securities markets in general.

18

Our common stock is currently not in compliance with Nasdaq Marketplace
Rule 4450(a)(5) which requires that a listed company maintain a minimum bid
price of $1.00 per share. Nasdaq has granted the Company a grace period, until
May 27, 2003, to regain compliance with this requirement. In order to regain
compliance with this Marketplace Rule and remain listed on the Nasdaq SmallCap
Market, GoAmerica's share price must close at a minimum of $1.00 per share for
10 consecutive trading days prior to the end of the grace period. If we are
unable to comply with this requirement by May 27, 2003, then the Company may be
eligible for an additional 90-day grace period, until August 25, 2003, provided
that the Company meets the initial listing criteria for the SmallCap Market
under Marketplace Rule 4310(c)(2)(A). At this point in time, we meet all of
these criteria. Nasdaq has announced that it intends to propose further
extensions of grace periods for companies that fail to meet this requirement;
however we cannot assure you at this time that these proposals will be
implemented prior to August 25th, 2003, or at all, or that they will
beneficially impact us.

If we do not regain compliance by the end of our final grace period,
the Nasdaq Staff may provide us with a written determination that our securities
will be delisted. At that time, we may appeal the Staff's determination to a
Listing Qualifications panel. In that event, our shares would continue to trade
on the SmallCap Market until the Listing Qualifications panel ruled on our
appeal.

If our common stock is delisted by Nasdaq, our common stock would be
eligible to trade on the OTC Bulletin Board maintained by Nasdaq, another
over-the-counter quotation system, or on the pink sheets, where an investor may
find it more difficult to dispose of our shares or obtain accurate quotations as
to the market value of our common stock. In addition, we would be subject to a
rule promulgated by the Commission that, if we fail to meet criteria set forth
in such rule, imposes various practice requirements on broker-dealers who sell
securities governed by the rule to persons other than established customers and
accredited investors. Consequently, such rule may deter broker-dealers from
recommending or selling our common stock, which may further affect the liquidity
of our common stock.

Delisting from Nasdaq will make trading our common stock more difficult
for investors, potentially leading to further declines in our share price. It
would also make it more difficult for us to raise additional capital. Further,
if we are delisted we could also incur additional costs under state blue sky
laws in connection with any sales of our securities.

19

RELATED STOCKHOLDER MATTERS

We have never declared or paid any cash dividends on our common stock.
We intend to retain earnings, if any, to fund future growth and the operation of
our business.

USE OF PROCEEDS

On April 6, 2000, the Commission declared effective our Registration
Statement on Form S-1 (No. 333-94801) as filed with the Commission in connection
with our initial public offering of common stock, which was managed by Bear,
Stearns & Co., Inc., Chase H&Q, U.S. Bancorp Piper Jaffray, Wit SoundView and
DLJdirect, now Harrisdirect. Pursuant to such Registration Statement, on April
12, 2000 we consummated the issuance and sale of an aggregate of 10,000,000
shares of our common stock, for a gross aggregate offering price of $160
million. We incurred underwriting discounts and commissions of approximately
$11.2 million. In connection with such offering, we incurred total expenses of
approximately $2.6 million. As of December 31, 2002, approximately $5.0 million
of the $146.2 million in net proceeds received by us upon consummation of such
offering, pending specific application, were invested in short-term,
investment-grade, interest-bearing instruments. The remaining $141.2 million of
the net proceeds have been specifically applied as follows: (i) $5.1 million for
the acquisition of other businesses, (ii) $36.7 million for sales and marketing
expenses, (iii) $10.9 million for the purchase of capital assets, and (iv) $88.5
million for working capital needs.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA.

The selected consolidated financial data set forth below with respect
to our statement of operations data for the years ended December 31, 2002, 2001
and 2000, and with respect to the consolidated balance sheet data at December
31, 2002 and 2001 are derived from and are qualified by reference to our audited
consolidated financial statements and related notes thereto found at "Item 15.
Exhibits, Financial Statement Schedules, and Reports on Form 8-K". Our
consolidated statement of operations data for the years ended December 31, 1999
and 1998 and consolidated balance sheet data as of December 31, 2000, 1999 and
1998 are derived from audited consolidated financial statements not included in
this Annual Report on Form 10-K. The selected consolidated financial data set
forth below should be read in conjunction with, and is qualified in its entirety
by, our audited consolidated financial statements and related notes thereto
found at "Item 15. Exhibits, Financial Statement Schedules, and Reports on Form
8-K" and "Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations", which are included elsewhere in this Annual Report
on Form 10-K.

20

YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
2002 2001 2000 1999 1998
---------- ---------- ---------- ---------- ----------

CONSOLIDATED STATEMENT OF OPERATIONS
DATA:
Revenues:
Subscriber....................... $ 29,017 $ 28,308 $ 8,535 $ 1,104 $ 360
Equipment........................ 6,560 10,088 5,097 1,420 449
Other............................ 335 618 242 207 18
---------- ---------- ---------- ---------- ----------
Total revenue...................... 35,912 39,014 13,874 2,731 827
---------- ---------- ---------- ---------- ----------
Costs and expenses:
Cost of subscriber revenue....... 20,434 22,578 7,194 4,051 304
Cost of equipment revenue........ 8,537 20,665 6,090 1,648 532
Cost of network operations....... 3,074 3,264 623 375 --
Sales and marketing.............. 8,038 24,700 35,807 3,283 909
General and administrative....... 29,082 40,685 26,853 3,970 1,549
Research and development......... 3,456 4,174 762 465 --
Depreciation and amortization of
fixed assets.................. 4,342 2,987 994 275 124
Amortization of goodwill and other
intangibles................... 1,483 18,398 7,247 -- --
Impairment of goodwill........... 8,400 12,991 -- -- --
Impairment of other intangible
assets........................ -- 12,423 -- -- --
Impairment of other long-lived
assets........................ 5,582 97 -- -- --
Settlement costs................. -- -- -- 297 --
---------- ---------- ---------- ---------- ----------
Total costs and expenses........... 92,428 162,962 85,570 14,364 3,418
---------- ---------- ---------- ---------- ----------
Loss from operations............... (56,516) (123,948) (71,696) (11,633) (2,591)
Interest income, net............... 191 3,099 6,944 165 14
---------- ---------- ---------- ---------- ----------
Net loss before benefit from income
taxes............................ (56,325) (120,849) (64,752) (11,468) (2,577)
Income tax benefit................. 436 578 -- -- --
---------- ---------- ---------- ---------- ----------
Net loss........................... (55,889) (120,271) (64,752) (11,468) (2,577)
Beneficial conversion feature and
accretion of redemption value of
mandatorily redeemable convertible
preferred stock.................. -- -- (30,547) (10,463) --
---------- ---------- ---------- ---------- ----------
Net loss applicable to common
stockholders..................... $ (55,889) $ (120,271) $ (95,299) $ (21,931) $ (2,577)
========== ========== ========== ========== ==========
Basic net loss per share applicable
to common stockholders........... $ (1.04) $ (2.27) $ (2.19) $ (1.02) $ (0.14)
=========== =========== =========== =========== ===========
Diluted net loss per share
applicable to common stockholders $ (1.04) $ (2.25) $ (2.18) $ (1.00) $ (0.14)
========== ========== ========== ========== ==========
Weighted average shares used in
computation of basic net loss per
share applicable to common
stockholders..................... 53,846 53,027 43,426 21,590 18,391
Weighted average shares used in
computation of diluted net loss
per share applicable to common
stockholders..................... 53,869 53,354 43,678 22,025 18,826

21

AS OF DECEMBER 31,
------------------------------------------------------------------------------
(IN THOUSANDS)
2002 2001 2000 1999 1998
--------------- --------------- --------------- -------------- ---------------

BALANCE SHEET DATA:
Cash and cash equivalents........... $4,982 $34,977 $114,411 $6,344 $1,961
Working capital (deficit)........... (1,037) 33,292 113,530 2,426 1,476
Total assets........................ 26,765 87,785 207,746 9,757 3,010
Series A redeemable convertible
preferred stock.................. -- -- -- 20,755 --
Series B redeemable convertible
preferred stock.................. -- -- -- -- --
Total stockholders' equity (deficit) 13,017 66,413 181,530 (16,659) 2,225

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

You should read the following discussion of our financial condition and
results of operations in conjunction with the consolidated financial statements
and the notes thereto included elsewhere in this Annual Report on Form 10-K. The
results shown in this Annual Report of Form 10-K are not necessarily indicative
of the results we will achieve in any future periods.

OVERVIEW

Historically, we have derived our revenue primarily from the sale of
basic and value-added wireless data services and the sale of related mobile
devices to our subscribers. During March 1997, we commenced offering our
services to individuals and businesses. Since our inception, we have invested
significant capital to build our wireless network operations and e-commerce
system as well as our billing system. We have invested additional capital in the
development of our software applications Go.Web and Mobile Office(R) as well as
other software applications. We have provided mobile devices made by third
parties to our customers at prices below our costs for such devices. We also
expect to continue to incur sales and marketing and administrative expenses. We
have incurred operating losses since our inception and expect to continue to
incur operating losses for at least the next several quarters. We will need to
significantly improve our overall gross margins, and further reduce our selling,
general and administrative expenses to become profitable and sustain
profitability on a quarterly or annual basis. As a result of our strategic
alliance with EarthLink, we anticipate overall revenue to decline; however we
expect that our gross margins as a percentage of revenue will increase and that
selling, marketing and administrative expenses will continue to decline. Upon
transition of certain subscribers to EarthLink, we expect to generate revenues
from three primary sources, (i) recurring service revenue; (ii) software
revenue; and (iii) activation bounties. Additionally, we expect to substantially
reduce our costs of subscriber airtime and operating costs as a result of our
strategic alliance with EarthLink.

Our subscriber revenue primarily consists of monthly service fees,
which we recognize as revenue when the services are provided to the subscriber.
Subscriber revenue accounted for approximately 80.8%, 72.6% and 61.5% of our

22

total revenue during 2002, 2001 and 2000, respectively. Historically, we offered
a variety of mobile data service plans. Our Go.Unlimited Plan, which was our
most utilized plan, provided unlimited data usage on any mobile device for a
fixed monthly fee, which currently ranges from $39.95 to $59.95 for retail
subscribers. As a result of our strategic alliance with EarthLink, subscriber
revenue will decrease in 2003 as compared to 2002. The decrease will be directly
attributable to the sale of our full service subscribers to EarthLink. We will
continue to derive recurring subscriber revenue from the sale of our Go.Web
software. Since we disposed of the full service portion of our subscribers, we
anticipate that our gross margin as a percentage of subscriber revenue will
increase during 2003 as compared to 2002. We also typically sell third-party
mobile devices in conjunction with a service agreement to a new subscriber.
Equipment revenue accounted for approximately 18.3%, 25.9% and 36.7% of our
total revenue during 2002, 2001 and 2000, respectively. We recognize equipment
revenue at the time of the shipment of the mobile device to a subscriber. During
2002, approximately 49% of our subscribers purchased a mobile device upon their
initial subscription. Over time, we expect that such percentage will decrease as
mobile devices for data transmission become more prevalent.

In addition to our subscriber and equipment revenue, we historically
have generated other revenue which consists of consulting services relating to
the development and implementation of wireless data systems for certain
corporate customers. As a result of our strategic alliance with EarthLink, we
anticipate that our professional service revenues will increase as a percentage
of our total revenues during 2003 from prior year levels. Additionally, we
anticipate during 2003 that we will increase the amount of non-recurring bounty
revenues we receive from EarthLink and other wireless providers for selling
their wireless services and other product offerings.

Our sales and marketing expenses consist primarily of compensation and
related costs for marketing personnel, advertising and promotions, travel and
entertainment and other related costs. We expect sales and marketing expenses to
increase as a percentage of sales as our revenues will decrease during 2003 as
compared to 2002 as a result of our strategic alliance with EarthLink.
Additionally, we anticipate that we will continue to reduce sales and marketing
costs during 2003 as set forth in our 2003 operating plan. Our general and
administrative expenses consist primarily of compensation and related costs for
general corporate and business development, along with rent and other related
costs. We expect general and administrative expenses to increase as a percentage
of our annual revenues primarily due to our strategic alliance with EarthLink.
We anticipate general and administrative expenses will continue to decrease
during 2003 as we implement our 2003 operating plan. Our research and
development expenses consist primarily of compensation and related costs and
professional service fees. Depreciation and amortization expenses consist
primarily of depreciation expenses arising from equipment purchased for our
network operations center and other property and equipment purchases.

During 1999 and the first quarter of 2000, we granted options to
certain of our employees at exercise prices below the deemed fair market value
per share of our common stock. Such grants resulted in non-cash employee
compensation expenses based on the difference, on the date of grant, between the
fair market value and the exercise price of stock options granted to employees.
The resulting deferred employee compensation is being amortized over the vesting
periods of the grants. During 2002, we incurred an aggregate of $2.3 million in
non-cash employee compensation as a result of stock option and warrant grants

23

during 1999 and the first quarter of 2000 which were granted at prices below the
fair market value of our common stock. During 2003, we expect to incur an
aggregate of $300,000 in non-cash employee compensation expense as a result of
the amortization of the remaining balance in deferred compensation.

Net interest income consists primarily of interest earned on cash and
cash equivalents. We expect interest income to decrease as we continue to
utilize funds during the course of our operations.

During 2000, we acquired Wynd and Hotpaper as well as certain assets
and liabilities of Flash for an aggregate purchase price of approximately $65.7
million. The purchase price of these entities included the issuance of an
aggregate of 5,437,388 shares of our common stock and cash (net of cash
acquired) of approximately $7.7 million, including merger related costs. As a
result of these acquisitions, we recorded intangibles including trade names,
developed technology, assembled work force and customer lists aggregating
approximately $22.5 million and recognized goodwill of approximately $44.8
million.

During 2002, we identified indicators of possible impairment of our
long-lived assets, principally goodwill and other acquired intangible assets
recorded with regard to the acquisitions of Wynd and Hotpaper. Such indicators
included the continued deterioration in the business climate for wireless
Internet service providers, significant declines in the market values of our
competitors in the wireless Internet services industry, recent changes in our
2003 operating and cash flow forecasts, and changes in our strategic plans for
certain of our acquired businesses. We determined that the carrying value of
these long-lived assets exceeded their respective fair values, thus requiring a
write-down totaling $8.4 million of goodwill, of which $4 million and $4.4
million is associated with the recorded goodwill of Wynd and Hotpaper,
respectively. Additionally, as a result of significant Company initiated
reductions in our workforce, we identified impairment of other long-lived
assets, principally software and furniture and fixtures, in the amount of $5.6
million.

24

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management's Discussion and Analysis of Financial Condition and Results
of Operations discusses 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 management
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and the related disclosure of contingent
assets and liabilities. On an on-going basis, management evaluates its estimates
and judgments, including those related to revenue recognition, allowance for
doubtful accounts, inventory valuation and recoverability of our intangible
assets. Management bases its estimates and judgments on historical experience
and on various other factors 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.

Management believes the following critical accounting policies, among
others, affect its more significant judgments and estimates used in the
preparation of its consolidated financial statements. Historically, we have
derived our revenue primarily from the sale of basic and value-added wireless
data services and the sale of related mobile devices. Subscriber revenue
consists primarily of monthly charges for access and usage and is recognized as
the services are provided. We also charge our CDPD subscribers a per kilobyte
fee for using a mobile device outside of a designated geographical area, or
roaming; such fees are recognized as revenue when collected. We also generally
charge a non-refundable activation fee upon initial subscription. To the extent
such fees exceed the related costs, they are deferred and recognized ratably
over the life of the related service contracts which is generally six months,
one year or two years. Equipment revenue is recognized upon shipment to the end
user. We have also provided mobile devices to our customers at prices below our
costs as incentives for customers to enter into service agreements. Such
incentives are recorded as a deferred asset and amortized against subscriber
gross margins over the life of the service agreement. We estimate the
collectibility of our trade receivables. A considerable amount of judgment is
required in assessing the ultimate realization of these receivables including
analysis of historical collection rates and the current credit-worthiness of
significant customers. Significant changes in required reserves have been
recorded in recent periods and may occur in the future due to the current market
conditions. We write down inventory for estimated excess or obsolete inventory
equal to the difference between the cost of inventory and the estimated market
value based upon assumptions about future demand and market conditions. If
actual market conditions are less favorable than those projected by management,
additional inventory write-downs may be required. In assessing the
recoverability of our goodwill and other intangibles, we must make assumptions
regarding estimated future cash flows. If such assumptions change in the future,
we may be required to record impairment charges for these assets not previously
recorded. During 2002, we adopted Statement of Financial Accounting Standard No.
142, "Goodwill and Other Intangible Assets," and have completed the required
transitional, interim and annual impairment tests of goodwill, and have recorded
an adjustment to the carrying value of goodwill.

25

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated certain
financial data as a percentage of revenue:

PERCENTAGE OF REVENUE
----------------------
YEARS ENDED
DECEMBER 31,
----------------------------------------
2002 2001 2000
---- ---- ----

Revenue:
Subscriber...................................... 80.8% 72.6% 61.5%
Equipment....................................... 18.3 25.9 36.8
Other........................................... 0.9 1.6 1.7
-------- -------- --------
Total revenue............................... 100.0 100.0 100.0
Costs and expenses:
Cost of subscriber revenue...................... 56.9 57.9 51.9
Cost of equipment revenue....................... 23.8 53.0 43.9
Cost of network operations...................... 8.6 8.4 4.5
Sales and marketing............................. 22.4 63.3 258.1
General and administrative...................... 81.0 104.3 193.5
Research and development........................ 9.6 10.7 5.5
Depreciation and amortization of fixed assets... 12.1 7.7 7.2
Amortization of goodwill and other intangibles. 4.1 47.2 52.2
Impairment of goodwill......................... 23.4 33.3 --
Impairment of other intangible assets.......... -- 31.8 --
Impairment of other long-lived assets.......... 15.5 0.2 --
-------- -------- ---------
Total costs and expenses.................... 257.4 417.7 616.8
-------- -------- --------
Loss from operations........................ 157.4 317.7 516.8
Interest income...................................... 0.5 7.9 50.1
Income tax benefit................................... 1.2 1.5 --
-------- -------- ---------
Net loss.................................... 155.7% 308.3% 466.7%
======== ======== =========

YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

Subscriber revenue. Subscriber revenue increased to $29.0 million for
the year ended December 31, 2002 from $28.3 million for the year ended December
31, 2001. The increase was primarily due to having a larger average subscriber
base in the year ended December 31, 2002 than in the year ended December 31,
2001. Our subscriber base decreased to 91,384 subscribers at December 31, 2002
from 140,927 subscribers at December 31, 2001 as a result of the sale of our
CDPD subscribers, as well as a portion of our Cingular and Motient network
subscribers, to EarthLink during the fourth quarter 2002. We expect the number
of our subscribers will increase (from levels at December 31, 2002) primarily as
a result of our continued leveraging of strategic agreements. Our average
monthly revenue per user, or ARPU, decreased to $23.53 for the year ended

26

December 31, 2002 from $25.02 for the year ended December 31, 2001. The decline
in ARPU was due to an increase in the number of new subscribers from the sale of
our Go.Web value added services, which generally have a lower monthly ARPU than
our full-service offerings. During 2001, we began charging our subscribers a per
kilobyte fee for roaming, which occurs when a customer uses their service
outside of a designated geographic area. Amounts billed to subscribers for
roaming that have been recognized as revenue have been insignificant to date.

Equipment revenue. Equipment revenue decreased to $6.6 million for the
year ended December 31, 2002 from $10.1 million for the year ended December 31,
2001. This decrease was primarily due to a decrease in the number of the mobile
devices sold during the year ended December 31, 2002 compared to the year ended
December 31, 2001. As a result of our strategic alliance with EarthLink, we
anticipate that equipment revenue will further decline.

Other revenue. Other revenue decreased to $335,000 for the year ended
December 31, 2002 from $618,000 for the year ended December 31, 2001. This
decrease was primarily due to our decision not to pursue certain consulting
projects and consulting services to third parties during 2002. We anticipate
that consulting services will increase as a result of our recent strategic
alliance with EarthLink in which we will collaborate on developing new
applications and extensions of existing technology, including EarthLink-branded
wireless data services, as well as new technologies.

Cost of subscriber revenue. Cost of subscriber revenue decreased to
$20.4 million for the year ended December 31, 2002 from $22.6 million for the
year ended December 31, 2001. This decrease was primarily due to a decrease in
roaming costs incurred. Roaming costs decreased to $2.5 million for the year
ended December 31, 2002 from $6.5 million for the year ended December 31, 2001.
We expect roaming costs will be eliminated as a result of our sale of CDPD
subscribers during the fourth quarter of 2002. We expect the number of
subscribers and related use of our services to decrease as a result of our sale
of CDPD subscribers, as well as a portion of our Cingular and Motient network
subscribers during the fourth quarter 2002, which will result in decreased costs
of subscriber airtime.

Cost of equipment revenue. Cost of equipment revenue decreased to $8.5
million for the year ended December 31, 2002 from $20.7 million for the year
ended December 31, 2001. This decrease primarily was due to decreased inventory
related charges of approximately $1.6 million for the year ended December 31,
2002 compared to $8.1 million for the year ended December 31, 2001, as well as a
decrease in the number of mobile devices sold during the year ended December 31,
2002 compared to the year ended December 31, 2001. The inventory related charges
primarily relate to wireless modems supporting laptop and older PALM OS based
models for which sales were lower than expected and a charge for a lower of cost
to market adjustment related to other equipment which remained unsold. As a
result of our strategic alliance with EarthLink, we anticipate that the cost of
equipment revenue will further decline.

Cost of network operations. Cost of network operations decreased
slightly to $3.1 million for the year ended December 31, 2002 from $3.3 million
for the year ended December 31, 2001. We expect our cost of network operations
will decline further if we are able to outsource this activity, as it relates to

27

our Go.Web value added services, to a third party provider as set forth in our
2003 operating plan.

Sales and marketing. Sales and marketing expenses decreased to $8.0
million for the year ended December 31, 2002 from $24.7 million for the year
ended December 31, 2001. This decrease primarily was due to decreased
advertising activities of $10.2 million including advertising costs paid to
third parties of approximately $4.0 million and a decrease in salaries and
benefits for personnel performing sales and marketing activities of
approximately $1.6 million. We expect sales and marketing expenses to decline
further as we continue to leverage our distribution relationships to further our
sales and marketing initiatives, as well as reducing costs as set forth in our
2003 operating plan.

General and administrative. General and administrative expenses
decreased to $29.1 million for the year ended December 31, 2002 from $40.7
million for the year ended December 31, 2001. This decrease primarily was due to
decreased professional fees for infrastructure buildout and general corporate
activities of approximately $3.9 million, decreased salaries and benefits for
personnel performing business development and general corporate activities of
approximately $3.3 million, and a decrease in our bad debt expense of
approximately $1.0 million, and decreased facility costs of approximately $1.5
million. We expect general and administrative expenses to further decline as we
continue to reduce costs as set forth in our 2003 operating plan.

Research and development. Research and development expense decreased to
$3.5 million for the year ended December 31, 2002 from $4.2 million for the year
ended December 31, 2001. This decrease primarily was due to decreased salaries
and benefits for personnel performing research and development activities. We
expect research and development expenses to continue to decline as we utilize
internal resources to develop and maintain our Go.Web technology rather than
using outside consultants.

Amortization of goodwill and other intangibles. Amortization of
goodwill and other intangibles decreased for the year ended December 31, 2002 to
$1.5 million from $18.4 million for the year ended December 31, 2001 This
decrease primarily was due to the adoption of Statement of Financial Accounting
Standard No. 142, "Goodwill and Other Intangible Assets" on January 1, 2002,
which no longer requires goodwill and certain intangible assets to be amortized,
but instead tested for impairment at least annually. In addition, the decrease
reflects the impact of reduced amortization of Other Intangibles as a result of
the impairment charge recorded during the fourth quarter of 2001.

Impairment of goodwill and other long-lived assets. During the third
quarter of 2002 and fourth quarter of 2001, we identified indicators of possible
impairment of our long-lived assets, principally goodwill and other acquired
intangible assets recorded upon the acquisitions of Wynd, Hotpaper and Flash.
Such indicators included the continued deterioration in the business climate for
wireless Internet service providers, significant declines in the market values
of our competitors in the wireless Internet services industry, recent changes in
our 2003 operating and cash flow forecasts, and changes in our strategic plans
for certain of our acquired businesses. With the assistance of independent
valuation experts, we performed asset impairment tests and determined the fair
value of the impaired long-lived assets for the respective acquired entities.
Fair value was determined primarily using the discounted cash flow method. A

28

write-down of goodwill and intangible assets totaling $8.4 and $25.4 million
were recorded during the third quarter of 2002 and fourth quarter of 2001,
respectively, reflecting the amount by which the carrying amount of the assets
exceed their respective fair values. The write-down consisted of $8.4 million
and $13.0 million for goodwill during the third quarter of 2002 and fourth
quarter of 2001, respectively, and $12.4 million for other acquired intangible
assets during the fourth quarter of 2001. In addition, impairment charges
related to property and equipment totaling $5.6 million and $97,000 were
recorded during 2002 and 2001, respectively in accordance with the Statement of
Financial Accounting Standard No. 144, "Accounting for Impairment of Long Lived
Assets" and Statement of Financial Accounting Standard No. 121, "Impairment of
Long-Lived Assets and Long-Lived Assets to Be Disposed Of".

Interest income, net. Interest income decreased to $191,000 for the
year ended December 31, 2002 from $3.1 million for the year ended December 31,
2001. This decrease was primarily due to the use of cash to fund our losses from
operations.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

Subscriber revenue. Subscriber revenue increased to $28.3 million for
the year ended December 31, 2001 from $8.5 million for the year ended December
31, 2000. The increase was primarily due to having a larger average subscriber
base in the year ended December 31, 2001 than in the year ended December 31,
2000. Our subscriber base increased to 140,927 subscribers at December 31, 2001
from 47,632 subscribers at December 31, 2000. A significant portion of such new
subscribers were enterprise customers. The sales cycle for enterprise customers
is longer than that for individual customers, which resulted in a decrease to
our subscriber revenue growth rate. Our average monthly revenue per user, or
ARPU decreased to $25.02 for the year ended December 31, 2001 from $26.59 for
the year ended December 31, 2000. The decline in ARPU was due to an increase in
the number of new subscribers from the sale of our Go.Web value added services,
which generally have a lower monthly ARPU than our full-service offerings.
During 2001, we began charging our subscribers a per kilobyte fee for roaming.
Amounts billed to subscribers for roaming that have been recognized as revenue
have been insignificant to date.

Equipment revenue. Equipment revenue increased to $10.1 million for the
year ended December 31, 2001 from $5.1 million for the year ended December 31,
2000. This increase was primarily due to an increase in the number of the mobile
devices sold to an increased number of subscribers during the year ended
December 31, 2001 compared to the year ended December 31, 2000.

Other revenue. Other revenue increased to $618,000 for the year ended
December 31, 2001 from $242,000 for the year ended December 31, 2000. This
increase was primarily due to the November 2000 acquisition of Flash, resulting
in additional revenues from consulting services.

Cost of subscriber revenue. Cost of subscriber revenue increased to
$22.6 million for the year ended December 31, 2001 from $7.2 million for the
year ended December 31, 2000. This increase was due to an increase in our

29

subscriber base and the related increase in airtime usage, as well as higher
than anticipated roaming costs incurred, during the year ended December 31,
2001, as compared to the year ended December 31, 2000. Roaming costs were $6.5
million for the year ended December 31, 2001. These costs were partially offset
when we renegotiated certain contractual obligations resulting in a $1.9 million
one-time reduction of accruals for certain subscriber-related costs recorded in
prior periods.

Cost of equipment revenue. Cost of equipment revenue increased to $20.7
million for the year ended December 31, 2001 from $6.1 million for the year
ended December 31, 2000. This increase primarily was due to inventory related
charges of approximately $8.1 million as well as an increase in the number of
mobile devices sold during the year ended December 31, 2001 compared to the year
ended December 31, 2000. The inventory related charges primarily relate to
wireless modems supporting laptop and older PALM OS based models for which sales
were lower than expected and a charge for a lower of cost to market adjustment
related to other equipment which remained unsold.

Cost of network operations. Cost of network operations increased to
$3.3 million for the year ended December 31, 2001 from $623,000 for the year
ended December 31, 2000. This increase was due to the opening of our Wireless
Internet Connectivity Center in New York City during the fourth quarter 2000.

Sales and marketing. Sales and marketing expenses decreased to $24.7
million for the year ended December 31, 2001 from $35.8 million for the year
ended December 31, 2000. This decrease primarily was due to decreased
advertising costs paid to third parties of approximately $14.5 million,
partially offset by an increase in salaries and benefits for personnel
performing sales and marketing activities of approximately $3.1 million.

General and administrative. General and administrative expenses
increased to $40.7 million for the year ended December 31, 2001 from $26.9
million for the year ended December 31, 2000. This increase primarily was due to
increased salaries and benefits for personnel performing business development
and general corporate activities of approximately $10.7 million, the outsourcing
of our customer and technical support centers of approximately $4.2 million, an
increase in our bad debt expense of approximately $3.8 million, increased
facility costs of approximately $1.5 million, and infrastructure buildout of
approximately $2.7 million, which was incrementally increased as a result of the
acquisitions of Hotpaper and Flash and was partially offset by a decrease of
approximately $9.1 million in stock-based compensation.

Research and development. Research and development expense increased to
$4.2 million for the year ended December 31, 2001 from $762,000 for the year
ended December 31, 2000. This increase was primarily due to our continued
development and enhancement of our proprietary Go.Web technology.

Amortization of goodwill and other intangibles. Amortization of
goodwill and other intangibles increased for the year ended December 31, 2001 to
$18.4 million from $7.2 million for the year ended December 31, 2000. This was
primarily attributable to a full year of amortization of goodwill and other
intangibles arising from the acquisitions of Wynd, Hotpaper and Flash.

30

Impairment of long-lived assets. During the fourth quarter of 2001, we
identified indicators of possible impairment of our long-lived assets,
principally goodwill and other acquired intangible assets recorded upon the
acquisitions of Wynd, Hotpaper and Flash. Such indicators included the continued
deterioration in the business climate for wireless Internet service providers,
significant declines in the market values of our competitors in the wireless
Internet services industry, recent changes in our 2002 operating and cash flow
forecasts, and changes in our strategic plans for certain of our acquired
businesses. With the assistance of independent valuation experts, we performed
asset impairment tests and determined the fair value of the impaired long-lived
assets for the respective acquired entities. Fair value was determined primarily
using the discounted cash flow method. A write-down of goodwill and intangible
assets totaling $25.4 million was recorded during the fourth quarter of 2001,
reflecting the amount by which the carrying amount of the assets exceed their
respective fair values. The write-down consisted of $13.0 million for goodwill,
$12.4 million for other acquired intangible assets. In addition, a write-down of
property and equipment totaling $97,000 was recorded during the fourth quarter
of 2001.

Interest income, net. Interest income decreased to $3.1 million for the
year ended December 31, 2001 from $6.9 million for the year ended December 31,
2000. This decrease was primarily due to the use of cash to fund our losses from
operations and for infrastructure build out.

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we financed our operations through private
placements of our equity securities and our redeemable convertible preferred
stock, which resulted in aggregate net proceeds of approximately $18.4 million
through December 31, 1999. During the first quarter of 2000, we issued and sold
648,057 shares of Series B Preferred Stock for net proceeds of approximately
$24.6 million. In April 2000, we consummated our initial public offering of
10,000,000 shares of our common stock at a price to the public of $16.00 per
share, all of which were issued and sold for net proceeds of $146.2 million.

We have incurred significant operating losses since our inception and
as of December 31, 2002 have an accumulated deficit of $256.2 million. During
2002, we incurred a net loss of $55.9 million and used $29.0 million of cash to
fund operating activities. As of December 31, 2002 we had $5.0 million in cash
and cash equivalents ($2.8 million at March 31, 2003), exclusive of $950,000 in
restricted cash supporting certain letters of credit. In execution of our 2002
operating plan, we took steps to reduce our annual payroll by more than 25% and
took further actions to reduce sales and marketing expenses. In addition, on
September 25, 2002, we formed a comprehensive strategic alliance with EarthLink
by entering into a series of agreements. Upon complete implementation of these
agreements, we anticipate generating revenues from three primary sources, (i)
recurring service revenue; (ii) software revenue; and (iii) activation bounties
as well as reducing our costs of subscriber airtime. Our 2003 operating plan
includes further reductions in headcount as well as additional reductions in
sales and marketing expenditures from levels incurred during 2002. Additionally,
we are actively working to renegotiate our long term lease obligations. We
currently anticipate that our available cash resources will be sufficient to
fund our operating needs for at least the next 6 months. In the event that we
are unable to successfully implement our strategic alliance with EarthLink,
achieve our 2003 operating plan or we incur unanticipated expenses, we may

31

require additional financing. At this time, we do not have any bank credit
facility or other working capital credit line under which we may borrow funds
for working capital or other general corporate purposes. In the event we need to
raise additional funds, we may not be able to do so on terms favorable to us, or
at all. In the event we cannot successfully execute our 2003 operating plan or
raise adequate funds on acceptable terms, we may not be able to continue to fund
our operations. As a result of these and related considerations, our independent
auditors have issued a going concern opinion in connection with our 2002
financial statements.

Over the past twelve months, our available cash has decreased
substantially. This reduction in liquidity creates significant constraints on
the manner in which our business can operate. We have decided to retain an
outside advisor to assist us in analyzing various steps that we may take to
enhance our liquidity. Such steps may include the sale or other disposition of
certain of our assets and the redeployment of the net proceeds in aspects of our
business which we believe are well positioned for revenue generation and growth.
We cannot assure you as to when or whether such steps will be taken and, if
taken, whether such steps will be successful.

Net cash used in operating activities was $29.0 million, $68.5 million
and $49.3 million for the years ended December 31, 2002, 2001 and 2000,
respectively. The principal use of cash in each of these periods was to fund our
losses from operations.

Net cash used in investing activities was $448,000, $10.3 million and
$13.5 million for the years ended December 31, 2002, 2001 and 2000,
respectively. For the year ended December 31, 2002, we used cash in investment
activities for purchases of $451,000 of property, equipment and leasehold
improvements. For the years ended December 31, 2001 and 2000, we used cash in
investment activities principally for purchases of property, equipment and
leasehold improvements and acquisitions, including Hotpaper and Flash. We expect
capital expenditures to decrease since we have substantially completed the
development and implementation of our e-commerce and billing systems.

Net cash used in financing activities was $533,000 for the year ended
December 31, 2002. Net cash used in financing activities was $649,000 for the
year ended December 31, 2001. Net cash provided by financing activities was
$170.8 million for the year ended December 31, 2000, which was primarily
attributable to proceeds from public and private equity offerings.

As of December 31, 2002, our principal commitments consisted of
obligations outstanding under operating leases. As of December 31, 2002, future
minimum payments for non-cancelable operating leases having terms in excess of
one year amounted to $10.2 million, of which $2.1 million is payable in 2003.

32

The following table summarizes our contractual obligations at December
31, 2002, and the effect such obligations are expected to have on our liquidity
and cash flow in future periods.

December 31, (In thousands) Total Less than 1 1-3 Years 4-5 Years After 5 Years
Year
Contractual Obligations:
Capital Lease
Obligations.................. $ 390 $ 348 $ 42 $ -- $ --
Operating Lease
Obligations.................. 10,245 2,085 3,088 2,501 2,571
------------------- -------------- ------------ ------------- --------------
Total Contractual Cash $ 10,635 $ 2,433 $3,130 $2,501 $ 2,571
Obligations..................
=================== ============== ============ ============= ==============

Other Commercial Commitments:
Standby Letter of Credit........ $ 950 $ 354 $ 596 $ -- $ --
------------------- -------------- ------------ ------------- --------------
Total Commercial $ 950 $ 354 $ 596 $ -- $ --
Commitments.................
=================== ============== ============ ============= ==============

We have entered into employment agreements with certain of our key
executives which provide for fixed compensation and bonuses based upon our
operating results. Our maximum aggregate cash liability under the agreements, if
we terminated these employees, is approximately $1.7 million at December 31,
2002.

As of December 31, 2002, we had net operating loss carryforwards of
approximately $178.5 million for Federal income tax purposes that will expire
through 2020. The state tax benefit during 2002 of $436,000 is attributable to
our sale of certain state net operating loss carryforwards. For financial
reporting purposes, a valuation allowance has been recognized to offset the
deferred tax assets related to these carryforwards. Due to limitations imposed
by the Tax Reform Act of 1986, and as a result of a significant change in our
ownership in 1999, the utilization of net operating loss carryforwards that
arose prior to such ownership change is subject to an annual limitation of $1.4
million. In addition, we acquired additional operating losses through our
acquisitions of Wynd and Hotpaper. We believe that an ownership change has
occurred with respect to these entities. The effect of an ownership change would
be the imposition of an annual limitation on the use of net operating loss
carryforwards attributable to periods before such change. We have not performed
a detailed analysis to determine the amount of the potential limitations.

33

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other
Intangible Assets". SFAS No. 142 addresses the recognition and measurement of
goodwill and other intangible assets subsequent to their acquisition. SFAS No.
142 also addresses the initial recognition and measurement of intangible assets
acquired outside of a business combination whether acquired individually or with
a group of other assets. Goodwill and intangible assets previously recorded in
our financial statements are affected by the provisions of SFAS No. 142. This
statement provides that intangible assets with finite useful lives be amortized
and that intangible assets with indefinite live and goodwill not be amortized,
but tested at least annually for impairment. We adopted SFAS No. 142 on January
1, 2002, as a result of such, we recorded an impairment charge of approximately
$8.4 million during the third quarter of 2002.

On August 1, 2001, the FASB issued SFAS No. 144, "Accounting For
Impairment of Long-Lived Assets". We were required to adopt this pronouncement
beginning January 1, 2002. SFAS No. 144 prescribes the accounting for long-lived
assets (excluding goodwill) to be disposed of by sale. SFAS No. 144 retains the
requirement of SFAS No. 121 to measure long-lived asset classified as held for
sale at the lower of its carrying value or fair market value less the cost to
sell. Therefore, discontinued operations are no longer measured on a net
realizable basis, and future operating results are no longer recognized before
they occur. The impact of adopting SFAS No. 144 was approximately $5.6 million
during 2002 as the result of identified impairments of property and equipment.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities". SFAS 146 requires recording costs
associated with exit or disposal activities at their fair values when a
liability has been incurred. Under previous guidance, certain exit costs were
accrued upon management's commitment to an exit plan, which is generally before
an actual liability has been incurred. Adoption of SFAS 146 is required with the
beginning of fiscal year 2003. We do not anticipate a significant impact on its
results of operations from adopting this Statement.

In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation--Transition and Disclosure, an amendment of FASB
Statement No. 123. This Statement amends FASB Statement No. 123, Accounting for
Stock-Based Compensation, to provide alternative methods of transition for a
voluntary change to the fair value method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure requirements of
Statement No. 123 to require prominent disclosures to both annual and interim
financial statements. Certain of the disclosure modifications are required for
fiscal years ending after December 15, 2002 and are included in the notes to our
2002 consolidated financial statements. The other provisions of SFAS No 148 are
not expected to be applicable us as we have not expressed an intent to change
our accounting for stock-based compensation.

34

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

We believe that we have limited exposure to financial market risks,
including changes in interest rates. At December 31, 2002, all of our available
excess funds are cash or cash equivalents. The value of our cash and cash
equivalents is not materially affected by changes in interest rates. A
hypothetical change in interest rates of 1.0% would result in an annual change
in net loss of approximately $100,000 based on cash and cash equivalent balances
at December 31, 2002. We currently hold no derivative instruments and do not
earn foreign-source income.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements and the notes thereto which contain
supplementary data required to be filed pursuant to this Item 8 are appended to
this Annual Report on Form 10-K. A list of the financial statements filed
herewith is found at "Item 15. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K".

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

As previously announced, on December 20, 2002, our Board of Directors,
acting upon the recommendation of our Audit Committee, decided to no longer
engage Ernst & Young LLP ("Ernst & Young") as our independent auditor and
engaged WithumSmith + Brown P.C. ("WSB") to serve as our independent auditor for
the year 2002.

Ernst & Young's reports on our consolidated financial statements for
each of the years ended December 31, 2001, 2000 and 1999 did not contain an
adverse opinion or disclaimer of opinion, nor were they qualified or modified as
to uncertainty, audit scope or accounting principles.

During the years ended December 31, 2001, 2000 and 1999 and through the
date of our announcement of a change in accountants, (the "Announcement Date"),
there were no disagreements with Ernst & Young on any matter of accounting
principle or practice, financial statement disclosure, or auditing scope or
procedure which, if not resolved to Ernst & Young's satisfaction, would have
caused them to make reference to the subject matter in connection with their
report on our consolidated financial statements for such years; and there were
no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

During the years ended December 31, 2001, 2000 and 1999 and through the
Announcement Date, we did not consult with WSB with respect to the application
of accounting principles to a specific transaction, either completed or
proposed, or the type of audit opinion that might be rendered on our
consolidated financial statements, or any other matters or reportable events as
set forth in Items 304(a)(2)(i) and (ii) of Regulation S-K.

35

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.

We will provide information that is responsive to this Item 10 in our
definitive proxy statement or in an amendment to this Annual Report not later
than 120 days after the end of the fiscal year covered by this Annual Report, in
either case under the caption "Directors and Executive Officers," and possibly
elsewhere therein. That information is incorporated in this Item 10 by
reference.

ITEM 11. EXECUTIVE COMPENSATION.

We will provide information that is responsive to this Item 11
regarding compensation paid to our executive officers in our definitive proxy
statement or in an amendment to this Annual Report not later than 120 days after
the end of the fiscal year covered by this Annual Report, in either case under
the caption "Executive Compensation," and possibly elsewhere therein. That
information is incorporated in this Item 11 by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

We will provide information that is responsive to this Item 12
regarding ownership of our securities by some beneficial owners and our
directors and executive officers in our definitive proxy statement or in an
amendment to this Annual Report not later than 120 days after the end of the
fiscal year covered by this Annual Report, in either case under the caption
"Security Ownership of Certain Beneficial Owners and Management," and possibly
elsewhere therein. That information is incorporated in this Item 12 by
reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

We will provide information that is responsive to this Item 13
regarding transactions with related parties in our definitive proxy statement or
in an amendment to this Annual Report not later than 120 days after the end of
the fiscal year covered by this Annual Report, in either case under the caption
"Certain Relationships and Related Transactions," and possibly elsewhere
therein. That information is incorporated in this Item 13 by reference.

ITEM 14. CONTROLS AND PROCEDURES.

The Company's management, including the Chief Executive Officer and
Chief Financial Officer, have conducted an evaluation of the effectiveness of
GoAmerica's disclosure controls and procedures pursuant to Exchange Act Rule
13a-15. Based on the Company's evaluation, which was completed during the 90
days prior to the date on which this Annual Report was filed with the
Commission, the Chief Executive Officer and Chief Financial Officer concluded
that the disclosure controls and procedures are effective in ensuring that all
material information required to be filed in this Annual Report has been made
known to them in a timely fashion. There have been no significant changes in
internal controls, or in factors that could significantly affect internal
controls, subsequent to the date the Chief Executive Officer and Chief Financial
Officer completed their evaluation.
PART IV

36

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a) (1) Consolidated Financial Statements.

Reference is made to the Index to Consolidated Financial
Statements and Financial Statement Schedule on Page F-1.

(2) Consolidated Financial Statement Schedule.

Reference is made to the Index to Consolidated Financial
Statements and Financial Statement Schedule on Page F-1.

All other schedules have been omitted because the required
information is not present or is not present in amounts
sufficient to require submission of the schedule, or because
the information required is included in the Consolidated
Financial Statements or Notes thereto.

(3) Exhibits.
Reference is made to the Exhibit Index on Page 42.

(b) Reports on Form 8-K.

During the last quarter of the fiscal year ended December 31,
2002, the registrant filed two Reports on Form 8-K with the
Commission:

On October 9, 2002, the Company filed a Current Report on Form
8-K with regard to the EarthLink strategic alliance (Item 5).

On December 24, 2002, the Company filed a Current Report on
Form 8-K with regard to the change in the Company's independent
auditors from Ernst & Young LLP to WithumSmith + Brown
P.C. (Item 4).

37

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized this 8th day of
April, 2003. --

GOAMERICA, INC.

By: /s/ Daniel R. Luis
------------------------
Daniel R. Luis,
Chief Executive Officer

38

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

SIGNATURE TITLE DATE
- -------------------------------------------- --------------------------------------- ------------------------

/s/ Aaron Dobrinsky Executive Chairman of the Board April 8, 2003
- --------------------------------------------
Aaron Dobrinsky

/s/ Daniel R. Luis Chief Executive Officer (Principal April 8, 2003
- -------------------------------------------- Executive Officer)
Daniel R. Luis

/s/ Francis J. Elenio Chief Financial Officer, Treasurer April 8, 2003
- -------------------------------------------- and Secretary (Principal Financial
Francis J. Elenio and Accounting Officer)

/s/ Joseph Korb Executive Vice Chairman, Strategy and April 8, 2003
- -------------------------------------------- Strategic Alliances
Joseph Korb

/s/ Robi Blumenstein Director April 8, 2003
- --------------------------------------------
Robi Blumenstein

/s/ Alan Docter Director April 8, 2003
- --------------------------------------------
Alan Docter

/s/ Mark Kristoff Director April 8, 2003
- --------------------------------------------
Mark Kristoff

/s/ King Lee Director April 8, 2003
- --------------------------------------------
King Lee

39

CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002

I, Daniel R. Luis, certify that:

1. I have reviewed this annual report on Form 10-K of GoAmerica, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: April 8, 2003

/s/ Daniel R. Luis
- -----------------------
Daniel R. Luis
Chief Executive Officer

40

I, Francis J. Elenio, certify that:

1. I have reviewed this annual report on Form 10-K of GoAmerica, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: April 8, 2003

/s/ Francis J. Elenio
- -----------------------
Francis J. Elenio
Chief Financial Officer
(Principal financial officer)

41

EXHIBIT INDEX++
ITEM 15(c)

EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ---------- ----------------------

(2) PLAN OF ACQUISITION

2.1 Merger Agreement and Plan of Reorganization, dated as of
June 13, 2000, by and among GoAmerica, Inc., GoAmerica
Acquisition I Corp., Wynd Communications Corporation and, as
to certain sections, the existing shareholders of Wynd
Communications Corporation (Incorporated by reference to
GoAmerica's Current Report on Form 8-K filed with the
Securities and Exchange Commission on July 13, 2000) (File
No. 000-29359)

2.2 Agreement and Plan of Merger, dated as of August 11, 2000,
by and among GoAmerica, Inc., GoAmerica Acquisition II Corp.
and Hotpaper.com. Inc. (Incorporated by reference to
GoAmerica's Current Report on Form 8-K filed with the
Securities and Exchange Commission on September 15, 2000)
(File No. 000-29359)

2.3 Asset Purchase Agreement, dated as of October 31, 2000,
by and among GoAmerica, Inc., GoAmerica Communications
Corp., Flash Creative Management, Inc. and the shareholders
of Flash Creative Management, Inc. listed on Annex I thereto
(Incorporated by reference to GoAmerica's Current Report on
Form 8-K filed with the Securities and Exchange Commission
on November 21, 2000) (File No. 000-29359)

2.4 Merger Agreement and Plan of Reorganization, dated as of
November 13, 2001, by and among GoAmerica, Inc., GoAmerica
Acquisition III Corp., OutBack Resource Group, Inc. and
certain shareholders thereof (Incorporated by reference to
GoAmerica's Current Report on Form 8-K filed with the
Securities and Exchange Commission on November 21, 2000)
(File No. 000-29359)

(3) ARTICLES OF INCORPORATION AND BY-LAWS

3.1 Amended and Restated Certificate of Incorporation, as filed
with the Secretary of State of the State of Delaware on May
8, 2000 (Incorporated by reference to GoAmerica's Quarterly
Report on Form 10-Q filed with the Securities and Exchange
Commission on August 7, 2000) (File No. 000-29359)

3.2 By-laws (Incorporated by reference to GoAmerica's
Registration Statement on Form S-1 [which became effective
on April 6, 2000]). (File No. 333-94801)

42

EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ---------- ----------------------

(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS,
INCLUDING INDENTURES

4.1 Warrant to Purchase Common Stock of GoAmerica, Inc.
issued to Research In Motion Limited by GoAmerica, Inc. on
August 31, 2000 (Incorporated by reference to GoAmerica's
Annual Report on Form 10-K filed with the Securities and
Exchange Commission on April 2, 2001) (File No. 000-29359)

4.2 Warrant to Purchase Common Stock of GoAmerica, Inc.
issued to Dell Ventures, L.P. by GoAmerica, Inc. on November
14, 2000 (Incorporated by reference to GoAmerica's Annual
Report on Form 10-K filed with the Securities and Exchange
Commission on April 2, 2001) (File No. 000-29359)

4.3 Warrant to Purchase Common Stock of GoAmerica, Inc.
issued to Sony Electronics, Inc. by GoAmerica, Inc. on
January 1, 2001 (Incorporated by reference to GoAmerica's
Annual Report on Form 10-K filed with the Securities and
Exchange Commission on April 2, 2001) (File No. 000-29359)

4.4 Form of Warrant to Purchase Common Stock of GoAmerica, Inc.
issued to former shareholders of OutBack Resource Group,
Inc. on November 13, 2001 (Incorporated by reference to
GoAmerica's Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on November 14, 2001)
(File No. 000-29359)

(10) MATERIAL CONTRACTS

10.1 Form of Invention Assignment and Non-Disclosure Agreement
by and between GoAmerica and its employees (Incorporated by
reference to GoAmerica's Registration Statement on Form S-1
[which became effective on April 6, 2000]) (File No.
333-94801)

10.2 Form of Indemnification Agreement by and between GoAmerica
and each of its directors and executive officers
(Incorporated by reference to GoAmerica's Registration
Statement on Form S-1 [which became effective on April 6,
2000]) (File No. 333-94801)

10.3= Value Added Reseller Agreement by and between GoAmerica and
BellSouth Wireless Data L.P. (now Cingular Interactive,
L.P.), dated August 31, 1999 (Incorporated by reference to
GoAmerica's Registration Statement on Form S-1 [which became
effective on April 6, 2000]) (File No. 333-94801)

43

EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ---------- ----------------------

10.4= Amendment No. 1, dated March 9, 2000, to the Value Added
Reseller Agreement by and between GoAmerica and BellSouth
Wireless Data L.P. (Incorporated by reference to GoAmerica's
Annual Report on Form 10-K filed with the Securities and
Exchange Commission on April 2, 2001) (File No. 000-29359)

10.5= Amendment No. 2, dated March 21, 2000, to the Value Added
Reseller Agreement by and between GoAmerica and BellSouth
Wireless Data L.P. (now Cingular Interactive, L.P.), dated
August 31, 1999 (Incorporated by reference to GoAmerica's
Annual Report on Form 10-K filed with the Securities and
Exchange Commission on April 2, 2001) (File No. 000-29359)

10.6= Reseller Agreement for Messaging Services by and between
GoAmerica and ARDIS Company (now Motient Communications
Inc.), dated August 25, 1999 (Incorporated by reference to
GoAmerica's Registration Statement on Form S-1 [which became
effective on April 6, 2000]) (File No. 333-94801)

10.7* Amended and Restated Employment Agreement by and between
GoAmerica, Inc. and Daniel R. Luis, dated as of May 6, 2002
(Incorporated by reference to GoAmerica's Quarterly Report
on Form 10-Q filed with the Securities and Exchange
Commission on August 2, 2002) (File No. 000-29359)

10.8* Employment Agreement by and between GoAmerica and Aaron
Dobrinsky, dated as of May 6, 2002 (Incorporated by
reference to GoAmerica's Quarterly Report on Form 10-Q filed
with the Securities and Exchange Commission on August 2,
2002) (File No. 000-29359)

10.9* Employment Agreement by and between GoAmerica and Aaron
Dobrinsky, dated as of December 31, 1999 (Incorporated by
reference to GoAmerica's Registration Statement on Form S-1
[which became effective on April 6, 2000]) (File No.
333-94801)

10.10* Employment Agreement by and between GoAmerica and Joseph
Korb, dated as of May 6, 2002 (Incorporated by reference to
GoAmerica's Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on August 2, 2002) (File
No. 000-29359)

10.11* Employment Agreement by and between GoAmerica and Joseph
Korb, dated as of December 31, 1999 (Incorporated by
reference to GoAmerica's Registration Statement on Form S-1
[which became effective on April 6, 2000]) (File No.
333-94801)

44

EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ---------- ----------------------

10.12* Employment Agreement by and between GoAmerica and Francis
Elenio, dated as of May 6, 2002 (Incorporated by reference
to GoAmerica's Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on August 2, 2002) (File
No. 000-29359)

10.13* Employment Agreement by and between GoAmerica and Francis
Elenio, dated as of December 31, 1999 (Incorporated by
reference to GoAmerica's Registration Statement on Form S-1
[which became effective on April 6, 2000]) (File No.
333-94801)

10.14* Employment Agreement by and between GoAmerica and Jesse
Odom, dated as of May 6, 2002 (Incorporated by reference to
GoAmerica's Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on August 2, 2002) (File
No. 000-29359)

10.15* Employment Agreement by and between GoAmerica and Jesse
Odom, dated as of December 31, 1999 (Incorporated by
reference to GoAmerica's Registration Statement on Form S-1
[which became effective on April 6, 2000]) (File No.
333-94801)

10.16* GoAmerica Communications Corp. 1999 Stock Option
Plan (Incorporated by reference to GoAmerica's Registration
Statement on Form S-1 [which became effective on April 6,
2000]) (File No. 333-94801)

10.17* GoAmerica, Inc. 1999 Stock Plan (Incorporated by
reference to GoAmerica's Registration Statement on Form S-1
[which became effective on April 6, 2000]) (File No.
333-94801)

10.18* GoAmerica, Inc. Employee Stock Purchase Plan (Incorporated
by reference to GoAmerica's Registration Statement on Form
S-1 [which became effective on April 6, 2000]) (File No.
333-94801)

10.19 Lease Agreement, dated August 7, 1996, by and between
GoAmerica and Continental Investors, L.P, as amended
(Incorporated by reference to GoAmerica's Registration
Statement on Form S-1 [which became effective on April 6,
2000]) (File No. 333-94801)

45

EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ---------- ----------------------

10.20 Third Amendment, dated December 1, 1999, to the Lease
Agreement by and between GoAmerica and Continental
Investors, L.P., dated August 7, 1996 (Incorporated by
reference to GoAmerica's Annual Report on Form 10-K filed
with the Securities and Exchange Commission on April 2,
2001) (File No. 000-29359)

10.21 Fifth Amendment, dated August 22, 2000, to the August 7,
1996 Lease Agreement by and between GoAmerica and
Continental Investors, L.P., and entered into by and between
GoAmerica and Stellar Continental LLC, the successor
landlord (Incorporated by reference to GoAmerica's Annual
Report on Form 10-K filed with the Securities and Exchange
Commission on April 2, 2001) (File No. 000-29359)

10.22 Facilities Maintenance Agreement by and between GoAmerica
and Data General, a division of EMC Corporation, dated
December 13, 1999 (Incorporated by reference to GoAmerica's
Registration Statement on Form S-1 [which became effective
on April 6, 2000]) (File No. 333-94801)

10.23 Amendment, dated March 14, 2001, to the Facilities
Maintenance Agreement by and between GoAmerica and Data
General, a division of EMC Corporation, December 13, 1999
(Incorporated by reference to GoAmerica's Annual Report on
Form 10-K filed with the Securities and Exchange Commission
on April 2, 2001) (File No. 000-29359)

10.23 Registration Rights Agreement, dated October 15, 1996, by
and between GoAmerica Communications Corp. and the Investors
set forth therein (Incorporated by reference to GoAmerica's
Registration Statement on Form S-1 [which became effective
on April 6, 2000]) (File No. 333-94801)

10.24 Strategic Alliance Marketing Agreement by and between
GoAmerica, Inc. and Research in Motion Limited, dated July
1, 2000 (Incorporated by reference to GoAmerica's Annual
Report on Form 10-K filed with the Securities and Exchange
Commission on April 2, 2001) (File No. 000-29359)

10.25= Acquisition Agreement, dated as of September 25, 2002,
between EarthLink, Inc., GoAmerica, Inc. and GoAmerica
Communications Corp. (Incorporated by reference to
GoAmerica's Current Report on Form 8-K filed with the
Securities and Exchange Commission on October 10, 2002)
(File No. 000-29359)

10.26= Sales Agent Agreement, dated as of September 25, 2002,
between EarthLink, Inc., GoAmerica, Inc. and GoAmerica
Communications Corp. (Incorporated by reference to
GoAmerica's Current Report on Form 8-K filed with the
Securities and Exchange Commission on October 10, 2002)
(File No. 000-29359)

46

EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ---------- ----------------------

10.27= Technology Development Agreement, dated as of September 25,
2002, between EarthLink, Inc., GoAmerica, Inc. and GoAmerica
Communications Corp. (Incorporated by reference to
GoAmerica's Current Report on Form 8-K filed with the
Securities and Exchange Commission on October 10, 2002)
(File No. 000-29359)

10.28= License Agreement, dated as of September 25, 2002, between
EarthLink, Inc., GoAmerica, Inc. and GoAmerica
Communications Corp. (Incorporated by reference to
GoAmerica's Current Report on Form 8-K filed with the
Securities and Exchange Commission on October 10, 2002)
(File No. 000-29359)

10.29 Employment Agreement by and between GoAmerica and David
Blumenthal, dated as of November 1, 2000 (Incorporated by
reference to GoAmerica's Annual Report on Form 10-K filed
with the Securities and Exchange Commission on April 2,
2001) (File No. 000-29359)

10.30 Employment Agreement by and between GoAmerica and Yair
Alan Griver, dated as of November 1, 2000 (Incorporated by
reference to GoAmerica's Annual Report on Form 10-K filed
with the Securities and Exchange Commission on April 2,
2001) (File No. 000-29359)

10.31= Service Provider Agreement by and between GoAmerica, Inc.
and Research In Motion Limited, effective May 1, 2000
(Incorporated by reference to GoAmerica's Quarterly Report
on Form-10-Q filed with the Securities and Exchange
Commission on May 11, 2001) (File No. 000-29359)

10.32= Amendment to the Service Provider Agreement, effective May
1, 2000, by and between GoAmerica, Inc. and Research In
Motion Limited, dated August 31, 2000 (Incorporated by
reference to GoAmerica's Quarterly Report on Form-10-Q filed
with the Securities and Exchange Commission on May 11, 2001)
(File No. 000-29359)

10.33= Termination Agreement and Mutual Releases, dated October 9,
2001, by and between GoAmerica, Telecordia Technologies,
Inc., Geoworks Corporation and others (Incorporated by
reference to GoAmerica's Quarterly Report on Form 10-Q filed
with the Securities and Exchange Commission on November 14,
2001) (File No. 000-29359)

(21) SUBSIDIARIES OF GOAMERICA, INC.

21.1 List of subsidiaries of GoAmerica, Inc. (filed herewith)

47

EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ---------- ----------------------

(23) CONSENTS OF EXPERTS AND COUNSEL

23.1 Consent of WithumSmith+Brown P.C. (filed herewith)
23.2 Consent of Ernst & Young LLP. (filed herewith)

(99) ADDITIONAL EXHIBITS

99.1 Risk Factors (filed herewith)
99.2 Certification pursuant to 18 U.S.C. Section 1350
(filed herewith)
99.3 Certification pursuant to 18 U.S.C. Section 1350
(filed herewith)

= Confidential treatment has been requested and granted (subject to
applicable renewals) for a portion of this Exhibit. Confidential
materials have been omitted and filed separately with the Securities
and Exchange Commission.

* Management contract or compensatory plan required to be filed as an
exhibit to this form pursuant to Item 15(c).

++ Certain schedules and exhibits to the documents listed in this index
are not being filed herewith or have not been previously filed because
we believe that the information contained therein is not material.
Upon request therefore, we agree to furnish supplementally a copy of
any schedule or exhibit to the Securities and Exchange Commission.

48

GOAMERICA, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND FINANCIAL STATEMENT SCHEDULE

PAGE
----

Reports of Independent Auditors................................................................... F-2

Consolidated Balance Sheets as of December 31, 2002 and 2001...................................... F-4

Consolidated Statements of Operations for the years ended December 31, 2002,
2001 and 2000................................................................................ F-5

Consolidated Statements of Stockholders' Equity (Deficit) for the years ended December 31, 2002,
2001 and 2000................................................................................ F-6

Consolidated Statements of Cash Flows for the years ended December 31, 2002, 2001 and 2000........ F-7

Notes to Consolidated Financial Statements........................................................ F-8

Financial Statement Schedule:

Valuation and Qualifying Accounts and Reserves for the years ended
December 31, 2002, 2001 and 2000............................................................. F-34

All other schedules have been omitted because the required information is
not present or is not present in amounts sufficient to require submission
of the schedule, or because the information required is included in the
Consolidated Financial Statements or Notes thereto.

F-1

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
GoAmerica, Inc.

We have audited the accompanying consolidated balance sheet of
GoAmerica, Inc. as of December 31, 2002, and the related consolidated statements
of operations, stockholders' equity (deficit) and cash flows for the year ended
December 31, 2002. Our audit also included the financial statement schedule for
the year ended December 31, 2002 as listed in the index at Item 15(a). These
financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audit.

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

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
GoAmerica, Inc. as of December 31, 2002, and the consolidated results of their
operations and their cash flows for the year ended December 31, 2002 in
conformity with accounting principles generally accepted in the United States of
America. Also, in our opinion, such financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
1 to the financial statements, the Company has suffered recurring losses from
operations, has consumed significant amounts of cash in its operations, and
lacks the prospects to obtain additional cash infusions from either debt or
equity sources to fund its operations. These factors raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 1. The 2002 financial
statements do not include any adjustments relating to the recoverability and
classification of asset carrying amounts or the amount and classification of
liabilities that might result from the outcome of this uncertainty.

As discussed in Notes 1 and 5 to the consolidated financial statements,
the Company changed its method of accounting for goodwill and other intangible
assets in accordance with Statement of Financial Accounting Standards (SFAS) No.
142 "Goodwill and Other Intangible Assets" effective January 1, 2002.

/s/ WithumSmith + Brown P.C.

New Brunswick, New Jersey
March 18, 2003

F-2

Report of Independent Auditors

The Board of Directors and Stockholders
GoAmerica, Inc.

We have audited the accompanying consolidated balance sheet of GoAmerica, Inc.
as of December 31, 2001, and the related consolidated statements of operations,
stockholders' equity (deficit) and cash flows for the years ended December 31,
2001 and 2000. Our audits also included the financial statement schedule for the
years ended December 31, 2001 and 2000 listed in the index at Item 15(a). These
financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of GoAmerica, Inc. as
of December 31, 2001, and the results of its operations and its cash flows for
the years ended December 31, 2001 and 2000, in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the
related financial statement schedule for the years ended December 31, 2001 and
2000, when considered in relation to the basic financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.

/s/ Ernst & Young LLP

MetroPark, New Jersey
March 26, 2002

F-3

GOAMERICA, INC.
CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

DECEMBER 31,
--------------------------------------
2002 2001
---------------- ----------------

ASSETS
Current assets:

Cash and cash equivalents......................................... $ 4,982 $ 34,977
Accounts receivable, less allowance for doubtful accounts of $3,418
in 2002 and $2,675 in 2001..................................... 5,780 8,672
Merchandise inventories, net...................................... 1,046 7,967
Prepaid expenses and other current assets......................... 520 2,373
---------------- ----------------
Total current assets................................................. 12,328 53,989

Restricted cash...................................................... 950 1,396
Property, equipment and leasehold improvements, net.................. 4,685 14,158
Trade names, net of accumulated amortization of $3,651 in 2002
and $3,282 in 2001............................................... 921 1,290
Other intangible assets, net of accumulated amortization of $5,729
in 2002 and $4,615 in 2001, respectively......................... 546 1,660

Goodwill, net ....................................................... 6,193 14,593
Other assets......................................................... 1,142 699
---------------- ----------------
Total assets......................................................... $ 26,765 $ 87,785
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................................. $ 4,694 $ 9,676
Accrued expenses.................................................. 5,917 7,565
Deferred revenue.................................................. 2,406 2,805
Other current liabilities......................................... 348 651
---------------- ----------------
Total current liabilities............................................ 13,365 20,697

Other long term liabilities.......................................... 383 675

Commitments and contingencies

Stockholders' equity:
Preferred stock, $.01 par value; authorized: 4,351,943 in 2002
and 2001; issued and outstanding: none in 2002 and 2001........ -- --
Common stock, $.01 par value; authorized: 200,000,000 in 2002
and 2001; issued and outstanding: 54,026,057 in 2002 and
53,709,803 in 2001, respectively............................... 540 537
Additional paid-in capital........................................ 269,015 269,053
Deferred employee compensation.................................... (314) (2,842)
Accumulated deficit............................................... (256,224) (200,335)
---------------- ----------------
Total stockholders' equity .......................................... 13,017 66,413
---------------- ----------------

Total liabilities and stockholders' equity.......................... $ 26,765 $ 87,785
================ ================
SEE ACCOMPANYING NOTES.

F-4

GOAMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

YEARS ENDED DECEMBER 31,
---------------------------------------------------
2002 2001 2000
----------------- ---------------- ----------------

REVENUES:
Subscriber............................................ $ 29,017 $ 28,308 $ 8,535
Equipment............................................. 6,560 10,088 5,097
Other................................................. 335 618 242
----------------- ---------------- ----------------
35,912 39,014 13,874

COSTS AND EXPENSES:
Cost of subscriber revenue............................ 20,434 22,578 7,194
Cost of equipment revenue............................. 8,537 20,665 6,090
Cost of network operations............................ 3,074 3,264 623
Sales and marketing................................... 8,038 24,700 35,807
General and administrative............................ 29,082 40,685 26,853
Research and development.............................. 3,456 4,174 762
Depreciation and amortization of fixed assets......... 4,342 2,987 994
Amortization of goodwill and other intangibles....... 1,483 18,398 7,247
Impairment of goodwill................................ 8,400 12,991 --
Impairment of other intangible assets................. -- 12,423 --
Impairment of other long-lived assets................. 5,582 97 --
----------------- ---------------- ----------------
92,428 162,962 85,570
----------------- ---------------- ----------------
Loss from operations....................................... (56,516) (123,948) (71,696)
Interest income, net.................................. 191 3,099 6,944
----------------- ---------------- ----------------
Net loss before benefit from income taxes.................. (56,325) (120,849) (64,752)
Income tax benefit.................................... 436 578 --
----------------- ---------------- ----------------
Net loss................................................... (55,889) (120,271) (64,752)

Beneficial conversion feature and accretion of redemption
value of mandatorily redeemable convertible preferred
stock................................................. -- -- (30,547)
----------------- ---------------- ----------------
Net loss applicable to common stockholders................. $ (55,889) $ (120,271) $ (95,299)
================= ================ =================
Basic net loss per share applicable to common stockholders. $ (1.04) $ (2.27) $ (2.19)
================= ================ =================
Diluted net loss per share applicable to common stockholders $ (1.04) $ (2.25) $ (2.18)
================= ================ =================

Weighted average shares used in computation of basic net loss
per share applicable to common stockholders........... 53,845,787 53,027,209 43,426,493
Weighted average shares used in computation of diluted net
loss per share applicable to common stockholders...... 53,869,236 53,353,958 43,677,912

SEE ACCOMPANYING NOTES.

F-5

GOAMERICA, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

(IN THOUSANDS, EXCEPT SHARE DATA)

COMMON STOCK TOTAL
------------------------ ADDITIONAL DEFERRED STOCKHOLDERS'
NUMBER PAID-IN EMPLOYEE ACCUMULATED EQUITY
OF SHARES AMOUNT CAPITAL COMPENSATION DEFICIT (DEFICIT)
------------ ----------- ------------- --------------- -------------- --------------

BALANCE AT JANUARY 1, 2000........... 23,687,184 $ 237 $ 5,484 $ 7,067) $ (15,312) $ (16,658)

Sale of common stock............. 10,000,000 100 146,119 -- -- 146,219

Issuance of common stock pursuant
to:
exercise of employee stock
options and warrants ......... 318,252 3 3,261 (3,088) -- 176
exercise of warrants.......... 219,865 3 2 -- -- 5
compensation for financing.... 243,266 2 3,647 -- -- 3,649
purchase of businesses........ 5,437,388 54 53,281 -- -- 53,335
Beneficial conversion feature and
accretion of redemption value of
redeemable convertible preferred
stock......................... -- -- (30,547) -- -- (30,547)
Issuance of common stock upon
conversion of preferred stock. 13,222,760 132 72,158 -- -- 72,290
Conversion of options of acquired
businesses.................... -- -- 4,657 (520) -- 4,137
Deferred employee compensation... -- -- 8,456 (8,456) -- --
Amortization of deferred employee
compensation.................. -- -- -- 11,345 -- 11,345
Issuance of warrant in exchange for
marketing services............ -- -- 2,331 -- -- 2,331
Net loss......................... -- -- -- -- (64,752) (64,752)
------------ ----------- ------------- --------------- -------------- --------------
BALANCE AT DECEMBER 31, 2000......... 53,128,715 531 268,849 (7,786) (80,064) 181,530

Issuance of common stock pursuant
to:
exercise of employee stock
options ...................... 369,642 4 267 -- -- 271
exercise of warrants.......... 130,450 1 (1) -- -- --
purchase of businesses........ 134,996 1 147 -- -- 148
Purchase of treasury stock....... (54,000) -- (49) -- -- (49)
Adjustment to deferred employee
compensation for terminations. -- -- (973) 973 -- --
Amortization of deferred employee
compensation.................. -- -- -- 3,971 -- 3,971
Issuance of warrant in exchange for
marketing services............ -- -- 813 -- -- 813
Net loss......................... -- -- -- -- (120,271) (120,271)
------------ ----------- ------------- --------------- -------------- --------------

BALANCE AT DECEMBER 31, 2001......... 53,709,803 537 269,053 (2,842) (200,335) 66,413

Issuance of common stock pursuant
to:
exercise of employee stock
options ..................... 231,018 2 112 -- -- 114
employee stock purchase plan.. 85,236 1 63 -- -- 64
Adjustment to deferred employee
compensation for terminations. -- -- (213) 213 -- --
Amortization of deferred employee
compensation.................. -- -- -- 2,315 -- 2,315
Net loss......................... -- -- -- -- (55,889) (55,889)
------------ ----------- ------------- --------------- -------------- --------------
BALANCE AT DECEMBER 31, 2002......... 54,026,057 $ 540 $ 269,015 $ (314) $(256,224) $ 13,017
============ =========== ============= =============== ============== ==============

SEE ACCOMPANYING NOTES.

F-6

GOAMERICA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

YEARS ENDED DECEMBER 31,
--------------------------------------------------------
2002 2001 2000
------------------ ------------------ -----------------

OPERATING ACTIVITIES
Net loss........................................................ $ (55,889) $ (120,271) $ (64,752)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization............................... 5,825 21,385 8,241
Impairment of goodwill...................................... 8,400 12,991 --
Impairment of other intangible assets....................... -- 12,423 --
Impairment of other long-lived assets....................... 5,582 97 --
Increase in provision for losses on accounts receivable..... 3,221 4,197 728
Non-cash employee compensation.............................. 2,315 3,971 11,345
Non-cash marketing expense.................................. -- 2,086 1,058
Other non-cash charges...................................... -- 254 256
Changes in operating assets and liabilities:
Increase in accounts receivable.......................... (329) (7,852) (4,703)
Decrease (increase) in inventory......................... 6,921 6,054 (13,345)
Decrease (increase) in prepaid expenses and other assets. 1,853 1,384 (6,298)
(Decrease) increase in accounts payable.................. (4,982) (259) 4,844
(Decrease) increase in accrued expenses and other current
liabilities........................................... (1,532) (5,582) 11,202
(Decrease) increase in deferred revenue.................. (399) 623 2,118
------------------ ------------------ -----------------
Net cash used in operating activities........................... (29,014) (68,499) (49,306)

INVESTING ACTIVITIES
Purchase of property, equipment and leasehold improvements...... (451) (9,159) (5,499)
Purchase of patents............................................. -- (1,000) --
Acquisition of businesses, net of cash acquired................. -- (127) (7,659)
Change in other assets and restricted cash...................... 3 -- (300)
------------------ ------------------ -----------------
Net cash used in investing activities........................... (448) (10,286) (13,458)

FINANCING ACTIVITIES
Issuance of common stock, net of related expenses............... 178 271 146,400
Issuance of preferred stock, net of related expenses............ -- -- 24,637
Purchase of treasury stock...................................... -- (49) --
Payments made on capital lease obligations...................... (711) (871) (206)
------------------ ------------------ -----------------
Net cash (used in) provided by financing activities............. (533) (649) 170,831
------------------ ------------------ -----------------
(Decrease) increase in cash and cash equivalents................ (29,995) (79,434) 108,067
Cash and cash equivalents at beginning of period................ 34,977 114,411 6,344
------------------ ------------------ -----------------
Cash and cash equivalents at end of period...................... $ 4,982 $ 34,977 $ 114,411
================== ================== =================
SEE ACCOMPANYING NOTES.

F-7

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

GoAmerica, Inc. (the "Company") develops and distributes wireless data
technology, applications and software that addresses the productivity and
communications needs of enterprise customers and consumers. The Company has
formed strategic relationships with wireless carriers, software providers, and
hardware manufacturers who provide the mobile computer user wireless
communications, services and devices that complement the Company's product and
services. The Company also distributes wireless communication devices,
principally to customers of its wireless services, and earns commissions from
the procurement of subscribers on behalf of various wireless network providers
and EarthLink, Inc. ("EarthLink").

The Company operates in a highly competitive environment subject to
rapid technological change and emergence of new technology. Although management
believes its services are transferable to emerging technologies, rapid changes
in technology could have an adverse financial impact on the Company.

The Company is highly dependent on EarthLink for billing and
collections, customer support and technical support. Additionally, the Company
is highly dependent on EarthLink and other third parties for wireless
communication devices and wireless network connectivity.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. However, the Company
has incurred significant operating losses since its inception and, as of
December 31, 2002, has an accumulated deficit of $256,224. During 2002, the
Company incurred a net loss of $55,889 and used $29,037 of cash to fund
operating activities. As of December 31, 2002 the Company had $4,982 in cash and
cash equivalents ($2,803 at March 31, 2003, unaudited), exclusive of $950 in
restricted cash supporting certain letters of credit. In execution of the 2002
operating plan, the Company took steps to reduce its annual payroll by more than
25% and took further actions to reduce sales and marketing expenses which
included entering into a strategic alliance with Earthlink (See Note 3). Upon
complete implementation of the Earthlink agreements, which is anticipated to be
on or near April 30, 2003, the Company anticipates further reducing its payroll,
administrative, sales and marketing expenses. In the event management is unable
to achieve its plans or complete its implementation of the EarthLink agreements,
additional further cost reductions may be required. Therefore, there exists
substantial doubt about the Company's ability to continue as a going concern as
of December 31, 2002. Management's 2003 operating plan includes further
reductions in employee related expenses as well as additional reductions in
sales and marketing expenditures from levels incurred during 2002. Additionally,
management is actively working to renegotiate the Company's long term lease
obligations. In the event management is unable to achieve its plans, additional
further reductions may be required in employee related expenses as well as sales
and marketing expenditures. There can be no assurance that the Company will
achieve its 2003 operating plan or successfully renegotiate the Company's long
term lease obligations. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

F-8

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Basis of Consolidation

The consolidated financial statements include the accounts of
GoAmerica, Inc. and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.

2. SIGNIFICANT ACCOUNTING POLICIES

Cash Equivalents

Cash equivalents consist of highly liquid investments with a maturity
of three months or less when purchased.

Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, and the reported amounts of
certain expenses during the reporting periods. Actual results could differ from
those estimates. Significant estimates that affect the financial statements
include, but are not limited to: collectibility of accounts receivable,
amortization periods and recoverability of long-lived assets.

Receivables and Credit Policies

Accounts receivable are uncollateralized customer obligations due under
normal trade terms requiring payment within 30 days from the invoice date.
Accounts receivable are stated at the amount billed to the customer. Interest is
not billed or accrued. Accounts receivable in excess of 90 days old are
considered delinquent. Payments of accounts receivable are allocated to the
specific invoices identified on the customer's remittance advice or, if
unspecified, are applied to the oldest unpaid invoices.

The carrying amount of accounts receivable is reduced by a valuation
allowance that reflects the Company's best estimate of the amounts that may not
be collected. This estimate is based on reviews of all balances in excess of 90
days from the invoice date and based on an assessment of current
creditworthiness, estimates the portion, if any, of the balance that will not be
collected. The Company reviews its valuation allowance on a quarterly basis.

Merchandise Inventories

Merchandise inventories, principally wireless devices, are stated at
the lower of cost (first-in, first-out) basis or market. The inventory of the
Company is subject to rapid technological changes which could have an adverse
impact on its realization in future periods. In addition, there are a limited
number of suppliers of the Company's inventory. Inventories are recorded net of
a reserve for excess and obsolete merchandise.

F-9

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements are stated at cost.
Depreciation is provided on the straight-line method over the estimated useful
lives of the related assets ranging from two to seven years. Expenditures for
maintenance and repairs are charged to expense as incurred.

Computer Software Developed or Obtained For Internal Use

All direct internal and external costs incurred in connection with the
application development stage of software for internal use are capitalized. All
other costs associated with internal use software are expensed when incurred.
Amounts capitalized are included in property, equipment and leasehold
improvements and are amortized on a straight-line basis over three years
beginning when such assets are placed in service.

Goodwill and Intangible Assets

Goodwill and intangible assets result from acquisitions accounted for
under the purchase method. In accordance with Statement of Financial Accounting
Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets" ("SFAS No.
142"), effective January 1, 2002, goodwill and intangible assets with indefinite
lives are no longer being amortized but are subject to impairment by applying a
fair value based test. Intangible assets with finite useful lives related to
developed technology, customer lists, trade names and other intangibles are
being amortized on a straight-line basis over the estimated useful life of the
related asset, generally three to five years.

Recoverability of Intangible and Other Long Lived Assets

In accordance with SFAS No.142, the Company reviews the carrying value
of goodwill and intangible assets with indefinite lives annually or in certain
circumstances. The Company measures impairment losses by comparing carrying
value to fair value. Fair value is determined using discounted cash flow
methodology.

In accordance with SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," long-lived assets used in operations are
reviewed for impairment whenever events or changes in circumstances indicate
that carrying amounts may not be recoverable. For long-lived assets to be held
and used, the Company recognizes an impairment loss only if its carrying amount
is not recoverable through its undiscounted cash flows and measures the
impairment loss based on the difference between the carrying amount and fair
value.
Prior to January 1, 2002, the Company accounted for its long-lived
assets under SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of." In accordance with SFAS No. 121,
the Company reviewed the recoverability of long-lived assets using an
undiscounted cash flow methodology, whenever events or changes in circumstances
indicated that carrying amounts may not be recoverable. The Company measured
impairment losses using a discounted cash flow methodology.

F-10

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Revenue and Deferred Revenue

The Company derives subscriber revenue from the provision of wireless
communication services. Subscriber revenue consists of monthly charges for
access and usage and is recognized as the service is provided. Roaming fees
billed to customers are recognized upon collection. Also included in subscriber
revenue are one-time non-refundable activation fees. To the extent such fees
exceed the related costs, they are deferred and recognized ratably over the life
of the related service contracts generally six or twelve months. Equipment
revenue is recognized upon shipment and transfer of title to the end user. The
Company provides mobile devices to its customers at prices below its costs as
incentives for customers to enter into service agreements. Such incentives are
recorded as a deferred asset and are amortized against subscriber gross margins
over the life of the customer contract. Sales into retail channels, where a
right of return exists, are deferred and recognized at the time such equipment
is sold to the end consumer. Consulting revenue, included in other revenue, is
recognized as the related services are provided. Software revenue through
December 31, 2002 was insignificant.

Cost of Revenues

Cost of subscriber revenue consists principally of airtime costs
charged by carriers. Cost of equipment revenue consists of the cost of equipment
sold.

Income Taxes

Deferred income taxes are determined using the liability method. Under
this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities
and are measured using the enacted tax rates and laws that will be in effect
when the differences are expected to reverse.

Advertising Costs

Advertising costs are expensed as incurred. During 2002, 2001 and 2000,
advertising expense was approximately $1,019, $4,900 and $19,500, respectively.

Research and Development Costs

Research and development costs are expensed as incurred.

Stock-Based Employee Compensation

The Company accounts for employee stock-based compensation in
accordance with Accounting Principles Board (APB) Opinion No. 25, "Accounting
for Stock Issued to Employees", using an intrinsic value approach to measure
compensation expense, if any. Under this method, compensation expense is
recorded on the date of the grant only if the current market price of the
underlying stock exceeds the exercise price. Options issued to non-employees are
accounted for in accordance with SFAS 123, "Accounting for Stock-Based

F-11

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Compensation", and Emerging Issues Task Force ("EITF") Issue No. 96-18,
"Accounting for Equity Instruments That Are Issued to Other Than Employees for
Acquiring, or in Conjunction with Selling, Goods and Services", using a fair
value approach

SFAS No. 123 established accounting and disclosure requirements using a
fair value-basis method of accounting for stock-based employee compensation
plans. As allowed by SFAS No. 123, the Company has elected to continue to apply
the intrinsic value-based method of accounting described above, and has adopted
the disclosure requirements of SFAS No. 123. Had the Company elected to
recognize compensation cost based on fair value of the stock options at the date
of grant under SFAS 123, such costs would have been recognized ratably over the
vesting period of the underlying instruments and the Company's net loss and net
loss per common share would have increased to the pro forma amounts indicated in
the table below.

Year ended December 31,
---------------------------------------------------------

2002 2001 2000
------------------- ------------------ --------------
Net loss applicable to common stockholders, as reported... $ (55,889) $ (120,271) $ (95,299)
Deduct: Stock-based employee compensation expense
included in reported net loss............................. 2,315 3,971 11,345

Add: Total stock-based employee compensation expense
determined under fair value based method for all awards... (6,966) (9,546) (15,326)
------------------- ------------------ --------------
Pro forma net loss applicable to common stockholders...... $ (60,540) $ (125,846) $ (99,280)
=================== ================== ==============
Loss per share - basic, as reported....................... $ (1.04) $ (2.27) $ (2.19)
Loss per share - diluted, as reported..................... $ (1.04) $ (2.25) $ (2.18)
Pro forma loss per share - basic.......................... $ (1.12) $ (2.37) $ (2.29)
Pro forma loss per share - diluted........................ $ (1.12) $ (2.36) $ (2.27)

The pro forma results above are not intended to be indicative of or a
projection of future results. Refer to Note 12 for assumptions used in computing
the fair value amounts above.

Net Loss Available for Common Stockholders

Net loss available for common stockholders represents net loss
increased by accretion of the redeemable preferred stock to redemption value and
an amount representing beneficial conversion features on preferred stock.

F-12

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Earnings (Loss) Per share

The Company computes net loss per share under the provisions of SFAS
No. 128, "Earnings per Share" (SFAS 128), and SEC Staff Accounting Bulletin No.
98 (SAB 98).

Under the provisions of SFAS 128 and SAB 98, basic and diluted net loss
per share is computed by dividing the net loss available to common stockholders
for the period by the weighted-average number of shares of common stock
outstanding during the period. The calculation of diluted net loss per share
excludes potential common shares if the effect is antidilutive. Basic loss per
share is computed by dividing loss applicable to common stockholders by the
weighted-average number of shares of common stock outstanding during the period.
The weighted average number of shares utilized in arriving at basic loss per
share reflects an adjustment for 23,449, 326,749 and 245,356 common shares for
the years ended December 31, 2002, 2001 and 2000, respectively, for shares held
in escrow as a result of the 2001 and 2000 acquisitions. Diluted loss per share
is determined in the same manner as basic loss per share except that the number
of shares is increased assuming exercise of dilutive stock options and warrants
using the treasury stock method. The weighted average number of shares utilized
in arriving at diluted loss per share presented reflects adjustments for 6,063
common shares in the year ended December 31, 2000, issuable pursuant to warrants
which were previously issued for nominal consideration. As the Company had a net
loss, the impact of the assumed exercise of the stock options, warrants and the
assumed preferred stock conversion is anti-dilutive and as such, these amounts
(except for warrants as issued for nominal consideration) have been excluded
from the calculation of diluted loss per share.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a
concentration of credit risk consist of cash and cash equivalents and accounts
receivable. The Company maintains a significant portion of its cash and cash
equivalents with two financial institutions. The Company performs periodic
credit evaluations of its customers but generally does not require collateral.

Fair Value of Financial Instruments

The carrying amounts of the Company's financial instruments, which
include cash and cash equivalents, accounts receivable, accounts payable and
accrued expenses approximate their fair values.

Segment Information

In June 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information," which establishes standards for the way that a public enterprise
reports information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating

F-13

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. The Company operates in a single segment.
The chief operating decision maker allocates resources and assesses the
performance associated with wireless services, and related equipment sales on a
single segment basis. Consulting services are not a material component of the
Company's business.

Reclassifications

The Company has reclassified certain prior year information to conform
with current year presentation.

Recent Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 142, Goodwill and Other
Intangible Assets. SFAS No. 142 addresses the recognition and measurement of
goodwill and other intangible assets subsequent to their acquisition. SFAS No.
142 also addresses the initial recognition and measurement of intangible assets
acquired outside of a business combination whether acquired individually or with
a group of other assets. Goodwill and intangible assets previously recorded in
the Company's financial statements are affected by the provisions of SFAS No.
142. This statement provides that intangible assets with finite useful lives be
amortized and that intangible assets with indefinite lives and goodwill not be
amortized, but tested at least annually for impairment. The Company adopted SFAS
No. 142 on January 1, 2002. During 2002, the Company recorded an impairment
charge of approximately $8,400, which was measured in accordance with SFAS 142
(see note 5).

On August 1, 2001, the Financial Accounting Standards Board, or FASB,
issued Statement of Financial Accounting Standards, or SFAS, No. 144,
"Accounting For Impairment of Long Lived Assets". The Company was required to
adopt this pronouncement beginning January 1, 2002. SFAS No. 144 prescribes the
accounting for long-lived assets (excluding goodwill) to be disposed of by sale.
SFAS No. 144 retains the requirement of SFAS No. 121 to measure long-lived asset
classified as held for sale at the lower of its carrying value or fair market
value less the cost to sell. Therefore, discontinued operations are no longer
measured on a net realizable basis, and future operating results are no longer
recognized before they occur. During 2002, the Company recorded impairment
charges of approximately $5,600, which were measured in accordance with SFAS
No. 144 (see note 6).

In June 2002, FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities". SFAS 146 requires recording costs
associated with exit or disposal activities at their fair values when a
liability has been incurred. Under previous guidance, certain exit costs were
accrued upon management's commitment to an exit plan, which is generally before
an actual liability has been incurred. Adoption of SFAS 146 is required with the
beginning of fiscal year 2003. The Company does not anticipate a significant
impact on its results of operations from adopting this statement.

F-14

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation--Transition and Disclosure, an amendment of FASB
Statement No. 123. This Statement amends FASB Statement No. 123, Accounting for
Stock-Based Compensation, to provide alternative methods of transition for a
voluntary change to the fair value method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure requirements of
Statement No. 123 to require prominent disclosures to both annual and interim
financial statements. Certain of the disclosure modifications are required for
fiscal years ending after December 15, 2002 and are included in the notes to the
Company's 2002 consolidated financial statements. The other provisions of SFAS
No 148 are not expected to be applicable to the Company as the Company has not
expressed an intent to change its accounting for stock-based compensation.

3. STRATEGIC ALLIANCE WITH EARTHLINK, INC.

On September 25, 2002, the Company formed a comprehensive strategic
alliance with EarthLink by entering into a series of agreements pursuant to
which, among other things (i) EarthLink purchased all of the Company's CDPD
subscribers as well as certain of the Company's Cingular and Motient network
subscribers (collectively, the "transferred subscribers"); (ii) EarthLink
purchased the Company's rights under a credit for $1,400 of inventory from a
hardware manufacturer, receiving the Company's equipment pricing at a discount;
(iii) the Company and EarthLink will market each other's wireless services in
exchange for commissions and/or recurring revenue shares; (iv) EarthLink will
provide billing, customer support and network services to most subscribers of
the Company's technology; and (v) the Company and EarthLink will collaborate on
developing new applications and extensions of existing technology, including
EarthLink-branded wireless data services, as well as new technologies.

As a result of this strategic alliance, the Company received
approximately $1,900 during the fourth quarter of 2002 of which $953 is included
in deferred revenue. The recorded 2002 amount of approximately $950 represents
$100 of other revenue and payment of approximately $850 for vendor credits
transferred. Subscriber revenue associated with the transferred subscribers was
$17, 900 and $17,400 with the related costs of subscriber airtime of $14,900 and
$18,600 for the years ended December 31, 2002 and 2001, respectively.

F-15

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

4. ACQUISITIONS

2001 Acquisition:

On November 13, 2001, the Company acquired OutBack Resource Group,
Inc., a software development company. The acquisition was accounted for under
the purchase method of accounting, and accordingly, the purchase price has been
allocated to the assets acquired and liabilities assumed based upon estimates of
fair market values at the date of acquisition. The total purchase price of
approximately $148 included the issuance of 134,996 shares of common stock
valued at $0.96 per share and warrants issued at the date of acquisition with an
estimated fair market value of approximately $19 to purchase an aggregate of
67,500 shares of the Company's common stock at an exercise price of $3.00 per
share which may be exercised immediately and expire three years from the date
thereof.

2000 Acquisitions:

The Company acquired three companies during 2000. Payment of the
aggregate purchase price for these acquisitions of approximately $65,700
consisted of (i) 5,437,388 shares of the Company's common stock at a
weighted-average value of $9.81 per share (based on the average closing prices
of the common stock on the date of announcement of each acquisition); (ii)
$7,659 in cash (net of cash acquired of $484) including merger related costs and
$2,000 held in escrow; and (iii) the conversion of options to purchase 559,373
shares of common stock the vested portion of which were valued at approximately
$4,100 as of the date of acquisition. These acquisitions were accounted for
under the purchase method of accounting, and accordingly, the purchase price has
been allocated to the assets acquired and liabilities assumed based upon
estimates of fair market values at the dates of acquisition. The results of
operations of the acquired businesses are included in the consolidated results
of operations of the Company from their respective dates of acquisition. The
excess of the purchase price over the fair value of the acquired net assets
aggregating approximately $44,800 has been recorded as goodwill and has
historically been amortized on a straight-line basis over useful lives ranging
from three to four years during 2000 and 2001. The 2000 acquisitions are further
described below.

On June 28, 2000, the Company acquired Wynd Communications Corporation
("Wynd"), a provider of wireless telecommunications services for the hearing
impaired. The total purchase price of approximately $44,000 included the
issuance of 3,964,975 shares of common stock valued at approximately $39,500
($9.96 per share) and the payment of approximately $469 in merger related costs.
Under the terms of the merger agreement, 396,498 shares of the common stock
issued were held in escrow for a period of one year from the acquisition date.
In addition, outstanding options to acquire Wynd shares were converted into
options to purchase, at a weighted average exercise price of $1.61 per share,
477,722 shares of the Company's common stock. Options vested at the date of
acquisition with an estimated fair market value of approximately $4,000 were
included in the determination of the total purchase price. Based upon an
independent valuation report, the Company has recorded identified intangible
assets including trade names, developed technology, assembled work force and

F-16

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

customer lists aggregating approximately $19,500. The cost of the acquisition
exceeded the fair value of the acquired net assets by approximately $25,800
which has been recorded as goodwill and has historically been amortized on a
straight-line basis over 4 years during 2000 and 2001.

On August 31, 2000, the Company acquired Hotpaper.com, Inc.
("Hotpaper"), a provider of Web-based document automation software,
infrastructure and content. The total purchase price of approximately $10,100
included the issuance of 1,006,111 shares of common stock, valued at
approximately $8,800 ($8.75 per share), cash consideration of $750 and
approximately $356 in merger related costs. Under the terms of the merger
agreement, 100,612 shares of the common stock issued were held in escrow for a
period of one year from the acquisition date. In addition, outstanding options
to acquire Hotpaper shares were converted into options to purchase, at a
weighted average exercise price of $0.59 per share, 81,651 shares of the
Company's common stock. Options vested at the date of acquisition with an
estimated fair market value of approximately $147 were included in the
determination of the total purchase price. Based upon an independent valuation
report, the Company recorded identified intangible assets including developed
technology and assembled work force aggregating approximately $3,000. The cost
of the acquisition exceeded the fair value of the acquired net assets by
approximately $7,000 which has been recorded as goodwill and has historically
been amortized on a straight-line basis over 3 years during 2000 and 2001.

On November 7, 2000, the Company acquired certain assets and assumed
certain liabilities of Flash Creative Management, Inc. ("Flash"), a provider of
consulting services to business customers in the areas of business improvement,
strategy and redesign and in software development and integration. The total
purchase price of approximately $11,600 included the issuance of 466,302 shares
of common stock valued at $5,000 ($10.81 per share), cash consideration of
$6,000 and approximately $568 in merger related costs. Under the terms of the
purchase agreement, payment of $2,000 of the cash consideration was deferred for
a period of one year from the acquisition date and 69,945 shares of the common
stock issued were held in escrow for a period of one year from the acquisition
date. The cost of the acquisition exceeded the fair market value of the acquired
net assets by approximately $11,100 which has been recorded as goodwill and has
historically been amortized on a straight-line basis over 3 years during 2000
and 2001.

The following unaudited pro forma summary presents the combined results
of operations as if the 2000 acquisitions described above had occurred as of
January 1, 2000, and does not purport to be indicative of the results that would
have occurred had the transactions been completed as of that date or of results
that may occur in the future. The OutBack acquisition has been excluded as the
pro forma impact of such acquisition was not significant.

F-17

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Year ended
December 31,
2000
-----------------------

Net revenues...................................... $ 18,637
Net loss applicable to common stockholders........ (111,463)
Net loss per share-basic.......................... (2.39)
Net loss per share-diluted........................ (2.39)

5. GOODWILL AND OTHER INTANGIBLE ASSETS

Impairment Charge Recorded Under SFAS No. 142

The Company adopted SFAS No. 142, Goodwill and Other Intangible Assets
as of January 1, 2002. During the first half of 2002, the Company completed the
first of the required impairment tests of goodwill and indefinite lived
intangible assets as of January 1, 2002, and no adjustment to the carrying value
of goodwill was required at that time. During the third quarter of 2002, the
Company identified indicators of impairment, including recent changes in the
Company's 2002 and 2003 operating and cash flow forecasts, and changes in its
strategic plans for certain of its acquired businesses, which required that the
Company evaluate the appropriateness of the carrying value of its long-lived
assets, principally goodwill recorded upon the acquisitions of Wynd and
Hotpaper. A write-down of goodwill totaling $8,400 was recorded during the third
quarter of 2002, reflecting the amount by which the carrying amount of the
respective reporting units exceeded their respective fair values as determined
utilizing estimates of future discounted cash flows. The Company's annual
impairment test indicated that no further impairment had occurred in the fourth
quarter of 2002.

Impairment Charge Prior to Adoption of SFAS No. 142

During the year ended December 31, 2001, the Company identified
indicators of possible impairment of its long-lived assets, principally goodwill
and other acquired intangible assets recorded upon the acquisitions of Wynd,
Hotpaper and Flash. Such indicators included the continued deterioration in the
business climate for wireless Internet service providers, significant declines
in the market values of the Company's competitors in the wireless Internet
services industry, recent changes in the Company's 2002 operating and cash flow
forecasts, and changes in the Company's strategic plans for certain of its
acquired businesses. With the assistance of independent valuation experts, the
Company determined the fair value of the impaired long-lived assets for the
respective acquired entities. Fair value was determined primarily using the
discounted cash flow method. Write-downs of goodwill and other intangible assets
totaling $12,991 and $12,423, respectively, reflect the amount by which the
carrying amount of the assets exceeded their respective fair values.

F-18

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

The following tables reflect pro forma results of operations of the
Company, giving effect to the provisions of SFAS No. 142 for the years ended
December 31, 2001 and 2000:

Years Ended December 31,
2002 2001 2000
---------------------------------------------------------

Net loss applicable to common
stockholders, as reported $ (55,889) $ (120,271) $ (95,299)
Add back: amortization, net of tax of $-0- -- 12,794 4,691
---------------------------------------------------------
Pro forma net loss applicable to common
stockholders $ (55,889) $ (107,477) $ (90,608)
=========================================================

Basic net loss per share applicable to
common stockholders, as reported $ (1.04) $ (2.27) $ (2.19)
Add back: amortization, net of tax of $-0- -- .24 .10
---------------------------------------------------------
Pro forma $ (1.04) $ (2.03) $ (2.09)
=========================================================

Diluted net loss per share applicable to
common stockholders:
As reported $ (1.04) $ (2.25) $ (2.18)
Add back: amortization, net of tax of $-0- -- .24 .11
---------------------------------------------------------
Pro forma $ (1.04) $ (2.01) $ (2.07)
=========================================================

The following table summarizes the activity in Goodwill for the
periods indicated:

Years Ended December 31,
2002 2001
------------------------------

Beginning balance, net $14,593 $ 40,117
Goodwill acquired during the period -- 261
Impairment charge (8,400) (12,991)
Amortization -- (12,794)
------------------------------
Ending balance, net $ 6,193 $ 14,593
==============================

F-19

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

The following table summarizes Other Intangibles subject to
amortization at the dates indicated:

December 31, 2002 December 31, 2001
Gross Gross
Carrying Accumulated Carrying Accumulated
Amount Amortization Net Amount Amortization Net
------------------------------------------------------------------------------------------------------------

Trade Names 4,572 (3,651) 921 4,572 (3,282) 1,290
Technology 3,017 (2,741) 276 3,017 (2,557) 460
Customer Lists 2,258 (1,988) 270 2,258 (1,808) 450
Patents 1,000 (1,000) -- 1,000 (250) 750
------------------------------------------------------------------------------------------------------------
$ 10,847 $ (9,380) $ 1,467 $10,847 $ (7,897) $ 2,950
============================================================================================================

Aggregate future amortization expense for the above intangible assets
is estimated to be:

Years Ending December 31, 2003: $ 733
2004: 551
2005: 184

No write-downs of goodwill or other acquired intangible assets were
recorded during 2000.

6. IMPAIRMENT OF OTHER LONG-LIVED ASSETS

During the year ended December 31, 2002 and 2001, the Company
identified indicators of possible impairment of its other long-lived assets.
Such indicators included the continued deterioration in the business climate for
wireless Internet service providers, significant declines in the market values
of the Company's competitors in the wireless Internet services industry, recent
changes in the Company's 2002 operating and cash flow forecasts, and changes in
our strategic plans. Based on these factors, the Company initiated significant
reductions in its workforce resulting in impairment to its property and
equipment, principally software and furniture and fixtures. The impairment
charge was calculated assuming no salvage value to be obtained from the assets.
As a result, the Company recorded impairment charges of $5,582 and $97 during
the years ended December 31, 2002 and 2001, respectively, for assets no longer
in use.

7. SUPPLEMENTAL BALANCE SHEET INFORMATION

Merchandise inventories:

During 2001, the Company recorded a write-down of approximately $3,500
in order to reflect inventory at the lower of cost or market. The write-down

F-20

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

primarily relates to wireless modems supporting laptop and older PALM OS based
models for which sales were lower than expected and a charge for a lower of cost
to market adjustment related to other equipment which remained unsold.
Additionally, during 2002 and 2001 the Company recorded reserves for excess
inventory quantities of approximately $5,889 and $4,600, respectively. As of
December 31, 2002, the Company had applied all reserves for excess inventory
quantities to the related merchandise inventory.

Property, equipment and leasehold improvements:

Property, equipment and leasehold improvements consists of the
following:

December 31,
-----------------------------------------------
2002 2001
---------------------- -------------------

Furniture, fixtures and equipment.................... $ 1,483 $ 2,882
Computer equipment and software...................... 8,679 15,255
Leasehold improvements............................... 372 421
---------------------- -------------------
10,534 18,558
Less accumulated depreciation and amortization....... (5,849) (4,400)
---------------------- -------------------
$ 4,685 $ 14,158
====================== ===================

At December 31, 2002 and 2001, the Company leased equipment, furniture
and fixtures with a cost basis of $2,169 which is included in property,
equipment and leasehold improvements. Accumulated amortization on leased
equipment was $893 and $488 at December 31, 2002 and 2001, respectively.

Accrued expenses:

Accrued expenses consisted of the following:

December 31,
-----------------------------------------------
2002 2001
---------------------- -------------------
Carrier services..................................... $ 3,234 $ 1,313
Professional fees.................................... 1,501 1,680
Employee compensation................................ 486 1,558
Maintenance agreements............................... 250 --
Inventory purchases.................................. 150 31
Dealer commissions................................... 57 221
Marketing expenses................................... 30 592
Equipment and leasehold improvement purchases........ -- 1,775
Other................................................ 209 395
---------------------- -------------------
$ 5,917 $ 7,565
====================== ===================

F-21

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

8. COMMITMENTS AND CONTINGENCIES

On February 15, 2002, Eagle Truck Lines Inc. (a/k/a Air Eagle, Inc.)
filed suit against GoAmerica, Inc. seeking payment of $590, plus other damages,
expenses, interest and costs of suit. Air Eagle alleges that GoAmerica, as
successor in interest to Flash Creative Management, Inc. ("Flash"), failed to
perform its obligations under a consulting contract dated July 2, 1999 (the
"Contract"), by and between Flash and Air Eagle. Air Eagle alleges that
GoAmerica assumed the rights and liabilities under this Contract as a result of
its purchase of substantially all of the assets of Flash in November 2000. On
June 3, 2002, GoAmerica filed an amended answer and counterclaim, denying the
allegations of the complaint and seeking payment from Air Eagle of an amount not
less than $590, plus expenses, interest and costs of suit based on Air Eagle's
failure to pay for services rendered by Flash and GoAmerica under the Contract.
The Company intends to defend this action and pursue its counterclaim
vigorously.

In a separate but related matter, on July 31, 2002, GoAmerica filed
suit against Flash and certain former officers and shareholders of Flash (the
"Flash Defendants") in the United States District Court for the District of New
Jersey for violations of federal and state securities law and common law fraud
in connection with the sale of the assets of Flash to GoAmerica. In October
2002, each of the Flash Defendants filed answers to GoAmerica's complaint
denying all of the Company's charges, with one of the Flash Defendants adding
counterclaims against the Company and certain named officers alleging, among
other things, fraudulent misrepresentation, violations of state securities law
and unjust enrichment in excess of $1,000. The other Flash Defendants have been
granted leave to amend their answer to include substantially similar
counterclaims against the Company and Company officer defendants. The Company
has filed a motion to dismiss the Flash Defendants' counterclaims, and the Flash
defendants have filed cross-motions for judgment on the pleadings and for
summary judgment seeking dismissal of the Company's claims against them. The
Company intends to vigorously pursue its claims against Flash and the other
named defendants in this action, and to defend the counterclaims asserted.

The Company leases office facilities under operating leases which
expire at various dates through 2010. The Company has the option to renew
certain leases for an additional five year period.

F-22

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

The Company is obligated under capital leases for computer and office
equipment that expire at various dates through December 2004 with interest
ranging from 9.85% to 15.0%. Future minimum capital lease payments and future
minimum lease payments relating to office space under noncancelable operating
leases as of December 31, 2002 are as follows:

Capital
Year ending December 31, Leases Operating Leases
-------------------- -----------------------

2003................................................................ $382 $2,085
2004................................................................ 44 1,636
2005................................................................ -- 1,452
2006................................................................ -- 1,402
2007................................................................ -- 1,099
Thereafter.......................................................... -- 2,571
-------------------- -----------------------
Total minimum lease payments........................................ 426 $10,245
=======================
Less amount representing interest................................... (36)
--------------------
Present value of net minimum capital 390

lease payments....................................................
Less current portion of capital lease obligations................... (348)
--------------------
Obligations under capital lease, net of current portion............. $ 42
====================

During 2002, 2001 and 2000 total rent expense was approximately $3,282,
$3,730 and $1,992, respectively.

At December 31, 2002 and 2001, standby letters of credit totaling
approximately $606 and $781, respectively, were outstanding as security deposits
on certain facility leases. Such letters of credit expire on various dates
during 2003. As of December 31, 2002 and 2001, $648 and $815, respectively, of
cash held in the Company's bank accounts is restricted to secure these letters
of credit. In addition, at December 31, 2002 and 2001, the Company had $302 and
$581, respectively, in reserve accounts as it relates to its credit card
processor.

During 2002, the Company entered into employment agreements with
certain of its key executives which provide for fixed compensation and bonuses
based upon the Company's operating results, as defined. These agreements
generally continue until terminated by the employee or the Company and, under
certain circumstances, provide for salary continuance for a specified period.
The Company's maximum aggregate liability under the agreements, if these
employees were terminated by the Company, is approximately $1,695 at December
31, 2002.

On October 9, 2001, the Company entered into a termination agreement
with Geoworks Corporation, Telcordia Technologies, Inc. and David Rein under
which it paid $1,750 which related to the purchase of certain patent licenses
from Geoworks, the settlement of all accrued royalties, and other costs and fees
associated with the early termination of the Settlement Agreement and Mutual
Releases between the parties. As a result, the Company recorded an intangible
asset of $1,000 representing the value of the patent licenses purchased with the
balance charged to expense in 2001. The patent licenses are fully amortized as
of December 31, 2002.

F-23

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

9. BENEFIT PLAN

The Company has established a defined contribution plan under Section
401(k) of the Internal Revenue Code which provides for voluntary employee
contributions of up to 15 percent of compensation for employees meeting certain
eligibility requirements. The Company does not contribute to the plan.

10. REDEEMABLE CONVERTIBLE PREFERRED STOCK

On June 25, 1999, the Company sold 7,500 shares of Series A Redeemable
Convertible Preferred Stock ("Series A Preferred Stock") to various investors at
a purchase price of $1,000 per share, the estimated fair value at such date,
resulting in net proceeds of approximately $7,335. On August 30, 1999, the
Company sold an additional 2,500 shares of Series A Preferred Stock to various
investors at a purchase price of $1,000 per share, the estimated fair value at
such date, resulting in net proceeds of approximately $2,457. During November
1999, the Company sold an additional 500 shares of Series A Preferred Stock. The
purchase price of such shares was $1,000 per share, resulting in net proceeds of
$500. The Company recorded an adjustment to net loss applicable to common
stockholders of approximately $500 relating to the beneficial conversion feature
inherent in the November 1999 issuance. This amount was determined based upon
the excess of the estimated fair value of the Company's common stock into which
the Series A Preferred Stock was immediately convertible less the initial
conversion price of $1.31 per share and in accordance with EITF No. 98-5,
"Accounting for Convertible Securities with Beneficial Conversion Features or
Contingently Adjustable Conversion Ratios" limited to the amount of proceeds
received for the 500 shares of Series A Preferred Stock.

Each share of Series A Preferred Stock had a liquidation value of
$1,000 per share and was convertible into shares of common stock at an initial
conversion price of $1.31 per share, subject to adjustments, under certain
circumstances. On December 9, 1999, the Company's Board of Directors adopted a
resolution which provided for the conversion of the Series A Preferred Stock
into common stock upon the consummation of the Company's initial public
offering. To the extent not previously converted, upon the five year anniversary
of the issuance of the Series A Preferred Stock, a stockholder had the right to
request the Company to redeem any or all shares of Series A Preferred Stock held
at their then fair market value, as defined.

The Series A Preferred Stock paid no dividends; however, such
stockholders were entitled to participate in the event dividends were paid to
the holders of the Company's common stock.

The holders of the Series A Preferred Stock voted together with all
other classes of stock on all actions taken by the stockholders of the Company
as a single class. Each holder of Series A Preferred Stock was entitled to that
number of votes such holder would be entitled to if the holder had converted the
shares of Series A Preferred Stock into shares of common stock.

F-24

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

The holders of the Series A Preferred Stock had registration rights
under an agreement dated June 25, 1999, which provided for the registration of
common stock held by such stockholders within the periods specified by such
agreements.

The holders of the Series A Preferred Stock had anti-dilution rights
granted pursuant to an agreement dated August 30, 1999, which allowed such
stockholders to purchase additional securities of the Company upon the issuance
or sale of certain equity instruments, as defined.

In January 2000, the Company sold 648,057 shares of its Series B
Redeemable Convertible Preferred Stock ("Series B Preferred Stock") for
aggregate net proceeds of approximately $24,637. Each share of the Series B
Preferred Stock had a liquidation value of $40.12 per share and was convertible
at any time at the option of the holder into eight shares of common stock,
subject to adjustments, under certain circumstances. The Series B Preferred
Stock was subject to automatic conversion upon the completion by the Company of
a qualified initial public offering, as defined, of its common stock. To the
extent not converted, commencing August 30, 2004 a holder of Series B Preferred
Stock had the right to require the Company to redeem any or all of the shares of
Series B Preferred Stock held at their then fair market value, as defined. The
Series B Preferred Stock paid no dividends; however, such stockholders were
entitled to participate in the event dividends were paid on the Company's common
and preferred stock. The Series B Preferred Stock had voting and registration
rights similar to those of the Company's Series A Preferred Stock. In connection
with the sale of the Series B Preferred Stock, the Company paid to its financial
advisors certain cash consideration and issued approximately 243,266 shares of
its common stock. Based on the beneficial conversion terms of the Series B
Preferred Stock, assuming an initial public offering price of $15.00 per share
the Company recorded an adjustment to net loss applicable to common stockholders
of approximately $21,000 at the date of issuance as a beneficial conversion in
accordance with EITF 98-5.

11. STOCKHOLDERS' EQUITY

During 1998, in conjunction with the sale of certain shares of its
common stock, the Company issued to the purchasers, warrants to purchase an
aggregate of 891,792 additional shares of the Company's common stock. Exercise
prices under the warrants range from $1.23 per share to $1.93 per share. The
warrants were exercisable at the date of issue and expire at various dates
through January 2003. As of December 31, 2002, 438,416 of these warrants remain
outstanding.

In connection with certain equity financings during 1998, two of the
Company's principal shareholders issued to an existing investor in the Company,
warrants to purchase 408,160 currently outstanding shares of the Company's
common stock owned by the principal shareholders at an exercise price of $.92
per share. Such warrants were exercisable at the date of grant and expire on
February 6, 2003. As of December 31, 2002, none of these warrants remain
outstanding.

During May 1999, the Company issued to certain stockholders warrants to
purchase 113,976 shares of the Company's common stock at a price of $.00125 per
share. These warrants were issued to settle the Company's obligations based upon

F-25

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

claims by certain stockholders arising from the sale of certain common stock.
Also, as part of this settlement, two of the Company's principal stockholders
issued options to purchase 113,848 currently outstanding shares of the Company's
common stock owned by the principal stockholders at an exercise price of $.00125
per share. As a result of these agreements and the related warrant and option
issuances by both the Company and the principal stockholders, the Company
recorded a non-cash charge of $297 during 1999 based on the estimated fair value
of the warrants and options on the date of issuance. Such fair value was
determined to equal the fair value of the underlying common stock. The options
issued by the principal stockholders have been accounted for as a capital
contribution.

In connection with the issuance of certain shares of its common stock
during 1998, the Company agreed to issue additional shares in the event certain
subscriber levels were not achieved. To satisfy its obligation, in May 1999, the
Company issued warrants to purchase 435,024 shares of its common stock at a
price of $.00125 per share.

The warrants and options described in the two immediately preceding
paragraphs were exercisable at the date of grant and were exercised as of
December 31, 2000.

During the fourth quarter of 1999, the Company sold an additional
1,871,008 shares of its common stock to certain existing common stockholders in
connection with the exercise of anti-dilution rights granted to them upon their
initial purchase of common stock. The net proceeds to the Company were
approximately $1,882.

On April 12, 2000, the Company consummated an initial public offering
of 10,000,000 shares of its common stock at a price to the public of $16.00 per
share, all of which shares were issued and sold by the Company. Upon closing of
the initial public offering, all issued and outstanding shares of Series A
Preferred Stock and Series B Preferred Stock were converted to shares of common
stock.

On August 31, 2000, the Company granted Research in Motion Limited, a
supplier of wireless devices and related software, a warrant to purchase 333,000
shares of the Company's common stock at $16.00 per share as partial
consideration for certain obligations pursuant to certain marketing and
strategic alliance agreements. The warrant is exercisable one year after the
date of grant and expires in three years. As of December 31, 2000, the warrant
had an estimated fair market value of approximately $526 of which approximately
$281 was recognized by the Company during 2000 as sales and marketing expense.
During 2001, $233 was recognized by the Company as a reduction to sales and
marketing expense, as a result of the remeasurement of the fair value of this
warrant. Such warrant remains outstanding as of December 31, 2002.

On November 14, 2000, the Company granted Dell Ventures, L.P., an
affiliate of Dell Products, a warrant to purchase 563,864 shares of the
Company's common stock at a price of $16.00 per share as partial consideration
for certain obligations pursuant to a product distribution agreement. This
warrant was immediately exercisable at the date of grant and expires in three

F-26

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

years. The warrant had an estimated fair market value at the date of grant of
approximately $2,300 of which approximately $1,500 and $777 was recognized by
the Company during 2001 and 2000, respectively, as sales and marketing expense.
Such warrant remains outstanding as of December 31, 2002.

During January 2001, the Company entered into a service agreement with
Sony Electronics Inc. with an initial term of one year. In conjunction with the
agreement, the Company issued a warrant to purchase 500,000 shares of the
Company's common stock at a price of $16.00 per share. Such warrant was
exercisable at the date of grant and has a three year term. The agreement also
requires the Company to provide up to $3,500 of marketing funds. During 2001,
the Company incurred a non-cash sales and marketing charge of $765 as a result
of the issuance. Such warrant remains outstanding as of December 31, 2002.

As of December 31, 2002, the Company had reserved shares of common
stock for issuance as follows:

Exercise of common stock options............................. 11,767,339
Exercise of common stock purchase warrants................... 1,902,780
Employee stock purchase plan................................. 3,914,764

12. STOCK OPTION PLANS AND OTHER STOCK-BASED COMPENSATION

On August 3, 1999, the Company adopted the GoAmerica Communications
Corp. 1999 Stock Option Plan. This plan provided for the granting of awards to
purchase shares of common stock. No further options will be made under the
GoAmerica Communications Corp. 1999 Stock Option Plan.

In December 1999, the Company's Board of Directors adopted the
GoAmerica, Inc. 1999 Stock Plan (the "Plan") as a successor plan to the
GoAmerica Communications Corp. 1999 Stock Option Plan, pursuant to which
4,800,000 additional shares of the Company's common stock have been reserved for
issuance to selected employees, non-employee directors and consultants. In May
2001, the Company's shareholders approved an increase in the maximum number of
shares issuable under the Plan from 4,800,000 to 10,624,743 shares.

Under the terms of the Plan, a committee of the Company's Board of
Directors may grant options to purchase shares of the Company's common stock to
employees and consultants of the Company at such prices as may be determined by
the committee. The Plan provides for award grants in the form of incentive stock
options and non-qualified stock options. Options granted under the Plan
generally vest annually over 4 years and expire after 10 years.

F-27

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

The following table summarizes activity on a combined basis for the
plans during 2002, 2001 and 2000:

Number of Weighted-Average
Options Exercise Price
---------------- ------------------

Outstanding at January 1, 2000............................................ 2,440,008 .92
Granted................................................................... 3,581,523 8.34
Exercised................................................................. (125,277) 1.41
Cancelled................................................................. (150,700) 11.81
----------------
Outstanding at December 31, 2000.......................................... 5,745,554 5.26
Granted................................................................... 1,095,310 1.78
Exercised................................................................. (369,642) .73
Cancelled................................................................. (376,067) 8.51
----------------
Outstanding at December 31, 2001.......................................... 6,095,155 4.70
Granted................................................................... 5,796,214 .83
Exercised................................................................. (231,018) .50
Cancelled................................................................. (2,436,080) 5.04
----------------
Outstanding at December 31, 2002.......................................... 9,224,271 2.22
================
Exercisable at December 31, 2002.......................................... 4,264,247 2.74
================
Exercisable at December 31, 2001.......................................... 3,354,112 3.56
================
Exercisable at December 31, 2000.......................................... 1,859,278 1.84
================
Available for grant at December 31, 2002.................................. 2,543,068 --
================
The following table summarizes information about fixed price stock
options outstanding at December 31, 2002:

Outstanding Exercisable
------------------------------------------------------- --------------------------------------
Weighted-
Average Weighted-
Range of Exercise Number Weighted- Average Remaining Number Average Exercise
Prices Outstanding Exercise Price Contractual Life Exercisable Price
- ------------------- ---------------- ------------------ ------------------- ------------------ -------------------
$.25--.33 3,526,374 $.29 9.9 years 836,276 $.29
.45--.56 1,005,069 .56 7.4 years 680,286 .56
.71--1.06 508,235 1.02 6.9 years 359,776 1.04
1.31--1.96 2,110,718 1.76 8.7 years 957,782 1.64
2.03--2.44 494,173 2.11 7.3 years 379,067 2.12
5.02--7.50 1,064,000 5.58 7.2 years 782,542 5.46
7.97--8.27 41,752 7.98 7.8 years 20,876 7.98
15.00--16.00 473,950 15.62 7.4 years 247,642 15.62

F-28

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

For certain options granted during 2000 and 1999, the Company has
recorded pursuant to APB No. 25 approximately $8,457 and $7,799 of deferred
compensation expense representing the difference between the exercise price and
the market value of the common stock on the date of grant. These amounts are
being amortized over the vesting period of each option and amounted to
approximately $2,315, $3,971 and $8,258 during the years ended December 31,
2002, 2001 and 2000, respectively.

During 1996, the Company granted an employee a warrant to purchase up
to 320,000 shares of the Company's common stock at $0.44 per share, an amount in
excess of the estimated fair value at the date of grant. During 2000, the
warrant was exercised on a cashless basis in accordance with the terms of the
original agreement resulting in the issuance of 192,975 shares of common stock.
As a result, the Company recorded a compensation charge of approximately $4,980
representing the difference between the exercise price and the market value of
the common stock as of the date of exercise.

The following table discloses, for the year ended December 31, 2002,
2001 and 2000, the number of options granted and certain weighted-average
information:

Year ended December 31,
--------------------------------------------------------------------------------------------------------------
2002 2001 2000
---------------------------------- --------------------------------- ---------------------------------
Number of Fair Exercise Number of Fair Exercise Number Fair Exercise
Options Value Price Options Value Price of Options Value Price
------- ----- ----- ------- ----- ----- ---------- ----- -----

Exercise price
greater than
market price......... -- $ -- $ -- -- $ -- $ -- 37,000 $2.97 $16.00
Exercise price
equals market price..5,796,214 0.83 0.83 1,095,310 1.08 1.78 2,137,150 7.32 11.08
Exercise price
less than market
price................ -- -- -- -- -- -- 1,407,373 10.64 3.60

Pro forma information regarding net income and earnings per share is
required by SFAS 123, and has been determined as if the Company had accounted
for its employee stock options under the fair value method of SFAS 123 (see note
1). For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The fair value
for these options was estimated at the date of grant using the Black-Scholes
option pricing model with the following assumptions for 2002, 2001 and 2000:
weighted-average risk-free interest rate of 4.03%, 5.86% and 6.20% respectively;
expected volatility of 0.80; no dividends; and a weighted-average expected life
of the options of 3.0 years, 4.0 years and 4.2 years, respectively. There were
no options granted prior to August 1999.

In December 1999, the Company's Board of Directors adopted the Employee
Stock Purchase Plan effective upon the Company's initial public offering of its
common stock which was completed on April 12, 2000. The Company initially
reserved 4,000,000 shares of common stock for issuance under the plan. During
2002, there were 85,236 shares sold pursuant to the plan.

F-29

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

13. INCOME TAXES

Significant components of the Company's deferred tax assets and
liabilities are as follows:

December 31,
-----------------------------------------
2002 2001
------------------- -------------------

Deferred tax assets:
Net operating loss carryforwards.................................... $ 70,500 $ 53,545
Deferred compensation............................................... 7,756 6,877
Reserves and accruals............................................... 1,298 2,814
Amortization of Goodwill............................................ 3,900 3,900
Other............................................................... 3,181 2,614
Less valuation allowance................................................ (86,050) (68,887)
------------------- -------------------
Deferred tax assets..................................................... 585 863
Deferred tax liabilities:
Intangible assets................................................... (585) (863)
Property, equipment and leasehold improvements...................... -- --
------------------- -------------------
Net deferred tax assets................................................. $ -- $ --
=================== ===================

A reconciliation setting forth the differences between the effective tax
rate of the Company and the U.S. statutory rate is as follows:

Year ended December 31,
--------------------------------------------------------
2002 2001 2000
---------------- --------------- -------------
Statutory federal income tax (benefit) at 34%............... $ (19,002) $ (41,089) $ (22,016)
State income tax (benefit), net of federal benefit.......... (1,911) (3,752) (3,597)
Non-deductible expenses, primarily impairment of goodwill... 4,130 2,603 1,425
Increase in valuation allowance............................. 16,347 41,660 24,188
---------------- --------------- -------------
Total....................................................... $ (436) $ (578) $ --
================ =============== =============

The state tax benefits recorded in 2002 and 2001 of $436 and $578,
respectively, are attributable to the Company's sale of certain state net
operating loss carryforwards.

At December 31, 2002, the Company had a federal and state net operating
loss ("NOL") carryforward of approximately $178,500 and $163,400, respectively.
The federal NOL carryforwards expire beginning in 2011 and state NOL's beginning
in 2003. The Tax Reform Act of 1986 enacted a complex set of rules limiting the
potential utilization of net operating loss and tax credit carryforwards in

F-30

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

periods following a corporate "ownership change." In general, for federal income
tax purposes, an ownership change is deemed to occur if the percentage of stock
of a loss corporation owned (actually, constructively and, in some cases,
deemed) by one or more "5% shareholders" has increased by more than 50
percentage points over the lowest percentage of such stock owned during a
three-year testing period. During 1999, such a change in ownership occurred. As
a result of the change, the Company's ability to utilize certain of its net
operating loss carryforwards will be limited to approximately $1,400 of taxable
income, per year. In addition, the Company acquired additional net operating
losses through its acquisitions of Wynd and Hotpaper. The Company believes that
an ownership change has occurred with respect to these entities. The effect of
an ownership change would be the imposition of an annual limitation on the use
of net operating loss carryforwards attributable to periods before the change.
The Company has not performed a detailed analysis to determine the amount of the
potential limitations.

F-31

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

14. QUARTERLY FINANCIAL DATA (UNAUDITED)

The table below summarizes the Company's unaudited quarterly operating
results for years ended December 31, 2002 and 2001.

Quarter Ended

2002 March 31 June 30 September 30 December 31
--------------- -------------- ---------------- -----------------

Net revenue and other income................. $ 10,443 $ 9,580 $ 9,100 $ 6,789
Cost of revenue.............................. (9,308) (8,510) (8,165) (6,062)
Operating expenses........................... (11,846) (10,757) (9,878) (8,095)
Depreciation and amortization expenses....... (1,605) (1,662) (1,645) (913)
Impairment of long-lived assets.............. -- -- (13,695) (287)
Interest income, net......................... 128 58 26 (21)
Benefit from income taxes.................... -- -- -- 436
Net (loss)................................... $ (12,188) $ (11,291) $ (24,257) $ (8,153)
Net (loss) applicable to common stockholders. $ (12,188) $ (11,291) $ (24,257) $ (8,153)
Net (loss) per common share:
- Basic.................................. $ (0.23) $ (0.21) $ (0.45) $ (0.15)
- Diluted................................ $ (0.23) $ (0.21) $ (0.45) $ (0.15)

2001 March 31 June 30 September 30 December 31
--------------- -------------- ---------------- -----------------

Net revenue and other income................. $ 7,999 $ 9,770 $ 10,617 $ 10,628
Cost of revenue.............................. (5,394) (14,600) (11,179) (15,334)
Operating expenses........................... (17,119) (19,624) (17,995) (14,821)
Depreciation and amortization expenses....... (5,097) (5,250) (5,361) (5,677)
Impairment of long-lived assets.............. -- -- -- (25,511)
Interest income, net......................... 1,479 842 519 259
Benefit from income taxes.................... -- -- -- 578
Net (loss)................................... $ (18,132) $ (28,862) $ (23,399) $ (49,878)
Net (loss) applicable to common stockholders. $ (18,132) $ (28,862) $ (23,399) $ (49,878)
Net (loss) per common share:
- Basic.................................. $ (0.34) $ (0.55) $ (0.44) $ (0.94)
- Diluted................................ $ (0.34) $ (0.54) $ (0.44) $ (0.94)

F-32

GOAMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

15. SUPPLEMENTAL CASH FLOW INFORMATION

The table below presents the Company's supplemental disclosure of cash
flow information for the years ended December 31, 2002, 2001 and 2000.

YEARS ENDED DECEMBER 31,
---------------------------------------------------------
2002 2001 2000
------------------- ------------------- -----------------

Supplemental disclosure of cash flow information:
Interest paid.............................................. $ 91 $ 169 $ 34

Non-cash investing and financing activities:
Acquisition of equipment through capital leases............ -- 1,182 615
Issuance of common stock purchase warrants in exchange for
sales and marketing services............................ -- 765 2,857

Purchase of businesses, net of cash acquired:

Working capital surplus (deficit), net of cash acquired $ -- $ 40 $ (2,886)
Property, equipment and leasehold improvements........ -- 1 822
Goodwill.............................................. -- 152 44,794
Trade names........................................... -- -- 10,900
Other intangibles..................................... -- -- 11,600
Other assets.......................................... -- -- 33
Non-current liabilities............................... -- -- (131)
Common stock, options and warrants issued............. -- 148 57,472

F-33

SCHEDULE II
GOAMERICA, INC.
FINANCIAL STATEMENT SCHEDULE

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

BALANCE AT ADDITIONS: BALANCE AT
BEGINNING OF CHARGED TO COSTS END OF
PERIOD AND EXPENSES DEDUCTIONS PERIOD
------------------ ------------------- ------------------ -------------

YEAR ENDED DECEMBER 31, 2002
Allowance for doubtful accounts $ 2,675 $ 3,221 $ 2,478(1) $ 3,418
Inventory Reserve 4,740 5,889 10,629(3) --
Sales allowances, discounts & returns 1,378 2,686 3,551(2) 513

YEAR ENDED DECEMBER 31, 2001
Allowance for doubtful accounts $ 388 $ 4,197 $ 1,910(1) $ 2,675
Inventory Reserve 117 4,623 -- 4,740
Sales allowances, discounts & returns 245 2,480 1,347(2) 1,378

YEAR ENDED DECEMBER 31, 2000
Allowance for doubtful accounts $ 75 $ 728 $ 415(1) $ 388
Inventory Reserve -- 117 -- 117
Sales allowances, discounts & returns -- 820 575(2) 245

(1) Uncollectible accounts written-off, net of recoveries.
(2) Returns and discounts charged to reserve.
(3) Inventory discounts charged to reserve.

F-34