UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2002

Commission file number:
000-27021

iGo CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE 94-3174623
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)

9850 DOUBLE R BLVD.
RENO, NEVADA 89521
(Address of principal executive offices)

(775) 746 - 6140
(Registrant's telephone number, including area code)

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 than 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 |_|

Shares outstanding of each of the registrant's
classes of common stock as of July 31, 2002

Class Outstanding as July 31, 2002
----- ----------------------------
Common stock, $0.001 par value 25,388,938

iGo CORPORATION

FORM 10-Q

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

ITEM 1 UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS AS OF
JUNE 30, 2002 AND DECEMBER 31, 2001 3

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 2002 AND 2001 4

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
SIX-MONTH PERIODS ENDED JUNE 30, 2002 AND 2001 5

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 6

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS 14

FACTORS THAT MAY AFFECT FUTURE RESULTS 21

ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 31

PART II OTHER INFORMATION

ITEM 1 LEGAL PROCEEDINGS 31

ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS 32

ITEM 3 DEFAULTS UPON SENIOR SECURITIES 33

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS 33

ITEM 5 OTHER INFORMATION 33

ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K 33

SIGNATURES 34

iGo CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

DOLLARS IN THOUSANDS JUNE 30, DECEMBER 31,
2002 2001
------------ ------------

ASSETS

Current assets:
Cash and cash equivalents ....................... $ 3,426 $ 5,846
Accounts receivable, net ........................ 2,471 4,212
Notes receivable, net ........................... 264 236
Inventory ....................................... 1,052 2,480
Prepaid expenses ................................ 450 654
------------ ------------
Total current assets ....................... 7,663 13,428
Property and equipment, net .......................... 1,744 2,378
Goodwill, net ........................................ -- 591
Intangible assets, net ............................... 573 650
Other assets ......................................... 38 509
------------ ------------
Total ................................. $ 10,018 $ 17,556
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable ................................ $ 903 $ 1,135
Accrued liabilities ............................. 2,105 2,936
Accrued liability related to business acquisition -- 972
Current portion of capital lease obligations
and long-term debt ......................... 10 137
Short-term borrowings ........................... -- 54
------------ ------------
Total current liabilities .................. 3,018 5,234
Long-term portion of capital lease obligations
and long-term debt ............................... 14 19
------------ ------------
Total liabilities .......................... 3,032 5,253
------------ ------------

Commitments and contingencies (Note 8)

Stockholders' equity:
Common stock, $0.001 par value; 50,000,000
shares authorized; 25,388,938 and
23,353,085 shares issued and outstanding 25 23
Additional paid-in capital ...................... 88,349 87,630
Deferred compensation ........................... (69) (126)
Receivable from stockholder ..................... (402) (388)
Accumulated deficit ............................. (80,917) (74,836)
------------ ------------
Total stockholders' equity ................. 6,986 12,303
------------ ------------
Total ................................. $ 10,018 $ 17,556
============ ============

The accompanying notes are an integral part of these condensed
consolidated financial statements.

iGo CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

DOLLARS IN THOUSANDS (EXCEPT PER SHARE DATA) THREE-MONTH PERIODS SIX-MONTH PERIODS
ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2002 2001 2002 2001
------------- ------------- ------------- -------------

Revenues:
Net product revenue ............................... $ 4,500 $ 7,747 $ 9,267 $ 17,383
Cost of goods sold ......................................... 3,107 6,730 6,154 14,466
------------- ------------- ------------- -------------
Gross profit ............................................... 1,393 1,017 3,113 2,917
------------- ------------- ------------- -------------

Operating expenses:
Sales and marketing ................................... 1,864 3,138 3,702 7,034
Product development ................................... 382 880 817 1,723
General and administrative ............................ 2,325 2,026 4,155 4,284
Merger and acquisition costs, including amortization
of goodwill and other purchased intangibles ......... -- 853 -- 1,705
------------- ------------- ------------- -------------
Total operating expenses ......................... 4,571 6,897 8,674 14,746
------------- ------------- ------------- -------------

Loss from operations ....................................... (3,178) (5,880) (5,561) (11,829)

Other income/(expense), net ................................ 44 (103) 71 240
------------- ------------- ------------- -------------

Loss before provision for income taxes and cumulative effect
of change in accounting principle ....................... (3,134) (5,983) (5,490) (11,589)
Provision for income taxes ................................. -- -- -- --
------------- ------------- ------------- -------------
Loss before cumulative effect of change in accounting
principle ............................................... (3,134) (5,983) (5,490) (11,589)
Cumulative effect of change in accounting
principle ............................................... -- -- (591) --
------------- ------------- ------------- -------------
Net loss ................................................... $ (3,134) $ (5,983) $ (6,081) $ (11,589)
============= ============= ============= =============
Loss per share - basic and diluted:
Loss before cumulative effect of change in accounting
principle ...................................... $ (0.12) $ (0.26) $ (0.22) $ (0.50)
Cumulative effect of change in accounting principle ... -- -- (0.03) --
------------- ------------- ------------- -------------
Net loss .......................................... $ (0.12) $ (0.26) $ (0.25) $ (0.50)
============= ============= ============= =============

Weighted-average shares outstanding:
Basic and diluted ..................................... 25,388,086 23,323,880 24,567,159 23,311,485
============= ============= ============= =============

The accompanying notes are an integral part of these condensed consolidated financial statements.

iGo CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

DOLLARS IN THOUSANDS SIX-MONTH PERIODS ENDED
JUNE 30, JUNE 30,
2002 2001
--------- ---------

Cash flows from operating activities:
Net loss .......................................................... $ (6,081) $(11,589)
Adjustments to reconcile net loss to net cash used in operating
activities:
Compensation expense related to stock options ................... 44 106
Accrued interest on stockholder note receivable ................. (14) (21)
Stock issued as payment of expense .............................. 11 --
Provisions for bad debt and inventory ........................... 764 2,329
Loss on disposition of assets ................................... -- 144
Depreciation and amortization ................................... 743 760
Amortization of goodwill ........................................ -- 1,705
Cumulative effect of change in accounting principle ............. 591 --
Changes in:
Accounts and notes receivable ................................. 1,430 575
Inventory ..................................................... 1,024 510
Prepaid expenses and other assets ............................. 206 249
Accounts payable and accrued liabilities ...................... (670) (3,871)
--------- ---------
Net cash used in operating activities ....................... (1,952) (9,103)
--------- ---------
Cash flows from investing activities:
Acquisition of business ........................................... (250) --
Acquisition of property and equipment ............................. (33) (131)
--------- ---------
Net cash used in investing activities ....................... (283) (131)
--------- ---------
Cash flows from financing activities:
Principal payments on short-term borrowings and capital leases .... (186) (262)
Stockholder note receivable ....................................... -- (306)
Proceeds from exercise of stock options ........................... 1 19
--------- ---------
Net cash used in financing activities ....................... (185) (549)
--------- ---------
Net decrease in cash and cash equivalents ........................... (2,420) (9,783)
Cash and cash equivalents, beginning of period ...................... 5,846 20,321
--------- ---------
Cash and cash equivalents, end of period ............................ $ 3,426 $ 10,538
========= =========
Supplemental disclosure of cash flows information:

Cash paid during the year for interest .......................... $ 14 $ 46
========= =========

Supplemental schedule of non-cash investing and financing activities:

Common stock issued in connection with acquisition .............. $ 723 $ --
========= =========

The accompanying notes are an integral part of these condensed consolidated financial statements.

iGo CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

iGo Corporation (formerly Battery Express, Inc.) (the "Company") was
incorporated in California in 1993 and is headquartered in Reno, Nevada. iGo
Corporation (NASDAQ: IGOC) is a leading provider of parts and accessories for
mobile technology products such as notebooks, cell phones and wireless devices.
iGo's mission is to keep the mobile professional powered up and connected
anywhere they go.

BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements for the
three and six-month periods ended June 30, 2002 and 2001 have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain interim information and
note disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed. In the opinion of management, all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of financial condition, results of operations, and cash flows have
been included. The results of operations for the interim periods should not be
considered indicative of results for any other interim period or for a full
calendar year. These financial statements should be read in conjunction with the
consolidated financial statements, and notes thereto, in the Company's Form 10-K
for the year ended December 31, 2001, as amended.

The Company has experienced negative cash flows from operations of
$11.4 million, $30.0 million and $12.8 million for the years ended December 31,
1999, 2000 and 2001, respectively, and $2.0 million for the six-months ended
June 30, 2002. Recurring losses and negative cash flows from operations and
limited financing opportunities raise substantial doubt about the Company's
ability to continue as a going concern. With a targeted focus on high margin
core products and improved inventory control resulting in significantly reduced
excess and obsolete inventory charges the Company has been able to achieve
improved gross margins. Additionally, the Company has taken steps to reduce
costs through several initiatives including: further downsizing the workforce
and facility cost reductions resulting from a relocation of the Company's main
facility in Reno to a smaller, less costly facility in Reno.

The Company may need to raise additional funds before the end of 2002
in the event that it fails to generate sufficient cash from operations. The
Company has no commitments and is not seeking commitments for additional
financing. If the Company were to seek additional financing, there can be no
assurance that it would be successful in obtaining any additional financing on
terms acceptable to the Company or its stockholders. If the Company raises
additional funds through the issuance of equity securities or convertible debt
securities, its existing stockholders may experience significant dilution. In
the event that the Company fails to generate sufficient cash from operations and
is unable to secure additional financing from other sources, it is uncertain if
or for how long the Company will be able to continue operations.

PRINCIPLES OF CONSOLIDATION

The condensed consolidated financial statements include the accounts of
iGo Corporation and its wholly owned subsidiaries. The subsidiaries were formed
for specific transactions, such as acquisitions. All significant intercompany
balances and transactions have been eliminated in consolidation.

NET LOSS PER SHARE

Net loss per share--basic and diluted, is computed using the
weighted-average number of common shares outstanding during the period. Stock
options and warrants were not included in the computations because they would
have been antidilutive. The number of potentially dilutive shares that were not
included in weighted average shares outstanding were 1,646,123 and 2,047,092 for
the three and six-month periods ended June 30, 2002 and 2001, respectively.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect amounts reported in the
consolidated financial statements. Actual amounts could differ from those
estimates.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other
Intangible Assets". SFAS No. 142 changes the accounting for goodwill and
indefinite lived intangible assets from an amortization method to an impairment
only approach. Thus, amortization of goodwill, including goodwill recorded in
past business combinations, ceased upon adoption of SFAS No. 142 in January
2002. Amortization is still required for identifiable intangible assets with
finite lives. See Note 6.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." The standard supersedes the
current authoritative literature on impairments as well as disposal of a segment
of a business and is effective for fiscal years and interim periods beginning
after December 15, 2001. The Company therefore adopted SFAS No. 144 in January
2002. The Company periodically evaluates its long-lived assets for impairment.
Adoption of SFAS No. 144 did not have a material effect on the Company's
condensed consolidated financial statements.

In June 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard No. 146, Accounting for Costs
Associated with Exit or Disposal Activities ("SFAS No. 146"). SFAS No.146
addresses financial accounting and reporting for costs associated with exit or
disposal activities and nullifies Emerging Issues Task Force Issue No. 94-3,
Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (including Certain Costs Incurred in a Restructuring). SFAS
No. 146 requires that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred. A fundamental conclusion
reached by the FASB in this statement is that an entity's commitment to a plan,
by itself, does not create a present obligation to others that meets the
definition of a liability. SFAS No. 146 also establishes that fair value is the
objective for initial measurement of the liability. The provisions of this
statement are effective for exit or disposal activities that are initiated after
December 31, 2002, with early application encouraged. The Company has not yet
determined the impact of SFAS No. 146 on its financial position and results of
operations, if any.

2. ACCOUNTS RECEIVABLE

Accounts receivable consist of the following at June 30, 2002 and
December 31, 2001:

DOLLARS IN THOUSANDS JUNE 30, DECEMBER 31,
2002 2001
-------- --------

Trade receivables...................................................... $ 3,634 $ 5,353
Other current receivables.............................................. 390 482
Allowance for bad debts................................................ (1,553) (1,623)
-------- --------
Total accounts receivable, net.................................... $ 2,471 $ 4,212
======== ========

3. NOTES RECEIVABLE

Notes receivable consist of the following at June 30, 2002 and December
31, 2001:

DOLLARS IN THOUSANDS JUNE 30, DECEMBER 31,
2002 2001
-------- --------
Notes receivable....................................................... $ 714 $ 472
Allowance for doubtful notes receivable................................ (450) (236)
-------- --------
Total notes receivable, net....................................... $ 264 $ 236
======== ========

4. INVENTORY

Inventory consists of the following at June 30, 2002 and December 31,
2001:

DOLLARS IN THOUSANDS JUNE 30, DECEMBER 31,
2002 2001
-------- --------
Products on hand....................................................... $ 1,993 $ 4,315
Inventory reserve...................................................... (941) (1,835)
-------- --------
Total inventory................................................... $ 1,052 $ 2,480
======== ========

5. PROPERTY AND EQUIPMENT

Property and equipment consists of the following at June 30, 2002 and
December 31, 2001:

DOLLARS IN THOUSANDS JUNE 30, DECEMBER 31,
2002 2001
-------- --------
Leasehold improvements................................................. $ 416 $ 416
Furniture and equipment................................................ 2,036 2,034
Software............................................................... 1,997 1,966
Accumulated depreciation............................................... (2,705) (2,038)
-------- --------
Total property and equipment, net................................. $ 1,744 $ 2,378
======== ========

6. INTANGIBLE ASSETS AND GOODWILL

On January 1, 2002, the Company adopted SFAS No. 142, "Goodwill and
Other Intangible Assets" ("SFAS 142"), which establishes new accounting and
reporting requirements for goodwill and other intangible assets. Under this
accounting standard, goodwill and intangible assets with indefinite lives are no
longer subject to amortization but are tested for impairment at least annually.
Amortization is still required for identifiable intangible assets with finite
lives.

SFAS 142 also requires the completion of a transitional impairment test
at the date this accounting standard is initially applied. The Company recorded
a charge during the first quarter of 2002 of $591,000 as a result of completing
its transitional impairment test, and has recognized this loss as the effect of
a change in accounting principle. This charge was determined based on a
comparison of the fair value of the Company with its carrying amount, including
goodwill that resulted from prior business acquisitions. The fair value applied
in the comparison is based upon the purchase price established in the definitive
merger agreement the Company entered into with Mobility Electronics, Inc., which
agreement (as amended) provides for the acquisition of the Company by Mobility
(see Note 12). The results of the comparison and loss measurement indicated that
goodwill existing at the date of adoption of this accounting standard was fully
impaired. In connection with its adoption of SFAS 142, the Company reassessed
previously recognized intangible assets and determined that their classification
and useful lives were appropriate.

Goodwill consists of the following at June 30, 2002 and December 31,
2001:

DOLLARS IN THOUSANDS JUNE 30, 2002 DECEMBER 31, 2001
------------- -----------------

Aggregate amount acquired.......................................................... $ 15,706 $ 15,706
Less accumulated amortization recognized prior to adoption of SFAS 142.......... (5,658) (5,658)
Write-off of goodwill recognized prior to adoption of SFAS 142.................. (9,457) (9,457)
Charge recognized as a result of transitional goodwill impairment test.......... (591) --
--------- ---------
Net carrying amount........................................................... $ -- $ 591
========= =========

Changes in the carrying amount of goodwill for the six months ended
June 30, 2002 are as follows:

DOLLARS IN THOUSANDS

Balance as of January 1, 2002....................................................... $ 591
Charge recognized as a result of transitional goodwill impairment test.............. (591)
---------
Balance as of June 30, 2002......................................................... $ --
=========

Intangible assets consist of the following at June 30, 2002 and December
31, 2001:

(DOLLARS IN THOUSANDS) JUNE 30, 2002 DECEMBER 31, 2001
------------- -----------------
AVERAGE GROSS NET GROSS NET
LIFE CARRYING ACCUMULATED INTANGIBLE CARRYING ACCUMULATED INTANGIBLE
(YRS) AMOUNT AMORTIZATION ASSETS AMOUNT AMORTIZATION ASSETS
------------- ------------- ------------- ------------- ------------- ------------- -------------
Amortized intangible assets:

Domain names .......... 6 $ 640 $ (261) $ 379 $ 640 $ (226) $ 414
Trademarks ............ 9 239 (76) 163 239 (55) 184
Other ................ 7 100 (69) 31 100 (48) 52
------------- ------------- ------------- ------------- ------------- ------------- -------------
Total ............. $ 979 $ (406) $ 573 $ 979 $ (329) $ 650
============= ============= ============= ============= ============= ============= =============

Aggregate amortization expense for intangible assets totaled $76,000
and $58,000 for the six-month periods ended June 30, 2002 and 2001,
respectively. Estimated amortization expense for each of the five succeeding
years ended December 31 is as follows:

DOLLARS IN THOUSANDS
FISCAL YEAR
-----------
2002.................................................... $144
2003.................................................... 119
2004.................................................... 114
2005.................................................... 113
2006.................................................... 104

The following table adjusts the Company's net loss and net loss per share
for the adoption of SFAS 142:

IN THOUSANDS, EXCEPT PER SHARE DATA THREE-MONTH PERIODS ENDED SIX-MONTH PERIODS ENDED
JUNE 30,2002 JUNE 30,2001 JUNE 30,2002 JUNE 30,2001
------------ ------------ ------------ ------------

Reported net loss ............................. $ (3,134) $ (5,983) $ (6,081) $ (11,589)
Goodwill amortization ...................... -- 853 -- 1,705
------------ ------------ ------------ ------------
Adjusted net loss ............................. $ (3,134) $ (5,130) $ (6,081) $ (9,884)
============ ============ ============ ============

Reported net loss per share - basic and diluted $ (0.12) $ (0.26) $ (0.25) $ (0.50)
Goodwill amortization ...................... -- 0.04 -- 0.08
------------ ------------ ------------ ------------
Adjusted net loss ............................. $ (0.12) $ (0.22) $ (0.25) $ (0.42)
============ ============ ============ ============

7. OTHER ASSETS

Other assets consists of the following at June 30, 2002 and December
31, 2001:

DOLLARS IN THOUSANDS JUNE 30, DECEMBER 31,
2002 2001
----------- -----------
Asset held for sale..................... $ -- $ 330
Other................................... 38 179
----------- -----------
Total other assets................. $ 38 $ 509
=========== ===========

8. LEGAL PROCEEDINGS

From time to time the Company is involved in litigation incidental to
the conduct of its business. The Company is not currently a party to any lawsuit
or arbitration proceeding the outcome of which the Company believes will have a
material adverse effect on its financial position, results of operations or
liquidity.

The Securities and Exchange Commission has entered a formal order of
private investigation concerning the events underlying the Company's revisions
of its fiscal 2000 operating results based on adjustments to fourth quarter 2000
revenue, which results were announced and revised in certain press releases
issued in January and March of 2001. In connection with its investigation, the
Commission will also be reviewing the restatement of the Company's financial
statements set forth in the Company's 2001 Annual Report on Form 10-K, as
amended, and certain related accounting, sales and organizational matters. The
Company has been cooperating fully with the Staff of the Commission in its
investigation and to date the Staff has made no determinations that the Company
is aware of with respect to this investigation.

On June 21, 2002, in the United States District Court, Central District
of California, Comarco Wireless Technologies, Inc. filed a lawsuit against the
Company and its wholly owned subsidiary Xtend Micro Products, Inc. The suit
alleges that the Company and Xtend are offering products for sale that infringe
upon two United States patents issued to Comarco. The suit seeks injunctive
relief, monetary damages, and costs and attorney's fees. The Company is
investigating the facts surrounding these claims and consulting with legal
counsel for Mobility regarding this matter, as Mobility is currently involved in
litigation with Comarco over similar patent issues. While the Company intends to
vigorously defend itself in this matter, it cannot be certain that its defense
will be successful, and its business could be harmed if it is unsuccessful.

On June 14, 2002, in the United States District Court, Northern Nevada,
the Company filed a lawsuit against Mark Rapparport and XMicro Holding Company,
Inc., seeking declaratory relief and alleging intentional interference with
prospective advantage. This lawsuit was filed in response to a letter received
from counsel for Rapparport and XMicro which made various allegations regarding
a previous settlement agreement between the parties, the Company's acquisition
of Xtend Micro Products and certain other matters. In the lawsuit the Company
sought an order stating that the settlement agreement is valid and enforceable,
an order preventing the defendants from further attempting to interfere with the
pending merger, monetary damages, and costs and attorney's fees. Effective July
18, 2002, the parties entered into a settlement agreement regarding these
matters. In connection with this settlement, presuming that the merger is
consummated, iGo will pay such parties $1,850,000 in cash, all active litigation
between the parties will be dismissed and all claims and demands terminated and
released. Mr. Rapparport has agreed to vote his 3,531,199 shares in favor of the
merger, but prior to the consummation of the merger, such shares will be
cancelled and he will not receive distributions of any of the merger
consideration. If the merger agreement is terminated or the merger does not
occur prior to October 31, 2002, the parties' respective obligations and
releases under the settlement agreement will terminate, Mr. Rapparport will keep
his shares and will forfeit all but certain portions of the settlement payment.
If the merger is terminated prior to September 3, 2002 and no stockholder
meeting to approve the merger has taken place by that time, Mr. Rapparport will
retain $350,000 of the settlement payment. If the merger is terminated after
September 3, 2002 or otherwise following the Company's stockholder meeting, Mr.
Rapparport will retain $250,000 in addition to the previously retained payment.
If the merger has not occurred by October 1, 2002 and the Company and Mobility
choose to extend the merger agreement, but the merger does not occur by October
31, 2002, then Mr. Rapparport would retain $500,000 in addition to the
previously retained payments. Mobility has agreed to reimburse the Company for
one-half of any payments retained by such stockholder in the event the agreement
is terminated or the merger does not occur by the deadline. Related to this
agreement, the Company recorded a charge, representing the cost of settlement,
of approximately $479,000 to general and administrative expense in the second
quarter of 2002.

9. BUSINESS ACQUISITION

On August 29, 2000, the Company acquired substantially all the assets
of Xtend Micro Products, Inc., for $2,500,000 in cash and 2,268,451 shares of
iGo Common Stock. Of such shares, 1,896,574 shares were subject to an earn-out
provision based on the post-closing operating performance of the Xtend business
unit. These earn-out provisions were met. Xtend also had the opportunity to earn
up to an additional $2,500,000 in a combination of iGo Common Stock and/or cash
(at iGo's election) for exceptional post-closing operating performance. In
August 2001, we advanced $500,000 to XMicro Holding Company against anticipated
payments that would be due to XMicro pursuant to the August 2000 Asset Purchase
Agreement. On March 13, 2002, iGo, Xtend Micro Products, Inc., XMicro Holding
Company, Inc., and Mark Rapparport entered into a settlement agreement resolving
certain matters related to the employment of Mr. Rapparport with one of our
subsidiaries and the finalization of an earn-out in relation to our acquisition
of Xtend Micro Products, Inc. In March 2002, iGo paid an additional $250,000 and
issued 1,989,807 shares of its common stock to XMicro Holding Company as final
settlement and satisfaction of these matters. At the deemed price per share of
$0.363, the aggregate value of the cash and stock provided in March 2002 as part
of this settlement is $972,300. This settlement was recorded as additional
purchase price in connection with the acquisition of Xtend Micro Products and
was included in the Company's write-down of goodwill in 2001 (see Note 6). The
Company subsequently entered into an additional agreement with Mr. Rapparport
and XMicro Holding Company relating to the Company's merger with Mobility
Electronics, Inc. See Note 8.

10. LOAN TO CHAIRMAN AND CHIEF EXECUTIVE OFFICER

On January 2, 2001, the Company entered into a Secured Loan Agreement
with Ken Hawk, then the Company's Chairman and Chief Executive Officer, pursuant
to which the Company loaned him $306,100. This loan bore interest at 10.5% and
would have matured on June 8, 2001. The loan was full recourse and was secured
by 306,100 shares of iGo common stock held by Mr. Hawk, which represented shares
with a market value of twice the loan principal amount on the date the loan was
made. As described below, this loan was subsequently restructured.

11. RESIGNATION OF CHAIRMAN AND CHIEF EXECUTIVE OFFICER

On March 26, 2001, Ken Hawk resigned from his employment with and as
the President, Chairman of the Board and Chief Executive Officer of the Company.
Mr. Hawk continues to serve as a member of the Company's Board of Directors.
Under a Consulting Agreement, Mr. Hawk also served as a consultant to the
Company for a period of one year following his resignation. As consideration for
his services as a consultant, Mr. Hawk received an aggregate of approximately
$240,500 during the term of the Consulting Agreement. The Company also agreed to
restructure the indebtedness owed by Mr. Hawk to the Company. Under the terms of
a Secured Note, previously existing notes payable to the Company were
consolidated into one note for an aggregate principal amount of $366,410. This
note bears interest at 8.0% and matures on March 26, 2003, or upon an event of
default. The note is secured by 977,000 shares of iGo common stock owned by Mr.
Hawk, which represented shares with a market value of approximately twice the
principal amount of the note on the date of the Security Agreement executed by
Mr. Hawk in conjunction with the note.

12. DEFINITIVE MERGER AGREEMENT WITH MOBILITY ELECTRONICS, INC.

On March 24, 2002, the Company entered into a definitive agreement to
be acquired by Mobility Electronics, Inc. of Phoenix, Arizona. Under the
agreement, the Company's stockholders would receive an aggregate of $5,100,000
in cash and 2,600,000 shares of Mobility Electronics common stock (valued at
$3,562,000 based on the approximate market price per share during the few days
leading up to and following the announcement of the transaction of $1.37) at the

transaction closing and up to an additional $1,000,000 in cash and 500,000
additional Mobility Electronics shares (similarly valued at $685,000) one year
following the transaction closing subject to certain conditions. The closing of
the transaction is subject to certain material conditions, including the
transaction's approval by the Company's stockholders and the effectiveness of a
registration statement to be filed with the Securities and Exchange Commission,
and there can be no assurance that all of the conditions will be satisfied.

On July 18, 2002, the Company entered into an amendment to the
Agreement and Plan of Merger among Mobility Electronics, Inc., IGOC Acquisition,
Inc., and the Company. The principal effects of the amendment are twofold.
First, the cash consideration to be distributed at closing was changed to
$3,250,000 from $5,100,000. Second, the date by which the merger must occur
before either party may terminate the Agreement was extended from August 31,
2002 to October 1, 2002. Relating to a settlement with a stockholder of the
Company as discussed above in Note 8, such stockholder has agreed to vote his
3,531,199 shares in favor of the merger pursuant to a Lock-Up and Voting
Agreement dated July 18, 2002, but prior to the consummation of the merger, such
shares will be cancelled and such stockholder will not receive distributions of
any of the merger consideration.

13. SECOND AMENDMENT TO LEASE AGREEMENT

On March 22, 2002, iGo entered into a Second Amendment with Dermody
Family Limited Partnership I and Gulia Dermody Turville, the landlord under the
lease for the premises located at 9393 Gateway Drive, Reno, Nevada. The primary
purpose of the Second Amendment is to provide that iGo may terminate the lease
at any time in its sole discretion by giving the landlord at least sixty (60)
days advance written notice of such termination. The Second Amendment also
provides that the landlord may terminate the lease at any time in its sole
discretion by giving iGo at least ninety (90) days' advance written notice of
such termination. In connection with the Second Amendment iGo agreed to allow
the landlord to forever retain the security deposit of $140,000 described in the
lease and paid the landlord $360,000. This total sum of $500,000, which was
recorded as an expense in the fourth quarter of 2001, is characterized in the
Second Amendment as a lease restructuring fee and as such is nonrefundable.
There are certain representations, warranties, releases and covenants by and
among the parties in the Second Amendment, as well as a condition imposed upon
iGo that it cannot terminate the lease if at the time of delivering notice to
the landlord there is an uncured monetary default. On May 31, 2002, the Company
provided the Dermody Family Limited Partnership I written notice of its intent
to terminate the lease on July 31, 2002.

14. POTENTIAL NASDAQ DELISTING

In February 2002, the Company received notice from Nasdaq that it was
not in compliance with Marketplace Rule 4450(a)(5), which requires its common
stock to have a minimum bid price per share of $1.00 and, in June 2002, the
Company also received notice from Nasdaq that it was not in compliance with
Marketplace Rule 4450(a)(2), which requires that the minimum market value of the
Company's publicly held shares (shares held by non-affiliates of the Company) be
at least $5,000,000. The Company failed to regain compliance with either of
these standards during the grace periods established under the Marketplace Rules
and received notice from Nasdaq on May 24, 2002 that its shares were subject to
delisting. The Company appealed this decision and at an oral hearing before the
Nasdaq Hearing Panel on July 11, 2002, requested a stay of delisting of its
common stock for a 90 day period in order for the merger with Mobility to be
completed.

On July 31, 2002, the Nasdaq Hearing Panel informed the Company that an
appeal to continue its listing on The Nasdaq National Market was successful and
its common stock could remain listed pending the consummation of the proposed
merger with Mobility. The Panel's determination follows an oral hearing on July
11, 2002, in which the Company requested such an extension. The Hearing Panel
has given the Company until October 11, 2002, to complete the merger and
immediately thereafter, voluntarily delist its securities from The Nasdaq
National Market. In the event the merger is not consummated, the Company may
choose to transfer its securities to the Nasdaq SmallCap Market. There can be no
assurance that the Company could maintain compliance with the continued listing
requirements of the Nasdaq SmallCap Market for any substantial period of time.
If the Company does not transfer its securities to the Nasdaq SmallCap Market,
its securities will be delisted from the Nasdaq Stock Market. While the
Company's stock would continue to trade on the over-the-counter bulletin board
following any delisting from either Nasdaq Market, the Company expects that its
stock price and trading volume would decline, possibly significantly, and its
ability to raise additional capital would be substantially diminished by any
such delisting.

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

The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. The following discussion was prepared by
iGo Corporation (referred throughout this document where appropriate, as "iGo,"
"Company," "we," "our," and "us"), and should be read in conjunction with, and
is qualified in its entirety by, the unaudited condensed consolidated financial
statements and the unaudited notes thereto included in this report as well as
the Factors That May Affect Future Results that follow this discussion. The
following discussion and other material in this report on Form 10-Q contain
certain forward-looking statements. The forward-looking statements are
necessarily based upon a number of estimates and assumptions that, while
considered reasonable, are inherently subject to significant business, economic
and competitive uncertainties and contingencies, many of which are beyond our
control, and upon assumptions with respect to future business decisions which
are subject to change. Accordingly, actual results could differ materially from
those contemplated by such forward-looking statements.

iGo, iGo (stylized), iGo.com, and Road Warrior are registered trademarks of iGo.
Mobile Technology Outfitter, iGo Alerts, iGo Concierge and Pocket Dock are
trademarks of iGo or its subsidiaries. This report also contains brand names,
service marks and trademarks of other companies which are the property of their
respective holders.

OVERVIEW

iGo was incorporated in March 1993 and began offering products for sale
later that year, but did not generate meaningful revenues until 1995. For the
period from inception to 1995, our operating activities related primarily to the
development of our proprietary databases and to locating favorable sources of
supply. In 1995, we launched our first direct marketing campaign and focused on
building sales volume and fulfillment capabilities, and in 1996, we launched our
website. In June 1997, we relocated from San Jose, California to Reno, Nevada to
take advantage of lower operating costs for our customer contact and fulfillment
centers.

Product revenue is generally recognized when persuasive evidence of a
sale arrangement exists, shipment has occurred, title has passed, the sales
price is fixed or determinable, and collectibility is reasonably assured.
Product revenue is recorded net of any discounts and reserves for expected
returns. The majority of orders are shipped the same day they are received.
Individual customer purchases are generally made with credit cards. We generally
receive payment from the credit card companies within one to four business days
after shipment of the product. We also extend credit terms, typically net 30

days to 90 days, to corporate accounts that we have evaluated for
creditworthiness. Inventory is carried at the lower of cost or market. We use
the first-in-first-out method to determine cost. Advertising and promotional
costs are expensed as incurred and are recorded net of any cooperative
advertising amounts due from our suppliers at that time. In the case of direct
mail campaigns, the expenses are recorded at the time the promotional piece is
mailed to potential customers because the projected future revenue stream from
these mailings, which can occur over a two-month period, cannot be ultimately
determined at the time the mailing occurs.

We incurred net losses of $31.8 million in fiscal year 2001, $23.9
million in fiscal year 2000, and $15.0 million in fiscal year 1999. These prior
years' net losses resulted primarily from costs associated with marketing
programs to attract new customers, merger and acquisition costs, including
amortization and write-down of goodwill through 2001, developing our website and
proprietary databases, provisions for excess and discontinued inventory,
provisions for bad debts and the development of our operational infrastructure.
For the six months ended June 30, 2002, our net loss was $6.1 million. At June
30, 2002, we had an accumulated deficit of approximately $80.9 million. In
conjunction with the adoption of SFAS No. 142 effective January 1, 2002, the
Company recorded an impairment charge of $591,000, which is reflected on the
statement of operations for the six-month period ended June 30, 2002 as a
cumulative effect of change in accounting principle.

On March 24, 2002, iGo entered into a definitive agreement to be
acquired by Mobility Electronics, Inc. of Phoenix, Arizona. Under the agreement,
our stockholders would receive an aggregate of $5,100,000 in cash and 2,600,000
shares of Mobility Electronics common stock at the transaction closing and up to
an additional $1,000,000 in cash and 500,000 additional Mobility Electronics
shares one year following the transaction closing subject to certain conditions.
The closing of the transaction is subject to certain material conditions,
including the transaction's approval by our stockholders and the effectiveness
of a registration statement filed by Mobility with the Securities and Exchange
Commission. The registration statement filed by Mobility was declared effective
by the Securities and Exchange Commission on August 6, 2002. There can be no
assurance that all of the remaining conditions will be satisfied. On July 18,
2002, the Company entered into an amendment to the definitive acquisition
agreement. The principal effects of the amendment are twofold. First, the cash
consideration to be distributed at closing was changed to $3,250,000 from
$5,100,000. Second, the date by which the merger must occur before either party
may terminate the Agreement was extended from August 31, 2002 to October 1,
2002. Relating to a settlement with a stockholder of the Company, such
stockholder has agreed to vote his shares in favor of the merger pursuant to a
Lock-Up and Voting Agreement dated July 18, 2002, but prior to the consummation
of the merger, such shares will be cancelled and such stockholder will not
receive distributions of any of the merger consideration. See Notes 8 and 12.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of financial condition and results of
operations is based upon our condensed consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States of America. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities. We evaluate, on an on-going basis, our estimates and
judgments, including those related to sales returns, bad debts, excess inventory
and purchase commitments, and contingencies and litigation. We base our
estimates on historical experience and assumptions that we believe 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.

We believe the following critical accounting policies, among others,
affect our more significant judgments and estimates used in the preparation of
our condensed consolidated financial statements:

o Revenue Recognition and Return Allowances;
o Inventory Reserves;
o Impairment of Long Lived Assets;
o Bad Debt Reserves; and
o Deferred Income Taxes.

Product revenue is generally recognized when persuasive evidence of a
sale arrangement exists, shipment has occurred, title has passed, the sales
price is fixed or determinable, and collectibility is reasonably assured.
Evidence of a sale arrangement may include one or more factors and may require
us to make subjective determinations regarding the extent to which an
arrangement exists. Collectibility determinations can be subjective and are
generally based on a customer's payment history or, in the case of new
customers, internal credit evaluations based upon available information. We
record a provision for returns on product sales in the same period as the
related revenues are recorded. These estimates are based on historical sales
returns and analysis of credit memo data. If the data used to calculate these
estimates does not properly anticipate future returns, revenue could be
misstated.

We write down inventory for estimated excess and obsolete inventory
equal to the difference between the cost of inventory and the estimated net
realizable value based upon assumptions about future demand and market
conditions. Although we strive to ensure the accuracy of our forecasts of future
product demand, any significant unanticipated changes in demand or technological
developments could have a significant impact on the value of our inventory and
commitments, and our reported results. If actual market conditions are less
favorable than those projected, additional inventory write-downs, purchase
commitment reserves, and charges against earnings may be required.

During the fourth quarter of 2001, in accordance with SFAS 121,
"Accounting for the Impairment of Long-Lived Assets and for Long Lived Assets to
be Disposed Of," we estimated the future cash flows of the businesses we
acquired based on what we believed to be reasonable assumptions and projections.
Our estimates of the future discounted and undiscounted cash flows attributable
to the unamortized balances of goodwill related to these business acquisitions
were less than the respective carrying values, as discussed further below.
Accordingly, we recorded a $9,457,000 write-down of goodwill in 2001, leaving a
remaining goodwill balance of $591,000, which was in turn written off when we
adopted SFAS 142 at January 1, 2002. See Note 6.

We maintain bad debt allowances against our receivables for potential
losses resulting from the inability of our customers to make required payments.
We analyze accounts receivable and historical bad debts, customer
concentrations, customer creditworthiness, current economic trends and changes
in customer payment terms and practices when evaluating the adequacy of the
allowance for doubtful accounts. If the financial condition of our customers
were to deteriorate, resulting in an impairment of their ability to make
payments, additional allowances and charges against earnings may be required.

Due to the uncertainty of the realization of certain tax carryforward
items, a valuation allowance against deferred income taxes has been established
in the aggregate of $24.6 million at December 31, 2001. The amount of this
allowance has been determined based on an assessment of our ability to generate
sufficient taxable income prior to the expiration of the loss and credit
carryforwards. Regardless of our internal assessment, the availability of the
loss and credit carryforwards may be subject to further limitation under the
Internal Revenue Code in the event of a significant change of control.

THREE MONTH AND SIX MONTH PERIODS ENDED JUNE 30, 2002 COMPARED TO THREE MONTH
AND SIX MONTH PERIODS ENDED JUNE 30, 2001

NET PRODUCT REVENUE. Net product revenue consists of product sales to
customers and outbound shipping charges, net of any discounts and reserves for
expected returns. Net product revenue decreased from $7.7 million for the
three-month period ended June 30, 2001 to $4.5 million for the three-month
period ended June 30, 2002. Net product revenue decreased from $17.4 million for
the six-month period ended June 30, 2001 to $9.3 million for the six-month
period ended June 30, 2002. These decreases in net product revenue were
primarily a result of an ongoing general contraction in purchasing by our
corporate customers, which has had an impact on our sales since the second
quarter of 2001. Additionally, revenue levels have declined in part due to the
reduction in products offered as we have focused on offering core accessory
products which are expected to generate higher gross margins.

COST OF GOODS SOLD AND GROSS MARGIN. Cost of goods sold consists of the
cost of products sold to customers, costs associated with excess and
discontinued inventory, inbound shipping expense and outbound shipping charges.
Cost of goods sold decreased from $6.7 million for the quarter ended June 30,
2001 to $3.1 million for the quarter ended June 30, 2002 and also decreased from
$14.5 million for the six-month period ended June 30, 2001 to $6.2 million for
the six-month period ended June 30, 2002. Gross margin represents the percentage
derived by dividing gross profit (net product revenue less cost of goods sold)
by net product revenue. Our gross margin increased from 13.1% in the second
quarter of 2001 to 31.0% in the second quarter of 2002 and from 16.8% in the
six-month period ended June 30, 2001 to 33.6% in the six-month period ended June
30, 2002. The increase in gross margin from the prior year periods was due
primarily to additional inventory write-downs for discontinued and excess
inventory of $1.0 million and $2.0 million in the three and six-month periods
ended June 30, 2001, respectively, and the higher gross margins associated with
our current offering of core accessory products. The lower gross margin on the
sale of close out inventory also contributed to the overall lower gross margin
in the 2001 periods.

SALES AND MARKETING. Sales and marketing expenses consist primarily of
advertising costs, fulfillment expenses, credit card costs and the salary and
benefits of our sales, marketing and customer contact center personnel.
Advertising and promotional expenses include pay for performance and online
marketing efforts, print advertising, trade shows and direct marketing costs.
Sales and marketing expenses decreased from $3.1 million for the three-month
period ended June 30, 2001 to $1.9 million for the three-month period ended June
30, 2002, and also decreased from $7.0 million for the six-month period ended
June 30, 2001 to $3.7 million for the six-month period ended June 30, 2002.

Historically, the most significant single component of our sales and marketing
expense has been advertising costs. From the second quarter of 2001 to the
second quarter of 2002, advertising costs declined from approximately $550,000
to approximately $450,000. Expressed as a percentage of net revenue, advertising
costs were 7% in the second quarter of 2001 compared to 10% in the second
quarter of 2002. From the six-month period ended June 30, 2001 to the six-month
period ended June 30, 2002, advertising costs declined from approximately $1.7
million, or 10% of net revenue, to $502,000, or 5% of net revenue. This decrease
is principally due to continued efforts to reduce spending and to redirect
marketing expenditures into programs with the greatest benefit potential.
Reductions in staffing, lower incentive plan expenses and lower fulfillment
expenses, which decline due to lower sales volume, also contributed to the cost
decline.

PRODUCT DEVELOPMENT. Product development expenses generally consist of
payroll and related expenses for merchandising and website personnel, site
hosting fees and web content and design expenses as well as expenses associated
with development of our proprietary products. Product development expenses
decreased from $880,000 for the three-month period ended June 30, 2001 to
$382,000 for the three-month period ended June 30, 2002. From the six-month
period ended June 30, 2001 to the six-month period ended June 30, 2002, product
development expenses declined from approximately $1.7 million to $817,000. The
expense decreases in the 2002 periods were attributable to completion in early
to mid-2001 of several of the development projects initiated in 2000.

GENERAL AND ADMINISTRATIVE. General and administrative expenses
generally consist of salaries and related costs for our executive,
administrative and finance personnel, support services and professional fees, as
well as general corporate expenses such as rent and depreciation and
amortization. General and administrative expenses increased from $2.0 million
for the quarter ended June 30, 2001 to $2.3 million for the quarter ended June
30, 2002. This increase in general and administrative expenses for the second
quarter of 2002 over the prior year period was primarily attributable to a
charge of approximately $479,000 associated with a settlement agreement with a
stockholder concerning certain allegations and related litigation. See Note 8.
From the six-month period ended June 30, 2001 to the six-month period ended June
30, 2002, general and administrative expenses declined approximately $129,000 to
approximately $4.2 million. The decrease in general and administrative expenses
for the six-month period ended June 30, 2002 over the prior year period was
primarily attributable to reductions in staffing.

MERGER AND ACQUISITION COSTS, INCLUDING AMORTIZATION OF GOODWILL IN
2001. Amortization of goodwill recorded in past business combinations ceased
upon the adoption of SFAS No. 142 in January 2002. Due to this change, the
Company recorded no amortization of goodwill in 2002 compared to $853,000 and
$1.7 million in amortization of goodwill in the three and six-month periods
ended June 30, 2001. (see Notes 1 and 6 to the accompanying condensed
consolidated financial statements). This non-cash acquisition cost primarily
relates to the amortization of goodwill resulting from the January 2000
acquisitions of Road Warrior and Cellular Accessory Warehouse and the August
2000 acquisition of Xtend Micro Products. Goodwill was amortized on a
straight-line basis over their respective useful lives through fiscal year 2001,
generally 40 to 60 months. In conjunction with the adoption of SFAS No. 142
effective January 1, 2002, the Company recorded a charge of $591,000, which is
reflected on the statement of operations for the six-month period ended June 30,
2002 as a cumulative effect of change in accounting principle.

OTHER INCOME, NET. Other income, net, consists primarily of interest
income earned on cash and cash equivalents, net of interest expense on borrowing
and capital leases, and losses resulting from disposals of fixed assets. Other
income, net, changed favorably from a net expense of $103,000 for the
three-month period ended June 30, 2001 to other income, net of $44,000 for the
three-month period ended June 30, 2002. This favorable difference is primarily
attributable to a write-off of $144,000 in the three-month period ended June 30,

2001 of the net book value of web site equipment and software resulting from the
implementation of our enhanced web site. For the six-month period ended June 30,
2002, other income, net was $71,000 compared to $240,000 for the six-month
period ended June 30, 2001. The decrease was primarily attributable to lower
interest income as funds invested from the net proceeds of the initial public
offering in October 1999 declined.

INCOME TAXES. The Company did not provide any current or deferred U.S.
federal, state or foreign income tax provision or benefit for any of the periods
presented because it has experienced losses since inception. Utilization of the
Company's net operating loss carryforwards, which begin to expire in 2011, may
be subject to certain limitations under Sections 382 and 383 of the Internal
Revenue Code of 1986, as amended. The Company has provided a full valuation
allowance on the deferred tax asset, consisting primarily of net operating loss
carryforwards, because of the uncertainty regarding its realizability.

LIQUIDITY AND CAPITAL RESOURCES

Prior to our initial public offering, we financed our operations
primarily through the sale of preferred stock, capital lease obligations and
revolving credit facilities. Prior to our initial public offering, we received
$13.2 million from the sale of preferred stock, net of issuance costs. Of this
amount, $1.4 million was received in June 1996, $6.0 million in October 1998 and
$5.8 million in July 1999. Proceeds from equipment financed under a
sale-leaseback transaction, net of principal repayments, amounted to $685,000
during the year ended December 31, 1999. There were no proceeds from equipment
financed under sale-leaseback transactions during the six-month period ended
June 30, 2002. Proceeds from our initial public offering in October 1999, net of
offering costs, amounted to approximately $62.6 million.

Net cash used in operating activities was $2.0 million for the
six-month period ended June 30, 2002, compared to $9.1 million for the six-month
period ended June 30, 2001. Net cash used in operating activities during the
current period consisted primarily of net losses, which was partially offset by
decreases in accounts and notes receivable and inventory. Non-cash expenses
included in the net loss for the six-month period ended June 30, 2002 were
approximately $2.9 million lower than for the six-month period ended June 30,
2001.

Net cash used in investing activities was $283,000 and $131,000 for the
six-month periods ended June 30, 2002 and 2001, respectively, which was
attributable to acquisitions of property and equipment and payment related to a
business acquisition in the 2002 period.

Net cash used in financing activities was $185,000 for the six-month
period ended June 30, 2002 compared to $549,000 for the six-month period ended
June 30, 2001. Cash used in financing activities included principal payments on
debt in both periods, and the prior year period included a loan to a
stockholder, who was formerly our Chairman and Chief Executive Officer.

We have experienced negative cash flows from operations of $11.4
million, $30.0 million and $12.8 million for the years ended December 31, 1999,
2000 and 2001, respectively, and $2.0 million for the six-month period ended
June 30, 2002. Recurring losses and negative cash flows from operations and
limited financing opportunities raise substantial doubt about our ability to
continue as a going concern. With a targeted focus on high margin core products
and improved inventory control resulting in significantly reduced excess and
obsolete inventory charges we believe that we will be able to achieve improved
gross margins. Additionally, we have taken steps to reduce costs through several
initiatives including: further downsizing the workforce and facility cost
reductions resulting from a relocation of our main facility in Reno to a
smaller, less costly facility in Reno completed in early August 2002.

We may need to raise additional funds before the end of 2002 in the
event that we fail to generate sufficient cash from operations. We have no
commitments and are not seeking commitments for additional financing. If we were
to seek additional financing there can be no assurance that we would be
successful in obtaining any additional financing on terms acceptable to iGo or
its stockholders. If we raise additional funds through the issuance of equity
securities or convertible debt securities, our existing stockholders may
experience significant dilution. In the event that we fail to generate
sufficient cash from operations and are unable to secure additional financing
from other sources, it is uncertain if or for how long we will be able to
continue operations. For a discussion of various risks that may impact the
likelihood that we will be able to generate cash from operations or financing
activities, please see "Factors that May Affect Future Results" below.

RECENT ACCOUNTING PRONOUNCEMENTS

FACTORS THAT MAY AFFECT FUTURE RESULTS

WE HAVE A HISTORY OF LOSSES AND WE EXPECT LOSSES FOR AT LEAST THE NEXT SEVERAL
QUARTERS.

Since our inception in 1993, we have incurred significant net losses,
resulting primarily from costs related to developing our proprietary databases,
establishing our brand, building our customer contact center, developing
relationships with suppliers and attracting users to our website. At June 30,
2002, we had an accumulated deficit of approximately $80.9 million. We do not
expect to achieve profitability for at least the next several quarters.

WE MAY NOT HAVE SUFFICIENT CAPITAL TO REACH PROFITABILITY.

It is unlikely that we will reach cash-flow positive without raising
additional funds. If additional funding is necessary, we may seek such
additional funding through debt or equity financings. We currently have no
commitments for any additional financing, and there can be no assurance that
adequate funds for our operations will be available to us. Our auditors gave us
a "going concern" opinion in connection with our fiscal 2001 audit, which may
further limit our ability to obtain additional financing. A lack of sufficient
capital may require us to delay, scale back or even eliminate some or all of our
operations. In the event that we fail to generate sufficient cash from
operations and are unable to secure additional financing from other sources, it
is uncertain if or for how long we will be able to continue operations.

IF OUR SHARES ARE DELISTED, OUR STOCK PRICE MAY DECLINE FURTHER AND WE MAY BE
UNABLE TO RAISE ADDITIONAL CAPITAL.

In February 2002, we received notice from Nasdaq that we were not in
compliance with Marketplace Rule 4450(a)(5), which requires our common stock to
have a minimum bid price per share of $1.00 and in June 2002, we also received
notice from Nasdaq that we were not in compliance with Marketplace Rule
4450(a)(2), which requires that the minimum market value of our publicly held
shares (shares held by non-affiliates of the Company) be at least $5,000,000. We
failed to regain compliance with either of these standards during the grace
periods established under the Marketplace Rules and received notice from Nasdaq
on May 24, 2002 that our shares were subject to delisting. We appealed this
decision and at an oral hearing before the Nasdaq Hearing Panel on July 11,
2002, requested a stay of delisting of our common stock for a 90 day period in
order for the merger with Mobility to be completed. On July 31, 2002, the Nasdaq
Hearing Panel informed us that our appeal was successful and our common stock
could remain listed on The Nasdaq National Market pending the consummation of
the proposed merger with Mobility. The Hearing Panel has given us until October
11, 2002, to complete the merger and immediately thereafter, voluntarily delist
our securities from The Nasdaq National Market. In the event the merger is not
consummated, we may choose to transfer our securities to the Nasdaq SmallCap
Market. There can be no assurance that we could maintain compliance with the
continued listing requirements of the Nasdaq SmallCap Market for any substantial
period of time. If we do not transfer our securities to the Nasdaq SmallCap
Market, our securities will be delisted from the Nasdaq Stock Market. While our
stock would continue to trade on the over-the-counter bulletin board following
any delisting from either Nasdaq Market, we expect that our stock price and
trading volume would decline, possibly significantly, and our ability to raise
additional capital would be substantially diminished by any such delisting.

ALTHOUGH WE ARE AWARE OF NO DETERMINATIONS, CONCERNS REGARDING THE SEC
INVESTIGATION COULD HARM OUR BUSINESS.

The Securities and Exchange Commission has issued a formal order of
private investigation concerning the events underlying our revisions of our
fiscal 2000 operating results based on adjustments to fourth quarter 2000
revenue, which results were announced and revised in certain press releases
issued in January and March of 2001. In connection with its investigation, the
Commission will also be reviewing the restatement of our financial statements
set forth in our 2001 Annual Report on Form 10-K, as amended, and certain
related accounting, sales and organizational matters. Although the Staff of the
Commission has made no determinations that we are aware of with respect to this
investigation, the investigation itself could raise concerns about iGo in the
eyes of customers and investors and, as a result, could harm our business and
our stock price.

OUR STOCK PRICE MAY BE ADVERSELY AFFECTED BY SIGNIFICANT FLUCTUATIONS IN OUR
QUARTERLY OPERATING RESULTS.

Although independent market research firms forecast that shipments of
portable personal computers, the number of wireless subscribers and the market
for accessories for mobile electronic devices will grow substantially over the
next few years, we cannot be certain that this growth will actually occur or
that our sales will grow at the same rate or at all. We cannot forecast with any
degree of certainty the extent of our sales of these products. We expect our
operating results could fluctuate significantly from quarter to quarter as a
result of various factors including:

o our ability to attract prospects and convert them into
customers;

o the level of merchandise returns we experience;

o changes and seasonal fluctuations in the buying patterns of
our customers;

o our inability to obtain adequate supplies of high-demand
products;

o unanticipated cost increases or delays in shipping of our
products, transaction processing, or production and
distribution of our direct marketing materials;

o unanticipated delays with respect to product introductions;
and

o the costs, timing and impact of our marketing and promotional
initiatives.

Because of these and other factors, we believe that quarter to quarter
comparisons of our results of operations are not good indicators of our future
performance. If our operating results fall below the expectations of investors
in some future periods, our stock price will likely decline further.

STRENGTHENING THE IGO, ROAD WARRIOR AND XTEND BRANDS IS CRITICAL TO OUR SUCCESS.

We believe that strengthening the iGo brand as well as the brands of
our proprietary product lines, Road Warrior and Xtend, will be critical to the
success of our business. We cannot be certain that our brands will attract new

customers or retain existing customers, and the failure to maintain a strong and
effective brand may harm our business, financial condition and results of
operations.

WE DEPEND ON OUR KEY PERSONNEL TO MANAGE OUR BUSINESS, AND WE MAY NOT BE ABLE TO
HIRE ENOUGH ADDITIONAL MANAGEMENT AND OTHER PERSONNEL AS OUR BUSINESS GROWS.

Our performance is substantially dependent on the continued services
and on the performance of our executive officers. The loss of the services of
any of our executive officers could harm our business. Any of our officers or
employees can terminate his or her employment relationship at any time. Some key
members of our management team have recently been hired. These individuals have
had little experience working in our organization. We cannot be certain that we
will be able to integrate new executives or other employees into our
organization effectively. In addition, there are significant administrative
burdens placed on our management team as a result of our status as a public
company. The loss of any of our officers could harm our results of operations
and financial condition. In addition, we may be unable to retain our other key
employees or attract, assimilate and retain other highly qualified employees in
the future, which could harm our business, financial condition and results of
operations.

COMPETITION MAY DECREASE OUR MARKET SHARE, NET REVENUES AND GROSS MARGINS AND
MAY CAUSE OUR STOCK PRICE TO DECLINE.

The mobile computing and communications markets in which we operate are
rapidly evolving and highly competitive. Our competitors operate in a number of
different distribution channels, including electronic commerce, traditional
retailing, catalog retailing and direct selling. We currently or potentially
compete with a variety of companies in the sale of products in specific
categories, including:

o mobile products suppliers such as Targus;

o retailers and etailers such as CompUSA and Amazon.com;

o direct marketers such as Buy.com, CDW, Insight and
Microwarehouse;

o traditional mobile device manufacturers or OEM's such as
Fujitsu, Toshiba, IBM, NEC, Acer, Gateway, Dell, Nokia,
Motorola and Erickson.

Our competitors may have the ability to devote substantially more
resources to the development, marketing, and/or sale of mobile device
accessories than we do. In addition, larger and more well-financed entities may
acquire, invest in or form joint ventures with our competitors. Some of our
competitors may be able to secure products from suppliers on more favorable
terms, fulfill customer orders more efficiently and adopt more aggressive
pricing or inventory availability policies then we can. Finally, new
technologies and the expansion of existing technologies, such as price
comparison programs that search for products from a variety of websites, may
direct customers to other online merchants. There can be no assurance that we
will be able to compete successfully against current and future competitors.

THE LOSS OF OUR PROPRIETARY DATABASES WOULD SERIOUSLY HARM OUR BUSINESS.

Our proprietary databases are a key competitive advantage. If we fail
to keep these databases current or if the proprietary customer, product,
supplier and compatibility information contained in these databases is damaged
or destroyed, our business would be seriously harmed and our stock price would
decline.

THE FAILURE TO SUCCESSFULLY GROW, MANAGE AND USE OUR DATABASE OF CUSTOMERS AND
USERS WOULD HARM OUR BUSINESS.

We intend to continually expand our database of customers, potential
customers and website registrants to more effectively create targeted direct
marketing offers. We seek to expand our customer database by using information
we collect through our website, search engine optimization, channel
relationships, our customer contact center and purchased or rented lists. We
must also continually develop and refine our techniques for segmenting this
information to maximize its usefulness. If we are unable to expand our customer
database or if we fail to utilize this information successfully, then our
business model may not be successful. In addition, if federal or state
governments enact privacy legislation resulting in the increased regulation of
mailing lists, we could experience increased costs in complying with potentially
burdensome regulations concerning the solicitation of consents to keep or add
customer names to our mailing lists.

FAILURE OF OUR STRATEGIC RELATIONSHIPS TO ATTRACT CUSTOMERS COULD HARM OUR
BUSINESS.

We intend to continue to establish, leverage and grow key strategic
relationships with manufacturers, airlines, suppliers and electronic commerce
partners to enable us to collect crucial product-specific information, ensure
access to adequate product supply and acquire new customers. We cannot be
certain that any of these strategic relationships or partnerships will be or
continue to be successful in attracting new customers. Our strategic
relationships are often not subject to formal agreements and/or can be
terminated on little or no advance notice. The terms of our agreements with
Acer, NEC and IBM require us to purchase minimum amounts of product each year.
If we fail to meet these purchase levels, those parties have the discretion to
terminate our agreements with them. We have not met such purchase levels to
date, but have received no indication from any of those parties that they intend
to terminate our relationship. Also, in each case either party may terminate the
agreement with or without cause on two to three months' written notice.
Accordingly, we can provide no assurance that these relationships will continue
on their current terms or at all. If these programs fail to attract additional
customers or we are unable to maintain these relationships, our business,
financial condition and results of operations would be harmed.

WE MUST EFFECTIVELY MANAGE OUR INVENTORY AND IMPROVE OUR GROSS MARGINS.

In order to fulfill our orders, we depend upon our factories and
vendors to produce sufficient quantities of products according to schedule. We
may maintain high inventory levels in some categories of merchandise in an
effort to ensure that these products are available to our customers. This may
expose us to risks of excess inventory and outdated merchandise, which could
harm our business. In 2001, we changed our product strategy to focus on offering
a targeted core product line with a higher gross margin. As a result of this
change of strategy, we recorded significant write-offs of inventory in 2001. If
we underestimate customer demand, we may disappoint customers who may purchase
from our competitors. We also seek to negotiate with our vendors to get the best
quality available at the best prices in order to maintain and increase our gross
margins. Our failure to be able to effectively manage our factories and vendors
effectively would harm our operating results.

FAILURE OF THIRD PARTY SUPPLIERS TO SHIP PRODUCTS DIRECTLY TO OUR CUSTOMERS
COULD HARM OUR BUSINESS.

For the year ended December 31, 2001 and the six months ended June 30,
2002, approximately 22% and 35%, respectively, of our total net revenues were
from products shipped to our customers directly from our suppliers. The failure

of these suppliers to continue to ship products directly to our customers or to
ship products to our customers in a timely manner could result in lost revenues,
customer dissatisfaction and damage to our reputation. In addition, if we could
not depend on these suppliers to ship products to our customers directly, we
would have to carry the products in our inventory, which would expose us to
risks of excess inventory, outdated merchandise and increased warehouse costs,
all of which could harm our business.

FAILURE OF THIRD-PARTY CARRIERS TO DELIVER OUR PRODUCTS TIMELY AND CONSISTENTLY
COULD HARM OUR BUSINESS.

Our supply and distribution system is primarily dependent upon our
relationships with United Parcel Service and Federal Express. We ship
substantially all of our orders with these carriers. Because we do not have
written agreements with these carriers that guarantee continued service, we
cannot be sure that our relationships with these carriers will continue on terms
favorable to us, or at all. If our relationship with one or more of these
carriers is terminated or impaired, or if one or more of these carriers is
unable to ship products for us, whether through labor shortage, slow down or
stoppage, deteriorating financial or business conditions or for any other
reason, we would be required to rely on other carriers. These carriers may not
be able to accommodate the increased shipping volume, in which case we may be
required to use alternative carriers, with whom we may have no prior business
relationship, for the shipment of products to our customers. We may be unable to
engage an alternative carrier on a timely basis or upon terms favorable to us.
Changing carriers would likely harm our business, financial condition and
results of operations. Potential adverse consequences include:

o reduced package tracking information;

o delays in order processing and product delivery;

o increased delivery costs, resulting in reduced gross margins;
and

o reduced shipment quality, which may result in damaged products
and customer dissatisfaction.

WE MAY NOT BE ABLE TO PROTECT AND ENFORCE OUR TRADEMARKS, INTERNET ADDRESSES AND
INTELLECTUAL PROPERTY RIGHTS.

We regard our brand and substantial elements of our website and
relational databases as proprietary, and seek their protection through
trademark, service mark, copyright and trade secret laws. We enter into
non-disclosure agreements with our employees and consultants, and generally with
strategic partners. Despite these precautions, it may be possible for third
parties to copy or otherwise obtain and use our intellectual property without
our authorization.

Our iGo brand and our Internet address, WWW.IGO.COM, are important
components of our business strategy. We have obtained federal trademark
registrations for our iGo, iGo (stylized), Road Warrior, Xtend, 1-800-Batteries,
iGo.com and PowerXtender trademarks. Mobile Technology Outfitter and Pocket Dock
are trademarks of iGo or its subsidiaries.

We also rely to a material extent on technology developed and licensed
from third parties. These licenses may not continue to be available to us on
commercially reasonable terms in the future. The loss of existing technology
licenses could harm the performance of our existing services until equivalent
technology can be identified, obtained and integrated. Failure to obtain new
technology licenses may result in delays or reductions in the introduction of
new features, functions or services, which would harm our business. We have been

notified from time to time that certain products that we offer may infringe on
the proprietary rights of others. There can be no assurances that third parties
will not claim infringement in the future. We expect that the continued growth
of the Internet will result in an increasing number of infringement claims as
legal standards related to our market continue to evolve. Any such claim, with
or without merit, could be time consuming, result in costly litigation, and may
have a material adverse effect on our business and results of operations.

We have also registered our iGo, Xtend and Road Warrior trademarks in
certain foreign countries in which we currently conduct, or intend to conduct
significant business. It is often difficult to obtain clear, registered title to
trademarks in foreign countries. We have encountered certain conflicts in
connection with these foreign trademark applications, and there is no guarantee
that we will be able to secure registrations in any particular foreign country.
In addition, we may be prohibited from using one or more of our marks in certain
foreign countries, which may have a material adverse effect on our business and
results of operations.

We currently hold various Internet domain names, including iGo.com,
RoadWarrior.com and XtendMicro.com. The acquisition and maintenance of domain
names generally is regulated by Internet regulatory bodies. The regulation of
domain names in the United States and in foreign countries is subject to change.
Governing bodies may establish additional top-level domains, appoint additional
domain name registrars or modify the requirements for holding domain names. As a
result, we may be unable to acquire or maintain relevant domain names in all
countries in which we conduct business. Furthermore, the relationship between
regulations governing domain names and laws protecting trademarks and similar
proprietary rights continues to evolve. Therefore, we may be unable to prevent
third parties from acquiring domain names that are similar to, infringe upon or
otherwise decrease the value of our trademarks and other proprietary rights.

FAILURE TO SUCCESSFULLY DEFEND A LAWSUIT ALLEGING PATENT INFRINGEMENT ON OUR
PART COULD HARM OUR BUSINESS.

On June 21, 2002, in the United States District Court, Central District
of California, Comarco Wireless Technologies, Inc. filed a lawsuit against iGo
and its wholly owned subsidiary Xtend Micro Products, Inc. The suit alleges that
iGo and Xtend are offering products for sale that infringe upon two United
States patents issued to Comarco. The suit seeks injunctive relief, monetary
damages, and costs and attorney's fees. We are investigating the facts
surrounding these claims and consulting with legal counsel for Mobility
regarding this matter, as Mobility is currently involved in litigation with
Comarco over similar patent issues. While we intend to vigorously defend
ourselves in this matter, we cannot be certain that our defense will be
successful, and our business could be harmed if we are unsuccessful.

WE MAY BE VULNERABLE TO NEW TAX OBLIGATIONS THAT COULD BE IMPOSED ON ELECTRONIC
COMMERCE TRANSACTIONS.

We do not expect to collect sales or other similar taxes or goods
shipped into most states. However, one or more states or the federal government
may seek to impose sales tax collection obligations on out-of-state companies,
such as ours, which engage in or facilitate electronic commerce. A number of
proposals have been made at the state and local levels that would impose
additional taxes on the sale of goods and services through the Internet. These
proposals, if adopted, could substantially impair the growth of electronic
commerce and cause purchasing through our website to be less attractive to
customers. In October 1998, the United States Congress passed legislation
limiting for three years the ability of the states to impose taxes on
Internet-based transactions, which moratorium has been extended until November

2003. Failure to renew this legislation could result in the imposition by
various states of taxes on electronic commerce. Further, states have attempted
to impose sales tax collection obligations on direct marketing sales from
businesses such as ours. A successful assertion by one or more states that we
should have collected or be collecting sales taxes on the sale of products could
harm our business.

IF WE EXPAND OUR BUSINESS INTERNATIONALLY, OUR BUSINESS WOULD BECOME
INCREASINGLY SUSCEPTIBLE TO NUMEROUS INTERNATIONAL RISKS AND CHALLENGES THAT
COULD AFFECT OUR RESULTS OF OPERATIONS.

Although we have not had meaningful international revenues to date, we
intend to increase our international sales efforts. International sales are
subject to inherent risks and challenges that could affect our results of
operations, including:

o the need to develop new supplier relationships;

o unexpected changes in international regulatory requirements
and tariffs;

o difficulties in staffing and managing foreign operations;

o potential adverse tax consequences;

o price controls or other restrictions on, or fluctuations in,
foreign currency; and

o difficulties in obtaining export and import licenses.

To the extent we generate international sales in the future, any
negative effects on our international business could harm our business,
financial condition and results of operations as a whole. In particular, gains
and losses on the conversion of foreign payments into U.S. dollars may
contribute to fluctuations in our results of operations, and fluctuating
exchange rates could cause reduced revenues from dollar-denominated
international sales.

ANY ACQUISITIONS WE MAKE COULD DISRUPT OUR BUSINESS AND HARM OUR FINANCIAL
CONDITION.

In addition to our acquisitions of Road Warrior, Cellular Accessory
Warehouse and Xtend Micro Products, we may again invest in or buy complementary
businesses, products or technologies in the future. In the event of any
investments or purchases, we could:

o issue stock that would dilute the percentage ownership of our
current stockholders;

o incur debt;

o assume liabilities;

o incur amortization expenses related to goodwill and other
intangible assets; or

o incur large and immediate write-offs.

These acquisitions could also involve numerous operational risks,
including:

o problems combining the purchased operations, products or
technologies;

o unanticipated costs;

o diversion of management's attention away from our core
business;

o adverse effects on existing business relationships with
suppliers and customers;

o risks associated with entering markets in which we have no or
limited prior experience; and

o potential loss of key employees, particularly those of the
purchased organizations.

We cannot assure you that we will be able to successfully integrate any
businesses, products or technologies that we have acquired or might acquire in
the future.

THE LOSS OF TECHNOLOGIES LICENSED FROM THIRD PARTIES COULD HARM OUR BUSINESS.

We rely to a material extent on technology developed and licensed from
third parties. The loss of existing technology licenses could harm the
performance of our existing services until equivalent technology can be
identified, obtained and integrated. Failure to obtain new technology licenses
may result in delays or reductions in the introduction of new features,
functions or services, which would harm our business.

OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE HARMED IF
WE WERE TO BE LIABLE FOR DEFECTS IN THE PRODUCTS WE OFFER.

We may be subject to product liability claims for the products we
design and develop as well as those we sell. While we believe that our product
liability coverage of $7,000,000 is currently adequate, we can provide no
assurance that the insurance can be maintained in the future at a reasonable
cost or in amounts sufficient to protect us against losses due to liability. A
successful liability claim brought against us in excess of relevant insurance
coverage could harm our business, financial condition and results of operations.

DAMAGE TO OR DESTRUCTION OF OUR WAREHOUSE COULD RESULT IN LOSS OF OUR
INVENTORY, WHICH COULD HARM OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.

If all or most of the inventory in our warehouse were damaged or
destroyed, we might be unable to replace the inventory in a timely manner and,
as a result, be unable to process orders in a timely manner or at all. For the
year ended December 31, 2001 and the six months ended June 30, 2002,
approximately 78% and 65%, respectively, of the products we sell come from the
inventory in our warehouse. We cannot be certain that we would be able to
replace the inventory as quickly as our customer orders demand, which may result
in the loss of revenue and customers, which would harm our business, financial
condition and results of operations.

RISKS RELATED TO THE INTERNET INDUSTRY

WE ARE DEPENDENT ON THE CONTINUED DEVELOPMENT OF THE INTERNET INFRASTRUCTURE.

Our industry is new and rapidly evolving. Our business would be harmed
if Internet usage does not continue to grow. Internet usage may be inhibited for
a number of reasons, including:

o inadequate Internet infrastructure;

o inconsistent quality of service; and

o unavailability of cost-effective, high-speed service.

If Internet usage grows, the Internet infrastructure may not be able to
support the demands placed on it by this growth, or its performance and
reliability may decline. In addition, websites, including ours, have experienced
interruptions in their service as a result of outages and other delays occurring
throughout the Internet network infrastructure. We anticipate that these outages
or delays will occur from time to time in the future and, if they occur

frequently or for extended periods of time, Internet usage, including usage of
our website, could grow more slowly or decline.

A PORTION OF OUR LONG-TERM SUCCESS DEPENDS ON THE DEVELOPMENT OF THE ELECTRONIC
COMMERCE MARKET, WHICH IS UNCERTAIN.

A portion of our future revenues substantially depends upon the
widespread acceptance and use of the Internet as an effective medium of commerce
by consumers. Demand for recently introduced products and services over the
Internet is subject to a high level of uncertainty. Although independent market
research firms forecast that the number of Internet users worldwide will grow
substantially in the next few years, we cannot be certain that this growth will
occur or that our sales will grow at the same rate. The development of the
Internet as a viable commercial marketplace is subject to a number of risks
including:

o potential customers may be unwilling to shift their purchasing
from traditional vendors to online vendors;

o insufficient availability of or changes in telecommunications
services could result in slower response times, which could
delay the acceptance of the Internet as an effective commerce
medium;

o continued growth in the number of Internet users;

o concerns about transaction security;

o continued development of the necessary technological
infrastructure;

o development of enabling technologies; and

o uncertain and increasing government regulations.

RAPID TECHNOLOGICAL CHANGE COULD RENDER OUR WEBSITES AND SYSTEMS OBSOLETE AND
REQUIRE SIGNIFICANT CAPITAL EXPENDITURES.

The Internet and the electronic commerce industry are characterized by
rapid technological change, sudden changes in customer requirements and
preferences, frequent new product and service introductions incorporating new
technologies and the emergence of new industry standards and practices that
could render our existing websites and transaction processing systems obsolete.
The emerging nature of these products and services and their rapid evolution
will require that we continually improve the performance, features and
reliability of our online services, particularly in response to competitive
offerings. Our success will depend, in part, on our ability:

o to enhance our existing products and services; and

o to respond to technological advances and emerging industry
standards and practices on a cost-effective and timely basis.

The development of websites and other proprietary technology entails
significant technical and business risks and requires substantial expenditures
and lead time. We may be unable to use new technologies effectively or adapt our
website, proprietary technology and transaction-processing systems to customer
requirements or emerging industry standards, which could harm our business.
Updating our technology internally and licensing new technology from third
parties may require significant additional capital expenditures and could affect
our results of operations.

WE ARE EXPOSED TO RISKS ASSOCIATED WITH ELECTRONIC COMMERCE SECURITY AND CREDIT
CARD FRAUD, WHICH MAY REDUCE COLLECTIONS AND DISCOURAGE ONLINE TRANSACTIONS.

Consumer concerns about privacy or the security of transactions
conducted on the Internet may inhibit the growth of the Internet and electronic
commerce. To securely transmit confidential information, such as customer credit
card numbers, we rely on encryption and authentication technology that we
license from third parties. We cannot predict whether the algorithms we use to
protect customer transaction data will be compromised. Furthermore, our servers
may be vulnerable to computer viruses, physical or electronic break-ins and
similar disruptions. We may need to expend significant additional capital and
other resources to protect against a security breach or to alleviate problems
caused by any security breaches. The measures we take to protect against
security breaches may not be successful. Our failure to prevent security
breaches could harm our business.

To date, we have suffered minor losses as a result of orders placed
with fraudulent credit card data even though the associated financial
institution approved payment of the orders in each case. Under current credit
card practices, a merchant is liable for fraudulent credit card transactions
where, as is the case with the transactions we process, that merchant does not
obtain a cardholder's signature. Failure to adequately control fraudulent credit
card transactions could reduce our revenues and harm our business.

WE COULD FACE LIABILITY FOR INFORMATION DISPLAYED ON AND COMMUNICATIONS THROUGH
OUR WEBSITE.

We may be subject to claims for defamation, negligence, copyright or
trademark infringement or other claims relating to the information we publish on
our website. These types of claims have been brought, sometimes successfully,
against Internet companies as well as print publications in the past. We also
utilize email as a marketing medium, which may subject us to potential risks,
such as:

o liabilities or claims resulting from unsolicited email;

o lost or misdirected messages; or

o illegal or fraudulent use of email.

These claims could result in substantial costs and a diversion of our
management's attention and resources, which could harm our business.

EFFORTS TO REGULATE OR ELIMINATE THE USE OF MECHANISMS THAT AUTOMATICALLY
COLLECT INFORMATION ON VISITORS TO OUR WEBSITE MAY INTERFERE WITH OUR ABILITY TO
TARGET OUR MARKETING EFFORTS.

Websites typically place a small tracking program on a user's hard
drive without the user's knowledge or consent. These programs automatically
collect data about any visits that a user makes to various websites. Website
operators use these mechanisms for a variety of purposes, including the
collection of data derived from users' Internet activity. Most currently
available Internet browsers allow users to elect to remove these tracking
programs at any time or to prevent this information from being stored on their
hard drive. In addition, some commentators, privacy advocates and governmental
bodies have suggested limiting or eliminating the use of these tracking
mechanisms. Any reduction or limitation in the use of this software could limit
the effectiveness of our sales and marketing efforts.

WE COULD FACE ADDITIONAL BURDENS ASSOCIATED WITH GOVERNMENT REGULATION OF AND
LEGAL UNCERTAINTIES SURROUNDING THE INTERNET.

New Internet legislation or regulation or the application of existing
laws and regulations to the Internet and electronic commerce could harm our
business, financial condition and results of operations. We are subject to
regulations applicable to businesses generally and laws or regulations directly
applicable to communications over the Internet and access to electronic
commerce. Although there are currently few laws and regulations directly
applicable to electronic commerce, it is possible that a number of laws and
regulations may be adopted with respect to the Internet covering issues such as
user privacy, pricing, content, copyrights, distribution, antitrust, taxation
and characteristics and quality of products and services. For example, the
United States Congress recently enacted Internet laws regarding children's
privacy, copyrights and transmission of sexually explicit material. In addition,
the European Union recently enacted its own Internet privacy regulations.
Furthermore, the growth and development of the market for electronic commerce
may prompt calls for more stringent consumer protection laws that may impose
additional burdens on those companies conducting business online. The adoption
of any additional laws or regulations regarding the Internet may decrease the
growth of the Internet or electronic commerce, which could, in turn, decrease
the demand for our products and services and increase our cost of doing
business. In addition, if we were alleged to have violated federal, state or
foreign civil or criminal law, we could be subject to liability, and even if we
could successfully defend such claims, they may involve significant legal
compliance and litigation costs.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk for changes in interest rates is limited to
the exposure related to our debt instruments which are tied to market rates. We
plan to ensure the safety and preservation of our invested principal funds by
limiting default risks, market risk and reinvestment risk. We have invested in
high-quality, investment-grade securities. As a result, we do not believe that
we are subject to material interest rate risk.

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time we are involved in litigation incidental to the
conduct of our business. We are not currently a party to any lawsuit or
arbitration proceeding the outcome of which we believe will have a material
adverse effect on our financial position, results of operations or liquidity.

The Securities and Exchange Commission has entered a formal order of
private investigation concerning the events underlying our revisions of our
fiscal 2000 operating results based on adjustments to fourth quarter 2000
revenue, which results were announced and revised in certain press releases
issued in January and March of 2001. In connection with its investigation, the
Commission will also be reviewing the restatement of our financial statements
set forth in our 2001 Annual Report on Form 10-K, as amended, and certain
related accounting, sales and organizational matters. We have been cooperating
fully with the Staff of the Commission in its investigation and to date the
Staff has made no determinations that we are aware of with respect to this
investigation.

On June 21, 2002, in the United States District Court, Central District
of California, Comarco Wireless Technologies, Inc. filed a lawsuit against us
and our wholly owned subsidiary Xtend Micro Products, Inc. The suit alleges that
we are offering products for sale that infringe upon two United States patents
issued to Comarco. The suit seeks injunctive relief, monetary damages, and costs
and attorney's fees. We are investigating the facts surrounding these claims and
consulting with legal counsel for Mobility regarding this matter, as Mobility is
currently involved in litigation with Comarco over similar patent issues. While
we intend to vigorously defend ourselves in this matter, we cannot be certain
that our defense will be successful, and our business could be harmed if we are
unsuccessful.

On June 14, 2002, in the United States District Court, Northern Nevada,
we filed a lawsuit against Mark Rapparport and XMicro Holding Company, Inc.,
seeking declaratory relief and alleging intentional interference with
prospective advantage. This lawsuit was filed in response to a letter received
from counsel for Rapparport and XMicro which made various allegations regarding
a previous settlement agreement between the parties, our acquisition of Xtend
Micro Products and certain other matters. In the lawsuit we sought an order
stating that the settlement agreement is valid and enforceable, an order
preventing the defendants from further attempting to interfere with the pending
merger, monetary damages, and costs and attorney's fees. Effective July 18,
2002, the parties entered into a settlement agreement regarding these matters.
In connection with this settlement, presuming that the merger is consummated, we
will pay such parties $1,850,000 in cash, all active litigation between the
parties will be dismissed and all claims and demands terminated and released.
Mr. Rapparport has agreed to vote his 3,531,199 shares in favor of the merger,
but prior to the consummation of the merger, such shares will be cancelled and
he will not receive distributions of any of the merger consideration. If the
merger agreement is terminated or the merger does not occur prior to October 31,
2002, the parties' respective obligations and releases under the settlement
agreement will terminate, Mr. Rapparport will keep his shares and will forfeit
all but certain portions of the settlement payment. If the merger is terminated
prior to September 3, 2002 and no stockholder meeting to approve the merger has
taken place, Mr. Rapparport will retain $350,000 of the settlement payment. If
the merger is terminated after September 3, 2002 or otherwise following our
stockholder meeting, Mr. Rapparport will retain $250,000 in addition to the
previously retained payment. If the merger has not occurred by October 1, 2002,
and iGo and Mobility choose to extend the merger agreement, but the merger does
not occur by October 31, 2002, then Mr. Rapparport would retain $500,000 in
addition to the previously retained payments. Mobility has agreed to reimburse
us for one-half of any payments retained by such stockholder in the event the
merger agreement is terminated or the merger does not occur by the deadline.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

In connection with our initial public offering of common stock, we
filed a Registration Statement on Form S-1, SEC File No. 333-84723 (the
"Registration Statement"), which was declared effective by the Commission on
October 13, 1999. Pursuant to the Registration Statement, we registered
5,750,000 shares of our common stock, $.001 par value per share, including
750,000 shares available for sale to the underwriters upon the exercise of their
over-allotment option. The aggregate offering price of the shares sold was $69.0
million, $4.8 million of which was applied towards the underwriters' discounts
and commissions. Other expenses related to the offering totaled $1.6 million.
The net proceeds to us from the sale of common stock in the initial public
offering were approximately $62.6 million, including exercise of the
underwriters' over-allotment option.

We have used a portion of the proceeds for investment in sales and
marketing, and general corporate purposes, including capital expenditures ($4.9
million), as well as strategic acquisitions ($5.0 million). The remainder of the
proceeds have been invested in short-term, interest-bearing, investment-grade
securities. The use of proceeds from the offering does not represent a material
change in the use of proceeds described in our final prospectus filed on October
15, 1999.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS ON
FORM 8-K

(a) EXHIBITS

Exhibit Number Description

99.1 Certification of Chief Executive Officer and Chief
Financial Officer Pursuant to 18 U.S.C. Section 1350

(b) REPORTS ON FORM 8-K

There were no reports on Form 8-K filed during the period covered by
this report. However, on July 26, 2002, the Company filed a Form 8-K under Item
1 and Item 5, announcing (respectively) an amendment to the Agreement and Plan
of Merger among Mobility Electronics, Inc., IGOC Acquisition, Inc., and the
Company, and that the adjustment to the cash consideration for the merger as set
forth in such amendment was the result of a settlement reached with a
significant stockholder of the Company, Mark Rapparport, and his affiliate,
XMicro Holding Company, with respect to certain allegations that were made by
such parties against the Company and certain of its affiliates. The principal
agreements for such amendment and settlement were filed in connection with such
Form 8-K and, accordingly, are not included herewith.

SIGNATURES

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

Dated: August 14, 2002

iGo CORPORATION

/s/ Scott Shackelton
-----------------------------------
Scott Shackelton
Senior Vice President, Finance
and Chief Financial Officer

(Duly Authorized Officer, Principal
Financial and Accounting Officer)