##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from __________________ to _________________
 Commission file number: 0-30907
 iGo, Inc.
 (Exact Name of Registrant as Specified in its Charter)
 Delaware
    
    86-0843914(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (IRS Employer Identification No.)17800 N. Perimeter Dr., Suite 200, Scottsdale, Arizona
    
    85255(Address of Principal Executive Offices)
    
    (Zip Code)
 (480) 596-0061  (Registrants telephone number, including area code)
 Not applicable  (Former Name, Former Address, and Former Fiscal Year if Changed Since Last Report)
  þ o
  o o
  Large Accelerated Filer o
    
    Accelerated Filer o
    
    Non-Accelerated Filer o
    
    Smaller Reporting Company þ(Do not check if a smaller reporting company)
  o þ




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##### 



IGO, INC.
FORM 10-Q
 TABLE OF CONTENTS
 PAGE NO.PART I FINANCIAL INFORMATION
    
    
    1Item 1. Financial Statements:
    
    
    1Condensed Consolidated Balance Sheets
    
    
    1Condensed Consolidated Statements of Operations
    
    
    2Condensed Consolidated Statements of Cash Flows
    
    
    3Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures About Market
Risk
    
    
    24Item 4. Controls and Procedures
    
    
    25PART II OTHER INFORMATION
    
    
    25Item 1. Legal Proceedings
    
    
    25Item 1A. Risk Factors
    
    
    25Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds
    
    
    25Item 5. Other Information
    
    
    25Item 6. Exhibits
    
    
    26SIGNATURES
    
    
    27EXHIBIT INDEX
    
    
    28EX-31.1EX-31.2EX-32.1
   i




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PART I FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS:
 IGO, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS  (In thousands, except share amounts)  (unaudited)
 September 30,
    
    
    December 31,2010
    
    
    2009As recastASSETSCurrent assets:Cash and cash equivalents
    
    $
    11,472
    
    
    $
    19,775Short-term investments
    
    
    20,216
    
    
    
    12,777Accounts receivable, net
    
    
    8,115
    
    
    
    5,109Inventories
    
    
    11,391
    
    
    
    5,964Prepaid expenses and other current assets
    
    
    321
    
    
    
    401Total current assets
    
    
    51,515
    
    
    
    44,026Property and equipment, net
    
    
    675
    
    
    
    835Goodwill
    
    
    171
    
    
    
    Intangible assets, net
    
    
    1,507
    
    
    
    1,048Notes receivable and other assets, net
    
    
    153
    
    
    
    268Total assets
    
    $
    54,021
    
    
    $
    46,177LIABILITIES AND EQUITYLiabilities:Accounts payable
    
    $
    8,687
    
    
    $
    3,557Accrued expenses and other current liabilities
    
    
    1,353
    
    
    
    1,424Deferred revenue
    
    
    2,504
    
    
    
    914Total liabilities
    
    
    12,544
    
    
    
    5,895Equity:Common stock, $.01 par value; authorized
90,000,000 shares; 32,884,952 and 32,411,531
shares issued and outstanding at September 30,
2010 and December 31, 2009, respectively
    
    
    329
    
    
    
    324Additional paid-in capital
    
    
    171,782
    
    
    
    171,034Accumulated deficit
    
    
    (130,797
    )
    
    
    (131,216
    )Accumulated other comprehensive income
    
    
    163
    
    
    
    140Total equity
    
    
    41,477
    
    
    
    40,282Total liabilities and equity
    
    $
    54,021
    
    
    $
    46,177
  1




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##### Table of Contents



IGO, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  (In thousands, except per share amounts)  (unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009As recast
    
    
    
    
    
    
    As recastRevenue
    
    $
    12,220
    
    
    $
    11,994
    
    
    $
    30,137
    
    
    $
    39,025Cost of revenue
    
    
    8,181
    
    
    
    7,870
    
    
    
    20,134
    
    
    
    27,105Gross profit
    
    
    4,039
    
    
    
    4,124
    
    
    
    10,003
    
    
    
    11,920Operating expenses:Sales and marketing
    
    
    2,059
    
    
    
    1,793
    
    
    
    5,464
    
    
    
    5,172Research and development
    
    
    351
    
    
    
    463
    
    
    
    1,060
    
    
    
    1,599General and administrative
    
    
    1,958
    
    
    
    1,697
    
    
    
    5,380
    
    
    
    6,268Total operating expenses
    
    
    4,368
    
    
    
    3,953
    
    
    
    11,904
    
    
    
    13,039Income (loss) from operations
    
    
    (329
    )
    
    
    171
    
    
    
    (1,901
    )
    
    
    (1,119
    )Other income, net:Interest income, net
    
    
    52
    
    
    
    57
    
    
    
    147
    
    
    
    184Gain on disposal of assets and other income, net
    
    
    93
    
    
    
    90
    
    
    
    1,938
    
    
    
    363Income (loss) before income tax
    
    
    (184
    )
    
    
    318
    
    
    
    184
    
    
    
    (572
    )Income tax benefit
    
    
    235
    
    
    
    
    
    
    
    235
    
    
    
    Net income (loss)
    
    
    51
    
    
    
    318
    
    
    
    419
    
    
    
    (572
    )Net income (loss) per shareBasic
    
    $
    0.00
    
    
    $
    0.01
    
    
    $
    0.01
    
    
    $
    (0.02
    )Diluted
    
    $
    0.00
    
    
    $
    0.01
    
    
    $
    0.01
    
    
    $
    (0.02
    )Weighted average common shares outstandingBasic
    
    
    32,885
    
    
    
    32,412
    
    
    
    32,731
    
    
    
    32,276Diluted
    
    
    34,777
    
    
    
    33,958
    
    
    
    34,623
    
    
    
    32,276
  2




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IGO, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (In thousands)  (unaudited)
 Nine Months EndedSeptember 30,2010
    
    
    2009As recastCash flows from operating activities:Net income (loss)
    
    $
    419
    
    
    $
    (572
    )Adjustments to reconcile net income (loss) to net cash provided by
operating activities:Provision for doubtful accounts and sales returns and credits
    
    
    201
    
    
    
    545Depreciation and amortization
    
    
    1,185
    
    
    
    1,086Stock compensation expense
    
    
    1,007
    
    
    
    1,008Gain on sale of business
    
    
    (1,714
    )
    
    
    Deferred taxes
    
    
    (235
    )
    
    
    Loss on disposal of assets, net
    
    
    
    
    
    
    56Changes in operating assets and liabilities, net of acquisition:Accounts receivable
    
    
    (1,216
    )
    
    
    3,091Inventories
    
    
    (5,427
    )
    
    
    (1,719
    )Prepaid expenses and other assets
    
    
    (211
    )
    
    
    290Accounts payable
    
    
    4,976
    
    
    
    (402
    )Accrued expenses and other current liabilities
    
    
    1,265
    
    
    
    (572
    )Net cash provided by operating activities
    
    
    250
    
    
    
    2,811Cash flows from investing activities:Purchase of property and equipment
    
    
    (236
    )
    
    
    (422
    )Proceeds from disposal of assets
    
    
    
    
    
    
    11Cash paid for acquisition
    
    
    (900
    )
    
    
    (Purchase) sale of short-term investments, net
    
    
    (7,430
    )
    
    
    (93
    )Net cash used in investing activities
    
    
    (8,566
    )
    
    
    (504
    )Cash flows from financing activities:Net cash provided by financing activities
    
    
    
    
    
    
    Effects of exchange rate changes on cash and cash equivalents
    
    
    13
    
    
    
    7Net (decrease)/increase in cash and cash equivalents
    
    
    (8,303
    )
    
    
    2,314Cash and cash equivalents, beginning of period
    
    
    19,775
    
    
    
    25,619Cash and cash equivalents, end of period
    
    $
    11,472
    
    
    $
    27,933
  3




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IGO, INC. AND SUBSIDIARIES
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 (1) Basis of Presentation
     Recent Accounting Pronouncements
    4




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(2) Mission Deconsolidation
    5




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December 31, 2009As reported
    
    
    Adjustments
    
    
    As recastASSETSCurrent assets:Cash and cash equivalents
    
    $
    20,091
    
    
    $
    (316
    )
    
    $
    19,775Short-term investments
    
    
    12,777
    
    
    
    
    
    
    
    12,777Accounts receivable, net
    
    
    5,692
    
    
    
    (583
    )
    
    
    5,109Inventories
    
    
    6,612
    
    
    
    (648
    )
    
    
    5,964Prepaid expenses and other current assets
    
    
    411
    
    
    
    (10
    )
    
    
    401Total current assets
    
    
    45,583
    
    
    
    (1,557
    )
    
    
    44,026Property and equipment, net
    
    
    890
    
    
    
    (55
    )
    
    
    835Intangible assets, net
    
    
    1,087
    
    
    
    (39
    )
    
    
    1,048Notes receivable and other assets
    
    
    174
    
    
    
    94
    
    
    
    268Total assets
    
    $
    47,734
    
    
    $
    (1,557
    )
    
    $
    46,177LIABILITIES AND EQUITYLiabilities:Accounts payable
    
    $
    3,868
    
    
    $
    (311
    )
    
    $
    3,557Accrued expenses and other current liabilities
    
    
    1,667
    
    
    
    (243
    )
    
    
    1,424Deferred revenue
    
    
    965
    
    
    
    (51
    )
    
    
    914Total liabilities
    
    
    6,500
    
    
    
    (605
    )
    
    
    5,895Equity:Total iGo, Inc. common stockholders equity
    
    
    40,310
    
    
    
    (28
    )
    
    
    40,282Non-controlling interest
    
    
    924
    
    
    
    (924
    )
    
    
    Total equity
    
    
    41,234
    
    
    
    (952
    )
    
    
    40,282Total liabilities and equity
    
    $
    47,734
    
    
    $
    (1,557
    )
    
    $
    46,177
  Three Months Ended
    
    
    Nine Months EndedSeptember 30, 2009
    
    
    September 30, 2009Asreported
    
    
    Adjustments
    
    
    As recast
    
    
    As reported
    
    
    Adjustments
    
    
    As recastRevenue
    
    $
    13,837
    
    
    $
    (1,843
    )
    
    $
    11,994
    
    
    $
    43,852
    
    
    $
    (4,827
    )
    
    $
    39,025Cost of revenue
    
    
    8,732
    
    
    
    (862
    )
    
    
    7,870
    
    
    
    29,552
    
    
    
    (2,447
    )
    
    
    27,105Gross profit
    
    
    5,105
    
    
    
    (981
    )
    
    
    4,124
    
    
    
    14,300
    
    
    
    (2,380
    )
    
    
    11,920Operating expenses:Sales and marketing
    
    
    2,009
    
    
    
    (216
    )
    
    
    1,793
    
    
    
    5,853
    
    
    
    (681
    )
    
    
    5,172Research and development
    
    
    751
    
    
    
    (288
    )
    
    
    463
    
    
    
    2,422
    
    
    
    (823
    )
    
    
    1,599General and administrative
    
    
    1,966
    
    
    
    (269
    )
    
    
    1,697
    
    
    
    7,072
    
    
    
    (804
    )
    
    
    6,268Total operating expenses
    
    
    4,726
    
    
    
    (773
    )
    
    
    3,953
    
    
    
    15,347
    
    
    
    (2,308
    )
    
    
    13,039Income (loss) from operations
    
    
    379
    
    
    
    (208
    )
    
    
    171
    
    
    
    (1,047
    )
    
    
    (72
    )
    
    
    (1,119
    )Other income (expense):Interest income, net
    
    
    28
    
    
    
    29
    
    
    
    57
    
    
    
    103
    
    
    
    81
    
    
    
    184Gain on disposal of assets and
other income, net
    
    
    131
    
    
    
    (41
    )
    
    
    90
    
    
    
    483
    
    
    
    (120
    )
    
    
    363Net income (loss)
    
    
    538
    
    
    
    (220
    )
    
    
    318
    
    
    
    (461
    )
    
    
    (111
    )
    
    
    (572
    )Less: Net loss attributable
to non-controlling interest
    
    
    (220
    )
    
    
    220
    
    
    
    
    
    
    
    (178
    )
    
    
    178
    
    
    
    Net income (loss)
attributable to iGo, Inc.
    
    $
    318
    
    
    $
    
    
    
    $
    318
    
    
    $
    (639
    )
    
    $
    67
    
    
    $
    (572
    )
 6




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Nine Months EndedSeptember 30, 2009As reported
    
    
    Adjustments
    
    
    As RecastCash flows from operating activities:Net loss
    
    $
    (461
    )
    
    $
    (111
    )
    
    $
    (572
    )Adjustments to reconcile net loss to net cash provided by operating
activities:Provision for doubtful accounts and sales returns and credits
    
    
    545
    
    
    
    
    
    
    
    545Depreciation and amortization
    
    
    1,145
    
    
    
    (59
    )
    
    
    1,086Stock compensation expense
    
    
    1,008
    
    
    
    
    
    
    
    1,008Loss on disposal of assets, net
    
    
    56
    
    
    
    
    
    
    
    56Changes in operating assets and liabilities:Accounts receivable
    
    
    3,188
    
    
    
    (97
    )
    
    
    3,091Inventories
    
    
    (1,483
    )
    
    
    (236
    )
    
    
    (1,719
    )Prepaid expenses and other assets
    
    
    (110
    )
    
    
    400
    
    
    
    290Accounts payable
    
    
    (461
    )
    
    
    59
    
    
    
    (402
    )Accrued expenses and other current liabilities
    
    
    (507
    )
    
    
    (65
    )
    
    
    (572
    )Net cash provided by operating activities
    
    
    2,920
    
    
    
    (109
    )
    
    
    2,811Cash flows from investing activities:Purchase of property and equipment
    
    
    (440
    )
    
    
    18
    
    
    
    (422
    )Proceeds from disposal of assets
    
    
    11
    
    
    
    
    
    
    
    11(Purchase) sale of investments, net
    
    
    (93
    )
    
    
    
    
    
    
    (93
    )Net cash used in investing activities
    
    
    (522
    )
    
    
    18
    
    
    
    (504
    )Cash flows from financing activities:Net cash provided by financing activities
    
    
    
    
    
    
    
    
    
    
    Effects of exchange rate changes on cash and cash equivalents
    
    
    7
    
    
    
    
    
    
    
    7Net increase in cash and cash equivalents
    
    
    2,405
    
    
    
    (91
    )
    
    
    2,314Cash and cash equivalents, beginning of period
    
    
    26,139
    
    
    
    (520
    )
    
    
    25,619Cash and cash equivalents, end of period
    
    $
    28,544
    
    
    $
    (611
    )
    
    $
    27,933
 (3) Acquisition
    7




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Estimated LifeTangible assets acquired
    
    $
    277Intangible assets acquiredCustomer relationships
    
    
    720
    
    
    5 yearsNon-compete agreements
    
    
    80
    
    
    3 yearsTrade name
    
    
    40
    
    
    3 yearsGoodwill
    
    
    171
    
    
    Indefinite1,288Liabilities assumed
    
    
    (153
    )Deferred tax liability, net
    
    
    (235
    )Total consideration
    
    $
    900
   (4) Fair Value Measurement
    (5) Investments
    8




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September 30, 2010
    
    
    December 31, 2009Net
    
    
    
    
    
    
    
    
    
    
    NetUnrealized
    
    
    
    
    
    
    
    
    
    
    UnrealizedHolding
    
    
    
    
    
    
    
    
    
    
    HoldingAmortized
    
    
    Gains
    
    
    Aggregate
    
    
    Amortized
    
    
    Gains
    
    
    AggregateCost
    
    
    (Losses)
    
    
    Fair Value
    
    
    Cost
    
    
    (Losses)
    
    
    Fair ValueU.S. corporate securities:Commercial paper
    
    $
    1,199
    
    
    $
    
    
    
    $
    1,199
    
    
    $
    3,495
    
    
    $
    
    
    
    $
    3,495Corporate notes and bonds
    
    
    5,175
    
    
    
    3
    
    
    
    5,178
    
    
    
    3,278
    
    
    
    
    
    
    
    3,2786,374
    
    
    
    3
    
    
    
    6,377
    
    
    
    6,773
    
    
    
    
    
    
    
    6,773U.S. municipal funds
    
    
    5,070
    
    
    
    
    
    
    
    5,070
    
    
    
    5,000
    
    
    
    4
    
    
    
    5,004U.S. government securities
    
    
    8,764
    
    
    
    5
    
    
    
    8,769
    
    
    
    1,001
    
    
    
    (1
    )
    
    
    1,000$
    20,208
    
    
    $
    8
    
    
    $
    20,216
    
    
    $
    12,774
    
    
    $
    3
    
    
    $
    12,777
 (6) Goodwill
  Reported balance at December 31, 2009
    
    $
    Acquisition of Adapt Mobile
    
    
    171Reported balance at September 30, 2010
    
    $
    171
 (7) Intangible Assets
  September 30, 2010
    
    
    December 31, 2009Average
    
    
    Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    As recast
    
    
    NetLife
    
    
    Intangible
    
    
    Accumulated
    
    
    Intangible
    
    
    Intangible
    
    
    Accumulated
    
    
    Intangible(Years)
    
    
    Assets
    
    
    Amortization
    
    
    Assets
    
    
    Assets
    
    
    Amortization
    
    
    AssetsAmortized intangible
assets:Patents and trademarks
    
    
    3
    
    
    $
    4,375
    
    
    $
    (3,774
    )
    
    $
    601
    
    
    $
    3,967
    
    
    $
    (3,052
    )
    
    $
    915Non-compete agreements
    
    
    3
    
    
    
    80
    
    
    
    (4
    )
    
    
    76
    
    
    
    
    
    
    
    
    
    
    
    Trade names
    
    
    8
    
    
    
    482
    
    
    
    (348
    )
    
    
    134
    
    
    
    442
    
    
    
    (309
    )
    
    
    133Customer relationships
    
    
    5
    
    
    
    720
    
    
    
    (24
    )
    
    
    696
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    $
    5,657
    
    
    $
    (4,150
    )
    
    $
    1,507
    
    
    $
    4,409
    
    
    $
    (3,361
    )
    
    $
    1,048
   (8) Notes Receivable and Other Assets, Net
   9




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(9) Stock-based Compensation
   2004 Directors Plan
    
    
    2004 Omnibus Plan
    
    
    Nasdaq Rule 5635(c)(4) GrantsWeighted Average
    
    
    
    
    
    
    Weighted Average
    
    
    
    
    
    
    Weighted AverageNumber
    
    
    Value per Share
    
    
    Number
    
    
    Value per Share
    
    
    Number
    
    
    Value per ShareOutstanding, December 31, 2009
    
    
    94,499
    
    
    $
    1.90
    
    
    
    790,194
    
    
    $
    2.60
    
    
    
    625,000
    
    
    $
    2.13Granted
    
    
    58,194
    
    
    
    1.54
    
    
    
    421,806
    
    
    $
    1.90
    
    
    
    600,000
    
    
    
    1.74Canceled
    
    
    
    
    
    
    
    
    
    
    (41,337
    )
    
    $
    2.36
    
    
    
    
    
    
    
    Released to common stock
    
    
    (80,417
    )
    
    
    2.05
    
    
    
    (221,816
    )
    
    $
    3.26
    
    
    
    (171,188
    )
    
    
    2.13Released for settlement of taxes
    
    
    
    
    
    
    
    
    
    
    (103,431
    )
    
    $
    3.86
    
    
    
    (78,812
    )
    
    
    2.13Outstanding, September 30, 2010
    
    
    72,276
    
    
    $
    1.45
    
    
    
    845,416
    
    
    $
    1.93
    
    
    
    975,000
    
    
    $
    1.89
    (10) Net Income (Loss) per Share
  Three Months Ended
    
    
    Nine Months EndedSeptember  30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009As recast
    
    
    
    
    
    
    As recastBasic net income (loss) per share computation:Numerator:Net income (loss)
    
    $
    51
    
    
    $
    318
    
    
    $
    419
    
    
    $
    (572
    )Denominator:Weighted average number of common shares outstanding
    
    
    32,885
    
    
    
    32,412
    
    
    
    32,731
    
    
    
    32,276Basic net income (loss) per share:
    
    $
    0.00
    
    
    $
    0.01
    
    
    $
    0.01
    
    
    $
    (0.02
    )Diluted net income (loss) per share computation:Numerator:Net income (loss)
    
    $
    51
    
    
    $
    318
    
    
    $
    419
    
    
    $
    (572
    )Denominator:Weighted average number of common shares outstanding
    
    
    32,885
    
    
    
    32,412
    
    
    
    32,731
    
    
    
    32,276Effect of dilutive stock options, warrants, and
restricted stock units
    
    
    1,892
    
    
    
    1,546
    
    
    
    1,892
    
    
    
    34,777
    
    
    
    33,958
    
    
    
    34,623
    
    
    
    32,276Diluted net income (loss) attributable to iGo, Inc. per share:
    
    $
    0.00
    
    
    $
    0.01
    
    
    $
    0.01
    
    
    $
    (0.02
    )Stock options not included in dilutive net income (loss) per
share since antidilutive
    
    
    
    
    
    
    200
    
    
    
    
    
    
    
    200Warrants not included in dilutive net income (loss) per share
since antidilutive
    
    
    5
    
    
    
    600
    
    
    
    5
    
    
    
    600
 10




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##### Table of Contents



(11) Comprehensive Income (Loss)
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009As recast
    
    
    
    
    
    
    As recastNet income (loss)
    
    $
    51
    
    
    $
    318
    
    
    $
    419
    
    
    $
    (572
    )Other comprehensive income:Unrealized gain (loss) on available for
sale investments
    
    
    12
    
    
    
    (6
    )
    
    
    9
    
    
    
    (8
    )Foreign currency translation adjustments
    
    
    130
    
    
    
    3
    
    
    
    14
    
    
    
    7Total comprehensive income (loss)
    
    $
    193
    
    
    $
    315
    
    
    $
    442
    
    
    $
    (573
    )
 (12) Business Segments, Concentration of Credit Risk and Significant Customers
   Three Months Ended
    
    
    Nine Months EndedSeptember  30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009As recast
    
    
    
    
    
    
    As recastRevenue:Computer power products
    
    $
    7,853
    
    
    $
    5,480
    
    
    $
    19,694
    
    
    $
    23,044Mobile electronic device power products
    
    
    3,958
    
    
    
    6,252
    
    
    
    9,712
    
    
    
    15,532Accessories
    
    
    357
    
    
    
    119
    
    
    
    559
    
    
    
    155Other
    
    
    52
    
    
    
    143
    
    
    
    172
    
    
    
    294$
    12,220
    
    
    $
    11,994
    
    
    $
    30,137
    
    
    $
    39,025
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009As recast
    
    
    
    
    
    
    As recastNorth America (principally United States)
    
    $
    9,585
    
    
    $
    10,691
    
    
    $
    24,310
    
    
    $
    35,648Europe
    
    
    2,086
    
    
    
    1,101
    
    
    
    4,248
    
    
    
    2,663Asia Pacific
    
    
    549
    
    
    
    202
    
    
    
    1,579
    
    
    
    714$
    12,220
    
    
    $
    11,994
    
    
    $
    30,137
    
    
    $
    39,025
  11




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##### Table of Contents



(13) Contingencies
   (14) Subsequent Event
 ® ®
   12




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##### Table of Contents



Estimated LifeTangible assets acquired
    
    $
    462Intangible assets acquiredCustomer relationships
    
    
    830
    
    
    5 yearsNon-compete agreements
    
    
    90
    
    
    3 yearsTrade name
    
    
    170
    
    
    3 yearsProprietary processes
    
    
    850
    
    
    5 yearsIn process research and development
    
    
    220
    
    
    IndefiniteGoodwill
    
    
    1,674
    
    
    Indefinite4,296Liabilities assumed
    
    
    (221
    )Deferred tax liability, net
    
    
    (735
    )Total consideration
    
    $
    3,340
   
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  13




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##### Table of Contents




    
    our dependence on large purchases from a significant customer;
 
    
    our ability to expand and diversify our customer base;
 
    
    our ability to expand our revenue base and develop new products;
 
    
    our loss or failure to replace any significant retail or distribution
partners;
 
    
    our ability to successfully integrate acquired businesses, products and
technologies, including Adapt Mobile and Aerial7;
 
    
    our failure to expand or protect our propriety rights and intellectual
property;
 
    
    our failure to complete development of products in a timely manner;
 
    
    our failure to achieve the performance criteria required of our
products by our customers;
 
    
    fluctuations in our operating results because of: the timing of new
product and technology introductions and product enhancements relative to our competitors,
market acceptance of our products, the size and timing of customer orders, our ability to
effectively manage inventory levels, delay or failure to fulfill orders for our products
on a timely basis, distribution of or changes in our revenue among distribution partners
and retailers, our inability to accurately forecast our contract manufacturing needs,
difficulties with new product production implementation or supply chain, our suppliers
ability to perform under their contracts with us, product defects and other product
quality problems, the degree and rate of growth in our markets and the accompanying demand
for our products, our ability to expand our internal and external sales forces and build
the required infrastructure to meet anticipated growth, and seasonality of sales;
 
    
    increased focus on consumer electronics retailers on their own private
label brands;
 
    
    decreasing sales prices on our products over their sales cycles;
 14




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##### Table of Contents




    
    increased reliance upon RadioShack and Walmart;
 
    
    the termination of reseller and distributor agreements or reduced or
delayed orders;
 
    
    difficulty in predicting sales to our customers resulting in increased
levels of inventory;
 
    
    lack of visibility to end user customers;
 
    
    resellers and distributors promotion of competitor products;
 
    
    corporate and other sales incentive changes at our resellers and
distributors;
 
    
    our failure to introduce new products and product enhancements that
achieve market acceptance;
 
    
    our failure to protect our intellectual property;
 
    
    intellectual property infringement claims against us;
 
    
    our reliance on and the risk relating to outsourced manufacturing
fulfillment of our products, including potential increases in manufacturing costs;
 
    
    our reliance on sole sources for key components;
 
    
    our ability to manage our anticipated growth;
 
    
    our ability to manage our inventory levels;
 
    
    the negative impacts of product returns;
 
    
    design and performance issues with our products;
 
    
    product liability claims;
 
    
    our ability to hire and retain qualified personnel;
 
    
    our ability to secure additional financing to meet our future capital
needs;
 
    
    increased competition and/or reduced demand in our industry;
 
    
    our failure to comply with domestic and international laws and
regulations;
 
    
    economic conditions, political events, war, terrorism, public health
issues, natural disasters and similar circumstances;
 
    
    volatility in our stock price;
 
    
    the risk that our common stock could be delisted from Nasdaq;
 
    
    concentration of stock ownership among our executive officers and
principal stockholders;
 
    
    provisions in our certificate of incorporation, bylaws and Delaware
law, as well as our stockholder rights plan, that could make a proposed acquisition of the
Company more difficult; and
 
    
    dilution resulting from potential future stock issuances.
 15




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##### Table of Contents



iGo®, iGo Green®, Adapt Mobile® and Aerial7® are registered trademarks of iGo, Inc. or its
subsidiaries in the United States and other countries. Other names and brands may be claimed as
the property of others.
 Overview
   Power
 ®
 Protection
  Audio
   16




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##### Table of Contents



Recent Developments
     Critical Accounting Policies and Estimates
   Results of Operations
  17




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009As recast
    
    
    
    
    
    
    As recastRevenue
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of revenue
    
    
    66.9
    %
    
    
    65.6
    %
    
    
    66.8
    %
    
    
    69.5
    %Gross profit
    
    
    33.1
    %
    
    
    34.4
    %
    
    
    33.2
    %
    
    
    30.5
    %Operating expenses:Sales and marketing
    
    
    16.8
    %
    
    
    14.9
    %
    
    
    18.1
    %
    
    
    13.3
    %Research and development
    
    
    2.9
    %
    
    
    3.9
    %
    
    
    3.5
    %
    
    
    4.1
    %General and administrative
    
    
    16.0
    %
    
    
    14.1
    %
    
    
    17.9
    %
    
    
    16.1
    %Total operating expenses
    
    
    35.7
    %
    
    
    33.0
    %
    
    
    39.5
    %
    
    
    33.4
    %Gain (loss) from operations
    
    
    (2.7
    %)
    
    
    1.4
    %
    
    
    (6.3
    %)
    
    
    (2.9
    %)Other income (expense):Interest, net
    
    
    0.4
    %
    
    
    0.5
    %
    
    
    0.5
    %
    
    
    0.5
    %Gain on disposal of assets and other income, net
    
    
    0.8
    %
    
    
    0.8
    %
    
    
    6.4
    %
    
    
    0.9
    %Income (loss) before income tax
    
    
    (1.5
    %)
    
    
    2.7
    %
    
    
    0.6
    %
    
    
    (1.5
    %)Income tax benefit
    
    
    1.9
    %
    
    
    
    %
    
    
    0.8
    %
    
    
    
    %Net income (loss)
    
    
    0.4
    %
    
    
    2.7
    %
    
    
    1.4
    %
    
    
    (1.5
    %)
 Comparison of Three Months Ended September 30, 2010 and 2009
 Revenue .
 Percentage changeThree Months
    
    
    Three Months
    
    
    Increase
    
    
    from the sameEnded
    
    
    Ended
    
    
    from same period in
    
    
    period in the priorSeptember  30, 2010
    
    
    September 30, 2009
    
    
    the prior year
    
    
    yearRevenue
    
    $
    12,220
    
    
    $
    11,994
    
    
    $
    226
    
    
    
    1.9
    %The increase in revenue was due primarily to increases of $2.2 million in sales to
Walmart and a combined increase of $1.4 million in sales to other direct-to-retail accounts,
including: Office Depot, Office Max, Best Buy Express, HH Gregg, Frys Electronics, and Microcel
for the three months ended September 30, 2010 compared to the three months ended September 30,
2009. Sales to Radioshack declined $3.4 million to $4.3 million for the three months ended
September 30, 2010 from $7.7 million for the three months ended September 30, 2009. We anticipate
continuing to gain market penetration for our iGo-branded products in retail and distribution
channels in 2010 and 2011, which we expect will partially offset the continued decrease in revenue
from RadioShack.Cost of revenue, gross profit and gross margin.Cost of revenue generally consists of costs
associated with components, outsourced manufacturing and in-house labor associated with assembly,
testing, packaging, shipping and quality assurance, depreciation of equipment and indirect
manufacturing costs. Gross profit is the difference between revenue and cost of revenue. Gross
margin is gross profit stated as a percentage of revenue. The following table summarizes the
year-over-year comparison of our cost of revenue, gross profit and gross margin for the periods
indicated ($ in thousands):Percentage changeThree Months
    
    
    Three Months
    
    
    Increase/(decrease)
    
    
    from the sameEnded
    
    
    Ended
    
    
    from same period in
    
    
    period in the priorSeptember  30, 2010
    
    
    September  30, 2009
    
    
    the prior year
    
    
    yearCost of revenue
    
    $
    8,181
    
    
    $
    7,870
    
    
    $
    311
    
    
    
    4.0
    %Gross profit
    
    $
    4,039
    
    
    $
    4,124
    
    
    $
    (85
    )
    
    
    (2.1
    )%Gross margin
    
    
    33.1
    %
    
    
    34.4
    %
    
    
    (1.3
    %)
    
    
    3.8
    %The increase in cost of revenue was due primarily to the increase in revenue discussed
above. The decreases in gross profit and gross margin were primarily due to an increase in
manufacturing overhead. Manufacturing overhead as a percent of revenue increased to 16.5% for the
three months ended September 30, 2010 compared to 5.4% for the three months ended September 30,
2009, primarily due to an increase in freight costs associated with selling products directly to
retailers rather than through private-label resellers. The increase in manufacturing overhead was
partially offset by an increase in direct margin which excludes labor and overhead costs to 49.6%
for the three months ended September 30, 2010 from 39.7% for the three months ended September 30,
2009 primarily as the increased direct margin of sales on iGo-branded products directly to
retailers. As a result of these factors, cost of revenue as a percentage of revenue increased to
66.9% for the three months ended September 30, 2010 from 65.6% for the three months ended September
30, 2009.Sales and marketing.Sales and marketing expenses generally consist of salaries, commissions
and other personnel-related costs of our sales, marketing and support personnel, advertising,
public relations, promotions, printed media and travel. The following table summarizes the
year-over-year comparison of our sales and marketing expenses for the periods indicated ($ in
thousands):Percentage changeThree Months
    
    
    Three Months
    
    
    Increase
    
    
    from the sameEnded
    
    
    Ended
    
    
    from same period in
    
    
    period in the priorSeptember 30,  2010
    
    
    September 30, 2009
    
    
    the prior year
    
    
    yearSales and marketing
    
    $
    2,059
    
    
    $
    1,793
    
    
    $
    266
    
    
    
    14.8
    %
 18




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##### Table of Contents



Research and development .
 Percentage changeThree Months
    
    
    Three Months
    
    
    Decrease from same
    
    
    from the sameEnded
    
    
    Ended
    
    
    period
    
    
    period in the priorSeptember 30, 2010
    
    
    September 30, 2009
    
    
    in the prior year
    
    
    yearResearch and development
    
    $
    351
    
    
    $
    463
    
    
    $
    (112
    )
    
    
    (24.2
    %)The decrease in research and development expenses primarily resulted from declines of
$78,000 in consulting, prototype and product certification and testing expenses, and $12,000 in
personnel related expenses. As a percentage of revenue, research and development expenses
decreased to 2.9% for the three months ended September 30, 2010 from 3.9% for the three months
ended September 30, 2009.General and administrative.General and administrative expenses primarily consist of salaries
and other personnel-related expenses of our finance, human resources, information systems,
corporate development and other administrative personnel, as well as facilities, legal and other
professional fees, depreciation and amortization and related expenses. The following table
summarizes the year-over-year comparison of our general and administrative expenses for the periods
indicated ($ in thousands):Percentage changeThree Months
    
    
    Three Months
    
    
    Increase
    
    
    from the sameEnded
    
    
    Ended
    
    
    from same period in
    
    
    period in the priorSeptember 30, 2010
    
    
    September 30, 2009
    
    
    the prior year
    
    
    yearGeneral and administrative
    
    $
    1,958
    
    
    $
    1,697
    
    
    $
    261
    
    
    
    15.4
    %
  Interest income, net.
 Gain on disposal of assets and other income, net .
 Income taxes .
 Comparison of Nine Months Ended September 30, 2010 and 2009
 Revenue .
 19




---



##### Table of Contents



Percentage changeNine Months
    
    Nine Months
    
    Decrease
    
    from the sameEnded
    
    Ended
    
    from same period in
    
    period in the priorSeptember 30, 2010
    
    September 30, 2009
    
    the prior year
    
    yearRevenue
    
    $
    30,137
    
    
    $
    39,025
    
    
    $
    (8,888
    )
    
    
    (22.8
    )%
  Cost of revenue, gross profit and gross margin .
 Percentage changeNine Months
    
    Nine Months
    
    Increase/(decrease)
    
    from the sameEnded
    
    Ended
    
    from same period in
    
    period in the priorSeptember 30, 2010
    
    September 30, 2009
    
    the prior year
    
    yearCost of revenue
    
    $
    20,134
    
    
    $
    27,105
    
    
    $
    (6,971
    )
    
    
    (25.7
    )%Gross profit
    
    $
    10,003
    
    
    $
    11,920
    
    
    $
    (1,917
    )
    
    
    (16.1
    )%Gross margin
    
    
    33.2
    %
    
    
    30.5
    %
    
    
    2.7
    %
    
    
    8.9
    %
  Sales and marketing .
 Percentage changeNine Months
    
    Nine Months
    
    Increase
    
    from the sameEnded
    
    Ended
    
    from same period in
    
    period in the priorSeptember 30, 2010
    
    September 30, 2009
    
    the prior year
    
    yearSales and marketing
    
    $
    5,464
    
    
    $
    5,172
    
    
    $
    292
    
    
    
    5.6
    %
  Research and development .
 20




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##### Table of Contents



Percentage changeNine Months
    
    Nine Months
    
    Decrease from same
    
    from the sameEnded
    
    Ended
    
    period
    
    period in the priorSeptember 30, 2010
    
    September 30, 2009
    
    in the prior year
    
    yearResearch and development
    
    $
    1,060
    
    
    $
    1,599
    
    
    $
    (539
    )
    
    
    (33.7
    )%
  General and administrative.
 Percentage changeNine Months
    
    Nine Months
    
    Decrease
    
    from the sameEnded
    
    Ended
    
    from same period in
    
    period in the priorSeptember 30, 2010
    
    September 30, 2009
    
    the prior year
    
    yearGeneral and administrative
    
    $
    5,380
    
    
    $
    6,268
    
    
    $
    (888
    )
    
    
    (14.2
    )%
  Interest income, net.
 Gain on disposal of assets and other income, net .
 Income taxes .
  Operating Outlook
  21




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##### Table of Contents



Liquidity and Capital Resources
 Cash and Cash Flow
    22




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##### Table of Contents



Nine Months Ended September 30,2010
    
    
    2009(As recast)Net cash provided by operating activities
    
    $
    250
    
    
    $
    2,811Net cash used in investing activities
    
    
    (8,566
    )
    
    
    (504
    )Net cash provided by financing activities
    
    
    
    
    
    
    Foreign currency exchange impact on cash flow
    
    
    13
    
    
    
    7Increase (decrease) in cash and cash equivalents
    
    $
    (8,303
    )
    
    $
    2,314Cash and cash equivalents at beginning of period
    
    $
    19,775
    
    
    $
    25,619Cash and cash equivalents at end of period
    
    $
    11,472
    
    
    $
    27,933
 
    
    Net cash provided by operating activities.Cash was provided by operating
activities for the nine months ended September 30, 2010 primarily as a result of net
income plus non-cash expenses and the combined effect of increases in inventories,
accounts receivable and accounts payable. For the current fiscal year, we expect to
generate cash from operating activities.
 Nine Months EndedSeptember 30,2010
    
    2009Days outstanding in ending accounts receivable (DSOs)
    
    
    73
    
    
    
    58Inventory turns
    
    
    3
    
    
    
    8
 The increase in DSOs at September 30, 2010 compared to September 30, 2009 was
primarily due to increases in accounts receivable as a result of our transition to a
customer base consisting largely of retail customers, who generally require longer
payment terms, as well as a lower overall revenue base. We expect DSOs for the remainder
of 2010 to remain consistent with the period ended September 30, 2010. The decrease in
inventory turns was primarily due to the decline in revenue from sales to RadioShack and
Targus, for whom we hold no inventory. We expect to manage inventory growth during 2010
and we expect inventory turns for the remainder of 2010 to remain consistent with the
period ended September 30, 2010.
    
    Net cash provided by / (used in) investing activities.For the nine months ended
September 30, 2010, net cash was used in investing activities primarily for purchases
of short-term investments and to acquire Adapt Mobile. Our current investment strategy
is to continue to invest excess cash in short-term investments.
    
    Net cash provided by financing activities.We had no cash flows from financing
activities during the first nine months of 2010 or 2009.
 Investments.
  23




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##### Table of Contents



Contractual Obligations.
 Payment due by period2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    More than 5 yearsOperating lease obligations
    
    $
    110
    
    
    $
    440
    
    
    $
    444
    
    
    $
    455
    
    
    $
    76
    
    
    $
    Inventory purchase obligations
    
    
    9,824
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Totals
    
    $
    9,934
    
    
    $
    440
    
    
    $
    444
    
    
    $
    455
    
    
    $
    76
    
    
    $
    
 Off-Balance Sheet Arrangements.
 Acquisitions and Dispositions.
   Net Operating Loss Carry-forwards.
 Liquidity Outlook.
 Recent Accounting Pronouncements
  
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   24




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##### Table of Contents



ITEM 4.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
 Changes in Internal Control Over Financial Reporting
 
 PART II OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
  
 ITEM 1A.
    
    RISK FACTORS
  
 ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 5.
    
    OTHER INFORMATION
  25




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##### Table of Contents



ITEM 6.
    
    EXHIBITS
  26




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##### Table of Contents



IGO, INC. AND SUBSIDIARIES
 
 SIGNATURES
  IGO, INC.Dated: November 4, 2010
    By:
    /s/ Michael D. HeilMichael D. HeilPresident and Chief Executive Officer
(Principal Executive Officer)By:
    /s/ Darryl S. BakerDarryl S. BakerVice President and
Chief Financial Officer
and Authorized Officer of Registrant
(Principal Financial Officer) 27




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description of Document2.1
    
    Agreement and Plan of Merger dated October 7, 2010 by and among iGo, Inc., Mobility Assets, Inc., Aerial7
Industries, Inc. and Seth Egorin, as Shareholders Agent (1)3.1
    
    Certificate of Incorporation of the Company (2)3.2
    
    Articles of Amendment to the Certificate of Incorporation of the Company dated as of June 17, 1997 (3)3.3
    
    Articles of Amendment to the Certificate of Incorporation of the Company dated as of September 10, 1997 (2)3.4
    
    Articles of Amendment to the Certificate of Incorporation of the Company dated as of July 20, 1998 (2)3.5
    
    Articles of Amendment to the Certificate of Incorporation of the Company dated as of February 3, 2000 (2)3.6
    
    Articles of Amendment to the Certificate of Incorporation of the Company dated March 31, 2000 (3)3.7
    
    Certificate of Designations, Preferences, Rights and Limitations of Series G Junior Participating Preferred
Stock of iGo, Inc. (4)3.8
    
    Certificate of Ownership and Merger Merging iGo Merger Sub Inc. with and into Mobility Electronics, Inc. (5)3.9
    
    Certificate of Elimination of Series C, Series D, Series E, and Series F Preferred Stock of Mobility
Electronics, Inc. (5)3.10
    
    Fourth Amended and Restated Bylaws of the Company (6)31.1
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*31.2
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002**
 
 *
    
    Filed herewith**
    
    Furnished herewith(1)
    
    Previously filed as an exhibit to Current Report on Form 8-K filed October 8, 2010.(2)
    
    Previously filed as an exhibit to Registration Statement No. 333-30264 dated February 11,
2000.(3)
    
    Previously filed as an exhibit to Amendment No. 2 to Registration Statement No. 333-30264 on
Form S-1 dated May 4, 2000.(4)
    
    Previously filed as an exhibit to Current Report on Form 8-K filed June 19, 2003.(5)
    
    Previously filed as an exhibit to Current Report on Form 8-K dated May 21, 2008.(6)
    
    Previously filed as an exhibit to Form 10-K for the period ended December 31, 2008. 28