##### 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, 2008
 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
(State or Other Jurisdiction of Incorporation)
    
    86-0843914
(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
  Large accelerated filer
o
    
    Accelerated filer
o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company
þ
  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
    
    
    11Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4. Controls and Procedures
    
    
    23PART II OTHER INFORMATION
    
    
    24Item 1. Legal Proceedings
    
    
    24Item 1A. Risk Factors
    
    
    24Item 5 Other Information
    
    
    25Item 6. Exhibits
    
    
    25SIGNATURES
    
    
    26EXHIBIT INDEX
    
    
    27EX-10.1EX-31.1EX-31.2EX-32.1
  i




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##### Table of Contents



PART I FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS:
 IGO, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands)
 (unaudited)
 September 30,
    
    
    December 31,2008
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    19,595
    
    
    $
    15,908Short-term investments
    
    
    7,116
    
    
    
    9,026Accounts receivable, net
    
    
    16,261
    
    
    
    16,924Inventories
    
    
    4,017
    
    
    
    7,406Prepaid expenses and other current assets
    
    
    486
    
    
    
    446Total current assets
    
    
    47,475
    
    
    
    49,710Property and equipment, net
    
    
    1,133
    
    
    
    1,553Intangible assets, net
    
    
    1,712
    
    
    
    1,926Notes receivable and other assets, net
    
    
    363
    
    
    
    961Total assets
    
    $
    50,683
    
    
    $
    54,150LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    7,678
    
    
    $
    11,694Accrued expenses and other current liabilities
    
    
    2,875
    
    
    
    3,680Deferred revenue
    
    
    473
    
    
    
    936Total current liabilities
    
    
    11,026
    
    
    
    16,310Minority interest
    
    
    594
    
    
    
    384Total liabilities
    
    
    11,620
    
    
    
    16,694Stockholders equity:Common stock
    
    
    319
    
    
    
    314Additional paid-in capital
    
    
    169,352
    
    
    
    168,010Accumulated deficit
    
    
    (130,742
    )
    
    
    (131,091
    )Accumulated other comprehensive income
    
    
    134
    
    
    
    223Total stockholders equity
    
    
    39,063
    
    
    
    37,456Total liabilities and stockholders equity
    
    $
    50,683
    
    
    $
    54,150
  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 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenue
    
    $
    20,091
    
    
    $
    19,039
    
    
    $
    57,583
    
    
    $
    57,410Cost of revenue
    
    
    13,946
    
    
    
    13,334
    
    
    
    40,456
    
    
    
    44,179Gross profit
    
    
    6,145
    
    
    
    5,705
    
    
    
    17,127
    
    
    
    13,231Operating expenses:Sales and marketing
    
    
    2,315
    
    
    
    2,242
    
    
    
    6,576
    
    
    
    7,683Research and development
    
    
    909
    
    
    
    1,169
    
    
    
    2,612
    
    
    
    4,303General and administrative
    
    
    2,388
    
    
    
    3,380
    
    
    
    9,117
    
    
    
    11,711Total operating expenses
    
    
    5,612
    
    
    
    6,791
    
    
    
    18,305
    
    
    
    23,697Income (loss) from operations
    
    
    533
    
    
    
    (1,086
    )
    
    
    (1,178
    )
    
    
    (10,466
    )Other income (expense):Interest income, net
    
    
    190
    
    
    
    291
    
    
    
    668
    
    
    
    847Gain on disposal of assets and other income, net
    
    
    136
    
    
    
    95
    
    
    
    397
    
    
    
    2,235Litigation settlement income
    
    
    
    
    
    
    
    
    
    
    672
    
    
    
    Income (loss) before minority interest
    
    
    859
    
    
    
    (700
    )
    
    
    559
    
    
    
    (7,384
    )Minority interest
    
    
    (210
    )
    
    
    (60
    )
    
    
    (210
    )
    
    
    (187
    )Net income (loss)
    
    $
    649
    
    
    $
    (760
    )
    
    $
    349
    
    
    $
    (7,571
    )Weighted net income (loss) per common shareBasic
    
    $
    0.02
    
    
    $
    (0.02
    )
    
    $
    0.01
    
    
    $
    (0.24
    )Diluted
    
    $
    0.02
    
    
    $
    (0.02
    )
    
    $
    0.01
    
    
    $
    (0.24
    )Weighted average shares outstandingBasic
    
    
    31,881
    
    
    
    31,391
    
    
    
    31,745
    
    
    
    31,568Diluted
    
    
    34,482
    
    
    
    31,391
    
    
    
    34,350
    
    
    
    31,568
  2




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IGO, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (unaudited)
 Nine Months EndedSeptember 30,2008
    
    
    2007Cash flows from operating activities:Net income (loss)
    
    $
    349
    
    
    $
    (7,571
    )Adjustments to reconcile net income (loss) to net cash provided by
operating activities:Minority Interest
    
    
    210
    
    
    
    187Provision for accounts receivable and sales returns and credits
    
    
    292
    
    
    
    421Depreciation and amortization
    
    
    1,185
    
    
    
    1,507Stock compensation expense
    
    
    1,558
    
    
    
    2,214Gain on disposal of assets, net
    
    
    
    
    
    
    (1,588
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    371
    
    
    
    3,578Inventories
    
    
    3,389
    
    
    
    6,964Prepaid expenses and other assets
    
    
    159
    
    
    
    (1,799
    )Accounts payable
    
    
    (4,016
    )
    
    
    (3,083
    )Accrued expenses and other current liabilities
    
    
    (1,507
    )
    
    
    372Net cash provided by operating activities
    
    
    1,990
    
    
    
    1,202Cash flows from investing activities:Purchase of property and equipment
    
    
    (152
    )
    
    
    (609
    )Proceeds from the sale of intangible assets
    
    
    
    
    
    
    1,850Purchase of investments
    
    
    (8,812
    )
    
    
    Sale of investments
    
    
    10,674
    
    
    
    8,135Net cash provided by investing activities
    
    
    1,710
    
    
    
    9,376Cash flows from financing activities:Payment of non-current liabilities
    
    
    
    
    
    
    (25
    )Repurchase of common stock
    
    
    
    
    
    
    (2,147
    )Net proceeds from issuance of common stock and exercise of options and
warrants
    
    
    28
    
    
    
    269Net cash
provided by (used in) financing activities
    
    
    28
    
    
    
    (1,903
    )Effects of exchange rate changes on cash and cash equivalents
    
    
    (41
    )
    
    
    17Net increase in cash and cash equivalents
    
    
    3,687
    
    
    
    8,692Cash and cash equivalents, beginning of period
    
    
    15,908
    
    
    
    9,201Cash and cash equivalents, end of period
    
    $
    19,595
    
    
    $
    17,893
  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) Variable Interest Entities
   5




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##### Table of Contents



iGoVIE
    
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    701
    
    
    $
    19,595Short-term investments
    
    
    
    
    
    
    7,116Accounts receivable, net
    
    
    508
    *
    
    
    16,261Inventories
    
    
    718
    
    
    
    4,017Prepaid expenses and other current assets
    
    
    98
    
    
    
    486Total current assets
    
    
    2,025
    
    
    
    47,475Property and equipment, net
    
    
    72
    
    
    
    1,133Intangible assets, net
    
    
    
    
    
    
    1,712Notes receivable (payable) and other assets
    
    
    (777)
    *
    
    
    363Total assets
    
    $
    1,320
    
    
    $
    50,683LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    364
    
    
    $
    7,678Accrued expenses and other current liabilities
    
    
    323
    *
    
    
    2,875Deferred revenue
    
    
    
    
    
    
    473Total current liabilities
    
    
    687
    
    
    
    11,026Minority interest
    
    
    
    
    
    
    594Total liabilities
    
    
    687
    
    
    
    11,620Stockholders equity:
    
    
    633
    
    
    
    39,063Total liabilities and stockholders equity
    
    $
    1,320
    
    
    $
    50,683
 
 *
    
    Reflects the elimination of intercompany accounts and notes receivable. (3) Fair Value Measurement
    (4) Investments
    6




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##### Table of Contents



September 30, 2008
    
    
    December 31, 2007Net
    
    
    
    
    
    
    
    
    
    
    NetUnrealized
    
    
    
    
    
    
    
    
    
    
    UnrealizedHolding
    
    
    Aggregate
    
    
    
    
    
    
    HoldingAmortized
    
    
    Gains
    
    
    Fair
    
    
    Amortized
    
    
    Gains
    
    
    AggregateCost
    
    
    (Losses)
    
    
    Value
    
    
    Cost
    
    
    (Losses)
    
    
    Fair ValueU.S. corporate securities:Commercial paper
    
    $
    3,276
    
    
    $
    
    
    
    $
    3,276
    
    
    $
    3,821
    
    
    $
    1
    
    
    $
    3,822Corporate notes and bonds
    
    
    3,880
    
    
    
    (40
    )
    
    
    3,840
    
    
    
    2,902
    
    
    
    
    
    
    
    2,9027,156
    
    
    
    (40
    )
    
    
    7,116
    
    
    
    6,723
    
    
    
    1
    
    
    
    6,724U.S. government securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,298
    
    
    
    4
    
    
    
    2,302$
    7,156
    
    
    $
    (40
    )
    
    $
    7,116
    
    
    $
    9,021
    
    
    $
    5
    
    
    $
    9,026
 (5) Inventories
  September 30,
    
    
    December 31,2008
    
    
    2007Raw materials
    
    $
    798
    
    
    $
    1,029Finished goods
    
    
    3,219
    
    
    
    6,377$
    4,017
    
    
    $
    7,406
 (6) Intangible Assets
  September 30, 2008
    
    
    December 31, 2007Average
    
    
    Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetLife
    
    
    Intangible
    
    
    Accumulated
    
    
    Intangible
    
    
    Intangible
    
    
    Accumulated
    
    
    Intangible(Years)
    
    
    Assets
    
    
    Amortization
    
    
    Assets
    
    
    Assets
    
    
    Amortization
    
    
    AssetsAmortized intangible
assets:License fees
    
    
    7
    
    
    $
    334
    
    
    $
    (324
    )
    
    $
    10
    
    
    $
    334
    
    
    $
    (280
    )
    
    $
    54Patents and trademarks
    
    
    5
    
    
    
    3,754
    
    
    
    (2,245
    )
    
    
    1,509
    
    
    
    3,368
    
    
    
    (1,726
    )
    
    
    1,642Trade names
    
    
    10
    
    
    
    442
    
    
    
    (249
    )
    
    
    193
    
    
    
    429
    
    
    
    (214
    )
    
    
    215Customer intangibles
    
    
    5
    
    
    
    33
    
    
    
    (33
    )
    
    
    
    
    
    
    33
    
    
    
    (18
    )
    
    
    15Total
    
    
    
    
    
    $
    4,563
    
    
    $
    (2,851
    )
    
    $
    1,712
    
    
    $
    4,164
    
    
    $
    (2,238
    )
    
    $
    1,926
  (7) Notes Receivable and Other Assets
   7




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(8) Stockholders Equity
  (9) Stock-based Compensation
    Nasdaq Rule2004 Directors Plan
    
    
    2004 Omnibus Plan
    
    
    4350(i)(1)(a)(iv) GrantWeighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageValue per
    
    
    
    
    
    
    Value per
    
    
    
    
    
    
    Value perNumber
    
    
    Share
    
    
    Number
    
    
    Share
    
    
    Number
    
    
    ShareOutstanding, December 31, 2007
    
    
    194,667
    
    
    $
    4.64
    
    
    
    1,158,165
    
    
    $
    4.88
    
    
    
    1,000,000
    
    
    $
    2.13Granted
    
    
    58,165
    
    
    $
    1.27
    
    
    
    864,750
    
    
    $
    1.29
    
    
    
    
    
    
    
    Canceled
    
    
    (48,875
    )
    
    $
    6.88
    
    
    
    (55,230
    )
    
    $
    4.02
    
    
    
    
    
    
    
    Released to common stock
    
    
    (74,125
    )
    
    $
    1.24
    
    
    
    (254,980
    )
    
    $
    5.40
    
    
    
    (125,000
    )
    
    $
    2.96Released for settlement of taxes
    
    
    
    
    
    
    
    
    
    
    (126,091
    )
    
    $
    5.39
    
    
    
    
    
    
    
    Outstanding, September 30, 2008
    
    
    129,832
    
    
    $
    3.83
    
    
    
    1,586,614
    
    
    $
    2.91
    
    
    
    875,000
    
    
    $
    2.01
    8




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##### Table of Contents



(10) Net Income (loss) per Share
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Basic net income (loss) per share computation:Numerator:Net income (loss)
    
    $
    649
    
    
    $
    (760
    )
    
    $
    349
    
    
    
    (7,571
    )Denominator:Weighted average number of common shares outstanding
    
    
    31,881
    
    
    
    31,391
    
    
    
    31,745
    
    
    
    31,568Basic net income (loss) per share:
    
    $
    0.02
    
    
    $
    (0.02
    )
    
    $
    0.01
    
    
    $
    (0.24
    )Diluted net income (loss) per share computation:Numerator:Net income (loss)
    
    $
    649
    
    
    $
    (760
    )
    
    $
    349
    
    
    $
    (7,571
    )Denominator:Weighted average number of common shares outstanding
    
    
    31,881
    
    
    
    31,391
    
    
    
    31,745
    
    
    
    31,568Effect of dilutive stock options, warrants, and
restricted stock units
    
    
    2,601
    
    
    
    
    
    
    
    2,605
    
    
    
    34,482
    
    
    
    31,391
    
    
    
    34,350
    
    
    
    31,568Diluted net income (loss) per share:
    
    $
    0.02
    
    
    $
    (0.02
    )
    
    $
    0.01
    
    
    $
    (0.24
    )Stock options not included in dilutive net income (loss)
per share since antidilutive
    
    
    266
    
    
    
    287
    
    
    
    266
    
    
    
    287Warrants not included in dilutive net income (loss) per
share since antidilutive
    
    
    600
    
    
    
    1,195
    
    
    
    600
    
    
    
    1,195
 (11) Business Segments, Concentration of Credit Risk and Significant Customers
    Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues:High-Power Group
    
    $
    11,782
    
    
    $
    10,699
    
    
    $
    34,536
    
    
    $
    35,032Low-Power Group
    
    
    6,295
    
    
    
    6,429
    
    
    
    17,754
    
    
    
    17,173Connectivity Group
    
    
    2,014
    
    
    
    1,911
    
    
    
    5,293
    
    
    
    5,205$
    20,091
    
    
    $
    19,039
    
    
    $
    57,583
    
    
    $
    57,410
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Operating income (loss):High-Power Group
    
    $
    (509
    )
    
    $
    623
    
    
    $
    1,491
    
    
    $
    550Low-Power Group
    
    
    2,911
    
    
    
    1,344
    
    
    
    5,319
    
    
    
    975Connectivity Group
    
    
    272
    
    
    
    327
    
    
    
    335
    
    
    
    (281
    )Corporate
    
    
    (2,141
    )
    
    
    (3,380
    )
    
    
    (8,323
    )
    
    
    (11,710
    )$
    533
    
    
    $
    (1,086
    )
    
    $
    (1,178
    )
    
    $
    (10,466
    )
 9




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##### Table of Contents



September 30,
    
    
    December 31,2008
    
    
    2007Assets:High-Power Group
    
    $
    13,525
    
    
    $
    19,035Low-Power Group
    
    
    8,705
    
    
    
    7,810Connectivity Group
    
    
    2,095
    
    
    
    2,199Corporate
    
    
    26,358
    
    
    
    25,106$
    50,683
    
    
    $
    54,150
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007High-power mobile electronic power products
    
    $
    11,813
    
    
    $
    10,686
    
    
    $
    34,413
    
    
    $
    34,803Low-power mobile electronic power products
    
    
    6,296
    
    
    
    5,703
    
    
    
    17,250
    
    
    
    14,646Expansion and docking products
    
    
    2,014
    
    
    
    1,910
    
    
    
    5,293
    
    
    
    5,019Portable keyboard products
    
    
    (1
    )
    
    
    727
    
    
    
    504
    
    
    
    2,524Accessories and other products
    
    
    (31
    )
    
    
    13
    
    
    
    123
    
    
    
    418Total revenues
    
    $
    20,091
    
    
    $
    19,039
    
    
    $
    57,583
    
    
    $
    57,410
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007North America (principally United States)
    
    $
    19,653
    
    
    $
    15,966
    
    
    $
    54,280
    
    
    $
    47,457Europe
    
    
    194
    
    
    
    1,061
    
    
    
    1,635
    
    
    
    2,820Asia Pacific and all other
    
    
    244
    
    
    
    2,012
    
    
    
    1,668
    
    
    
    7,133$
    20,091
    
    
    $
    19,039
    
    
    $
    57,583
    
    
    $
    57,410
 Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2008
    
    2007
    
    2008
    
    2007OEM and private-label-resellers
    
    
    46
    %
    
    
    41
    %
    
    
    49
    %
    
    
    52
    %Retailers and distributors
    
    
    51
    %
    
    
    46
    %
    
    
    48
    %
    
    
    37
    %Other
    
    
    3
    %
    
    
    13
    %
    
    
    3
    %
    
    
    11
    %100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    10




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##### Table of Contents



(12) Litigation Settlement
  (13) Contingencies
    
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 www.igo.com
 11




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##### Table of Contents




    
    the loss of, and failure to replace, any significant customers;
    
    the inability to timely and successfully complete product development efforts and
introduce new products, including internal development projects and those being pursued
with strategic partners;
    
    the ineffectiveness of our sales and marketing strategy;
    
    the inability to create broad consumer awareness and acceptance for our products and
technology;
    
    the timing and success of competitive product development efforts, new product
introductions and pricing;
    
    the ability to expand and protect our proprietary rights and intellectual property;
    
    the timing of substantial customer orders;
    
    the lack of available qualified personnel;
    
    the inability to successfully resolve pending and unanticipated legal matters;
    
    the lack of available qualified suppliers and subcontractors and/or their inability
to meet our specification, performance, and quality requirements; and
    
    market demand and industry and general economic or business conditions.
  iGo® is a trademark or registered trademark 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
    12




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##### Table of Contents



High-Power Group.
 Low-Power Group.
  Connectivity Group ®
 Recent Developments
  13




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##### Table of Contents



Critical Accounting Policies and Estimates
  14




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##### Table of Contents



Results of Operations
  September 30,
    
    September 30,2008
    
    2007
    
    2008
    
    2007Revenue
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of revenue
    
    
    69.4
    %
    
    
    70.0
    %
    
    
    70.3
    %
    
    
    77.0
    %Gross profit
    
    
    30.6
    %
    
    
    30.0
    %
    
    
    29.7
    %
    
    
    23.0
    %Operating expenses:Sales and marketing
    
    
    11.5
    %
    
    
    11.8
    %
    
    
    11.4
    %
    
    
    13.4
    %Research and development
    
    
    4.5
    %
    
    
    6.1
    %
    
    
    4.5
    %
    
    
    7.5
    %General and administrative
    
    
    11.9
    %
    
    
    17.8
    %
    
    
    15.8
    %
    
    
    20.4
    %Total operating expenses
    
    
    27.9
    %
    
    
    35.7
    %
    
    
    31.7
    %
    
    
    41.3
    %Income (loss) from operations
    
    
    2.7
    %
    
    
    (5.7
    %)
    
    
    (2.0
    %)
    
    
    (18.2
    %)Other income (expense):Interest, net
    
    
    0.9
    %
    
    
    1.5
    %
    
    
    1.1
    %
    
    
    1.5
    %Other, net
    
    
    0.6
    %
    
    
    0.5
    %
    
    
    0.7
    %
    
    
    3.9
    %Litigation settlement income
    
    
    
    
    
    
    
    
    
    
    1.2
    %
    
    
    Minority interest
    
    
    (1.0
    %)
    
    
    (0.3
    %)
    
    
    (0.4
    %)
    
    
    (0.3
    %)Net income (loss)
    
    
    3.2
    %
    
    
    (4.0
    %)
    
    
    0.6
    %
    
    
    (13.2
    %)
 Comparison of Three Months Ended September 30, 2008 and 2007
 Revenue .
 Three Months
    
    
    Three MonthsEnded
    
    
    Ended
    
    
    Increase/(decrease)
    
    
    Percentage changeSeptember 30,
    
    
    September 30,
    
    
    from same period
    
    
    from the same period2008
    
    
    2007
    
    
    in the prior year
    
    
    in the prior yearHigh-Power Group
    
    $
    11,782
    
    
    $
    10,699
    
    
    $
    1,083
    
    
    
    10.1
    %Low-Power Group
    
    
    6,295
    
    
    
    6,429
    
    
    
    (134
    )
    
    
    (2.1
    )%Connectivity Group
    
    
    2,014
    
    
    
    1,911
    
    
    
    103
    
    
    
    5.4
    %Total Revenue
    
    $
    20,091
    
    
    $
    19,039
    
    
    $
    1,052
    
    
    
    5.5
    %
 High-Power Group.
 Low-Power Group.
 Connectivity Group.
 15




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##### Table of Contents



Cost of revenue, gross profit and gross margin .
 Three Months
    
    Three MonthsEnded
    
    Ended
    
    Increase from same
    
    Percentage change fromSeptember 30,
    
    September 30,
    
    period in the prior
    
    the same period in the2008
    
    2007
    
    year
    
    prior yearCost of revenue
    
    $
    13,946
    
    
    $
    13,334
    
    
    $
    612
    
    
    
    4.6
    %Gross profit
    
    $
    6,145
    
    
    $
    5,705
    
    
    $
    440
    
    
    
    7.7
    %Gross margin
    
    
    30.6
    %
    
    
    30.0
    %
    
    
    0.6
    %
    
    
    2.0
    %
  Sales and marketing .
 Three Months
    
    Three MonthsEnded
    
    Ended
    
    Increase
    
    Percentage changeSeptember 30,
    
    September 30,
    
    from same period
    
    from the same period2008
    
    2007
    
    in the prior year
    
    in the prior yearSales and marketing
    
    $
    2,315
    
    
    $
    2,242
    
    
    $
    73
    
    
    
    3.2
    %
  Research and development .
 Three Months
    
    Three MonthsEnded
    
    Ended
    
    Decrease from
    
    Percentage change fromSeptember 30,
    
    September 30,
    
    same period
    
    the same period in the2008
    
    2007
    
    in the prior year
    
    prior yearResearch and development
    
    $
    909
    
    
    $
    1,169
    
    
    $
    (260
    )
    
    
    (22.2
    )%
  General and administrative.
 16




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##### Table of Contents



Three Months
    
    Three MonthsEnded
    
    Ended
    
    Decrease
    
    Percentage changeSeptember 30,
    
    September 30,
    
    from same period
    
    from the same period2008
    
    2007
    
    in the prior year
    
    in the prior yearGeneral and administrative
    
    $
    2,388
    
    
    $
    3,380
    
    
    $
    (992
    )
    
    
    (29.3
    )%
  Interest income, net.
 Minority interest.
 Income taxes .
 Comparison of Nine Months Ended September 30, 2008 and 2007
 Revenue .
 Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Increase/(decrease)
    
    
    Percentage changeSeptember 30,
    
    
    September 30,
    
    
    from same period
    
    
    from the same period2008
    
    
    2007
    
    
    in the prior year
    
    
    in the prior yearHigh-Power Group
    
    $
    34,536
    
    
    $
    35,032
    
    
    $
    (496
    )
    
    
    (1.4
    )%Low-Power Group
    
    
    17,754
    
    
    
    17,173
    
    
    
    581
    
    
    
    3.4
    %Connectivity Group
    
    
    5,293
    
    
    
    5,205
    
    
    
    88
    
    
    
    1.7
    %Total Revenue
    
    $
    57,583
    
    
    $
    57,410
    
    
    $
    173
    
    
    
    0.3
    %
 High-Power Group.
 17




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##### Table of Contents



Low-Power Group.
 Connectivity Group.
 Cost of revenue, gross profit and gross margin .
 Nine Months
    
    Nine MonthsEnded
    
    Ended
    
    Increase/(decrease)
    
    Percentage change fromSeptember 30,
    
    September 30,
    
    from same period in
    
    the same period in the2008
    
    2007
    
    the prior year
    
    prior yearCost of revenue
    
    $
    40,456
    
    
    $
    44,179
    
    
    $
    (3,723
    )
    
    
    (8.4
    )%Gross profit
    
    $
    17,127
    
    
    $
    13,231
    
    
    $
    3,896
    
    
    
    29.4
    %Gross margin
    
    
    29.7
    %
    
    
    23.0
    %
    
    
    6.7
    %
    
    
    29.1
    %
  Sales and marketing .
 Nine Months
    
    Nine MonthsEnded
    
    Ended
    
    Decrease
    
    Percentage changeSeptember 30,
    
    September 30,
    
    from same period
    
    from the same period2008
    
    2007
    
    in the prior year
    
    in the prior yearSales and marketing
    
    $
    6,576
    
    
    $
    7,683
    
    
    $
    (1,107
    )
    
    
    (14.4
    )%
 18




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##### Table of Contents



Research and development .
 Nine Months
    
    Nine MonthsEnded
    
    Ended
    
    Decrease from
    
    Percentage change fromSeptember 30,
    
    September 30,
    
    same period
    
    the same period in the2008
    
    2007
    
    in the prior year
    
    prior yearResearch and development
    
    $
    2,612
    
    
    $
    4,303
    
    
    $
    (1,691
    )
    
    
    (39.3
    )%
  General and administrative.
 Nine Months
    
    Nine MonthsEnded
    
    Ended
    
    Decrease
    
    Percentage changeSeptember 30,
    
    September 30,
    
    from same period
    
    from the same period2008
    
    2007
    
    in the prior year
    
    in the prior yearGeneral and administrative
    
    $
    9,117
    
    
    $
    11,711
    
    
    $
    (2,594
    )
    
    
    (22.2
    )%
  Interest income, net.
 Gain on disposal of assets and other income, net .
 Litigation settlement income .
 19




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##### Table of Contents



Minority interest.
 Income taxes .
 Operating Outlook
  
    
    Continued growth in sales of power products for high-power mobile electronic devices
driven by further growth in private label reseller accounts and expanded international
distribution;
    
    Continued penetration of both the domestic and international wireless carrier,
dealer/agent, retail and distributor markets for our low-power products;
    
    Continued investment in enhancements to grow direct online sales through igo.com and
retail partner web sites;
    
    A strong new product pipeline that will provide consumers with innovative power
products offering a broad range of features and price points;
    
    An emphasis on development and marketing of products that are environmentally
friendly; and
    
    Improvements in operational execution.
      20




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##### Table of Contents



Liquidity and Capital Resources
 Cash and Cash Equivalents
    Nine Months Ended September 30,2008
    
    
    2007Net cash provided by operating activities
    
    $
    1,990
    
    
    $
    1,202Net cash provided by investing activities
    
    
    1,710
    
    
    
    9,376Net cash provided by financing activities
    
    
    28
    
    
    
    (1,903
    )Foreign currency exchange impact on cash flow
    
    
    (41
    )
    
    
    17Increase in cash and cash equivalents
    
    $
    3,687
    
    
    $
    8,692Cash and cash equivalents at beginning of period
    
    $
    15,908
    
    
    $
    9,201Cash and cash equivalents at end of period
    
    $
    19,595
    
    
    $
    17,893
 
    
    Net cash provided by operating activities.Cash was provided by operating activities
for the nine months ended September 30, 2008 primarily as a result of collections of
accounts receivable and sales of inventory, partially offset by use of cash to pay
suppliers. For the remainder of 2008, we expect operating activities and changes in
working capital to have a relatively neutral effect on cash flows. Our consolidated
cash flow operating metrics are as follows:
 September 30,2008
    
    2007Days outstanding in ending accounts receivable (DSOs)
    
    
    77
    
    
    
    80Inventory turns
    
    
    14
    
    
    
    10
 The decrease in DSOs at September 30, 2008 compared to September 30, 2007, was primarily
due to the reductions in accounts receivable from Dell and Lenovo due to the loss of
those accounts, combined with the faster timing of payments received from our large
private-label reseller customer, Targus. We expect DSOs will
 21




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##### Table of Contents



remain consistent for the balance of 2008 as a result of anticipated timing of cash
receipts from our customers. The increase in inventory turns was primarily due to excess
and obsolete inventory charges recorded during 2007 relating to our connectivity,
low-power and keyboard inventories. We expect to manage inventory growth during 2008 and
2009 and we expect inventory turns to remain consistent for the balance of 2008.
 
    
    Net cash provided by investing activities.For the nine months ended September 30,
2008, net cash was provided by investing activities as we generated proceeds from the
sale of investments of $2.0 million. We anticipate future investment in capital
equipment, primarily for tooling equipment to be used in the production of new
products.
    
    Net cash provided by financing activities.Net cash provided by financing
activities for the nine months ended September 30, 2008 was primarily from net proceeds
from the exercises of stock options and warrants. Although we expect to generate cash
flows from operations sufficient to support our operations, we may issue additional
            shares of stock in the future to generate cash for growth opportunities.
 Investments.
  Financing Facilities.
 Contractual Obligations.
 Payment due by period2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    More than 5 yearsOperating lease obligations
    
    $
    70
    
    
    $
    345
    
    
    $
    431
    
    
    $
    440
    
    
    $
    444
    
    
    $
    531Inventory purchase obligations
    
    
    13,885
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other long-term obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Totals
    
    $
    13,955
    
    
    $
    345
    
    
    $
    431
    
    
    $
    440
    
    
    $
    444
    
    
    $
    531
  Off-Balance Sheet Arrangements.
 Acquisitions and Dispositions.
  22




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##### Table of Contents



Net Operating Loss Carry-forwards.
 Liquidity Outlook.
 Recent Accounting Pronouncements
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
 23




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
 
 PART II OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
   
 ITEM 1A. RISK FACTORS
  Economic conditions, political events, war, terrorism, public health issues, natural disasters
and other circumstances could materially adversely affect our operations and performance.
   24




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##### Table of Contents



ITEM 5 OTHER INFORMATION
  www.corporate.igo.com
 
 ITEM 6. EXHIBITS
  25




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##### Table of Contents



IGO, INC. AND SUBSIDIARIES
 
 SIGNATURES
  IGO, INC.Dated: October 31, 2008
    By:
    /s/ Michael D. HeilMichael D. HeilPresident, Chief Executive Officer

and Chairman of the Board

(Principal Executive Officer)By:
    /s/ Joan W. BrubacherJoan W. BrubacherExecutive Vice President and Chief Financial Officer

and Authorized Officer of Registrant

(Principal Financial Officer)By:
    /s/ Darryl S. BakerDarryl S. BakerVice President, Chief Accounting Officer and
Controller 26




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description of Document3.1
    
    Certificate of Incorporation of the Company (1)3.2
    
    Articles of Amendment to the Certificate of Incorporation of the Company dated as of June 17, 1997 (2)3.3
    
    Articles of Amendment to the Certificate of Incorporation of the Company dated as of September 10, 1997 (1)3.4
    
    Articles of Amendment to the Certificate of Incorporation of the Company dated as of July 20, 1998 (1)3.5
    
    Articles of Amendment to the Certificate of Incorporation of the Company dated as of February 3, 2000 (1)3.6
    
    Articles of Amendment to the Certificate of Incorporation of the Company dated as of March 31, 2000 (2)3.7
    
    Certificate of Designations, Preferences, Rights and Limitations of Series G Junior Participating
Preferred Stock of iGo, Inc. (3)3.8
    
    Certificate of Ownership and Merger effecting name change to iGo, Inc. (4)3.9
    
    Certificate of Elimination of Series C, Series D, Series E and Series F Preferred Stock (4)3.10
    
    Third Amended and Restated Bylaws of the Company (4)10.1
    
    Fifth Amendment to Lease Agreement, dated as of August 27, 2008*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 Registration Statement No. 333-30264 dated February 11,
2000.(2)
    
    Previously filed as an exhibit to Amendment No. 2 to Registration Statement No. 333-30264 on
Form S-1 dated May 4, 2000.(3)
    
    Previously filed as an exhibit to Current Report on Form 8-K filed June 19, 2003.(4)
    
    Previously filed as an exhibit to Current Report on Form 8-K filed September 26, 2008. 27