U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB



(Mark One)

XXX        QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
           ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003.

___        TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM_____TO_____.


                         Commission File Number 0-27106


                                  Viseon, Inc.
        (Exact name of small business issuer as specified in its charter)


             Nevada                                       41-1767211
             ------                                       ----------
   (State or other jurisdiction                          (IRS Employer
  Of incorporation or organization)                   Identification No.)

8445 Freeport Parkway, Suite 245, Irving, Texas               75063
------------------------------------------------              -----
   (Address of principal executive offices)                 (Zip Code)

                                 (972) 906-6300
                           (Issuer's Telephone Number)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was Required to file such report), and (2) has been
subject to such filing requirements for the past 90 days. YES X NO __

The Company had 19,494,412 shares of Common Stock, $ 0.01 par value per share,
outstanding as of November 12, 2003.

Transitional Small Business Disclosure Format (Check one): Yes __ No X



<PAGE>



                                  Viseon, Inc.

                                      INDEX



                                                                         Page


PART I.  FINANCIAL INFORMATION

     Item 1.   Financial Statements

               Consolidated Balance Sheets - September 30, 2003
                  (unaudited) And June 30, 2003 ...........................   3

               Consolidated Statements of Operations (unaudited) - Three
                   Months ended September 30, 2003 and 2002. ..............   4

               Consolidated Statements of Cash Flows (unaudited) - Three
                   Months ended September 30, 2003 and 2002. .................5

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

     Item 2.   Management's Discussion and Analysis of Financial Condition
                   and Results of Operations.................................13

     Item 3.   Control and Procedures........................................17



PART II  OTHER INFORMATION...................................................18

     Item 1.   Legal Proceedings.............................................18

     Item 2.   Changes in Securities.........................................20_

     Item 3.   Defaults Upon Senior Securities...............................20

     Item 4.   Submission of Matters to a Vote of Security Holders...........20

     Item 5.   Other Information.............................................20


Signatures ..................................................................21

Exhibit Index ...............................................................21

                                       2
<PAGE>
                           VISEON, INC. AND SUBSIDIARY

                           Consolidated Balance Sheets


                                                     September 30,     June 30,
                                                         2003            2003
            Assets                                  (Unaudited)      (Audited)
--------------------------------------------------------------------------------
Current assets:
  Cash and cash equivalents                          $    54,379   $      7,784
  Accounts receivable, net of allowance for doubtful
    accounts of $500 and $0                               61,773         46,955
  Inventories, net                                           799          7,079
  Prepaid expenses                                       109,876         46,573
                                                     ---------------------------
 Total current assets                                    226,827        108,391
                                                     ---------------------------

Net property and equipment                                65,352         71,882
                                                     ---------------------------

Intangible assets, net                                   113,519        110,898
                                                     ---------------------------

      Total assets                                   $   405,698      $ 291,171
                                                     ===========================

                   Liabilities and Stockholders' Deficit
--------------------------------------------------------------------------------

Current liabilities:
  Subordinated notes payable                         $   264,148      $ 228,296
  Short-term notes payable                                65,000             -
  Accounts payable                                     1,889,834      1,840,597
  Accrued expenses                                       386,511        104,692
                                                     ---------------------------
      Total current liabilities                        2,605,493      2,173,585

Long-term liabilites
  Subordinated notes payable, net                        157,784         23,333
                                                     ---------------------------

      Total Liablilities                               2,763,277      2,196,918
                                                     ---------------------------

Stockholders' deficit:
    Common stock ($.01 par value per share, 50,000,000
      shares authorized, 18,131,139 and 17,829,829
      issued and outstanding)                            181,311        178,298
    Additional paid-in capital                        24,395,865     24,179,469
    Accumulated deficit                              (26,934,755)   (26,263,514)
                                                    ----------------------------
      Total stockholders' deficit                     (2,357,579)    (1,905,747)
                                                   -----------------------------

      Total liabilities and stockholders' deficit  $     405,698   $    291,171
                                                   =============================

See accompanying notes to consolidated financial statements.

                                       3
<page>
                          VISEON, INC. AND SUBSIDIARY

                      Consolidated Statements of Operations


                                        Three Months Ended   Three Months Ended
                                          September 30,        September 30,
                                              2003                 2002
                                          (Unaudited)          (Unaudited)
  ------------------------------------------------------------------------------

  Net sales                                  $   30,699             $   632,526
  Cost of goods sold                             33,540                 569,429
                                          --------------------------------------
Gross profit (loss)                              (2,841)                 63,097

  Research and development                        1,546                  25,189
  Selling, general, and administrative          463,320               1,037,035
                                          --------------------------------------
Operating income (loss)                        (467,707)               (999,127)
                                          --------------------------------------

  Other income (expense):
      Interest expense                         (203,534)                (86,020)
      Other income (expense)                        -                    (3,170)
                                          --------------------------------------
Other income (expense), net                    (203,534)                (89,190)
                                          --------------------------------------

Net loss                                  $    (671,241)            $(1,088,317)
                                          ======================================

Net loss per share - basic                $       (0.04)            $     (0.08)
Net loss per share - diluted              $       (0.04)            $     (0.08)


Weighted average shares outstanding
   - basic                                   17,971,406              14,313,903
Weighted average shares outstanding
   - diluted                                 17,971,406              14,313,903


  See accompanying notes to consolidated financial statements.

                                       4
<page>

                           VISEON, INC. AND SUBSIDIARY

                     Consolidated Statements of Cash Flows


                                         Three Months Ended   Three Months Ended
                                           September 30,          September 30,
                                                2003                    2002
                                             (Unaudited)           (Unaudited)
 -------------------------------------------------------------------------------

 Cash flows from operating activities:
     Net loss                                    $   (671,241)   $   (1,088,317)
     Adjustments to reconcile net loss
       to net cash used in operating activities:
           Depreciation and amortization                7,831            97,184
           Amortization of original issue discount    170,303            88,281
           Compensation related to stock options       46,446            59,020
           Compensation related to issuance of stock  127,963                 -
           Warrants issued for services                    -            261,941
           Loss on sale of equipment                      152                 -
           Changes in operating assets and liabilities:
              Accounts receivable, net                (14,818)          739,727
              Inventories, net                          6,280           (11,522)
              Prepaid expenses                        (63,303)             (571)
              Cash issued in excess of cash in bank        -            (51,919)
              Accounts payable                         49,237            (3,129)
              Accrued expenses                        281,819           (20,228)
              Deferred revenue                             -              9,450
                                                 -------------------------------
 Net cash provided by (used in) operating
    activities                                       (59,331)            79,917
                                                 -------------------------------

 Cash flows from investing activities:
    Proceeds from sale of equipment                    1,000                  -
    Payments for patent costs                         (5,074)                 -
                                                 -------------------------------
Net cash used in investing activities                 (4,074)                 -
                                                 -------------------------------

 Cash flows from financing activities:
    Net repayments on revolving credit facility            -           (454,793)
    Payments of note payable                         (110,000)           (4,017)
    Proceeds from subordinated notes payable          175,000                 -
    Proceeds from issuance of common stock                 -            350,000
    Proceeds from exercise of common stock options     45,000            37,701
                                                 -------------------------------
Net cash provided by (used in) financing activities   110,000           (71,109)
                                                 -------------------------------

Net change in cash and cash equivalents                46,595             8,808


 Cash and cash equivalents at beginning of period       7,784                -
                                                 -------------------------------

 Cash and cash equivalents at end of period      $     54,379       $     8,808
                                                ================================

 Supplemental cash flow information:
    Cash paid for interest, net of original
        issue discount                           $         30       $    11,020



 See accompanying notes to consolidated financial statements.

                                       5

<page>
                                  VISEON, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           September 30, 2003 and 2002

1. DESCRIPTION OF THE BUSINESS:

Viseon, Inc. (the "Company"), a Nevada corporation formerly known as "RSI
Systems, Inc., historically has been a developer of its own video conferencing
systems primarily sold to corporate end users and OEM customers such as Philips
Electronics, N.V. In May 2001, the former RSI Systems, Inc. was merged into its
wholly owned subsidiary Viseon, Inc. in order to change the domicile of the
Company to Nevada from Minnesota and to effect a simultaneous name change to
Viseon, Inc. The shareholders of RSI Systems, Inc. approved the Plan of Merger
between RSI Systems, Inc. and Viseon, Inc. on May 23, 2001. RSI Systems, Inc.
was incorporated under the laws of Minnesota on December 21, 1993. On July 25,
1995, it completed its initial public offering of its common stock, par value
$0.01 per share (the "Common Stock").

         In January 2003, the Company decided to change itsfocus from being a
group videoconferencing manufacturer and reseller to a desktop and consumer
video communications manufacturer and reseller. The only measurable revenues tha
Company is currently realizing result from the sales of the VisiFone.

          The VisiFone is a low-cost broadband videophone. It is a
self-contained system that does not require a PC or any external equipment. The
VisiFone operates on any broadband connection and home or office network
including high-speed Internet connections via DSL or cable modem. The VisiFone
is H.323 compliant and it is compatible with most corporate video conferencing
systems. The VisiFone can be used by corporations and consumers.

         The Company intends to enter into additional agreements whereby it may
grant a license of its intellectual property to third parties in furtherance of
developing proprietary consumer broadband videophone products and services, some
of which will be based on its existing intellectual property. The Company plans
on undertaking the development of these products and services jointly with a
suitable, established developer and manufacturer. The Company is currently in
the process of identifying and selecting the developer and manufacturer and has
also become a distributor in the U.S. of a broadband videophone manufactured by
Leadtek, an Asian partner. The Company also plans on continuing to form new
relationships with other companies to distribute their products alongside its
own products.

         The Company's marketing strategy targets corporations with widespread
operations across regional, national and international boundaries as well as
residential consumers who have historically not purchased video communication
devices in the past. All of these developments have affected and will continue
to affect the Company's financial model in terms of margins, cash flow
requirements and other areas. The Company has a limited operational history with
respect to the direction its business is now taking. There can be no assurance
that the Company will be able to succeed in implementing its strategy, or that
the Company will be able to achieve positive cash flow or profitable operations
as a result of these changes in its business.


                                       6
<page>

2. BASIS OF PRESENTATION:

The unaudited interim consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America, pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, certain information and footnote disclosures normally
included in the consolidated financial statements have been omitted or condensed
pursuant to such rules and regulations. The accompanying unaudited consolidated
financial statements should be read in conjunction with the Company's June 30,
2003 consolidated financial statements and related notes included in the
Company's Annual Report on Form 10-KSB.

The consolidated financial statements include the accounts of RSI Systems Ltd. a
subsidiary in the United Kingdom and Viseon PVT, both of which are wholly owned
subsidiaries of Viseon, Inc.

The consolidated financial statements reflect all adjustments, of a normally
recurring nature, necessary to fairly present the results of operations and
financial position of the Company for the interim periods. Operating results for
the three months ended September 30, 2003 are not necessarily indicative of the
results that may be expected for the year as a whole.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Capitalized Software Costs. Software costs have been accounted for in accordance
with Statement of Financial Accounting Standards (SFAS) No. 86 "Accounting for
the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed". Costs
associated with the planning and design phase of software development, including
coding and testing activities necessary to establish technological feasibility,
are classified as research and development and expensed as incurred. Once
technological feasibility has been determined, additional costs incurred in
development, including coding, testing and product quality assurance is
capitalized, when material. At September 30, 2003 and June 30, 2003, the Company
had $2,217 and $2,758 respectively of unamortized computer software costs,
including software acquired.

Liquidity. The Company has incurred losses from operations and negative cash
flows for the three months ended September 30, 2003 and 2002. Together with a
working capital deficit at September 30, 2003, these conditions raise concerns
about the Company's ability to generate positive cash flows and fund operations.

Management plans to try to increase sales and improve operating results through
(i) increased marketing and direct sales activities to corporate customers; (ii)
continued initiatives to gain acceptance of our product by Consumer broadband
providers for sale to their subscribers; (iii) continued measures to minimize
overhead and (iv) initiatives to monetize our intellectual property rights.
Management believes that funds generated from operations will not be sufficient
to cover cash needs in the foreseeable future, and the Company will continue to
rely on short term loans, private equity placements and/or funds generated from
the exercise of outstanding warrants and options to cover its cash needs,
although there can be no assurance in this regard. In the event sales do not
materialize at the expected rates, or we do not achieve planned gross margins,
management may seek additional financing in addition to expanding it efforts to
conserve cash through further expense reductions. There can be no assurance that
the Company will be successful in achieving these objectives, becoming
profitable, or continuing its business without interruption. Our failure to
achieve the objectives outlined above or execute an alternative plan may
ultimately result in the permanent cessation of our business.

                                       7

Intangible Assets. The Company amortizes patents over their estimated useful
lives of ten years using the straight-line method. Covenants not to compete are
being amortized using the straight-line method over the term of the covenants.
At June 30, 2003, these covenants were considered impaired and were written off.
Accumulated amortization of intangible assets was $32,686 and $ 30,234 at
September 30, 2003 and June 30, 2003 respectively.

Revenue Recognition. The Company records sales revenue at the time products are
delivered. The Company ensures the transaction complies with the seven
conditions and the six considerations contained in Accounting and Auditing
Enforcement Release No. 108 of the Securities and Exchange Commission (SEC).

 The SEC issued Staff Accounting Bulletin (SAB) No. 101, "Revenue Recognition."
SAB No. 101, as amended, sets forth the SEC staff's position regarding the point
at which it is appropriate for a registrant to recognize revenue. The staff
believes that revenue is realizable and earned when all of the following
criteria are met: persuasive evidence of an arrangement exists, delivery has
occurred or service has been rendered, the seller's price to the buyer is fixed
or determinable and collectibility is reasonably assured. The Company uses the
above criteria to determine whether revenue can be recognized.

Accounts Receivable reserves. The Company maintains allowances for doubtful
accounts for estimated losses resulting from the inability of its customers to
make required payments. If the financial condition of the Company's customers
declined, resulting in an impairment of their ability to make payments,
additional allowances may be required.

Inventory valuation. The Company writes down excess and obsolete inventory equal
to the difference between the cost of inventory and the estimated market value
based upon assumptions about product life cycles, demand for the Company's
products, market conditions and other pertinent factors. If actual product life
cycles, product demand and market conditions are less favorable than those
projected by management, additional inventory write-downs may be required in
future periods.

Basic net loss per common share is computed by dividing the net loss by the
weighted average number of common shares outstanding for the reporting period.
Diluted net loss per common share is computed by dividing net loss by the sum of
the weighted average number of common shares outstanding plus the number that
represents all additional shares of common stock that would have been
outstanding if all potentially dilutive common shares related to common share
equivalents (stock options and stock warrants) had been issued. All options and
warrants outstanding during the three months ended September 30, 2003 and 2002
were anti-dilutive.

                                       8

4. REVOLVING CREDIT FACILITY:



In June 2003, two outside investors purchased the remaining balance of the
indebtedness owed by the Company to its previous lender on a revolving line of
credit in the amount of $386,706, which had matured. Following the consummation
of that transaction, the Company issued new notes, convertible into common stock
of the Company, in the amount of $193,353 each, in exchange for the preexisting
debt, which extended the maturity date for a period of eighteen months, until
Dec 2004. In addition to these notes, the Company issued warrants to these
lenders to purchase 1,289,020 common shares at $0.30 per share. The notes mature
in December 2004 with quarterly interest only payments at 12% and are secured by
substantially all assets of the Company. These notes are also convertible into
common stock of the Company at a conversion rate of $0.30 per share through
December 2004 per the terms of the agreement. Proceeds of $386,706 were
allocated between the notes and warrants, which were valued using the
Black-Scholes pricing model. The resulting original issue discount of $386,706
(the fair value of the warrants) is being amortized over the life of the notes
using the straight-line method, which approximates the interest method. At
September 30, 2003 and June 30, 2003, the outstanding balance on these notes was
$386,706.

Subordinated notes payable. In June 2002, the Company borrowed $300,000 from two
private investors, and issued warrants to these lenders to purchase 545,454
common shares at $0.55 per share through June 2003. In connection with these
notes, the Company issued 38,182 warrants to purchase common shares for services
provided at $0.55 per share, which expire in June 2007. During June 2003, the
Company extended the note agreements and cancelled the existing warrants
attached to the original note. The Company issued new warrants to the various
lenders to purchase 999,999 common shares at $0.30 per share through December
2003. The notes are subordinated, mature December 2003 with interest at 12%, and
are secured by substantially all assets of the Company. The notes are also
convertible into common stock of the Company at a conversion rate of $0.30 per
share through December 2003 per the terms of the agreement. The new warrants
were valued using the Black-Scholes pricing model. The resulting original issue
discount of $71,704 (the fair value of the warrants) is being amortized over
the life of the notes using the straight-line method, which approximates the
interest method. At September 30, 2003 and June 30, 2003, the outstanding
balance was $300,000.

During May 2003, the Company converted a then currently due account payable in
the amount of $300,000 into a long-term subordinated note of the same amount and
issued warrants to this vendor to purchase 1,000,000 common shares at $0.30 per
share through November 2004. The note is subordinated, matures November 2004,
requires semi-annual interest only payments at 12%, and is secured by
substantially all assets of the Company. The subordinated note is also
convertible into common stock of the Company at a conversion rate of $0.30 per
share through November 2004 per the terms of the agreement. The conversion of
accounts payable of $300,000 was allocated between the note and the warrants,
which were valued using the Black-Scholes pricing model. The resulting original
issue discount of $300,000 (the fair value of the warrants) is being amortized
over the life of the notes using the straight-line method, which approximates
the interest method. At September 30, 2003 and June 30, 2003, the outstanding
balance was $300,000.

                                       9

During May 2003, the Company converted a currently due account payable in the
amount of $120,000 into a long-term subordinated note of the same amount and
issued warrants to this vendor to purchase 400,000 common shares at $0.30 per
share through November 2004. The note is subordinated, matures November 2004,
requires semi-annual interest only payments at 12%, and is secured by
substantially all assets of the Company. This subordinated note is also
convertible into common stock of the Company at a conversion rate of $0.30 per
share through November 2004 per the terms of the agreement. The conversion of
accounts payable of $120,000 was allocated between the note and the warrants,
which were valued using the Black-Scholes pricing model. The resulting original
issue discount of $120,000 (the fair value of the warrants) is being amortized
over the life of the notes using the straight-line method, which approximates
the interest method. At September 30, 2003 and June 30, 2003, the outstanding
balance was $120,000.

                                       10

<PAGE>

5. RELATED PARTY TRANSACTIONS:

RSI Marketing, LLC

In February  2001, in connection  with a marketing  agreement  with a company to
market its  products  and  services,  the Company  issued the rights to purchase
warrants for 1,000,000 shares of its common stock at an exercise price of $0.45.
These  warrants were valued at $206,300 using the  Black-Scholes  pricing model.
The warrants  were issued  based on the  achievement  of gross sales  targets by
December 2001. The warrants expire in February 2006.

The Company is obligated to pay  commissions  based on the terms outlined in the
agreement.  Commission  expense and  advertising  and  marketing  for the period
ending  September  30,  2003 was $0 and for the  year  ended  June 30,  2003 was
$99,359.


6. COMMITMENTS AND CONTINGENCIES:

a)       Manufacturing Agreement

On August 28, 1996, the Company  entered into a  manufacturing  agreement with a
third party custom manufacturer (Manufacturer).  Pursuant to this agreement, the
Manufacturer  agrees to produce the  Company's  videoconferencing  products  and
warrants that all products will be free from defects in material and workmanship
for  twelve  months  from the date the  Company  ships any such  product  to the
customer or fifteen months from the date the Manufacturer  ships to the Company,
whichever  comes first.  The  agreement  may be  terminated by either party upon
failure of the other party to comply  with any  material  term of the  agreement
after a 30 day written notice and cure period. In the event of such termination,
the Company would be obligated to pay for any goods  accepted under the terms of
the agreement. The Company may also terminate the agreement upon 30 days written
notice.  In such case,  the Company  would be  obligated to pay for material and
work in progress for products ordered.

On June 30, 2003, the Company and the manufacturer agreed that the Company would
no longer place orders for its Mediapro(R) group videoconferencing  product line
from the manufacturer.  The agreement has not yet been terminated;  however, the
Company  and the  manufacturer  have  entered  into  discussions  regarding  the
potential  obligation  that may arise from the  termination of the agreement and
the  Company  has  accrued  an  estimate  of the  expense  associated  with that
potential  liability of $518,500.  The total  disputed  amount is  approximately
$1,127,000.

b)       Investor and Recruitment Agreement

In  February  2001,  in  connection  with an  agreement  for  seeking  potential
investors  and  recruiting  and hiring  senior  management,  the Company  issued
warrants to purchase  500,000  shares of its common stock at a price of $.45 per
share.  50,000  warrants were issued and vested  immediately  and were valued at
$10,315 using the  Black-Scholes  pricing model. In addition,  450,000  warrants
vest at a rate of 37,500 quarterly and may vest earlier based on the achievement
of  earnings  criteria  as  defined in the  agreement.  In  connection  with the
agreement,   37,500  warrants  vested  and  were  valued  at  $7,736  using  the
Black-Scholes  pricing model during the first quarter of fiscal year 2004. As of
September 30, 2003, 375,000 warrants vested and were valued at $77,359 using The
Black-Scholes pricing model. The warrants expire in February 2006.
                                       11
7.       Shareholders (Deficit)

For the 3 months  ended  September  30,  2003,  201,310  shares had been  issued
pursuant to the 2003 Consultant  Compensation  Plan in payment of  approximately
$127,963 in services rendered.


8.       Subsequent Events

During October 2003, a warrant holder exercised a warrant to purchase  1,000,000
shares of common  stock at $0.25 per share  generating  proceeds of $250,000 and
another warrant holder  exercised a warrant to purchase  166,666 of common stock
at $0.60 per share generating proceeds of $100,000.  The Company also sold a new
warrant to an accredited  investor for the purchase of 166,666  shares of common
stock at $1.62 per share in consideration of $5,000 and teo additional  warrants
to accredited  investors to purchase 500,000 shares of common stock at $1.10 for
total  consideration  of $65,000  related to the conversion of short-term  notes
payable of $65,000.

CAUTIONARY STATEMENT IDENTIFYING IMPORTANT FACTORS THAT COULD CAUSE THE
COMPANY'S ACTUAL RESULTS TO DIFFER FROM THOSE PROJECTED IN FORWARD LOOKING
STATEMENTS

In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, readers of this document and any document
incorporated by reference herein, are advised that this document and documents
incorporated by reference into this document contain both statements of
historical facts and forward looking statements. The forward-looking statements
subject to certain risks and uncertainties, which could cause actual results to
differ materially from those, indicate forward-looking statements. Examples of
forward looking statements include, but are not limited to (i) projections of
revenues, income or loss, earnings or loss per share, capital expenditures,
dividends, capital structure and other financial items, (ii) statements of the
plans and objectives of the Company or its management or Board of Directors,
including the introduction of new products, or estimates or predictions of
actions by customers, suppliers, competitors or regulatory authorities, (iii)
statements of future economic performance, and (iv) statements of assumptions
underlying other statements and statements about the Company or its business.

This document and any documents incorporated by reference herein also identify
important factors which could cause actual results to differ materially from
those indicated by the forward looking statements. These risks and uncertainties
include price competition, the decisions of customers, the actions of
competitors, the effects of government regulation, possible delays in the
introduction of new products, customer acceptance of products and services, and
other factors which are described herein and/or in documents incorporated by
reference herein. The cautionary statements made pursuant to the Private
Litigation Securities Reform Act of 1995 above and elsewhere by the Company
should not be construed as exhaustive or as any admission regarding the adequacy
of disclosures made by the Company prior to the effective date of such Act.
Forward looking statements are beyond the ability of the Company to control and
in many cases the Company cannot predict what factors would cause results to
differ materially from those indicated by the forward looking statements.

                                     12
<PAGE>


                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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

         Viseon, Inc. (the "Company"), a Nevada corporation formerly known as
"RSI Systems, Inc.," historically has been a developer of its own video
conferencing systems primarily sold to corporate end users and OEM customers
such as Philips Electronics, N.V. In May 2001, the former RSI Systems, Inc. was
merged into its wholly owned subsidiary Viseon, Inc. in order to change the
domicile of the Company to Nevada from Minnesota and to effect a simultaneous
name change to Viseon, Inc. The shareholders of RSI Systems, Inc. approved the
Plan of Merger between RSI Systems, Inc. and Viseon, Inc. on May 23, 2001. RSI
Systems, Inc. was incorporated under the laws of Minnesota on December 21, 1993.
On July 25, 1995, it completed its initial public offering of its common stock,
par value $0.01 per share (the "Common Stock").

         Beginning with the third quarter of the Company's fiscal 2002, the
Company's profit margins were eroded by intense competition from other group
video conferencing product manufacturers and resellers. The Company recognized
the need to modify its business model to achieve higher margins and benefit from
its portfolio of U.S. patents, the fifth of which was allowed in June 2003.

In January 2003, the Company completed its change in focus from being a group
videoconferencing manufacturer and reseller to a desktop and consumer video
communications manufacturer and reseller.

In February 2003, the Company received notice of allowance for all of its
pending patent applications from the European Patent Office. The Company is
currently waiting for the patents to be issued in the following countries:
Austria, Belgium, Denmark, France, Germany, Great Britain, Greece, Ireland,
Italy, Lichtenstein, Luxembourg, Monaco, Netherlands, Portugal, Spain, Sweden,
and Switzerland. The Company anticipates exploring ways to license these patents
as soon as they are received. However, no assurance can be made as to the future
value of these patents.

        The VisiFone(R) is a low-cost broadband videophone available in 3
separate models.

        The VisiFone is a self-contained system that does not require a PC or
any external equipment. The VisiFone operates on any broadband connection and
home or office network including high-speed Internet connections via DSL or
cable modem. The VisiFone can be purchased in either H.323 or SIP protocol.
H.323 offers compatibility with most corporate video conferencing systems while
the SIP protocol allows the VisiFone to connect to many of the existing Voice
Over IP (VoIP) service providers. Either VisiFone can be used by corporations
and consumers.

          The VisiFoneTV(TM) is the third model of the VisiFone family and
contains all of the features present in the H.323 model of the VisiFone. The
VisiFoneTV is operated by a handheld remote and is offered with a full-duplex
speakerphone and requires a television monitor to display the video images.

         The Company intends to achieve additional licensing of its intellectual
property to third parties and developing proprietary consumer broadband
videophone products and services, some of which will be based on its existing
intellectual property. The Company plans on undertaking the development of these
products and services jointly with a suitable, established developer and
manufacturer. The Company is currently in the process of identifying and
selecting the developer and manufacturer and has also become a distributor in
the U.S. of a broadband videophone manufactured by Leadtek, an Asian partner.
The Company also plans on continuing to form new relationships with other
companies to distribute their products alongside its own products.

         The Company's marketing strategy is to focus on corporations who have
widespread operations across regional, national and international boundaries as
well as residential consumers who have historically not purchased video
communications. All of these developments have affected and will continue to
affect the Company's financial model in terms of margins, cash flow
requirements, and other areas. The Company has a limited history with respect to
the direction its business is now taking. There can be no assurance that the
Company will be able to succeed in implementing its strategy, or that the
Company will be able to achieve positive cash flow or profitable operations as a
result of these changes in its business.

                                       13
<PAGE>


RESULTS OF OPERATIONS

Three Months Ended September 30, 2003 Compared to Three Months Ended September
30, 2002.

Net Sales. Net sales for the first quarter of fiscal year 2004 were $30,699 down
95.1% from $632,526, in the first quarter of fiscal year 2003. The decrease in
sales in the first quarter of fiscal year 2004 was a result of lower sales
volume associated with the Company's new focus on personal broadband videophone
sales in North America and an overall reduction in the number of sales .

Gross Profit (Loss). Gross loss was ($2,841) in the first quarter of fiscal year
2004 compared to a gross profit of $63,097 during the first quarter of fiscal
year 2003. Cost of goods sold as a percentage of net sales in the first quarter
of fiscal year 2004 was 109.3% compared to 90% in the first quarter of fiscal
year 2003. During the first quarter of fiscal year 2004, the Company continued
to focus on its efforts on its new Personal Broadband Videophone product. The
Company anticipates that, in the remaining three quarters of fiscal 2004,
revenues will be less relative to the same quarter in fiscal 2003 due to the
Company's focus of its efforts on its new product.

Research and Development Expenses. Research and development expenses were $1,546
for the first quarter of fiscal year 2004, or 5% of net sales, compared to
research and development expenses of $25,189 or 4% of net sales for the first
quarter of fiscal year 2003. Actual expenses decreased approximately $23,643 as
a result of a decrease in personnel in conjunction with the Company's
utilization of independent third-parties to broaden its current product
offerings and the reduction of amortization and depreciation expenses associated
with the prior period reduction of capitalized research and development costs.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $463,320 or 1,509.2% of net sales for the first
quarter of fiscal year 2004 compared to $1,037,035 or 164% of net sales for the
first quarter of fiscal year 2003. Overall expenses were reduced by $573,715
compared to fiscal year 2003. Selling, general and administrative expenses
during the first quarter of fiscal year 2004 included approximately $6,153
non-cash expense related to depreciation and amortization, $46,446 non-cash
expenses related to variable stock option accounting rule, $127,963 in stock
compensation expense related to services rendered by consultants. The total
non-cash expense was $180,562 for the first quarter of fiscal 2004. The Company
anticipates that, in the remaining three quarters of fiscal 2004, Selling,
General and Administrative expenses will be less relative to the same quarter in
fiscal 2003 due to the Company's focus of its efforts on its new product.

Other Income (Expense). Other income (expense) was $(203,534) in the first
quarter of fiscal year 2004, compared to $(89,190) in the first quarter of
fiscal year 2003. The increase in expenses was primarily due to the amortization
of warrant costs associated with a higher amount of subordinated debt in the
first quarter of fiscal year 2004 compared to the first quarter of fiscal year
2003.

As a result of the foregoing, net loss for the first quarter of fiscal year 2004
was $(671,241), or ($.04) per common share compared to a net loss of
$(1,088,317) or $(.08) per common share in the first quarter of fiscal year
2003.
                                       14
<PAGE>
LIQUIDITY, CAPITAL RESOURCES AND MATERIAL CHANGES IN FINANCIAL CONDITION

Net cash used in operating activities was ($59,331 in the first quarter of
fiscal year 2004, compared to $79,917 provided by operating activities in the
first quarter of fiscal year 2003.

Our previous line of credit (secured by virtually all of our assets) matured on
December 5, 2002, at a time when we did not have sufficient funds to pay the
outstanding balance owed under the line. This situation entitled the lender,
Silicon Valley Bank, to liquidate our assets, possibly causing us to cease
operations or seek bankruptcy protection. However, on June 26, 2003, Silicon
Valley Bank assigned its rights under the loan. The outstanding balance owed by
us on this loan was approximately $386,700 as of June 30, 2003. Exim Corporation
and Henry Mellon, two of our stockholders with whom we are on favorable terms
acquired this debt obligation. On June 30, 2003, the Company entered into an
agreement with Exim Corporation and Henry Mellon to restructure certain terms of
this indebtedness which included the execution and delivery of a separate
promissory note to each of them. The restructured promissory notes extended the
maturity date for 18 months until December 31, 2004, reduced the interest rate
to 12% per annum and require no payments other than quarterly interest payments.
The terms of the restructured notes also provide that any amounts due thereunder
may be converted, in whole or in part, into shares of the Company's common stock
at the conversion price of thirty cents ($0.30) per share. On December 31, 2004,
the remaining balance of the loan will become due. At that time, unless
conversion has been requested, we will have to pay the outstanding balance owed,
or enter into an agreement with our lenders to modify the loan terms again, or
face the possible assertion of secured creditor's rights and remedies.
Nevertheless, we believe that the assignment of the loan as just described
represents a favorable development; giving to us much needed time to reorganize
our business focus. Exim Corporation and Henry Mellon each received a warrant to
purchase 644,510 shares of common stock of the Company at a per-share price of
$0.30. These warrants were valued at $193,353 each using the Black-Scholes
pricing model.

We note that, even before the Silicon Valley Bank loan matured, we were not in
compliance with the covenants in the documentation governing this loan, and the
possibility exists that we may fail in the future to comply with covenants
governing our borrowing arrangements. In addition to the default on the former
Silicon Valley Bank indebtedness, we were also in default on all monthly
interest payments due on two subordinated secured convertible notes in the
aggregate original principal amount of $300,000 that were originally scheduled
to mature in full on June 30, 2003.

We have modified these notes so that all principal of and accrued but unpaid
interest on these subordinated notes shall be due and payable in full on
December 31, 2003, At that time, we will have to pay the outstanding balance
owed or modify the terms of the notes again, or else face the possible assertion
of creditor's rights and remedies.

                                       15

<PAGE>


CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of net revenues and
expenses during the reporting period. We regularly evaluate our estimates and
assumptions related to net revenues, allowance for doubtful accounts, sales
return and allowances, inventory reserves, goodwill and purchased intangible
asset valuations, warranty reserves, restructuring cost, litigation and other
contingencies. We base our estimates and assumptions on historical experience
and on various other factors 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. To the extent there are material differences between our
estimates and the actual results, our future results of operations will be
affected.

Revenue Recognition
We believe the following critical accounting policies required us to make
significant judgments and estimates in the preparation of our consolidated
financial statements:

We do not recognize revenue until all of the following criteria are met:
persuasive evidence of an arrangement exists; delivery has occurred or services
have been rendered; our price to buyer is fixed or determinable; and
collectibility is reasonably assured.

When product sales revenue is recognized, we establish and estimated allowance
for future product returns based on historical returns experience; when price
reductions are approved, we establish an estimated liability for price
protection payable on inventories owned by product resellers. Should actual
product returns or pricing adjustments exceed our estimates, additional
reductions to revenue would result. Revenue from the licensing of patents is
recognized at the time of a patent agreement is executed and the goods, services
and/or cash are received. Our product typically carries a ninety-day to
five-year warranty. Although we engage in extensive product quality programs and
processes, our warranty obligation is affected by product failure rates, use of
materials or service delivery cost that differ from our estimates. As a result,
additional warranty reserves could be required, which could reduce gross
margins.

Allowance for Doubtful Accounts
We maintain an allowance for doubtful accounts for estimated losses resulting
from the inability of our customers to make required payments. Our allowance for
doubtful accounts is based on our assessment of the collectibility of specific
customer accounts, the aging of accounts receivable, our history of bad debts
and the general condition of the industry. If a major customer's credit
worthiness deteriorates, or our customers' actual defaults exceed our historical
experience, our estimates could change and impact our reported results.

Inventory Valuation
Our policy is to value inventories at the lower of cost market on a part-by-part
basis. This policy requires us to make estimates regarding the market value of
our inventories, including an assessment of excess and obsolete inventories. We
determine excess and obsolete based on an estimate of the future sales demand
for our product within a specified time horizon, generally 24 months. The
estimates we use for demand are also used for near-term capacity planning and
inventory purchasing is consistent with our revenue forecast.

If our sales forecast is less than the inventory we have on hand at the end of
an accounting period, we may be required to take excess and obsolete inventory
charges, which will decrease gross margin and net operating results for that
period.

                                       16
<PAGE>


Item 3.           CONTROLS AND PROCEDURES

As of the end of the period covered by this report, the Company conducted an
evaluation, under the supervision and with the participation of the Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934 as amended (the "Exchange
Act")). Based on this evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures as of the end of the fiscal quarter covered by this Quarterly Report
on Form 10-QSB are effective to ensure that information required to be disclosed
by the Company in reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in Securities and Exchange Commission rules and forms. Management of the Company
has also evaluated, with the participation of the Chief Executive Officer and
Chief Financial Officer of the Company, any change in the Company's internal
control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act) that occurred during the fiscal quarter covered by this
Quarterly Report on Form 10-QSB. There was no change in the Company's internal
control over financial reporting during the Company's most recently completed
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.

                                       17


<PAGE>


                                     PART II
                                OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

On June 22, 2001,  the Company  initiated a suit in the United  States  District
Court for the District of Minnesota,  Hennepin County, Minnesota against Forgent
Networks,  Inc.  seeking  damages  for  reasonable  royalties  and lost  profits
associated with the alleged infringement of the Company's first two U.S. patents
numbered 6,073,192 and 5,802,281 respectively.  The United States District Court
granted a partial  summary  judgment in favor of Forgent which resolved  certain
claims advanced.  Forgent and the Company have submitted briefs on the remaining
issues which  include the payment of  attorneys'  fees and the dismissal of this
litigation.  The United  States  District  Court has not  rendered a decision on
these remaining issues.

On February 17, 2003, Avanstar Communications,  Inc. instituted suit against the
Company in the District Court of Dallas County,  Texas, 192nd Judicial District,
(Cause No.  CC03-01851-C)  seeking the  recovery of $21,469  allegedly  owed for
goods and services  which the  Plaintiff  claims were  purchased by the Company.
This amount  includes  damages  resulting from an alleged breach of contract and
the recovery of attorneys'  fees. The Company has answered this lawsuit  denying
all of the  material  allegations  advanced  therein and  intends to  vigorously
defend against the claims asserted.

On April 11,  2003,  the  Minnesota  District  Court,  Hennepin  County,  Fourth
Judicial District, entered judgment in the amount of $69,625 against the Company
in favor of  Simplex  Time  Recorder  Co in a lawsuit it had filed  against  the
Company (Cause No. DC DJ 03-005590).  On September 29, 2003, the Company settled
this matter in full by paying Simplex Time Recorder Co the sum of $20,000.

On May 5, 2003,  Dow Jones,  Inc.  instituted  a suit against the Company in the
District  Court of Dallas County,  Texas,  192nd  Judicial  District  (Cause No.
CC03-04578-A)  seeking  the  recovery  of $31,029  allegedly  owed for goods and
services  purchased by the Company  from this  plaintiff.  This amount  includes
damages for an alleged  breach of contract and recovery of attorneys'  fees. The
Company has answered this lawsuit and intends to vigorously  defend  against the
claims asserted, although various settlement offers have been made and received.

On June 9,  2003,  the  Company  received  service  of notice  regarding  a suit
initiated by Polycom,  Inc. in the County Court at Law Number 4, Dallas  County,
Texas (Cause No.  cc-03-01742-d)  against the Company seeking $426,471 allegedly
owed for  videoconferencing  products purchased by the Company from Polycom.  In
the month of October,  2003,  the Company  entered  into an  agreement  with the
Plaintiff in full and final settlement of this matter for the amount of $80,000.
Pursuant to the terms of the  settlement  agreement,  an Order of Dismissal With
Prejudice will be entered by the court in final  resolution of this  litigation.
The Company paid $40,000 on October 31, 2003 and will pay the remaining  $40,000
balance of the settlement on November 30, 2003.

                                       18
<PAGE>

On June 12, 2003, Mike Prell d/b/a/ Dallas Computer  Recovery  instituted a suit
against  the  Company  in the  District  Court of Dallas  County,  Texas,  192nd
Judicial District, (Cause No. 03-05996-K) seeking recovery of $169,766 allegedly
owed for goods and services  purchased by the Company  from this  plaintiff  and
liquidated  damages for the Company's  failure to purchase goods which plaintiff
alleges it was  obligated  to  purchase.  This  amount  includes  damages for an
alleged  breach of contract and  recovery of  attorneys'  fees.  The Company has
answered  this  lawsuit  and  intends to  vigorously  defend  against the claims
asserted.

On August 20, 2003,  Genesys  Conferencing,  Inc.  instituted a suit against the
Company in the District Court of Dallas County, Texas, 192 nd Judicial District,
(Cause No.  CC-0306083-C)  seeking the  recovery of $14,027  allegedly  owed for
goods and services purchased by the Company from this plaintiff. In the month of
October, 2003, the Company settled this matter for the sum of $2,500.

On October 15,  2003,  Sony  Electronics,  Inc.  instituted  a suit  against the
Company in the District Court of Dallas County,  Texas,  192nd Judicial District
(Cause No. CC03-9448-A) seeking the recovery of $17,475 allegedly owed for goods
and services purchased by the Company from this plaintiff.  This amount includes
damages for an alleged  breach of contract and recovery of attorneys'  fees. The
Company has answered this lawsuit and intends to vigorously  defend  against the
claims asserted.

The Company is subject to certain  other  litigation  and claims  arising in the
ordinary course of business.

Management  believes the amounts ultimately payable, if any, as a result of such
claims and assessments will be less than the required  disclosure  thresholds of
the U.S. Securities and Exchange Commission (the "Commission").

                                       19
<PAGE>

Item 2. CHANGES IN SECURITIES

For the period ending September 30, 2003 201,310 shares had been issued pursuant
to the 2003 Consultant Compensation Plan in payment of approximately $127,963 in
services rendered.

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

        31.01    Certification pursuant to Rule 13a-14(a) of the Securities
                 ans Exchange Act of 1934.

        32.01    Certification Pursuant to 18 U.S.C. Section 1350, as adopted
                 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

        (b) Reports on Form 8-K

         During the quarter ended September 30, 2003, the Company filed one
         Current Report on Form 8-K on September 24, 2003 reporting on and
         filing a proposed letter to stockholders.






                                       20

<PAGE>


                                   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.


                                  VISEON, Inc.

Dated:   November 14, 2003              By:   /s/ John C Harris
                                        -----------------
                                        John C. Harris
                                        It's President & Chief Executive Officer


                                        By:  /s/ John C Harris
                                        John C. Harris
                                        It's Chief Financial Officer



                                       21