<PAGE>
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                 FORM 10-QSB/A


(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

<TABLE>
<CAPTION>
                                                     September 30,      June 30,
                                                        2003              2003
                                                     (Unaudited)       (audited)
                 Assets                              (Restated)        (Restated)
----------------------------------------------------------------------------------
<S>                                                 <C>              <C>
Current assets:
  Cash and cash equivalents                         $     54,379     $      7,784
  Accounts receivable                                     18,927            4,109
  Inventories, net                                           799            7,079
  Prepaid expenses                                       109,876           46,573
                                                    ------------------------------
 Total current assets                                    183,981           65,545
                                                    ------------------------------

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

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

      Total assets                                  $    362,852     $    248,325
                                                    ==============================

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

Current liabilities:
  Subordinated notes payable                        $    264,148     $    228,296
  Short-term notes payable                                65,000               --
  Accounts payable                                       626,536          553,299
  Net liabilities of discontinued operations           1,220,452        1,244,452
  Accrued expenses                                       386,511          104,692
                                                    ------------------------------
      Total current liabilities                        2,562,647        2,130,739

Long-term liabilities

  Subordinated notes payable, net                        157,784           23,333
                                                    ------------------------------

      Total Liabilities                                2,720,431        2,154,072
                                                    ------------------------------

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   $    362,852     $    248,325
                                                    ==============================
</TABLE>


See accompanying notes to consolidated financial statements.

                                        3
<PAGE>
                           VISEON, INC. AND SUBSIDIARY

                      Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                        Three Months Ended    Three Months Ended
                                           September 30,         September 30,
                                               2003                  2002
                                            (Unaudited)           (Unaudited)
                                            (Restated)            (Restated)
--------------------------------------------------------------------------------
<S>                                     <C>                    <C>
  Net sales                                $     30,699         $          --
  Cost of goods sold                             35,993                    --
                                           -------------------------------------
Gross profit (loss)                              (5,294)                   --

  Research and development                        1,546                25,189
  Selling, general, and administrative          460,867               716,486
                                           -------------------------------------
Operating income (loss)                        (467,707)             (741,675)
                                           -------------------------------------

  Other income (expense):
      Interest expense                         (203,534)              (86,020)
      Other income (expense)                         --                (3,877)
                                           -------------------------------------
Other income (expense), net                    (203,534)              (89,897)
Loss from continuing operations                (671,241)             (831,572)
Gain (loss) from discontinued operations             --              (256,745)
                                           -------------------------------------
Net loss                                   $   (671,241)        $  (1,088,317)
                                           =====================================

Basic and diluted loss per share:

Loss from continuing operations            $      (0.04)        $       (0.06)
                                           =====================================
Gain (loss) from discontinued operations   $         --         $       (0.02)
                                           =====================================
Net loss                                   $      (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
</TABLE>



See accompanying notes to consolidated financial statements.

                                        4
<PAGE>
                           VISEON, INC. AND SUBSIDIARY

                      Consolidated Statements of Cash Flows



<TABLE>
<CAPTION>
                                                   Three Months Ended   Three Months Ended
                                                      September 30,        September 30,
                                                           2003                  2002
                                                       (Unaudited)           (Unaudited)
                                                       (Restated)            (Restated)
----------------------------------------------------------------------------------------
<S>                                                    <C>                  <C>
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               56,270
      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)                  --
        Inventories, net                                     6,280                   --
        Prepaid expenses                                   (63,303)                (571)
        Cash issued in excess of cash in bank                   --              (51,919)
        Accounts payable                                    69,237               (1,479)
        Accrued expenses                                   281,819               (1,778)
                                                       ---------------------------------
Net cash provided by (used in) operating
  activities                                               (39,331)            (678,552)
                                                       ---------------------------------

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)
                                                       ---------------------------------

                                                       ---------------------------------
Change in cash attributable to discontinued
 operations                                                (20,000)             758,469
                                                       ---------------------------------
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
</TABLE>


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 its focus from being a
group videoconferencing manufacturer and reseller to a desktop and consumer
video communications manufacturer and reseller. The only measurable revenues
the Company is currently realizing result from the sales of the VisiFone.
Therefore, we have classified the net assets and operations related to the
group videoconferencing business as discontinued operations in the accompanying
consolidated financial statements.


      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
<PAGE>
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 merchandise
is shipped. In November 1999, 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 believes it meets all of the requirements for revenue recognition
under SFAS 48 and SAB 101. The Company recognizes revenue on shipment and
records a reserve for potential returns based upon historical experience rates.



The Company offers an unconditional 30-day right of return on the sale of its
Visifone products. The Company recognizes revenue on shipment and records a
reserve for potential returns. The Company's warranty policy during the first
year after the sale includes an obligation to replace during the first 30 days
and to repair during the next 11 months. The Company has a one-year warranty
with the manufacturer, so there is little, if any, cost to the Company for
warranty claims. No warranty reserve has been recorded to date, although the
Company will record a reserve if warranty activity increases and there are
unrecoverable costs to the Company.



In May 2003, the Company entered into an agreement with a supplier pursuant to
which the supplier manufactures and private labels the VisiFone for the Company.
The Company assumes the risks and rewards of ownership of the inventory
purchased from the supplier and, accordingly, records revenue on a gross basis.
Substantially nil revenues in fiscal 2004 were from sales of the VisiFone
purchased from this supplier.


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.


Stock-Based Compensation. In accordance with Accounting Principles Board (APB)
Opinion No. 25 and related interpretations, the Company uses the intrinsic
value-based method for measuring stock-based compensation cost which measures
compensation cost as the excess, if any, of quoted market price of the Company's
common stock at the grant date over the amount the employee must pay for the
stock. The Company's general policy is to grant stock options at fair value at
the date of grant. The Company has adopted the disclosure only provision of SFAS
No. 148, "Accounting for Stock-Based Compensation."



Had compensation cost been recognized based on the fair values of options at the
grant dates consistent with the provisions of Statement of Financial Accounting
Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation," the
Company's net loss and basic and diluted net loss per common share would have
been changed to the following pro forma amounts:



<Table>
<Caption>
                                         For the three months ended
                                               September 30,
                                           2003              2002
                                       ------------      ------------
<S>                                    <C>                 <C>
Net Loss:
   As reported                         $   (671,241)       (1,088,317)
   Pro forma                               (687,466)       (1,104,542)

Basic net loss per Common share:
   As reported                                (0.04)            (0.08)
   Pro forma                                  (0.04)            (0.08)

Diluted net loss per Common share:
   As reported                                (0.04)            (0.08)
   Pro forma                                  (0.04)            (0.08)

Stock based compensation:
   As reported                               46,446            59,020
   Pro forma                                 16,225            16,225
</Table>



In determining the compensation cost of options granted during the three months
ended September 30, 2003 and 2002, as specified by SFAS No. 123, the fair value
of each option grant has been estimated on the date of grant using the
Black-Scholes option pricing model and the weighted average assumptions used in
these calculations are summarized as follows:



<Table>
<Caption>
                                              For the Three Months Ended
                                                     September 30,
                                                 2003             2002
                                             ------------     ------------
<S>                                          <C>              <C>

Risk-free interest rate                               N/A             4.38%
Expected life of options granted                      N/A          5 years
Expected volatility                                   N/A             68.9%
Expected dividend yield                               N/A                0%
</Table>


                                        8
<PAGE>
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
<PAGE>
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>
   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 on the agreement. Commission expense and advertising and
            marketing for the period ending September 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.


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
<PAGE>
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 two 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.


9.    Discontinued Operations



      In January 2003, we decided to change our focus from being a group
      videoconferencing manufacturer and reseller to a desktop and consumer
      video communications manufacturer and reseller. This has been accomplished
      by the transfer to a third party of our group videoconferencing services
      contract portfolio and the liquidation of our remaining group
      videoconferencing assets. The only measurable revenues we are now
      receiving result from the sales of the VisiFone. Therefore, we have
      classified the net assets and operations related to the group
      videoconferencing business as discontinued operations in the accompanying
      consolidated financial statements.


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, we decided to exit the group videoconferencing business. The
group videoconferencing business qualified for accounting treatment as
discontinued operations. As a result, all historical financial information of
this business (sales, costs and expenses, assets and liabilities, and cash
flows) has been reported separately as discontinued operations. Prior to January
2003, the group videoconferencing business was the source for substantially all
revenue.


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>

Net Sales. Net sales for the first quarter of fiscal year 2004 were $30,699 up
100% from zero, in the first quarter of fiscal year 2003. This represents the
initial quarter in which sales of the personal broadband videophone have been
recorded.


Gross Profit (Loss). Gross loss was ($5,294) in the first quarter of fiscal year
2004 compared to a gross profit of $0 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 117.2% compared to 0% in the first quarter of fiscal
year 2003. Cost of goods sold was in excess of sales revenue due to the Company
offering phones at below costs to certain potential distributors.


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 $460,867 or 1,501.2% of net sales for the first
quarter of fiscal year 2004 compared to $716,486 for the first quarter of fiscal
year 2003. Overall expenses were reduced by $255,619 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.

Other Income (Expense). Other income (expense) was $(203,534) in the first
quarter of fiscal year 2004, compared to $(89,897) 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.

Loss from discontinued operations. Loss from discontinued operations was $0 for
the first quarter of fiscal year 2004 compared to ($256,745) for the first
quarter of fiscal year 2003.

As a result of the foregoing, net loss from continuing operations for the first
quarter of fiscal year 2004 was $(671,241), or ($.04) per common share compared
to a net loss of $(831,572) or $(.06) 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 $39,331 in the first quarter of
fiscal year 2004, compared to $678,552 used in operating activities in the
first quarter of fiscal year 2003. The reduction in cash used is due to reduced
employees and related operating expenses.


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, 192nd 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.




                                       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
                and 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: August 13, 2004            By:  /s/ John C Harris
                                      --------------------------
                                       John C. Harris
                                       Its President & Chief Executive Officer


                                  By:  /s/ John C Harris
                                      --------------------------
                                       John C. Harris
                                       Its Chief Financial Officer


                                       21