UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(MARK ONE)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                For the quarterly period ended December 31, 2003

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                For the transition period from ______ to _______

                         Commission file number 0-49812

                               BIZCOM U.S.A., INC.
                               -------------------
        (Exact name of small business issuer as specified in its charter)

                FLORIDA                                      65-0681772
                -------                                      ----------
   (State or other jurisdiction of                       (I.R.S. Employer
    incorporation or organization)                       Identification No.)

                  5440 NW 33RD AVENUE, SUITE 106, FLORIDA 33309
                    (Address of principal executive offices)

                                 (954) 714-0028
                                 --------------
                            Issuer's telephone number

                    -----------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

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 reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes ( ) No (X)

As of November 30, 2004, there were 24,682,674 shares of the Registrant's common
stock outstanding.

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


<PAGE>

                               BIZCOM U.S.A., INC.
                                      INDEX

                          PART I FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheet at December 31, 2003 and June 30, 2003 .........    3

Consolidated Statements of Operations for the three months and
  six months ended December 31, 2003 and 2002 .............................    4

Consolidated Statements of Stockholders' Equity for the
  six months ended December 31, 2003 ......................................    5

Consolidated Statements of Cash Flows for the six months
  ended December 31, 2003 and 2002 ........................................    6

Notes to Consolidated Financial Statements ................................ 7-17

Item 2. Management's Discussion and Analysis of
  Financial Condition and Results of Operations ...........................18-28

Item 3. Controls and Procedures ...........................................   28


                            PART II OTHER INFORMATION
Item 1. Legal Proceedings .................................................   29

Item 2. Unregistered Sales of Equity Securities and
  Use of Proceeds .........................................................   29

Item 3. Defaults Upon Senior Securities ...................................   29

Item 4. Submission of Matters to a Vote of Security Holders ...............29-30

Item 5. Other Information .................................................   30

Item 6. Exhibits and Reports on Form 8-K ..................................30-31




                                       2
<PAGE>
                          PART I FINANCIAL INFORMATION

Item 1. Financial Statements

BIZCOM U.S.A., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AT
DECEMBER 31, 2003 AND JUNE 30, 2003

<TABLE>
<CAPTION>

                                                                        December 31,       June 30,
                                                                            2003            2003
                                                                        ------------    ------------
                                                                        (Unaudited)
<S>                                                                     <C>                  <C>
                                     ASSETS

Current assets:
  Cash                                                                  $     53,495    $    264,428
  Accounts receivable, net                                                   202,619         218,656
  Inventory                                                                  258,242         137,402
  Prepaid expenses and other current assets                                   76,834              13
                                                                        ------------    ------------
      Total current assets                                                   591,190         620,499
                                                                        ------------    ------------

Property and equipment, net                                                5,346,520       5,072,709
                                                                        ------------    ------------

Other assets:
  Deposits                                                                     8,445           1,474
  Other receivables                                                          484,597         245,597
  Intangible assets, net                                                  30,247,936      15,288,880
                                                                        ------------    ------------
      Total other assets                                                  30,740,978      15,535,951
                                                                        ------------    ------------
      Total assets                                                      $ 36,678,688    $ 21,229,159
                                                                        ============    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities                                $    638,911    $    548,897
Note payable                                                                 400,000            --
Deferred revenue                                                             305,761          70,000
                                                                        ------------    ------------
      Total current liabilities                                            1,344,672         618,897
                                                                        ------------    ------------
Long term liabilities:
  Note payable                                                             2,900,000            --
                                                                        ------------    ------------
      Total liabilities                                                    4,244,672         618,897
                                                                        ------------    ------------

Commitments and contingencies                                                   --              --

Stockholders' equity:
  Preferred stock, $0.0001 par value; 20,000,000 shares
    authorized; no shares issued and outstanding at December 31, 2003
    and June 30, 2003, respectively                                             --              --
  Common stock, $0.0001 par value; 200,000,000 shares authorized;
    21,095,674 and 15,053,750 shares issued and outstanding                    2,109           1,505
    at December  31, 2004 and June 30, 2003, respectively
Additional paid-in capital                                                42,019,905      26,929,320
Accumulated deficit                                                       (9,587,998)     (6,320,563)
                                                                        ------------    ------------
      Total stockholders' equity                                          32,434,016      20,610,262
                                                                        ------------    ------------
      Total liabilities and stockholders' equity                        $ 36,678,688    $ 21,229,159
                                                                        ============    ============
</TABLE>

Note:    The Balance Sheet at June 30, 2003 has been derived from the audited
         financial statements at that date, but does not include all of the
         information and footnotes required by generally accepted accounting
         principles for complete financial statements.

          See accompanying notes to consolidated financial statements.



                                       3
<PAGE>
BIZCOM U.S.A., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS AND SIX MONTHS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>

                                                 THREE MONTHS ENDED              SIX MONTHS ENDED
                                                    DECEMBER 31,                   DECEMBER 31,

                                                2003            2002            2003            2002
                                            ------------    ------------    ------------    ------------


<S>                                         <C>             <C>             <C>             <C>
Sales                                       $    317,488    $    496,406    $    502,506    $    754,408

Operating expenses:
  Cost of sales                                  204,869         234,985         332,432         321,755
  Amortization of licenses                       575,834          82,011         990,946         163,307
  Depreciation                                   149,049           8,352         285,585          12,863
  General and administrative                   1,105,138         938,387       2,147,959       1,909,571
                                            ------------    ------------    ------------    ------------
       Total operating expenses                2,034,890       1,263,735       3,756,922       2,407,496
                                            ------------    ------------    ------------    ------------

Operating loss                                (1,717,402)       (767,329)     (3,254,416)     (1,653,088)
                                            ------------    ------------    ------------    ------------


Interest expense                                  13,019            --            13,019            --
                                            ------------    ------------    ------------    ------------
Net loss                                    $ (1,730,421)   $   (767,329)   $ (3,267,435)   $ (1,653,088)
                                            ============    ============    ============    ============

Net loss per common share,
 basic and diluted                          $      (0.10)   $      (0.12)   $      (0.20)   $      (0.26)
                                            ============    ============    ============    ============

Weighted-average number of
 common shares, basic and diluted             17,731,615       6,528,717      16,487,856       6,325,565
                                            ============    ============    ============    ============
</TABLE>

          See accompanying notes to consolidated financial statements.



                                       4
<PAGE>
BIZCOM U.S.A., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
FOR THE SIX MONTHS ENDED DECEMBER 31, 2003

<TABLE>
<CAPTION>

                                   Preferred Stock               Common Stock            Additional
                             --------------------------   --------------------------     Paid-In      Accumulated
                                Shares        Amount         Shares        Amount        Capital        Deficit          Total
                             ------------  ------------   ------------  ------------   ------------   ------------    ------------

<S>                          <C>           <C>              <C>         <C>            <C>            <C>             <C>
Balance, July 1, 2003                --            --       15,053,750  $      1,505   $ 26,929,320   $ (6,320,563)   $ 20,610,262
Issuance of common stock
  for cash                           --            --          981,924            98      2,441,091           --         2,441,189
Issuance of common stock
  for acquisitions                   --            --        5,060,000           506     12,649,494           --        12,650,000
Net loss for the six months
    ended December 31, 2003          --            --             --            --             --       (3,267,435)     (3,267,435)
                             ------------  ------------   ------------  ------------   ------------   ------------    ------------
Balance, December 31, 2003           --            --       21,095,674  $      2,109   $ 42,019,905   $ (9,587,998)   $ 32,434,016
                             ============  ============   ============  ============   ============   ============    ============
</TABLE>





          See accompanying notes to consolidated financial statements.


                                       5
<PAGE>

BIZCOM U.S.A., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED DECEMBER 31, 2003 AND 2002
<TABLE>
<CAPTION>

                                                                        2003            2002
                                                                    ------------    ------------
<S>                                                                 <C>             <C>
Cash flows from operating activities:
  Net Loss                                                          $ (3,267,435)   $ (1,653,088)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
      Depreciation and amortization                                    1,276,531         176,170
      Allowance for doubtful accounts                                     76,900            --
      Deferred revenue                                                   (48,089)           --
      (Increase) decrease in:
      Accounts receivable                                                (60,863)       (385,232)
      Inventory                                                           96,522          13,309
      Prepaid expenses and other current assets                          (76,821)       (332,684)

  Increase (decrease) in accounts payable and accrued liabilities        (37,480)        147,481
                                                                    ------------    ------------
Net cash used in operating activities                                 (2,040,735)     (2,034,044)
                                                                    ------------    ------------

Cash flows from investing activities:
  Payment of other liabilities assumed with license and equipment       (239,000)           --
  Cash payment for acquisition                                          (300,000)           --
  Purchase of property and equipment                                     (65,416)         (8,838)
  Purchase of license agreements                                            --          (124,000)
  Increase in other assets                                                (6,971)           --
                                                                    ------------    ------------
Net cash used in operating activities                                   (611,387)       (132,838)
                                                                    ------------    ------------

Cash flows from financing activities:
  Common stock issuance, net of expenses                               2,441,189       2,053,060
                                                                    ------------    ------------
Net cash provided by financing activities                              2,441,189       2,053,060
                                                                    ------------    ------------

Net decrease in cash                                                    (210,933)       (113,822)
Cash, beginning of year                                                  264,428         227,451
                                                                    ------------    ------------
Cash, end of year                                                   $     53,495    $    113,629
                                                                    ============    ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Stock and notes issued in acquisition:
  Issuance of common stock (5,000,000 shares)                       $ 12,500,000    $       --
  Note payable December 31, 2007                                       2,900,000            --
  Note payable January 31, 2004                                          400,000            --
                                                                    ------------    ------------
                                                                    $ 15,800,000    $       --
                                                                    ============    ============
Stock issued in acquisition (60,000 shares):                        $    150,000    $       --
                                                                    ============    ============
Cash paid for interest                                              $       --      $       --
                                                                    ============    ============
Cash paid for income taxes                                          $       --      $       --
                                                                    ============    ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       6
<PAGE>

BIZCOM U.S.A., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - NATURE OF BUSINESS

Bizcom U.S.A., Inc. was incorporated in the State of Florida on July 1, 1996.
The consolidated financial statements include the accounts of Bizcom U.S.A.,
Inc. and its wholly-owned subsidiaries, Bizcom Southern Holdings, Inc. and SMR
Management, Inc. (collectively, the "Company"). All material intercompany
transactions have been eliminated. The Company provides emergency management and
first responder software, and wireless voice and data communications equipment
for public safety, critical infrastructure, homeland security, and industrial /
commercial markets.

The Company, when it was originally formed in 1996, planned to manage and
acquire certain 220 MHz Specialized Mobile Radio ("SMR") mobile radio systems.
However, due to capital constraints, the Company was unable to acquire such
systems and ultimately ceased its activities. Through July 2001, the Company had
only minimal administrative activities, which primarily were to maintain the
legal existence and standing of the Company.

During August 2001, control of the entity was obtained by present management,
and activities were initiated to establish a new business. In accordance with
applicable accounting standards, the Company was deemed to have re-entered the
development stage in August 2001. Through April 2002, planned principal
operations had not commenced, and management devoted most of its efforts to
general business planning, raising capital, recruiting personnel, obtaining
business contracts, and developing markets. The Company emerged from the
development stage during May 2002 when its planned principal operations began.

During fiscal 2002, the Company entered into software licensing agreements that
positioned the Company to compete in the public safety operations and emergency
and incident management software market. Also, the Company entered into a patent
licensing agreement that provided radio technology necessary to operate the 220
MHz radio spectrum holdings. During fiscal 2003, the Company completed
acquisitions of one hundred four 220 MHz SMR Federal Communications Commission
("FCC") licenses and related communications equipment. In November 2003, the
Company acquired substantially all of the assets of Sophia Communications, Inc.
("Sophia") and Sophia Licensee, Inc., a wholly-owned subsidiary of Sophia, which
included a nationwide ten-channel, two regional and eight economic area 220 SMR
FCC licenses and related communications equipment and Sophia's proprietary radio
technology. In December 2003, the Company acquired a site specific 220 SMR FCC
license and related communications equipment covering the greater New York City
metropolitan area. The Company continues to consider and may acquire additional
radio technology, software and FCC licenses in the 220 MHz frequency.

NOTE 2 - BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements of the Company have
been prepared in accordance with generally accepted accounting principles for
interim financial information and Regulation S-B. Accordingly, they do not
include all of the information and footnotes required for complete financial
statements.

In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation of the results for the
interim periods presented have been included.

These results have been determined on the basis of generally accepted accounting
principles and practices applied consistently with those used in the preparation
of the Company's Annual Financial Statements for the year ended June 30, 2003.
Operating results for the six months ended December 31, 2003 are not necessarily
indicative of the results that may be expected for the year ending June 30,
2004.

It is recommended that the accompanying condensed financial statements be read
in conjunction with the financial statements and notes for the year ended June
30, 2003, found in the Company's Form 10-KSB/A.

                                       7
<PAGE>

BIZCOM U.S.A., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3 - SUMMARY OF ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Bizcom U.S.A.,
Inc. and its subsidiaries. All material intercompany balances and transactions
have been eliminated in consolidation.

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments purchased with an
original maturity of three months or less. At December 31, 2003 and December 31,
2002, the Company had no cash equivalents.

Accounts Receivable

The Company provides an allowance for doubtful accounts equal to the estimated
uncollectible amounts. The Company's estimate is based on historical collection
experience and a review of the current status of trade accounts receivable. It
is reasonably possible that the Company's estimate of the allowance for doubtful
accounts will change. Accounts receivable are presented net of an allowance for
doubtful accounts of $115,000 and $0 at December 31, 2003 and December 31, 2002,
respectively.

Inventory

Inventory consists primarily of 220 MHz radios, radio components and
communications equipment held for resale and are carried at the lower of cost
(first-in, first-out method) or market.

Property and Equipment

Property and equipment, consisting of computer equipment and office equipment,
is recorded at acquisition cost and depreciated using the straight-line method
over the estimated useful lives of the assets, which is presently five years for
office and computer equipment and ten years for communications equipment.

Intangible Assets

The Company has adopted Statement of Financial Accounting Standards ("SFAS") No.
142 "Goodwill and Other Intangible Assets" as of July 1, 2001. Intangible assets
are recorded at acquisition cost, which is considered to be fair value per SFAS
No. 142. Certain of the Company's intangible assets are licensing agreements
that will be amortized over their expected useful life. The method of
amortization shall reflect the pattern in which the economic benefits of the
intangible asset are consumed or otherwise used up. If that pattern cannot be
reliably determined, a straight-line amortization method shall be used. The
Company reviews these intangible assets periodically to assess whether the
carrying amount will be fully recovered through estimated future operating cash
flows. An impairment loss is recorded if the carrying amount exceeds the present
value of the estimated future cash flows.

The Company's intangible asset that arose from the purchase of a software
license is amortized following the provisions of SFAS No. 86, "Accounting for
the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed." This
asset will be amortized on a product-by-product basis, and shall be the greater
of (a) an amount computed based on anticipated future gross revenues, or (b) an
amount computed on a straight-line method over the remaining economic life. An
impairment loss will be recorded if the unamortized cost exceeds net realizable
value.

We periodically review the value of our intangible assets, and do not believe
these assets are subject to impairment at this time. However, this may change in
the future due to the Company's inability to achieve business plan revenues by
reason of possible technology issues and lack of funding to implement planned
marketing programs.

                                       8
<PAGE>

BIZCOM U.S.A., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3 - SUMMARY OF ACCOUNTING POLICIES, CONTINUED

Revenue Recognition

Revenue generated from radio sales is generally recognized at the time the goods
are shipped. Revenue from software sales and related consulting services is
generally recognized at the time the product and/or service has been delivered
and/or accepted by the customer. In April 2003, the Company adopted a new
licensing agreement that requires customers to renew the license annually to
continue using the license. Sales and customer support revenues generated under
the revised license agreement will be amortized ratably over the term of the
license. At December 31, 2003, the Company had deferred revenue of $125,911
related to license sales. Prior to the acquisition, Sophia received advanced
payments from customers for land mobile radio equipment and services. At
December 31, 2003, the Company had deferred revenue of $179,850 related to such
advance payments.

Advertising

Advertising costs are expensed as incurred. Advertising expenditures totaled $0
and $2,868 during the three months ended December 31, 2003 and 2002,
respectively.

Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Net Loss per Share

The Company follows the provisions of SFAS No. 128, "Earnings per Share," which
requires companies with complex capital structures or common stock equivalents
to present both basic and diluted earnings per share ("EPS") on the face of the
income statement. Basic EPS is calculated as income available to common
stockholders divided by the weighted average number of common shares outstanding
during the period. Diluted EPS is calculated using the "if converted" method for
common stock equivalents.

Stock-Based Compensation

SFAS No. 123, "Accounting for Stock-Based Compensation," encourages, but does
not require, companies to record employee stock option compensation plans at
fair value. The Company has chosen to apply Accounting Principles Board Opinion
("APB") No. 25, "Accounting for Stock Issued to Employees" for its employee
stock option grants. Under APB No. 25, if the exercise price of the Company's
stock options is less than the market price of the underlying stock on the date
of grant, the Company must recognize compensation expense; otherwise, no
compensation is recorded. SFAS No. 123 will be followed for disclosure purposes
only. For transactions with other than employees, in which services were
performed in exchange for stock or other equity instruments, the transactions
are recorded on the basis of the fair value of the services received or the fair
value of the issued equity instrument, whichever is more readily measurable.

Pro-Forma Stock Option Disclosures

For purposes of pro-forma disclosures, consistent with the method under SFAS
123, the estimated fair values of the options are amortized to expenses over the
option's vesting periods, using the straight-line method. Pro forma results for
the three months ended December 31, 2003 reflecting application of SFAS 123 are
as follows:

                                       9
<PAGE>

BIZCOM U.S.A., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3 - SUMMARY OF ACCOUNTING POLICIES, CONTINUED

Net loss
  As reported                                     $  (1,730,421)      $(767,329)
                                                  =============       =========
  Pro forma                                       $  (1,734,029)      $(772,140)
                                                  =============       =========
  Basic and diluted loss per share                $       (0.10)      $   (0.12)
                                                  =============       =========

SFAS No. 123 requires entities that account for awards of stock-based
compensation to employees in accordance with APB No. 25 to present pro forma
disclosures of results of operations and earnings per share as if compensation
cost was measured at the date of grant based on the fair value of the award

Reclassifications

Certain amounts in the fiscal year 2003 financial statements have been
reclassified to conform to the 2004 fiscal year presentation.

Freight Costs

Freight costs incurred for delivering goods to customers are included in cost of
goods sold and amounted to $10,619 and $17,315 in the six months ended December
31, 2003 and 2002, respectively. The Company generated $4,110 and $2,962 of
freight revenues recharged to customers in the six months ended December 31,
2003 and 2002, and this amount is included in sales.

Recent Accounting Pronouncements

In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51."
FIN 46 requires certain variable interest entities to be consolidated by the
primary beneficiary of the entity if the equity investors in the entity do not
have the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties. FIN 46 is
effective immediately for all new variable interest entities created or acquired
after January 31, 2003. For variable interest entities created or acquired prior
to February 1, 2003, the provisions of FIN 46 must be applied for the first
interim or annual period beginning after June 15, 2003. The Company does not
believe that the adoption of this standard will have a material impact on its
financial position or results of operations.

NOTE 4 -FAIR VALUE OF FINANCIAL INSTRUMENTS

Cash, accounts receivable, accounts payable and other current liabilities are
recorded in the financial statement at cost, which approximates fair market
value because of the short-term maturity of those instruments.

NOTE 5 -INTANGIBLE ASSETS

The Company has acquired certain FCC licenses in the 220 MHz SMR spectrum,
patent and technology rights related to radios and other equipment required to
communicate on the 220 MHz SMR spectrum and software licenses for use in
emergency management. Intangible assets related to these acquisitions and
licenses are as follows:

                                       10
<PAGE>

BIZCOM U.S.A., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 5 -INTANGIBLE ASSETS, CONTINUED

                                                      December 31,     June 30,
                                                         2003            2003
                                                      -----------    -----------

220 MHz spectrum use agreement                        $   320,000    $   320,000
220 MHz radio patent and technology agreement             569,000        569,000
Exclusive software license (see note 8)                   439,000        439,000
Purchased radio technology                              8,000,000           --
220 MHz spectrum licenses owned                        22,652,613     14,702,613
Other intangibles                                          10,000         10,000
                                                      -----------    -----------
                                                      $31,990,613    $16,040,613
                                                      ===========    ===========

The Company will amortize these assets over the expected useful lives of the
assets, which are five years for the spectrum use agreement, seven years for the
radio patent, technology agreement and purchased radio technology, and ten years
for the FCC licenses. Amortization of the software license will be the greater
of (a) an amount computed based on anticipated future gross revenues, or (b) the
estimated remaining useful economic life of ten years. The useful lives were
based on each asset's separate initial contractual life. Amortization expense
for the quarters ended December 31, 2003 and 2002 was $575,834 and $82,011, and
accumulated amortization totaled $1,742,677 and $751,732 at December 31, 2003
and June 30, 2003, respectively.

Estimated amortization of intangible assets over the ensuing five years is as
follows:

                  Year Ending June 30,
                  --------------------

                          2004                  $  2,783,780
                          2005                     3,584,971
                          2006                     3,584,971
                          2007                     3,548,304
                          2008                     3,534,304
                                                ------------
                                                $ 17,036,330
                                                ============

We periodically review the value of our intangible assets, and do not believe
these assets are subject to impairment at this time. However, this may change in
the future due to the Company's inability to achieve business plan revenues by
reason of possible technology issues and lack of funding to implement planned
marketing programs.

                                       11
<PAGE>

BIZCOM U.S.A., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 6 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following:

                                                         December 31,   June 30,
                                                             2003         2003
                                                           --------     --------

Accounts payable                                           $475,746     $244,662
Accrued professional fees and other expenses                 86,100      154,947
Accrued payroll, benefits and related taxes                  77,065      149,288
                                                           --------     --------
Total accounts payable and accrued liabilities             $638,911     $548,897
                                                           ========     ========

NOTE 7 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

                                                 December 31,         June 30,
                                                    2003                2003
                                                 -----------        -----------

Communications equipment                         $ 5,426,720        $ 5,122,000
Office and computer equipment                        405,891            151,215
                                                 -----------        -----------
                                                   5,832,611          5,273,215
Less: accumulated depreciation                      (486,091)          (200,506)
                                                 -----------        -----------
  Property and equipment, net                    $ 5,346,520        $ 5,072,709
                                                 ===========        ===========

Depreciation expense was $149,049 and $8,352 for the quarters ended December 31,
2003 and 2002, respectively.

NOTE 8 - RELATED PARTY TRANSACTIONS

At December 31, 2003 and 2002, the Company had a note receivable of $23,000 due
from The Public Safety Group, LLC ("PSG"), an entity whose managing member was
an officer and director of the Company through October 14, 2002. The Company
also had an account receivable of $29,476 and $5,501 due from PSG at December
31, 2003 and 2002, respectively. The amounts in accounts receivable arose from
software maintenance services provided by the Company to third parties but
billed by PSG during the transition period following the execution of the
license agreement with PSG.

During the twelve months ended June 30, 2002, the Company disbursed a total of
$469,000 to PSG. Of this amount, $439,000 was paid to acquire a software
license, and the remainder was paid for emergency management consulting
services, and was expensed in 2002.

NOTE 9 - NOTES PAYABLE AND PLEDGE AGREEMENT

The Company issued two promissory notes to Sophia on the date of the
acquisition. Included in current liabilities is a note in the principal amount
of $400,000 payable on January 31, 2004 bearing interest of 4% per annum.

                                       12
<PAGE>

BIZCOM U.S.A., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 9 - NOTES PAYABLE AND PLEDGE AGREEMENT, CONTINUED

The Company paid $200,000 of the required principal payment on the due date,
which due date was later extended and payment made in full. Included in
long-term liabilities is a note payable in the amount of $2,900.000 payable on
December 31, 2007 that bears interest at the annual rate of 4% payable
semi-annually. Under a pledge and security agreement, Sophia has a security
interest in the shares of SMR Management, Inc., a wholly owned subsidiary, which
holds the FCC licenses acquired in the acquisition.

NOTE 10 - STOCKHOLDERS' EQUITY

Common Stock

All shares of common stock are identical with each other in every respect, and
the holders thereof are entitled to one vote for each share of common stock upon
all matters upon which the shareholders have the right to vote.

Preferred Stock

The Board of Directors of the Company is authorized, subject to the limitations
prescribed by law, to provide for the issuance of shares of preferred stock in
series and, by filing articles of amendment pursuant to the applicable law of
the State of Florida, to establish from time to time the number of shares of
preferred stock to be included in each such series and to determine and fix the
designations, powers, preferences and rights of the shares of each such series
(including without limitation the voting rights, dividend rights and
preferences, liquidation rights, and conversion rights, if any, thereof) and the
qualifications, limitations, and restrictions thereon.

Private Placements of Common Stock

During the quarters ended December 31, 2003 and 2002, the Company issued 649,924
and 384,000 shares of restricted common stock and 2,109,500 and 506,000
warrants, respectively, pursuant to a private placement unit offering, as
amended ("Unit Offering"), and pursuant to another private placement offering.
(See "Warrants to Purchase Common Stock - Summary" below.) The Company received
net proceeds of $1,620,547 and $954,858 in the quarters ending December 31, 2003
and 2002, respectively, from these private placements. Expenses associated with
the offerings for the years ending December 31, 2003 and 2002 were $4,263 and
$5,152, and they have been offset against the proceeds received.

The terms of the Unit Offering are as follows: each unit is priced at $7,500,
and is comprised of 3,000 shares of restricted common stock, $0.0001 par value
per share, and warrants to purchase 1,500 additional shares of the Company's
restricted common stock at an exercise price of $3.00 per share for a period of
3 years from date of issuance, subject to customary adjustments. Additional
warrants are issued to investors in the offering when their cumulative
investment in the offering exceeds certain breakpoints. The terms of the other
private placement offering are as follows: each unit is priced at $25,000 and is
comprised of 10,000 shares of restricted common stock, $0.0001 par value per
share, and warrants to purchase 40,000 additional shares of the Company's
restricted common stock at an exercise price of $3.00 per share for a period of
3 years from date of issuance, subject to customary adjustments. A subscriber
must purchase a minimum of four units.

                                       13
<PAGE>

BIZCOM U.S.A., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 11 - OPTIONS AND WARRANTS

Stock Options - Employees

During the year ended June 30, 2002, the Company issued warrants to purchase
92,500 shares of our restricted common stock to a former employee, in
conjunction with his employment agreement. These warrants have an exercise price
of $3.00 per share through April 28, 2012, which was in excess of the Company's
$2.50 per share fair value of its common stock at the date of grant, therefore
no compensation charge has been recorded pursuant to APB No. 25.

At the annual shareholder meeting held in December 2003, the shareholders
approved the 2003 employee stock option plan. The plan authorizes the grant of
options by the Company's Board of Directors to purchase up to 2,000,000 shares
of common stock, subject to consultation and concurrence as to individual
employee grants with an informal shareholder representative who held proxies for
47% percent of the shares eligible to vote at the meeting and 68% of the shares
actually voting at the meeting. No options have been granted to date. The
employee stock option plan provides that the exercise price per share of common
stock shall not be less than the fair market value on the date of grant, or 110%
of fair market value for options granted to any person who owns more than ten
percent of the voting power of the Company

Pro-Forma Stock Option Disclosures

For purposes of pro-forma disclosures, consistent with the method under SFAS
123, the estimated fair values of the options are amortized to expenses over the
option's vesting periods, using the straight-line method. Pro forma results
reflecting application of SFAS 123 are as follows:

Net loss
  As reported                                     $  (1,730,421)      $(767,329)
                                                  =============       =========
  Pro forma                                       $  (1,734,029)      $(772,140)
                                                  =============       =========
  Basic and diluted loss per share                $       (0.10)      $   (0.12)
                                                  =============       =========

SFAS No. 123 requires entities that account for awards of stock-based
compensation to employees in accordance with APB No. 25 to present pro forma
disclosures of results of operations and earnings per share as if compensation
cost was measured at the date of grant based on the fair value of the award. No
options were granted during the quarter ended December 31, 2003. The computed
fair value of the options granted in fiscal 2002 is $0.48 each. The fair value
of each option is estimated on the date of grant using the Black-Scholes
option-pricing model with the following assumptions:

             Risk-free interest rate              4%
             Expected life (years)               10
             Expected volatility                  0
             Expected dividends                   0


The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions. The Company assumed zero stock price volatility since
its stock does not have an established trading market. Because the Company's
employee stock options have characteristics different from those of traded
options, and because changes in the subjective input assumptions can materially
affect the fair value estimate, in management's opinion, the existing models do
not necessarily provide a reliable single measure of the fair value of its
employee stock options.

                                       14
<PAGE>

BIZCOM U.S.A., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 11 - OPTIONS AND WARRANTS, CONTINUED

Warrants to Purchase Common Stock - Summary

The Company has issued through December 31, 2003, warrants to purchase a total
of 9,005,465 shares of restricted common stock. These immediately exercisable
common stock purchase warrants were issued in three separate private placements
and as part of the consideration for two acquisitions. The warrants issued in
the private placement which commenced October 17, 2001 and ended April 26, 2002
total 3,435,000; all were originally to expire during the Company's fiscal year
ending June 30, 2005, and have an exercise price of $1.50 each. In October 2004,
the Company extended the exercise period for these warrants for a period of one
year from their respective expiration dates. Warrants issued through December
31, 2003 in the private placement Unit Offering and in the other private
placement total 4,496,000; 91,500, 1,915,500 and 2,489,000 of the warrants
expire during the Company's fiscal years ending June 30, 2005 and 2006 and 2007,
respectively and have an exercise price of $3.00 each. The Company issued a
warrant to purchase 1,000,000 shares of the Company's common stock to the
shareholders of Sophia. The warrant has an exercise price of $3.00 per share,
and expires on December 31, 2007. The Company issued a warrant to purchase
74,465 shares of the Company's restricted common stock to a limited liability
partnership as partial consideration for the acquisition of a FCC license and
related communications equipment. The warrant has an exercise price of $3.00 per
share, and expires on December 18, 2006.

Subsequent Issuances of Common Stock

Subsequent to December 31, 2003 and through November 30, 2004, the Company
issued 1,485,000 shares of its common stock and warrants to purchase 3,726,000
shares of restricted common stock pursuant to the private placement Unit
Offering and in the other private placement for cash totaling $3,345,000. The
warrants expire in the fiscal year ending June 30, 2007.

NOTE 12- ACQUISITIONS

On November 25, 2003, the Company acquired substantially all of the assets of
Sophia, which included a nationwide ten-channel, two regional and eight economic
area 220 MHz Specialized Mobile Radio ("SMR") Federal Communications Commission
("FCC") licenses and related communications equipment, Sophia's proprietary
radio technology and other assets including inventory and computer and office
equipment for an aggregate purchase price of $16.2 million. The purchase price
was paid with five million shares of the Company's restricted common stock
valued at $2.50 per share, the assumption of certain obligations totaling
$311,000, the issuance of a $2,900,000 promissory note payable on or before
December 31, 2007 with simple interest at the rate of 4% per annum payable
semiannually, a warrant to purchase one million shares of the Company's
restricted common stock at an exercise price subject to certain determinations,
but not more than $6.00 per share, exercisable through December 31, 2007,
$300,000 in cash and a $400,000 promissory note with simple interest at the rate
of 4% per annum payable on or before January 31, 2004. The consideration of
common stock and warrant was held in escrow until December 31, 2003, when the
FCC formally authorized Sophia to transfer the licenses. The Company took title
to all other assets at the closing. The common stock and shares of common stock
underlying the warrant are subject to certain "piggyback" registration rights.
As of January 31, 2004, the Company and Sophia informally agreed to amend the
terms of the $400,000 promissory note to provide for the payment of $200,000
thereof on February 2, 2004, which was paid from working capital. The due date
for the remaining balance was later extended and payment made in full.

The promissory notes are secured by a pledge of the common stock of SMR
Management, Inc., a wholly owned subsidiary of the Company, which owns the FCC
licenses. The Company has exclusive worldwide rights to the radio technology
except in Mexico, Latin and South America, where Sophia retains non-exclusive
rights to use the radio technology.

                                       15
<PAGE>

BIZCOM U.S.A., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 12- ACQUISITIONS, CONTINUED

The Company recorded the acquisition as follows:
Purchase price:
Issuance of common stock (5,000,000 shares)                          $12,500,000
Note payable December 31, 2007                                         2,900,000
Note payable January 31, 2004                                            400,000
Net cash used from the issuance of common
 stock (120,000 shares)                                                  300,000
Accrued acquisition costs                                                100,000
                                                                     -----------
                                                                     $16,200,000
                                                                     ===========

Value of assets acquired and liabilites assumed:
Fair value of recorded net assets acquired                           $   400,000
Purchased technology                                                   8,000,000
FCC licenses                                                           7,800,000
                                                                     -----------
                                                                     $16,200,000
                                                                     ===========

On December 18, 2003, the Company acquired a site specific 220 MHz SMR FCC
license and related communications equipment covering the greater New York City
metropolitan area for a purchase price of 60,000 shares of the Company's
restricted common stock and a warrant to purchase 74,465 shares of the Company's
restricted common stock exercisable at $3.00 per share through December 18,
2006. The Company allocated the $150,000 purchase price to FCC licenses. An
additional 44,465 shares of restricted stock were issued to the seller for cash.

NOTE 13 - COMMITMENTS AND CONTINGENCIES

Litigation, Claims, and Assessments

In the ordinary course of business, the Company is exposed to various claims,
threats, and legal proceedings. In management's opinion, the outcome of existing
matters, if any, will not have a material impact upon the Company's financial
position and results of operations.

FCC CONSTRUCTION REQUIREMENTS

The FCC has construction requirements that require holders of FCC licenses to be
broadcasting to a minimum population by certain dates. The Company applied to
the FCC for a construction waiver to extend the time to implement such
construction for the nationwide and other licenses acquired in the Sophia
acquisition. Such waiver was unnecessary as the Company met the construction
requirements by March 21, 2004.

NOTE 14 - SEGMENT INFORMATION

The Company's reportable business segments are strategic business units that
offer distinctive products that are marketed through different channels. The two
reportable segments of the Company for the quarters ended December 31, 2003 and
2002 are land mobile radio sales and public safety software and consulting. The
Company's accounting policies for segments are the same as those described in
the summary of significant accounting policies. Management evaluates segment
performance based on segment profit and loss. Information for reportable
segments is as follows:

                                       16
<PAGE>

BIZCOM U.S.A., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 14 - SEGMENT INFORMATION, CONTINUED
<TABLE>
<CAPTION>

                                           THREE MONTHS ENDED             SIX MONTHS ENDED
                                              DECEMBER 31,                  DECEMBER 31,

                                         2003           2002            2003          2002
                                      -----------    -----------    -----------    -----------

<S>                                   <C>            <C>            <C>            <C>
Sales - Land Mobile Radio (LMR)       $   237,118    $   366,809    $   361,682    $   567,413
Sales - Public Safety                      80,370        129,597        140,824        186,995

Cost of Sales - LMR                       198,092        234,985        317,635        321,755
Cost of Sales - Public Safety               6,777           --           14,797           --

Depreciation and amortization - LMR       703,623         71,036      1,235,810        141,357
Amortization - Public Safety               10,975         10,975         21,950         21,950

Segment income (loss) - LMR              (664,597)        60,788     (1,191,763)       104,301
Segment income - Public Safety             62,618        118,622        104,077        165,045

Depreciation - administrative              10,285          8,352         18,771         12,863

Unallocated general and
 administrative expenses                1,105,138        938,387      2,147,959      1,909,571
                                      -----------    -----------    -----------    -----------

Operating loss                        $(1,717,402)   $  (767,329)   $(3,254,416)   $(1,653,088)
                                      ===========    ===========    ===========    ===========
</TABLE>

NOTE 15 - GOING CONCERN

The Company's consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the settlement
of liabilities and commitments in the normal course of business. As described
above, the Company was in the development stage from August 2001 until May 2002,
at which time operations began. The Company has incurred a loss from operations,
and its present level of revenues is not sufficient to cover all the Company's
incurred expenses. Management recognizes that the Company must generate
additional resources to enable it to pay its obligations as they come due, and
that the Company must ultimately achieve profitable operations. Management is
working to generate additional revenue from operations, and as necessary, to
raise additional capital to support operations until the Company reaches
profitability. No assurances can be given that the Company will be successful in
these activities. Should any of these events not occur, the accompanying
consolidated financial statements will be materially affected.

                                       17
<PAGE>

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

The following is a discussion and analysis of our financial condition and
results of operations for the three and six month periods ended December 31,
2003 and significant factors that could affect our prospective financial
condition and results of operations. You should read this discussion in
conjunction with our financial statements and notes contained in our annual
report on Form 10-KSB/A for the year ended June 30, 2003, as amended. Historical
results may not be indicative of future performance.

This Report on Form 10-QSB contains forward-looking statements within the
meaning of and which are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to risks and uncertainties that could cause actual
results to be materially different from historical results or from any results
expressed or implied by such forward-looking statements. Forward-looking
statements generally are accompanied by words such as "anticipates," "belief,"
"believes," "estimates," "expects," "intends," "plans" and similar statements,
and should be considered uncertain and forward-looking. Any forward-looking
statements speak only as of the date on which such statement is made, are not
guarantees of future performance and involve certain risks, uncertainties and
assumptions that are difficult to predict. Therefore, actual outcomes and
results may differ materially from what is expressed or forecast in such
forward-looking statements, whether as a result of new information, future
events or otherwise. Factors that could cause our results to differ materially
from the results discussed in such forward-looking statements include, without
limitation: going-concern considerations; uncertain continued ability to meet
our development and operational needs in view of our serious working capital
shortage; recently adopted cost reduction programs due to our serious working
capital shortage which may affect our ability to attain stated objectives; no
assurances of and uncertainty of future profitability; our plan to enter new,
untested markets; need for replacement manufacturer of certain components of our
key data radio product; our dependence on our management and the requirement of
additional management in order to execute our operating plan; the uncertainty of
the U.S. economic recovery and economic trends; the extended selling process
with certain of our customers, and a concentration of risk associated with our
emergency management software market as most of our software revenue is from
state and local governments; the limited operating history of the 220 MHz
Specialized Mobile Radio industry and the uncertainty of future broad based
market acceptance of our 220 MHz products and services within such industry; our
ability to successfully integrate acquisitions, including our acquisition of
certain assets of Sophia Communications, Inc., which has strained our operating
earnings and cash flow as revenues have not been generated as quickly or to the
extent desired; the impact of competitive services and pricing; the Sarbanes
Oxley Act has increased our legal, accounting and administrative costs; and as
further set forth in our Form 10-KSB, as amended, for the fiscal year ending
June 30, 2003 under the heading "Factors That May Effect Future Operating
Results," in our press releases and other reports filed with the Securities and
Exchange Commission ("SEC"). Many of such risk factors are beyond our control.
New factors emerge from time to time and it is not possible for management to
predict all of such factors, nor can it assess the impact of each such factor on
the business or the extent to which any factor, or combination of factors may
cause actual results to differ materially from those contained in any
forward-looking statements. In light of these risks and uncertainties, there can
be no assurance that the results anticipated in these forward-looking statements
contained in this Report will in fact occur. All forward-looking statements
wherever they may appear are expressly qualified in their entirety by the
cautionary statements in this section. We undertake no obligation to update any
such forward-looking statements.

OVERVIEW

Bizcom U.S.A., Inc. d/b/a CX2 Technologies (the "Company") provides wireless
voice and data communications solutions within the 220-222 MHz Specialized
Mobile Radio ("SMR") spectrum, and emergency management and first responder
software applications for industrial/commercial, critical infrastructure, public
safety, and homeland security markets. We own substantial amounts of the 220 MHz
SMR spectrum available nationwide, and own patented, proprietary, enabling
technology that maximizes operating efficiencies within such spectrum.

We have a serious working capital shortage, and must continue to seek and secure
significant capital from outside funding sources as cash flow from operations is
insufficient to sustain our operations. No assurances are given that we will be
successful in obtaining such needed capital. Our inability to promptly secure
needed capital will materially adversely affect the Company and its operations,
as we believe our current cash position and anticipated receipt of revenues will
enable us to sustain current operations for up to approximately one month.

                                       18
<PAGE>

Given the severe working capital shortage, management has recently administered
several cost reduction programs, including payroll expense reductions in the
form of layoffs, reductions in work hours and reductions in pay. We have also
reduced other general and administrative expenses. Management continues to have
discussions with key vendors to renegotiate payment terms.

We entered into an informal agreement with Sophia Communications, Inc.
("Sophia") to extend the payment to Sophia of an interest payment of
approximately $60,000 which had been due to be paid on June 30, 2004 pursuant to
the terms of a promissory note in the amount of $2,900,000 issued by the Company
to Sophia in November, 2003, in connection with an acquisition of certain
material assets discussed below. To date, the Company has made payments of
$35,000 against the outstanding interest amount. At December 31, 2003 we had
negative working capital of $(753,482) that included a $400,000 payment to
Sophia due January 31, 2004, which payment due date was later extended and
payment made in full. At March 31, 2004, we also had long-term debt of
$2,900,000. Since our inception, we have incurred losses of $(9,587,998), and
during the three months ended December 31, 2003, we used cash in operating
activities of $(2,040,735).

Our objectives over the next twelve months in order of priority are to: (a)
develop our telemetry and commercial data transmission markets, both as a
technology provider and as a network operator; (b) launch our AVL (automatic
vehicle location) product in the Chicago area followed by other select markets;
(c) initiate a direct mail campaign for the purpose of marketing Geocommand, our
licensed emergency management software first responder GIS (Geographic
Information Systems) product; (d) continue product engineering and development
projects currently under way relating to wireless products, including an
improvement to the data protocol that increases network capacity, modifying
DATALynx(TM) design to replace obsolete components and begin work on next
generation products including new handheld voice radio; (e) continue the
acquisition of select assets comprising constructed 220 MHz SMR systems to
further enhance and consolidate our position as a leading spectrum holder in
such frequency band; and (f) continue pursuing strategic alliances with
companies whose products and services are supportive of ours.

In view of the current working capital shortage, some or all of these objectives
may not be achievable, and the Company may decide to cancel or postpone product
launches, forgo advertising campaigns, discontinue product engineering and
development, abandon all discussions with third parties to acquire additional
spectrum and withdraw from any or all strategic alliances.

We have recently determined not to currently pursue further development of an
integrated emergency management software/sensor communications 220 MHz radio
communications systems solution due to the anticipated cost and time associated
with such project, which funds and time we believe can be better utilized for
the objectives described above. We have successfully conducted a demonstration
of the technical effectiveness of such system for potential customers using a
limited number of sensor devices.

We have determined that our homeland security, emergency management product
known as EM2000 needs to be re-engineered on a Microsoft platform to better meet
the needs of the Federal Emergency Management Agency (FEMA) and the Department
of Homeland Security for a prospective national incident management solution.
Accordingly, at the present time, we continue to support our existing EM2000
customers, but are not engaging in any significant marketing efforts toward
promoting this product.

CERTAIN ACQUISITIONS

In November 2003, the Company acquired substantially all of the assets of
Sophia, which included a nationwide ten-channel, two regional, and eight
economic area 220 MHz SMR licenses issued by the FCC. Also included were related
communications equipment, Sophia's proprietary-radio technology and other assets
including inventory and computer and office equipment for an aggregate purchase
price of $16.2 million. The purchase price was paid with five million shares of
the Company's restricted common stock valued at $2.50 per share, the assumption
of certain obligations totaling $311,000, the issuance of a $2,900,000
promissory note payable on or before December 31, 2007 with simple interest at
the rate of 4% per annum payable semiannually, a warrant to purchase one million

                                       19
<PAGE>

shares of the Company's restricted common stock at an exercise price subject to
certain determinations, but not more than $6.00 per share, exercisable through
December 31, 2007, $300,000 in cash and a $400,000 promissory note with simple
interest at the rate of 4% per annum payable on or before January 31, 2004,
which due date was later extended and payment made in full. The consideration of
common stock and warrant was held in escrow until December 31, 2003, when the
FCC formally authorized Sophia to transfer the licenses; the Company took title
to all other assets at the closing. The common stock and shares of common stock
underlying the warrant are subject to certain "piggyback" registration rights.

The promissory notes are secured by a pledge of the common stock of SMR
Management, Inc., a wholly owned subsidiary of the Company, which owns the FCC
licenses. The Company has exclusive worldwide rights to the radio technology
except in Mexico, Latin and South America, where Sophia retains non-exclusive
rights to use the radio technology. While the acquisition presents opportunities
to increase sales and enter new markets, the Company will have to continue to
seek additional capital from outside funding sources to sustain existing and new
operations.

This acquisition has significantly improved our capabilities within the 220MHz
SMR spectrum due to the spectrum acquired and proprietary radio and enabling
technology that enhances data transmission and related operating efficiencies
within that frequency band. Our prior technology offered the capability of
approximately 300 users per channel as full capacity, assuming an average poling
time of once every 5 minutes. 2,000 users per channel utilizing the same
application and poling time is possible with the data radio and enabling
technology acquired. We currently believe that an engineering project concluded
in September 2004 will double the capacity to approximately 4000 users per
channel utilizing the same application and that faster polling times will now be
possible. The added capacity has enhanced our wireless revenue model as both a
network operator, and as a technology provider.

The Company recognized $363,000 of revenues from former customers of Sophia for
the fiscal year through June 30, 2004. The majority of these revenues were
related to deferred revenue, prepayments from customers, acquired from Sophia,
for which the Company subsequently supplied the related products and services.
This amount is significantly less than what was originally planned due in part
to issues related to the end-to-end solutions for these customers, as well as
integration matters relating to compatibility issues. Problems and issues of
customers have either been fixed or are being currently addressed. The Company
continues to believe that the technology will enhance our wireless revenue model
as more users may be added to the system.

On December 5, 2003, the Company entered into an asset purchase agreement with
various equipment owners and license owners to acquire various 220 MHz SMR
Federal Communications Commission ("FCC") licenses and related communications
equipment, as well as certain other assets, for an aggregate purchase price of
$8,987,000, to be paid with the issuance of 2,998,000 shares of the Company's
restricted common stock valued at $2.50 per share, and promissory notes payable
in the amount of $1,492,000.

On May 27, 2004, the Company and certain of such equipment owners and license
owners closed upon the acquisition of certain of such assets, including certain
of such 220 MHz FCC licenses, related communications equipment, radio inventory,
certain office equipment, internally developed software and data based programs
relating to industry-wide participant ownership of 220 MHz spectrum utilized for
spectrum auction strategy and incumbent co-channel interference analysis, as
well as certain other assets, for an aggregate purchase price of $7,495,000,
including $2,240,000 of assumed obligations (trade accounts payable, promissory
notes and other accrued expenses). The purchase price was paid with 2,102,000
shares of the Company's restricted common stock valued at $2.50 per share. The
aggregate consideration for such purchased assets was determined based upon
management's analysis of the fair market value of such assets taken as a whole,
and its prior, substantial experience in effecting transactions of a similar
nature.

The principal officer and unit holder of SMR Advisory Group, L.C. ("SLC"), which
served as the representative of the above-described equipment and license
owners, and was itself the seller of certain assets, including office equipment
and the obligations discussed above, including past due compensation owed by
such entity to such person of $175,000, has and may continue to provide
informal, part-time, non-compensated consulting services to the Company relating
to its business and operations. Such person may provide consulting services
directly or indirectly to the Company of a similar nature in the future on a
compensated basis as may be mutually determined and agreed upon. SLC itself owns
a minority interest in certain entities from which the Company has previously
acquired certain 220 MHz FCC licenses and related equipment in consideration for
restricted common stock of the Company, including certain of the entities which
consummated the transactions described herein.

                                       20
<PAGE>

We plan to utilize the licenses and related communications equipment and other
acquired assets to operate 220 MHz SMR communications systems, comprised of such
licenses and equipment, and to market such systems to prospective business
customers in the geographical areas to which such FCC licenses relate. Most of
such licenses relate to geographical areas east of the Mississippi River and
within the eastern portion of the United States, with the balance located
primarily in certain western states. Prior to their acquisition by the Company,
the former owners of the subject licenses held such licenses for planned
utilization in connection with the operation of 220 MHz SMR communications
systems, but did not operate such systems. We plan to use the other assets
acquired for the same purposes as utilized by the entities from whom such assets
were acquired (i.e. possible radio inventory sales, office operations). None of
the sellers of the subject assets had any meaningful business operations prior
to the purchase of such assets by the Company.

We may in our discretion seek to acquire the remaining assets we did not acquire
pursuant to the above-described asset purchase agreement, which are primarily
several additional 220 MHz SMR licenses and related communications equipment
relating to single site locations which are constructed but which have little or
no subscribers or business operations, subject to the satisfaction of certain
conditions precedent, including but not limited to completion of due diligence
by the Company to our satisfaction and ratification by the holders of the
majority of the equity ownership of such entities relating to the sale of such
assets.

OTHER MATTERS

On June 3, 2004, we entered into a consulting services agreement with Mr. David
George whereby Mr. George agreed to serve as a part-time consultant to the
Company on an independent contractor basis for various project areas, including
product development and engineering, sales and marketing support,
administration, spectrum management and network development, and to resign as an
officer and employee. Mr. George formerly served as our Chief Operating and
Technical Officer. Pursuant to such agreement, the Company and Mr. George agreed
that the April 26, 2002 employment agreement by and between the Company and Mr.
George was terminated by mutual consent, that Mr. George was vested through May
31, 2004 with warrants to purchase 92,500 shares of our restricted common stock
at an exercise price of $3.00 through April 28, 2012, that he forfeited the
unvested balance of warrants to purchase 27,500 shares of our restricted common
stock at the same exercise price per share and having the same exercise term,
and that the Company has no continuing obligations under such prior employment
agreement. The consulting agreement provides for Mr. George to consult
approximately 20 hours per week commencing June 3, 2004 through April 20, 2005,
subject to extension by mutual agreement, and to receive $1,350 per week for
such services.

In October 2004, the Company extended the exercise period for certain warrants
for a period of one year from their respective expiration dates. These warrants
were issued in the private placement which commenced October 17, 2001 and ended
April 26, 2002 and total 3,410,000; all warrants were originally due to expire
during the Company's fiscal year ending June 30, 2005, and have an exercise
price of $1.50 each.

SALES AND MARKETING INITIATIVES

Currently planned sales and marketing initiatives include the following:

         (1)      Launch our AVL product in the Chicago area for the purpose of
                  increasing our subscriber base on our existing network. We
                  have prepared marketing materials and have recently retained a
                  project leader on a consulting basis for this purpose. Our
                  Chicago network is comprised of eleven base stations, which
                  provide complete geographic coverage for such area. The
                  network is currently populated primarily with taxi cabs using
                  our CX2 data radios integrated with taxi meters and a credit
                  card swipe for a wireless point of sale application. We plan
                  to add additional taxis to the network, as well as AVL
                  subscribers.

         (2)      Build network infrastructure in selected geographic markets
                  for the purpose of replicating the network operator model
                  established in Chicago.

                                       21
<PAGE>

         (3)      Launch a direct marketing campaign for GeoCommand, our GIS
                  (Geographic Information Systems) mobile mapping product
                  designed for first responders such as law enforcement, fire
                  rescue, and utility companies. We recently conducted a survey
                  of approximately 9,000 law enforcement, fire rescue agencies,
                  and utilities companies, and received both a response rate and
                  response demonstrating high interest levels for such product.

         (4)      Continue to offer "build to suit" networks for enterprises
                  requiring private network voice and/or data communications.

         (5)      Engage in discussions with various companies to market jointly
                  additional products that are complementary to our wireless
                  products and our homeland security products. Such companies
                  may include Global Positioning Systems (GPS) providers,
                  Computer Aided Dispatch (CAD) companies, and software
                  application integrators and providers.

All of the above initiatives are dependent upon the continued availability of
sufficient working capital to implement and sustain these plans. No assurances
can be given that such capital will be available or that these marketing
initiatives will be successful in achieving profitability for the Company.

ENGINEERING AND PRODUCT INITIATIVES

Current engineering and product development initiatives include the following:

         (1)      Develop a "next generation" over-the-air protocol for our data
                  radio that approximately doubles current data transmission
                  capacities.

         (2)      Modify the base station controller board ("RRM") which will
                  allow for improved manufacturing efficiencies.

         (3)      Redesign of DATATracker - this is the OEM (Original Equipment
                  Manufacturer) version of our data radio known as DATALynx(TM).
                  This is necessary due to parts obsolescence issues.

         (4)      Interface of RRM to ESP1000 (the Company's 20 watt base
                  station) which will allow us to use our large inventory of 20
                  watt base stations without significantly affecting
                  transmission efficiencies.

         (5)      Numerous application software projects for sales, or potential
                  sales, which, upon completion, can be offered as upgrades, or
                  additional products/services/applications in order to improve
                  subscription rates as well as increasing the average revenue
                  per user of existing subscribers.

         (6)      Sourcing and qualification of new manufacturing partner for
                  the assembly of circuit boards and RRM boards for our data
                  radio. Our current manufacturing source ceased operations on
                  November 30, 2004. The Company took advantage of a "last
                  production run" by this manufacturer to have sufficient
                  additional inventory of circuit boards and RRM boards
                  assembled. We anticipate finalizing an agreement with another
                  manufacturing partner during December 2004 and do not
                  anticipate any delayed sales given the aforementioned
                  additional inventory assembled

All of the above initiatives are dependent upon the continued availability of
sufficient working capital to implement and sustain these plans. No assurances
can be given that such capital will be available or that these engineering
initiatives will be successfully completed. No assurance can be given that a new
contract manufacturer will be obtained or if obtained successfully assemble
circuit and RRM boards at the cost and quality levels necessary.

RESULTS OF OPERATIONS

Three Months Ended December 31, 2003 Compared to the Three Months Ended December
31, 2002

Total revenues for the quarter ended December 31, 2003 were $317,488, a decrease
of $178,918, or 36% from the December 31, 2002 quarter sales of $496,406. Sales

                                       22
<PAGE>

included $104,000 generated from the acquired Sophia operations. Sales of radio
products and airtime decreased $129,691, or 35%, from $366,809 in the quarter
ended December 31, 2002 to $237,118 in the quarter ended December 31, 2003; the
2002 quarter benefited from a large commercial data communications order. Sales
of public safety software and services were $80,370 in the quarter ended
December 31, 2003 compared to $129,597 in the prior year quarter, a decrease of
$49,227, or 38%. The decrease was due primarily to an overall decline in sales
and a change in the terms of the license agreements with customers that require
the Company to amortize license fees over the term of the license. In April
2003, we modified our software licenses with new customers that will require us
to amortize license fees over the term of the license; at December 31, 2003 we
had $125,911 of deferred license revenues compared to $0 in the prior year
quarter.

Cost of sales for radio products and airtime in the quarter ended December 31,
2003 decreased $36,893, or 16%, to $198,092 compared to $234,985 in the quarter
ended December 31, 2002. Gross margin for radio products excluding airtime for
the quarter ended December 31, 2003 were $76,691 a decrease of $55,133, or 58%
from the December 31, 2002 quarter due to lower sales and lower margins. Gross
margin for radio products excluding airtime as a percent of sales increased to
73% in the quarter ended December 31, 2003 compared to 36% in the 2002 quarter.

Airtime sales were $33,474 in the quarter ended December 31, 2003. Cost of sales
for airtime sales, which are primarily tower rents, were $71,139 during the
quarter ended December 31, 2003. There were no airtime sales or tower rents in
the prior year fiscal quarter. We lease facilities on existing tower sites to
avoid the cost of tower and shelter construction. The 220 MHz SMR FCC licenses
require us to maintain transmission operations in order to maintain ownership of
the licenses. We will continue to pay tower rents as working capital permits to
continue transmissions on some sites, even though they may not be generating
current income, in order to maintain ownership of these licenses. In addition,
as a result of the acquisition of the assets of Sophia, we have deconstructed
certain existing sites owned by the Company and moved the equipment to service
areas with larger populations than previously served in order to meet certain
FCC construction requirements. As a result, we may have licenses revoked by the
FCC if we do not resume broadcasting at such sites within a certain time period.
We do not currently believe that the revocation, if effected by the FCC, of such
licenses would materially adversely affect our operations due to either the
minimal population within proximity of such license locations or due to
overlapping coverage within certain areas as a result of our acquisition of
additional licenses.

Depreciation increased $140,697 to $149,049 in the quarter ended December 31,
2003 from $8,352 in the quarter ended December 31, 2002 year, due to the
acquisition of communications equipment related to the 220 MHz SMR FCC licenses
which we acquired in February and June of 2003 and equipment we acquired in the
Sophia acquisition. Amortization expense increased $493,823 to $575,834 in the
quarter ended December 31, 2003 from $82,011 in the quarter ended December 31,
2002 year due primarily to the amortization of 220 MHz SMR FCC licenses which we
acquired in February and June of 2003 and in the December 2003 Sophia
acquisition. Amortization of licenses acquired to date will increase to
$2,783,780, and depreciation of assets acquired to date will increase to
$627,147 in fiscal 2004.

Administration expense increased $166,751, or 18%, to $1,105,138 in the quarter
ended December 31, 2003 compared to $938,387 in the quarter ended December 31,
2002 due to higher wages and benefits in sales and administration from former
Sophia employees hired and increased bad debt expense and increased
administrative costs from the acquired Sophia operations. Administration expense
for the quarter ended December 31, 2003 included $198,624 of administration
costs from the operations acquired from Sophia. Professional fees decreased
$46,027 to $81,924 in fiscal 2003 compared to $127,951 in the quarter ended
December 31, 2002. Bad debt expense was $40,000 in the quarter ended December
31, 2003; there was no bad debt expense in the quarter ended December 31, 2002.

We believe that we will have to increase the number of our personnel over the
next approximately 12-18 months as our business may expand due to the
acquisition of the Sophia operations and the need to increase our sales and
marketing efforts.

                                       23
<PAGE>

Six Months Ended December 31, 2003 Compared to the Six Months Ended
December 31, 2002

Total revenues for the six months ended December 31, 2003 were $502,506, a
decrease of $251,902 or 33% from the December 31, 2002 six months sales of
$754,408. Sales included $104,000 generated from the acquired Sophia operations.
Sales of radio products and airtime decreased $205,731, or 36%, from $567,413 in
the six months ended December 31, 2002 to $361,682 in the six months ended
December 31, 2003, primarily due to lower commercial repeater and radio sales;
the 2002 quarter benefited from a large commercial data communications order.
Sales of public safety software and services were $140,824 in the six months
ended December 31, 2003 compared to $186,995 in the prior year period. The
decrease was due primarily to an overall decline in sales and a change in
accounting policy to amortize license fees over the term of the license. Also,
we limited our marketing efforts for the EM2000 software during the first
quarter of fiscal 2004 while making program software changes.

Cost of sales for radio products and airtime in the six months ended December
31, 2003 decreased $4,120, or 1%, to $317,635 compared to $321,755 in the six
months ended December 31, 2002. Gross margin for radio products excluding
airtime for the six months ended December 31, 2003 were $124,777, a decrease of
$120,888, or 51% from the six months ended December 31, 2002 due to lower sales
and lower margins. Gross margin for radio products excluding airtime as a
percent of sales increased to 74% in the six months ended December 31, 2003
compared to 43% in the six months ended December 31, 2002. Airtime sales were
$71,150 in the six months ended December 31, 2003. Cost of sales for airtime
sales, which are primarily tower rents, were $151,873 during the six months
ended December 31, 2003; there were no tower rents in the prior year period.

Depreciation increased $272,722 to $285,585 in the six months ended December 31,
2003 from $12,863 in the six months ended December 31, 2002, due to the
acquisition of communications equipment related to the 220 MHz SMR FCC licenses
which we acquired in February and June of 2003 and equipment we acquired in the
Sophia acquisition. Amortization expense increased $827,638 to $990,946 in the
six months ended December 31, 2003 from $163,307 in the six months ended
December 31, 2002 year due primarily to the amortization of 220 MHz SMR FCC
licenses which we acquired in February and June of 2003 and in the December 2003
Sophia acquisition.

Administration expense increased $238,388, or 1%, to $2,147,959 in the six
months ended December 31, 2003 compared to $1,909,571 in the six months ended
December 31, 2002 due to higher wages and benefits, professional fees and
consulting fees offset by higher bad debt expense and investor relations
expense. Administration expense for the six months ended December 31, 2003
included $198,624 of administration costs from the operations acquired from
Sophia; the Sophia administrative costs included $158,614 of wages and benefits.
Sales and administrative wages and benefits excluding the Sophia operations
decreased $197,064 in the six months ended December 31, 2003 to $878,354 from
$1,075,424 in the six months ended December 31, 2002. Professional fees
decreased $48,416 to $141,252 in fiscal 2003 compared to $189,668 in the six
months ended December 31, 2002. Consulting fees decreased $123,987 to $70,400 in
fiscal 2003 compared to $194,387 in the six months ended December 31, 2002;
certain administrative and business development functions were performed by
outside consultants during early fiscal 2003, and were replaced by full time
employees during the third and fourth quarters of fiscal 2003. Bad debt expense
was $76,900 in the six months ended December 31, 2003; there was no bad debt
expense in the six months ended December 31, 2002. Investor relations expense
was $82,500 in the six months ended December 31, 2003 compared to $21,000 in the
six months ended December 31, 2002. Investor relations expense increased due to
preparation for our first annual meeting, investor conference calls, and
collateral materials.

The Company's reportable business segments are strategic business units that
offer distinctive products that are marketed through different channels. The two
reportable segments of the Company for the quarters ended December 31, 2003 and
2002 are land mobile radio sales and public safety software and consulting. The
Company's accounting policies for segments are the same as those described in
the summary of significant accounting policies. Management evaluates segment
performance based on segment profit and loss. Information for reportable
segments is as follows:

                                       24
<PAGE>

<TABLE>
<CAPTION>

                                           THREE MONTHS ENDED             SIX MONTHS ENDED
                                              DECEMBER 31,                  DECEMBER 31,

                                         2003           2002            2003          2002
                                      -----------    -----------    -----------    -----------

<S>                                   <C>            <C>            <C>            <C>
Sales - Land Mobile Radio (LMR)       $   237,118    $   366,809    $   361,682    $   567,413
Sales - Public Safety                      80,370        129,597        140,824        186,995

Cost of Sales - LMR                       198,092        234,985        317,635        321,755
Cost of Sales - Public Safety               6,777           --           14,797           --

Depreciation and amortization - LMR       703,623         71,036      1,235,810        141,357
Amortization - Public Safety               10,975         10,975         21,950         21,950

Segment income (loss) - LMR              (664,597)        60,788     (1,191,763)       104,301
Segment income - Public Safety             62,618        118,622        104,077        165,045

Depreciation - administrative              10,285          8,352         18,771         12,863

Unallocated general and
 administrative expenses                1,105,138        938,387      2,147,959      1,909,571
                                      -----------    -----------    -----------    -----------

Operating loss                        $(1,717,402)   $  (767,329)   $(3,254,416)   $(1,653,088)
                                      ===========    ===========    ===========    ===========
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

Our financial statements appearing elsewhere in this Report have been prepared
on a going concern basis that contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of business.
Management realizes that we must generate capital and revenue resources to
enable us to achieve profitable operations. To the extent that we are unable to
obtain additional working capital from operations and/or other sources as
required or otherwise desired, our consolidated financial statements will be
materially affected. Revenues from operations are not currently adequate to
sustain all operations, and we will continue to require funding from outside
sources for the currently foreseeable future, the availability of which cannot
be assured.

The Company has a serious working capital shortage, and must continue to raise
significant capital from outside funding sources to execute its operating plans
and sustain operations. At December 31, 2003, we had negative working capital of
$(753,482) and long-term debt of $2,900,000. Since our inception, we have
incurred losses of $(9,587,998) and during the last six months, we used cash in
operating activities of ($2,040,735).

At December 31, 2003, we had stockholders' equity of $32,434,016, tangible net
worth of $2,186,080, negative working capital of ($753,482), and long term debt
of $2,900,000. Since our inception, we have incurred losses of $(9,587,998) and
during the last six months, we used cash in operating activities of ($2,040,735)
and cash in investing activities of ($611,387). Our operations and acquisitions
have been funded primarily by the sale of common stock with gross proceeds of
approximately $10,806,900 from October 17, 2001 through December 31, 2003 in
private equity financing from certain accredited investors. These funds have
been used for working capital and general corporate purposes and acquisition and
licensing costs in furtherance of our business plan. Subsequent to the 2004
fiscal quarter end and through November 30, 2004, we have raised an additional
$3,712,500 in equity funds. There are no current arrangements with purchasers
for any of our securities.

We currently plan to seek additional equity financing during approximately the
next 12 months on a private placement basis of up to $15,000,000 from one or
more potential financing sources. We have no current agreements, arrangements or
understandings with any third party for such funding, and no assurances can be
given that we will secure such funding. If we were to receive such funds, we
currently plan to utilize such funds for implementing the sales and marketing
and engineering initiatives enumerated above. Other planned sales and marketing

                                       25
<PAGE>

programs will be supported by such funding. Such efforts may include, but not be
limited to, networks in markets other than those previously discussed above as
well as pursuing possible opportunities on a value proposition basis.
Engineering projects in addition to those enumerated above may also be initiated
with such funding, if obtained, including, but not limited to developing a
reduced cost, second generation DATALynx(TM) / DATATracker, a new voice portable
radio, and an integrated platform for our voice/data radios. Additional software
application development relating to certain of our products and services may
also be undertaken if such funding is received.

To the extent that we receive at least $6,000,000 of proceeds, of which no
assurances are given, these funds together with funds on hand and funds
anticipated from operations are currently anticipated to provide sufficient
capital to meet our cash and operational requirements for up to approximately
one year from the receipt of such funds. Engineering projects are planned to
continue as enumerated previously. Sales and marketing initiatives would be
negatively impacted, however, as our plans to replicate the Chicago network in
other markets, and roll out AVL and Point of Sale (POS) applications to achieve
subscription levels on those networks would be severely curtailed.

If we received less than $4,000,000 in additional capital, we would have to
significantly limit our operational and marketing plans. To the extent that we
raise less capital, we nevertheless intend to proceed with selected engineering
and product development initiatives including, the development of the "next"
generation over-the-air protocol, modification of the base station controller
board for improved manufacturing efficiencies, redesign of the data radio due to
parts obsolescence, and the sourcing of a new contract manufacturing partner for
our data radio products. Current sales and marketing expenditures would be
reduced. Additionally, the AVL product would be launched in the Chicago area on
a smaller scale. Operationally, the Company would not be able to build network
infrastructure in other markets as planned. General and administrative costs
would be reduced, by curtailing administrative staffing levels and support
costs.

In the event we were to receive little or no additional proceeds, such event
will significantly restrict and possibly cause us to cease our operations which
would have a substantial adverse effect on the Company and shareholders. There
is no assurance that the Company will be able to obtain additional capital as
required or otherwise desired, or otherwise obtain additional capital on terms
acceptable to the Company.

We do not currently anticipate any material capital expenditures for our
existing operations. We do not currently anticipate purchasing, leasing or
selling any plant or significant equipment during approximately the next twelve
(12) months except to the extent that we engage in acquiring additional 220 MHz
SMR assets and equipment. To the extent that we engage in such acquisitions, we
plan to utilize shares of the Company's common stock for such purposes, and may
assume certain obligations and debt in such transactions. Such common stock
issuances, as well as any common stock issuances, for cash to the extent
effected, will have the effect of creating further shareholder dilution.

At the annual shareholder meeting held by the Board of Directors in December
2003, the shareholders approved the 2003 employee stock option plan. The plan
authorizes the grant of options by the Company's Board of Directors to purchase
up to 2,000,000 shares of common stock, subject to consultation and concurrence
as to individual employee grants with an informal shareholder representative who
held proxies for 47% percent of the shares eligible to vote at the meeting and
68% of the shares actually voting at the meeting. No options have been granted
to date. Any issuances of common stock under such plan will cause dilution to
existing shareholders.

We do not believe that inflation has had a material effect on our results of
operations. However, there can be no assurances that our business will not be
affected by inflation in the future. We do not generally believe that our
business is seasonal; however, we are aware of the fact that federal government
agencies which may be interested in our emergency management software products
and services generally expend budgeted funds allocated to them by December 31 of
each calendar year and that state agencies (and local municipalities, including
counties, cities and towns, all of which generally follow the expenditure period
of the state in which they are located) generally expend budgeted funds
allocated to them by either June 30 or December 31 of each calendar year,
depending upon the particular state. As such, we may find in some instances that
sales of our emergency software products and services may be greater in or
around such time periods.

We have no off balance sheet arrangements.

                                       26
<PAGE>

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have no derivative investments, and do not borrow funds. We are not exposed
to market risk from changes in interest rates. The price per share of common
stock, offered in our equity private placements, has been determined by the
Company and the future price of shares could be affected by market forces
including demand or lack of demand for our shares in any private placement.

SEGMENT REPORTING DISCLOSURES

Our reportable business segments are strategic business units that offer
distinctive products that are marketed through different channels. Our two
reportable segments are land mobile radio sales and public safety software and
consulting. Our accounting policies for segments are the same as those described
in the summary of significant accounting policies below. Management evaluates
segment performance based on segment profit and loss.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Note 3 of the Notes to the Financial Statements include a summary of the
significant accounting policies and methods used in the preparation of our
Financial Statements. We consider the following accounting policies and methods
to be the most important to our financial position and results of operations,
either because of the significance of the financial statement item or because
they require the exercise of significant judgment or the use of estimates. In
addition, Financial Reporting Release No. 61 requires all companies to include a
discussion to address, among other things, liquidity, off-balance sheet
arrangements, contractual obligations and commercial commitments.

Accounts Receivable

We provide an allowance for doubtful accounts equal to the estimated
uncollectible amounts. Our estimate is based on historical collection experience
and a review of the current status of trade accounts receivable. It is
reasonably possible that our estimate of the allowance for doubtful accounts
will change. Accounts receivable are presented net of an allowance for doubtful
accounts of $115,000 and $0 at December 31, 2003 and June 30, 2003,
respectively.

Property and Equipment

Property and equipment, consisting of computer equipment and office equipment,
is recorded at acquisition cost and depreciated using the straight-line method
over the estimated useful lives of the assets, which is presently five years for
office and computer equipment and ten years for communications equipment.

Intangible Assets

We have adopted Statement of Financial Accounting Standards ("SFAS") No. 142
"Goodwill and Other Intangible Assets" as of July 1, 2001. Intangible assets are
recorded at acquisition cost, which is considered to be fair value per SFAS No.
142. Certain of our intangible assets are licensing agreements that will be
amortized over their expected useful life. The method of amortization shall
reflect the pattern in which the economic benefits of the intangible asset are
consumed or otherwise used up. If that pattern cannot be reliably determined, a
straight-line amortization method shall be used. We review these intangible
assets periodically to assess whether the carrying amount will be fully
recovered through estimated future operating cash flows. An impairment loss is
recorded if the carrying amount exceeds the present value of the estimated
future cash flows.

Our intangible asset that arose from the purchase of a software license is
amortized following the provisions of SFAS No. 86, "Accounting for the Costs of
Computer Software to be Sold, Leased, or Otherwise Marketed." This asset will be
amortized on a product-by-product basis, and shall be the greater of (a) an
amount computed based on anticipated future gross revenues, or (b) an amount
computed on a straight-line method over the remaining economic life. An
impairment loss will be recorded if the unamortized cost exceeds net realizable
value.

                                       27
<PAGE>

We periodically review the value of our intangible assets, and do not believe
these assets are subject to impairment at this time. However, this may change in
the future due to the Company's inability to achieve business plan revenues by
reason of possible technology issues and lack of funding to implement planned
marketing programs.

Revenue Recognition

Revenue generated from radio sales is generally recognized at the time the goods
are shipped. Revenue from software sales and related consulting services is
generally recognized at the time the product and/or service has been delivered
and/or accepted by the customer. In April 2003, the Company adopted a new
licensing agreement that requires customers to renew the license annually to
continue using the license. Sales and customer support revenues generated under
the revised license agreement will be amortized ratably over the term of the
license. At December 31, 2003, the Company had deferred revenue of $125,911
related to license sales. Prior to the acquisition, Sophia received advanced
payments from customers for land mobile radio equipment and services. At
December 31, 2003, the Company had deferred revenue of $179,850 related to such
advance payments.

Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain amounts in the fiscal year 2003 financial statements have been
reclassified to conform to the 2004 fiscal year presentation.

Recent Accounting Pronouncements

In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51."
FIN 46 requires certain variable interest entities to be consolidated by the
primary beneficiary of the entity if the equity investors in the entity do not
have the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties. FIN 46 is
effective immediately for all new variable interest entities created or acquired
after January 31, 2003. For variable interest entities created or acquired prior
to February 1, 2003, the provisions of FIN 46 must be applied for the first
interim or annual period beginning after June 15, 2003. The Company does not
believe that the adoption of this standard will have a material impact on its
financial position or results of operations.

ITEM 3.  CONTROLS AND PROCEDURES

The Company's principal executive and financial officer evaluated the
effectiveness of the design and operation of the Company's disclosure controls
and procedures as of the end of the period covered by this Report. Based on the
evaluation, such person concluded that the Company's disclosure controls and
procedures as of the end of the period covered by this Report, have been
designed and are functioning effectively to provide reasonable assurance that
the information required to be disclosed by the Company in reports filed under
the Securities Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
forms. Due to our serious working capital shortage, we did not have funds
available until recently to have the quarterly review relating to this report
performed by our outside auditors. There have been no changes in our internal
control over financial reporting that occurred during the quarter ending
December 31, 2003 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting. The Company
believes that a control system, no matter how well designed and operated, cannot
provide absolute assurance that all control issues and instances of fraud, if
any, within a company have been detected.

                                       28
<PAGE>

                            PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are not a party to and none of our property is subject to any pending or
threatened legal, governmental, administrative or judicial proceedings, except
as described below. There has never been a bankruptcy or receivership proceeding

The Company recently received correspondence from counsel for a third party
vendor alleging the Company's wrongful retention, conversion and
misappropriation of certain equipment and demanding its return. Such
correspondence alleges that the equipment had a value of $325,000 and threatens
the institution of legal action if the equipment is not promptly returned. The
Company disputes this claim and plans to vigorously defend any litigation which
may be brought, including the assertion of certain counterclaims.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

For the period September 1, 2003 through December 31, 2003, we sold securities
pursuant to Section 4(2) under the Securities Act of 1933, as amended (the
"Securities Act"), based upon the limited number of offerees, their relationship
to the Company, the number of shares offered, the size of the offering, and the
manner of such offering: During the second fiscal quarter ending December 31,
2003, we issued units for an aggregate of $1,507,500 to accredited investors
pursuant to Rule 506 under the Securities Act. The Company issued units at a
price of $7,500 per unit for an aggregate of $390,000 pursuant to a unit
offering, as amended; each unit is comprised of 3,000 shares of restricted
common stock and a warrant to purchase 1,500 shares of restricted common stock
at an exercise price of $3.00 per share for a period of 3 years from the date of
issuance, subject to customary adjustments. Additional warrants are issued to
investors in the offering when their cumulative investment in the offering
exceeds certain breakpoints. The Company issued units at a price of $25,000 per
unit for an aggregate of $1,117,500 pursuant to a private placement offering to
accredited investors; each unit is comprised of 10,000 shares of restricted
common stock, $0.0001 par value per share, and 40,000 warrants to purchase
additional shares of the Company's restricted common stock at an exercise price
of $3.00 per share for a period of 3 years from date of issuance, subject to
customary adjustments. A subscriber must purchase a minimum of four units. Each
of the certificates representing shares of common stock and warrants bear a
restrictive legend restricting transferability under the Securities Act.

On November 25, 2003, the Company acquired substantially all of the assets of
Sophia, which included a nationwide ten-channel, two regional and eight economic
area 220 MHz SMR licenses issued by the FCC and related communications
equipment, Sophia's proprietary radio technology and other assets including
inventory and computer and office equipment for an aggregate purchase price of
$16.2 million. The purchase price was paid with five million shares of the
Company's restricted common stock valued at $2.50 per share, the assumption of
certain obligations totaling $311,000, the issuance of a $2,900,000 promissory
note payable on or before December 31, 2007 with simple interest at the rate of
4% per annum payable semiannually, a warrant to purchase one million shares of
Bizcom's restricted common stock at an exercise price subject to certain
determinations, but not more than $6.00 per share, exercisable through December
31, 2007, $300,000 in cash and a $400,000 promissory note with simple interest
at the rate of 4% per annum payable on or before January 31, 2004. The due date
for such promissory note was later extended and payment made in full.

On December 18, 2003, the Company acquired a site specific 220 SMR FCC license
and related communications equipment covering the greater New York City
metropolitan area for a purchase price of 60,000 shares of the Company's
restricted common stock and a warrant to purchase 74,465 shares of the Company's
restricted common stock exercisable at $3.00 per share through December 18,
2006. An additional 44,465 shares were issued to the seller for cash.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

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

On December 6, 2003, the Company held its annual shareholders meeting at which
shareholders elected one director, approved the 2003 Stock Option Plan and
ratified the appointment of the Company's independent auditing firm for the next

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<PAGE>

fiscal year. The following table shows the results of the votes for these
matters:
<TABLE>
<CAPTION>

                                                                             Votes In Favor     Votes Against   Votes Abstaining
                                                                             --------------     -------------   ----------------

<S>                                                                            <C>                  <C>              <C>
Item one: election of Hank Klein as a director of the Company                  10,951,000           10,000           75,000

Item two: to approve the adoption of the 2003 Stock Option Plan                11,026,000           10,000                -

Item three: ratification of the appointment of the Company's
independent auditing firm for the 2004 fiscal year.                            11,026,000           10,000                -

Total votes represented at meeting                                             11,036,000
Number of shares entitled to vote at the meeting                               15,764,750
</TABLE>

At the annual shareholders meeting on December 6, 2003, the shareholders
approved the 2003 employee stock option plan. The plan authorizes the grant of
options by the Company's Board of Directors to purchase up to 2,000,000 shares
of common stock, subject to consultation and concurrence as to individual
employee grants with an informal shareholder representative who held proxies for
47% percent of the shares eligible to vote at the meeting and 68% of the shares
actually voting at the meeting. No options have been granted to date.

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

Exhibit No. Description

3.0 Articles of Incorporation of Bizcom U.S.A., Inc. ("Bizcom") (incorporated by
reference to Exhibit 3.0 to Amendment No. 2 to Form 10-SB filed on July 23, 2002

3.1 Bylaws (incorporated by reference to Exhibit 3.1 to Amendment No. 2 to Form
10-SB filed on July 23, 2002)

4.0 Form of Common Stock Share Certificate (incorporated by reference to Exhibit
4.0 to Amendment No.2 to Form 10-SB filed on July 23, 2002)

4.1 Form of Warrant (incorporated by reference to Exhibit 4.1 to Amendment No. 2
to Form 10-SB filed on July 23, 2002)

4.2 Form of Promissory Note dated August 1, 2001 (incorporated by reference to
Exhibit 4.2 to Amendment No. 2 to Form 10-SB filed on July 23, 2002)

4.3 $2,900,000 Secured Promissory Note payable to Sophia Communications, Inc.
due on or before December 31, 2007 dated as of November 25, 2003 (incorporated
by reference to Exhibit 4.3 to Form 8-K filed on December 10, 2003.

4.4 $400,000 Secured Promissory Note payable to Sophia Communications, Inc. due
on or before January 31, 2004 dated as of November 25, 2003 (incorporated by
reference to Exhibit 4.4 to Form 8-K filed on December 10, 2003)

4.5 Warrant to Purchase 1,000,000 Shares of Common Stock, dated as of November
25, 2003

4.6 Bizcom 2003 Stock Option Plan (incorporated by reference to definitive proxy
statement pursuant to Schedule 14A filed on November 19, 2003)

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<PAGE>

10.0 Exclusive Patent and Related Technology License Agreement by and between
Bizcom and Datamarine International, Inc. (incorporated by reference to Exhibit
10.0 to Bizcom's Amendment No. 2 to Form 10-SB filed on July 23, 2002)

10.1 Amendment to Exclusive Patent and Related Technology License Agreement by
and between Bizcom and Datamarine International, Inc. (incorporated by reference
to Exhibit 10.1 to Amendment No. 2 to Form 10- SB filed on July 23, 2002)

10.2 Consulting Agreement by and between Bizcom and The Public Safety Group LLC
(incorporated by reference to Exhibit 10.2 to Bizcom's Amendment No. 2 to Form
10-SB filed on July 23, 2002)

10.3 Exclusive License Agreement by and between Bizcom and The Public Safety
Group LLC (incorporated by reference to Exhibit 10.3 to Amendment No.2 to Form
10-SB filed on July 23, 2002)

10.4 Radio Subscriber Service Agreement (incorporated by reference to Exhibit
10.4 to Amendment No. 2 to Form 10-SB filed on July 23, 2002)

10.5 Employment Agreement dated as of April 26, 2002 by and between Bizcom and
David L. George (incorporated by reference to Exhibit 10.5 to Form 10-SB filed
on May 10, 2002)

10.6 Assignment and Amendment of Lease dated July 17, 2002 (incorporated by
reference to Exhibit 10.6 to Form 10-KSB filed on October 15, 2002)

10.7 Agreement by and between Bizcom and Edward W. Lent III dated as of October
14, 2002 (incorporated by reference to Exhibit 10.7 to Form 10-KSB filed on
October 15, 2002)

10.8 Asset Purchase Agreement by and among Bizcom, Bizcom Southern Holdings,
Inc. and certain equipment owners dated as of February 7, 2003 (incorporated by
reference to Exhibit 10.8 to Form 8-K filed on February 13, 2003)

10.9 Asset Purchase Agreement by and between Bizcom and certain
equipment/license owners dated June 30, 2003 (incorporated by reference to
Exhibit 10.9 to Form 8-K filed on July 15, 2003)

10.10 Asset Purchase Agreement by and between Bizcom and certain
equipment/license owners dated June 30, 2003 (incorporated by reference to
Exhibit 10.10 to Form 8-K filed on July 15, 2003)

10.11 Asset Purchase Agreement by and among Bizcom, Sophia Communications Inc.
and Sophia Licensee, Inc., dated as of November 25, 2003 (incorporated by
reference to Exhibit 10.11 to Form 8-K filed on December 10, 2003)

10.12 Registration Rights Agreement between Bizcom and Sophia Communications
Inc., dated as of November 25, 2003 (incorporated by reference to Exhibit 10.12
to Form 8-K filed on December 10, 2003)

10.13 Pledge and Security Agreement by and Bizcom, SMR Management, Inc. and
Sophia Communications Inc., dated as of November 25, 2003 (incorporated by
reference to Exhibit 10.13 to Form 8-K filed on December 10, 2003)

10.14 Technology License Agreement between Bizcom and Sophia Communications
Inc., dated as of November 25, 2003 (incorporated by reference to Exhibit 10.14
to Form 8-K filed on December 10, 2003)

10.15 Asset Purchase Agreement by and between Bizcom and certain equipment
owners, dated December 5, 2003 (incorporated by reference to Exhibit 10.15 to
Form 8-K filed on June 29, 2004)

31.0 Certification - filed herewith

32.0 Section 1350 Certification - filed herewith

Reports on Form 8-K: On November 26, 2003, a current report on Form 8-K was
filed with the Commission which attached a press release reporting the
acquisition of the assets of Sophia Communications, Inc. On December 10, 2003, a
current report on Form 8-K was filed with the Commission reporting the
acquisition of the assets of Sophia Communications, Inc. and the results of the
Company's annual shareholders' meeting held on December 6, 2003.

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<PAGE>

                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Date: December 10 , 2004               Bizcom U.S.A., Inc.
                                       (Registrant)

                                       By:  /s/ Hanan Klein
                                       -------------------------------
                                       Hanan Klein
                                       Chief Executive Officer, Principal
                                       Executive and Financial Officer






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