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 March 31, 2004

[ ] 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 March 31, 2004 and June 30, 2003........................................3

Consolidated Statements of Operations
  for the three months and nine months ended March 31, 2004 and 2003.........4

Consolidated Statements of Stockholders' Equity
  for the nine months ended March 31, 2004...................................5

Consolidated Statements of Cash Flows
  for the nine months ended March 31, 2004 and 2003..........................6

Notes to Consolidated Financial Statements................................7-16

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations........................................17-27

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

Item 5. Other Information...................................................29

Item 6.Exhibits and Reports on Form 8-K..................................29-31

                                       2
<PAGE>
                          PART 1. FINANCIAL INFORMATION

Item 1.  Financial Statements

BIZCOM U.S.A., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
MARCH 31, 2004 AND JUNE 30, 2003
<TABLE>
<CAPTION>
                                                                           MARCH 31, 2004         JUNE 30, 2003
                                                                           --------------         -------------
                                                                             (UNAUDITED)
<S>                                                                         <C>                         <C>
                                 ASSETS

Current assets:
  Cash                                                                      $        799           $    264,428
  Accounts receivable, net                                                       250,833                218,656
  Inventory                                                                      161,252                137,402
  Prepaid expenses and other current assets                                       41,643                     13
                                                                            ------------           ------------
    Total current assets                                                         454,527                620,499
                                                                            ------------           ------------

Property and equipment, net                                                    5,176,124              5,072,709
                                                                            ------------           ------------

Other assets:
  Deposits                                                                           821                  1,474
  Other receivables                                                              538,597                245,597
  Intangible assets, net                                                      29,348,360             15,288,880
                                                                            ------------           ------------
    Total other assets                                                        29,887,778             15,535,951
                                                                            ------------           ------------
    Total assets                                                            $ 35,518,429           $ 21,229,159
                                                                            ============           ============

                     LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued liabilities                                  $  1,049,606           $    548,897
  Note payable                                                                   100,000                     --
  Deferred revenue                                                               297,349                 70,000
                                                                            ------------           ------------
    Total current liabilities                                                  1,446,955                618,897
                                                                            ------------           ------------
Long term liabilities:
  Note payable                                                                 2,900,000                     --
                                                                            ------------           ------------
    Total liabilities                                                          4,346,955                618,897
                                                                            ------------           ------------

Commitments and contingencies                                                         --                     --

Stockholders' equity:
  Preferred stock, $0.0001 par value; 20,000,000 shares
    authorized; no shares issued and outstanding at March 31, 2003
    and June 30, 2003, respectively                                                   --                     --
  Common stock, $0.0001 par value; 200,000,000 shares authorized;
    21,499,674 and 15,053,750 shares issued and outstanding                        2,150                  1,505
    at March 31, 2004 and June 30, 2003, respectively
  Additional paid-in capital                                                  43,016,126             26,929,320
  Accumulated deficit                                                        (11,846,802)            (6,320,563)
                                                                            ------------           ------------
    Total stockholders' equity                                                31,171,474             20,610,262
                                                                            ------------           ------------
    Total liabilities and stockholders' equity                              $ 35,518,429           $ 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 NINE MONTHS ENDED MARCH 31, 2004 AND 2003
<TABLE>
<CAPTION>
                                            THREE MONTHS ENDED                  NINE MONTHS ENDED
                                                 MARCH 31,                          MARCH 31,
                                           2004              2003             2004             2003
                                       ------------      -----------      ------------      -----------
<S>                                    <C>               <C>              <C>               <C>
Sales                                  $    516,388      $   368,865      $  1,018,894      $ 1,123,274

Operating expenses:
  Cost of sales                             278,276          146,125           615,099          487,632
  Amortization of licenses                  899,676          253,356         1,890,521          416,663
  Depreciation                              171,188           90,808           456,773          103,671
  General and administrative              1,394,281        1,022,302         3,537,848        2,913,385
                                       ------------      -----------      ------------      -----------
    Total operating expenses              2,743,421        1,512,591         6,500,241        3,921,351
                                       ------------      -----------      ------------      -----------

Operating loss                           (2,227,033)      (1,143,726)       (5,481,347)      (2,798,077)
                                       ------------      -----------      ------------      -----------

Other income                                     --               --                --              125
Interest expense                             31,873               --            44,892               --
                                       ------------      -----------      ------------      -----------
Net loss                               $ (2,258,906)     $(1,143,726)     $ (5,526,239)     $(2,797,952)
                                       ============      ===========      ============      ===========

Net loss per common share,
 basic and diluted                     $      (0.10)     $     (0.12)     $      (0.30)     $     (0.37)
                                       ============      ===========      ============      ===========

Weighted-average number of
  common shares, basic and diluted       21,298,685        9,860,772        18,099,361        7,486,732
                                       ============      ===========      ============      ===========
</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 NINE MONTHS ENDED MARCH 31, 2004
<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                     --        --         1,385,924         139       3,437,312              --        3,437,451
Issuance of common stock
  for acquisitions                                  5,060,000         506      12,649,494                       12,650,000
Net loss for the nine months
    ended March 31, 2004       --        --                --          --              --      (5,526,239)      (5,526,239)
                             ------    ------      ----------     -------     -----------    ------------     ------------
Balance, March 31, 2004        --        --        21,499,674     $ 2,150     $43,016,126    $(11,846,802)    $ 31,171,474
                             ======    ======      ==========     =======     ===========    ============     ============
</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 NINE MONTHS ENDED MARCH 31, 2004 AND 2003
<TABLE>
<CAPTION>
                                                                2004             2003
                                                            ------------      -----------
<S>                                                         <C>               <C>
Cash flows from operating activities:
  Net Loss                                                  $ (5,526,239)     $(2,797,952)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
  Depreciation and amortization                                2,347,294          507,571
  Allowance for doubtful accounts                                 76,900               --
  Deferred revenue                                               (56,501)              --
  (Increase) decrease in:
  Accounts receivable                                           (109,077)        (287,357)
  Inventory                                                      193,512           31,676
  Prepaid expenses and other current assets                      (41,630)           7,533
  Increase in accounts payable and accrued liabilities           373,216          778,349
                                                            ------------      -----------
Net cash used in operating activities                         (2,742,525)      (1,760,180)
                                                            ------------      -----------

Cash flows from investing activities:
  Payment of other liabilities assumed
    with license and equipment                                  (293,000)              --
  Cash payment for acquisition                                  (300,000)              --
  Notes payable payments                                        (300,000)              --
  Purchase of property and equipment                             (66,208)          (4,592)
  Purchase of license agreements                                      --          (10,000)
  Decrease in other assets                                           653               --
                                                            ------------      -----------
Net cash used in investing activities                           (958,555)         (14,592)
                                                            ------------      -----------

Cash flows from financing activities:
           Common stock issuance, net of expenses              3,437,451        1,942,365
                                                            ------------      -----------
Net cash provided by financing activities                      3,437,451        1,942,365
                                                            ------------      -----------

Net increase (decrease) in cash                                 (263,629)         167,593
Cash, beginning of year                                          264,428          227,451
                                                            ------------      -----------
Cash, end of year                                           $        799      $   395,044
                                                            ============      ===========

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 March 31, 2004                                    100,000               --
                                                            ------------      -----------
                                                            $ 15,500,000      $        --
                                                            ============      ===========
  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 in 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 area 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 nine months ended March 31, 2004 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 March 31, 2004 and March 31, 2003,
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 $56,000 at March 31, 2004 and March 31, 2003,
respectively.

Inventory

Inventory consists primarily of 220 MHz radios, radio components and
communications equipment held for resale, and is being 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 March 31, 2004, the Company had deferred revenue of $213,249 related
to license and equipment sales. Prior to the acquisition, Sophia received
advanced payments from customers for land mobile radio equipment and services.
At March 31, 2004, the Company had deferred revenue of $84,100 related to such
advance payments.

Advertising

Advertising costs are expensed as incurred. Advertising expenditures totaled
$601 and $10,226 during the three months ended March 31, 2004 and 2003,
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 nine months ended March 31, 2004 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

                                                2004           2003
                                            -----------    -----------
         Net loss
           As reported                        $(5,526,239)   $(2,797,952)
                                              ===========    ===========
           Pro forma                          $(5,529,847)   $(2,802,763)
                                              ===========    ===========
           Basic and diluted loss per share   $     (0.26)   $     (0.28)
                                              ===========    ===========

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 $29,474 and $30,190 in the nine months ended March
31, 2004 and 2003, respectively. The Company generated $6,114 and $3,970 of
freight revenues recharged to customers in the nine months ended March 31, 2004
and 2003, 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.

                                       10
<PAGE>

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

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:

                                                        March 31,     June 30,
                                                          2004          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 March 31, 2004 and 2003 was $899,676 and $253,356, and
accumulated amortization totaled $2,642,253 and $751,732 at March 31, 2004 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:

                                                        March 31,     June 30,
                                                          2004          2003
                                                       -----------   ----------
         Accounts payable                               $  851,648     $244,662
         Accrued professional fees and other expenses      109,608      154,947
         Accrued payroll, benefits and related taxes        88,350      149,288
                                                        ----------     --------
         Total accounts payable and
           accrued liabilities                          $1,049,606     $548,897
                                                        ==========     ========

NOTE 7 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

                                                        March 31,     June 30,
                                                          2004          2003
                                                       -----------   ----------
         Communications equipment                       $5,326,720   $5,122,000
         Office and computer equipment                     506,683      151,215
                                                        ----------   ----------
                                                         5,833,403    5,273,215
         Less: accumulated depreciation                   (657,279)    (200,506)
                                                        ----------   ----------
         Property and equipment, net                    $5,176,124   $5,072,709
                                                        ==========   ==========


Depreciation expense was $171,188 and $90,808 for the quarters ended March 31,
2004 and 2003, respectively.

NOTE 8 - RELATED PARTY TRANSACTIONS

At March 31, 2004 and 2003, 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 $81,136 due from PSG at March 31,
2004 and 2003, 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 $300,000 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
semiannually. 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. On July 31,
2001, the Company completed a split of its common shares. In accordance with
applicable accounting rules, the split has been retroactively applied to all
periods presented.

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 March 31, 2004 and 2003 the Company issued 404,000 and
438,000 shares of restricted common stock and 1,130,000 and 322,500 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
$1,010,000 and $1,095,800 in the quarters ending March 31, 2004 and 2003,
respectively, from these private placements. Expenses associated with the
offerings for the periods ending March 31, 2004 and 2003 were $13,738 and
$4,297, 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:

                                                 2004            2003
                                              -----------    -----------
         Net loss
           As reported                        $(5,526,239)   $(2,797,952)
                                              ===========    ===========
           Pro forma                          $(5,529,847)   $(2,802,763)
                                              ===========    ===========
           Basic and diluted loss per share   $     (0.26)   $     (0.28)
                                              ===========    ===========

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 March 31, 2004. 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 March 31, 2004, warrants to purchase a total of
10,135,465 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 a
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 March 31,
2004 in the private placement Unit Offering and in the other private placement
total 5,626,000; 91,500, 1,915,500 and 3,619,000 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 March 31, 2004 and through November 30, 2004, the Company issued
1,081,000 shares of its common stock and warrants to purchase 2,500,000 shares
of restricted common stock pursuant to the private placement Unit Offering and
in the other private placement for cash totaling $2,335,000. The warrants expire
in the fiscal year ending June 30, 2007.

NOTE 12 - 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 13 - 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 March 31, 2004 and
2003 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 policies. Management evaluates segment performance
based on segment profit and loss. Information for reportable segments is as
follows:

                                       15
<PAGE>

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



NOTE 13 - SEGMENT INFORMATION, CONTINUED
<TABLE>
<CAPTION>
                                            THREE MONTHS ENDED               NINE MONTHS ENDED
                                                 MARCH 31,                         MARCH 31,
                                           2004              2003            2004             2003
                                        -----------      -----------      -----------      -----------
<S>                                     <C>              <C>              <C>              <C>
Sales - Land Mobile Radio (LMR)         $   435,663      $   261,277      $   797,345      $   828,565
Sales - Public Safety                        80,725          107,588          221,549          294,709

Cost of Sales - LMR                         276,267          146,125          598,293          487,632
Cost of Sales - Public Safety                 2,009               --           16,806

Depreciation and amortization - LMR       1,049,604          324,837        2,296,288          477,169
Amortization - Public Safety                 10,975           10,975           21,950           21,950

Segment income (loss) - LMR                (890,208)        (209,685)      (2,097,236)        (136,236)
Segment income - Public Safety               67,741           96,613          182,793          272,759

Depreciation - administrative                10,285            8,352           29,056           21,215

Unallocated general and
 administrative expenses                  1,394,281        1,022,302        3,537,848        2,913,385
                                        -----------      -----------      -----------      -----------

Operating loss                          $(2,227,033)     $(1,143,726)     $(5,481,347)     $(2,798,077)
                                        ===========      ===========      ===========      ===========
</TABLE>

NOTE 14 - 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.

                                       16
<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 nine month periods ended March 31, 2004
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 220 MHz SMR spectrum
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.



                                       17
<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 March 31, 2004 we had
negative working capital of $(992,428) that included a $100,000 payment to
Sophia due January 31, 2004, which payment due date was later extended and
payment made in full after the end of the quarter. At March 31, 2004, we also
had long-term debt of $2,900,000. Since our inception, we have incurred losses
of $(11,846,802), and during the nine months ended March 31, 2004, we used cash
in operating activities of $(2,742,525).

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
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,


                                       18
<PAGE>

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 of approximately 4000 users per
channel utilizing the same application and that faster polling times will now be
possible. The additional capacity has enhanced our wireless revenue model both
as 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 whom 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.

                                       19
<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 (ie. 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 that wde 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.

     (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


                                       20
<PAGE>

          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 March 31, 2004
Compared to the Three Months Ended March 31, 2003

Total revenues for the quarter ended March 31, 2004 were $516,388, an increase
of $147,523, or 40% from the March 31, 2003 quarter sales of $368,865. Sales
included $212,000 generated from the acquired Sophia operations. Sales of radio
products and airtime increased $174,386, or 54%, from $261,277 in the quarter
ended March 31, 2003 to $435,563 in the quarter ended March 31, 2004. Sales of
public safety software and services were $80,725 in the quarter ended March 31,
2004 compared to $108,435 in the prior year quarter, a decrease of $27,710, or
26%. 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


                                       21
<PAGE>

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 March 31, 2004, the
Company had $111,999 of deferred license revenues compared to $0 in the prior
year quarter.

Cost of sales for radio products and airtime in the quarter ended March 31, 2004
increased $130,142, or 89%, to $276,267 compared to $146,125 in the quarter
ended March 31, 2003 due to higher radio sales for the quarter and increased
site lease expenses related to the former Sophia operation. Gross margin for
radio products excluding airtime for the quarter ended March 31, 2004 were
$196,121, an increase of $68,552, or 54% from the March 31, 2003 quarter due to
higher sales. Gross margin for radio products excluding airtime as a percent of
sales increased slightly to 38% in the quarter ended March 31, 2004 compared to
35% in the 2003 quarter; the gross margin in the current year includes lower
margins for the sales of data radios.

Airtime sales were $21,085 in the quarter ended March 31, 2004. Cost of sales
for airtime sales, which are primarily tower rents, were $61,885 during the
quarter ended March 31, 2004. There were $23,972 airtime sales and $36,390 cost
of sales for airtime sales 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 affected 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 $80,380 to $171,188 in the quarter ended March 31, 2004
from $90,808 in the quarter ended March 31, 2003, 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 $646,320 to $899,676 in the quarter
ended March 31, 2004 from $253,356 in the quarter ended last 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 $371,979, or 36%, to $1,394,281 in the quarter
ended March 31, 2004 compared to $1,022,302 in the quarter ended March 31, 2003
due primarily to increases in salaries and benefits, professional fees and rent
expense from the acquired Sophia operations. Salaries and benefits increased
$124,606 to $678,761 for the quarter as compared to the quarter ended March 31,
2003. This increase is due to the additional personnel hired related to the
Sophia acquisition. Professional fees increased $78,526 to $231,454 in the
quarter ended March 31, 2004 compared to $152,928 in the quarter ended March 31,
2003. Rent expense increased $45,209 to $101,735 during the quarter ended March
31, 2004 compared to $56,526 in the same quarter in fiscal year 2003. Also, Bad
Debt Expense was $0 for the quarter ended March 31, 2004 as compared to $56,000
for the quarter ended March 31, 2003.

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 need to
increase our sales and marketing efforts.

Nine Months Ended March 31, 2004
Compared to the Nine Months Ended March 31, 2003

Total revenues for the nine months ended March 31, 2004 were $1,018,894, a
decrease of $104,380 or 9% from the March 31, 2003 nine months sales of
$1,123,274. Sales included $316,000 generated from the acquired Sophia
operations. Sales of radio products and airtime, of $797,345 decreased $31,221,
or 4%, from $828,565 in the nine months ended March 31, 2003, primarily due to
lower voice repeater and radio sales; the 2003 quarter benefited from a large
commercial data communications order. Sales of public safety software and
services were $221,549 in the nine months ended March 31, 2004 compared to


                                       22
<PAGE>

$294,709 in the prior year period. The decrease was due primarily to 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 nine months ended March 31,
2004 increased $235,167, or 52%, to $598,293 compared to $487,632 in the nine
months ended March 31, 2003. Gross margin for radio products excluding airtime
for the nine months ended March 31, 2004 were $342,571, a decrease of $10,782,
or 3% from the nine months ended March 31, 2003, due to lower sales and lower
margins. Gross margin for radio products excluding airtime as a percent of sales
increased slightly to 34% in the nine months ended March 31, 2004 compared to
33% in the nine months ended March 31, 2003. Airtime sales were $92,234 in the
nine months ended March 31, 2004 compared to $23,972 for the same period in the
prior year. Cost of sales for airtime sales, which are primarily tower rents,
were $235,755 during the nine months ended March 31, 2004 compared to much lower
tower rents of $36,390 in the corresponding period last year.

Depreciation increased $353,102 to $456,773 in the nine months ended March 31,
2004 from $103,671 in the previous 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 $1,473,858 to $1,890,521 in the nine
months ended March 31, 2004 from $416,663 in the previous year due primarily to
the amortization of 220 MHz SMR FCC licenses which we acquired in the last
twelve months.

Administration expense increased $624,463, or 21%, to $3,537,848 in the nine
months ended March 31, 2004 compared to $2,913,385 in the nine months ended
March 31, 2003 due to higher salaries and benefits, bad debt expense, and higher
rent expense, insurance expense and travel expenses related to the acquisitions
over the last year, offset by reduced consulting expenses related to the 2003
acquisitions. Salaries and benefits increased $276,190 to $1,907,088 for the
nine months ended March 31, 2004 compared to $1,630,897 for the same period last
year. This is a result of the additional staff hired as part of the Sophia
acquisition. Bad debt expense was $76,900 in the nine months ended March 31,
2003 as compared to $56,000 for the same nine-month period in the previous year.
Rent expense was $208,902 for the nine months ended March 31, 2004, an increase
of $62,454 as compared to the $146,448 for the nine months ended the previous
year. Insurance expense was $71,007 for the nine months ended on March 31, 2004
as compared to $51,809 for the period ended on March 31, 2003, an increase of
$19,198, 35%. Travel expense for the nine-month period ended March 31, 2004 was
$148,082 as compared to $125,761 for the same period in the previous year.

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 March 31, 2004 and
2003 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 policies. Management evaluates segment performance
based on segment profit and loss. Information for reportable segments is as
follows:



                                       23
<PAGE>
<TABLE>
<CAPTION>
                                            THREE MONTHS ENDED                NINE MONTHS ENDED
                                                 MARCH 31,                         MARCH 31,
                                           2004              2003            2004             2003
                                        -----------      -----------      -----------      -----------
<S>                                     <C>              <C>              <C>              <C>
Sales - Land Mobile Radio (LMR)         $   435,663      $   261,277      $   797,345      $   828,565
Sales - Public Safety                        80,725          107,588          221,549          294,709

Cost of Sales - LMR                         276,267          146,125          598,293          487,632
Cost of Sales - Public Safety                 2,009               --           16,806

Depreciation and amortization - LMR       1,049,604          324,837        2,296,288          477,169
Amortization - Public Safety                 10,975           10,975           21,950           21,950

Segment income (loss) - LMR                (890,208)        (209,685)      (2,097,236)        (136,236)
Segment income - Public Safety               67,741           96,613          182,793          272,759

Depreciation - administrative                10,285            8,352           29,056           21,215

Unallocated general and
 administrative expenses                  1,394,281        1,022,302        3,537,848        2,913,385
                                        -----------      -----------      -----------      -----------
Operating loss                          $(2,227,033)     $(1,143,726)     $(5,481,347)     $(2,798,077)
                                        -----------      -----------      -----------      -----------
</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 critical working capital shortage, and must continue to raise
significant capital from outside funding sources to execute our operating plans
and sustain operations. At March 31, 2004, we had negative working capital of
$(992,428) and long-term debt of $2,900,000. Since our inception, we have
incurred losses of $(11,846,802) and during the last nine months, we used cash
in operating activities of ($2,742,525)

At March 31, 2004, we had stockholders' equity of $31,171,474, tangible net
worth of $2,186,000, negative working capital of $(992,428), and long-term debt
of $2,900,000. Since inception, we have incurred losses of $$(11,846,802), and
during the last nine months, we used cash in operating activities of
$(2,742,525) and cash in investing activities of $(958,555). Our operations and
acquisitions have been funded primarily by the sale of common stock with gross
proceeds of approximately $11,756,900, from October 17, 2001 through March 31,
2004 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 $2,702,500 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


                                       24
<PAGE>

currently plan to utilize such funds for implementing the sales and marketing
and engineering initiatives enumerated above in the order as enumerated above.
Other planned sales and marketing efforts are also to 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
will also be reduced by reducing the administrative staffing levels and related
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.


                                       25
<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 $56,000 at March 31, 2004 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.

                                       26
<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 March 31, 2004, the Company had deferred revenue of $213,249 related
to license and equipment 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 $84,100 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.

                                       27
<PAGE>

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 March
31, 2004 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 January 1, 2004 through March 31, 2004, 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 third fiscal quarter ending March 31, 2004,
we issued units for an aggregate of $950,000 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 $420,000 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 $650,000 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.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

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)

                                       29
<PAGE>

    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)

    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)

                                       30
<PAGE>

    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:  None.

                                       31
<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

                                       32