In this Quarterly Report on Form 10-Q, unless the context indicates otherwise, the terms "the Company," "we," "us" and "our" refer to the combined company, which is iGo, Inc. and its wholly owned subsidiaries Adapt, Aerial 7, Mobility California, Inc., Mobility Idaho, Inc., iGo EMEA Limited, Mobility Texas, Inc. and iGo Direct Corporation.

iGoฎ, iGo Greenฎ, Adapt Mobileฎ, and Aerial7ฎ are registered trademarks of iGo, Inc. or its subsidiaries in the United States and other countries. Other names and brands may be claimed as the property of others.

This report contains statements that constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. The words "believe," "expect," "anticipate," "estimate" and other similar statements of expectations identify forward-looking statements. Forward-looking statements in this report can be found in the "Business," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Financial Statements and Supplementary Data" sections as well as other sections of this report and include, without limitation, statements concerning our expectations regarding our anticipated revenue, costs, cash flows, gross profit, gross margins, operating efficiencies, and related expenses for 2012; our expectations regarding our strategy, including but not limited to, our intentions to expand our line of cases, skins, screen protectors, audio products and introduce new accessories for mobile devices, to protect our intellectual property position by filing for additional patents, to pursue opportunities to acquire businesses, products or technologies, and to expand the market availability of our products; our anticipated ability to broaden our distribution base, thus decreasing our dependence on sales to Walmart and RadioShack; beliefs relating to our competitive advantages and the market need for our products; the expected sources, availability and sufficiency of cash and liquidity; expected market and industry trends; our expectations regarding the success of new product introductions; the anticipated strength, and ability to protect, our intellectual property portfolio; our expectations about competition; trends in key operating metrics, including days outstanding in accounts receivable and inventory turns; the results of future tax audits and tax settlements; the realizability of our deferred tax asset and the outcome of uncertain tax positions; the recognition of unrecognized equity compensation cost; our initiatives, including plans for internal product development, sourcing products from third-parties, joint marketing ventures, product bundling, licensing opportunities, acquisitions of complementary and synergistic product families and companies, expanding our distribution beyond consumer retail by selling products into the enterprise, government and education channels and the resulting positive impact on our revenue and earnings of these initiatives; our intention to retain cash balances in the United Kingdom; the possible disposition of assets; future payments to suppliers for letters of authorization; the possibility that we may issue additional shares of stock or attempt to access a credit facility; our intention and ability to hold marketable securities to maturity; our intentions about employing hedging strategies; and our expectations regarding the outcome and anticipated impact of various legal proceedings in which we may be involved.

These forward-looking statements are based largely on our management's expectations and involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance, achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include those discussed in our Annual Report on Form 10-K for the year ended December 31, 2011 under the heading "Risk Factors" and those set forth in other sections of this report and in other reports that we file with the SEC. Additional factors that could cause actual results to differ materially from those expressed in these forward-looking statements include, among others, the following:

• the sufficiency of our revenue to absorb expenses;

• our ability to expand our revenue base and develop new products and product enhancements;

• our dependence on large purchases from significant customers, namely Walmart;

• our ability to expand and diversify our customer base;

• our reliance upon Walmart and RadioShack, as well as other distributors and resellers;

• increased focus by consumer electronics retailers on their own private label brands;

• fluctuations in our operating results due to increases in product costs from our suppliers, our suppliers' ability to perform, the timing of potential product and technology introductions and product enhancements relative to our competitors, market acceptance of our products, the size and timing of customer orders, our ability to effectively manage inventory levels, delay or failure to fulfill orders for our products on a timely basis, distribution of or changes

• our ability to manage our inventory levels;

• decreasing sales prices on our products over their sales cycles;

• our failure to integrate acquired businesses, products and technologies;

• our reliance on and the risk relating to outsourced manufacturing fulfillment of our products, including potential increases in manufacturing costs;

• our reliance on sole sources for key components;

• the negative impacts of product returns;

• design and performance issues with our products;

• liability claims;

• our failure to expand or protect our proprietary rights and intellectual property;

• intellectual property infringement claims against us;

• our ability to hire and retain qualified personnel;

• our ability to secure additional financing to meet our future capital needs;

• increased competition and/or reduced demand in our industry;

• our failure to comply with domestic and international laws and regulations;

• economic conditions, political events, war, terrorism, public health issues, natural disasters and similar circumstances;

• that our common stock could be delisted from the NASDAQ Global Market;

• volatility in our stock price;

• concentration of stock ownership among our executive officers and principal stockholders;

• provisions in our certificate of incorporation, bylaws and Delaware law, as well as our stockholder rights plan, that could make a proposed acquisition of the Company more difficult; and

• dilution resulting from potential future stock issuances.

In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this report will prove to be accurate. We undertake no obligation to publicly update or revise any forward-looking statements, or any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements.

Overview

We are a provider of innovative accessories and power management solutions for the electronics industry. Our vision is to attach our products and technology to every mobile electronic device. Increased functionality and the ability to access and manage information remotely are driving the proliferation of mobile electronic devices and applications. The popularity of these devices is increasing due to reductions in size, weight and cost and improvements in functionality, storage capacity and reliability. Each of these devices needs to be powered and connected when in the home, in the office, or on the road, and each can be accessorized, representing opportunities for one or more of our products.

We design and develop products that make computers and mobile electronic devices more efficient and cost effective, thus enabling professionals and consumers higher utilization of their mobile devices and the ability to access information more readily. Our current product offering primarily consists of power, batteries, audio and protection solutions for mobile electronic devices, and we intend to continue to introduce new accessories for mobile electronic devices.

Power

The centerpiece of our power management solutions is our proprietary iGo Greenฎ technology. Our first iGo Green products are laptop chargers and surge protectors that incorporate our patented technology. Our iGo Green technology reduces energy consumption and almost completely eliminates standby power, or "Vampire Power." We believe that this power-saving technology will help us achieve our long-term goal of establishing an industry standard for reduced power consumption when charging mobile electronic devices.

Batteries

Through our relationship with Pure Energy, we are the exclusive marketer and distributor of Pure Energy's patented rechargeable alkaline (RAMcell) batteries to retailers worldwide (excluding China) with non-exclusive distribution rights in Africa. RAMcell batteries are pre-charged and hold a charge for up to seven years. RAMcell batteries provide users an environmentally friendly, cost-effective alternative to disposable alkaline batteries. We believe that RAMcell batteries and related battery chargers are complementary to our power-saving technology and contribute to lower levels of electronic waste.

Audio

As a result of our acquisition of Aerial7 in 2010, we offer a line of earbuds and headphones. As mobile phones have evolved into smartphones and new portable media devices capable of playing music and video, many consumers utilize a variety of mobile electronic devices for both communication and entertainment purposes. Our audio products are uniquely designed to provide enhanced sound quality compared to competitive products at similar price points. They also offer consumers the ability to both communicate with others via an integrated microphone that can be used with a portable computer, mobile phone, computer or other portable media device as well as the ability to listen to music or video from these devices. In addition to delivering quality sound output, our line of audio products is designed to appeal to the fashion sense of consumers, allowing them to express their unique and personal style through their mobile electronic devices. Currently, our audio products are offered primarily through lifestyle and music retailers around the world. We intend, however, to expand our line of audio products and increase its distribution through global, broad-based consumer electronics retailers as well.

Protection

As a result of our acquisition of Adapt in 2010, we also offer a line of skins, cases and screen protectors for mobile electronic devices. Consumers value the protection of their mobile electronic devices as they rely on them heavily in their daily lives to both connect with others and store information. Consumers also view our protection products as a way to express personal fashion and style, much like they do with our audio products, clothing and other personal accessories. Our line of protection products is designed to meet both of these consumer needs by providing consumers with a high degree of protection and a unique, fashionable design that fits their personal styles. Currently, we offer our cases, skins, screen protectors and other similar products primarily in Europe.

Our ability to execute successfully on our near and long-term objectives depends largely on general market acceptance of our power, protection and audio products, our ability to protect our unique proprietary rights, including our iGo Green technology, our ability to generate additional major customers, and general economic conditions. Additionally, we must execute on the customer relationships that we have developed and continue to design, develop, manufacture and market new and innovative technology and products that are embraced by these customers and by the overall market.

(1) Critical Accounting Policies and Estimates

There were no changes in our critical accounting policies during the six months ended June 30, 2012 from those set forth in our Annual Report on Form 10-K for the year ended December 31, 2011.

(2) Results of Operations

The following table presents certain selected consolidated financial data for the periods indicated expressed as a percentage of total revenue:

                                    Three Months  Ended            Six Months  Ended
                                          June 30,                      June 30,
                                    2012            2011           2012          2011

     Revenue                          100.0 %        100.0 %        100.0 %       100.0 %
     Cost of revenue                   80.3 %         74.1 %         81.5 %        71.8 %

     Gross profit                      19.7 %         25.9 %         18.5 %        28.2 %


     Operating expenses:
     Sales and marketing               21.3 %         20.0 %         20.1 %        20.9 %
     Research and development           8.6 %          5.6 %          8.2 %         5.4 %
     General and administrative        24.8 %         18.8 %         24.5 %        20.3 %

     Total operating expenses          54.6 %         44.4 %         52.7 %        46.6 %

     Loss from operations             (34.9 )%       (18.6 )%       (34.2 )%      (18.4 )%

     Other income (expense):
     Interest, net                      0.0 %          0.2 %          0.0 %         0.2 %
     Other, net                       (13.5 )%         0.5 %         (6.5 )%        0.4 %

     Net loss                         (48.4 )%       (17.9 )%       (40.7 )%      (17.8 )%

Comparison of Three months Ended June 30, 2012 and 2011

Revenue. Revenue generally consists of sales of products, net of returns and allowances. To date, our revenues have come predominantly from sales of laptop chargers. The following table summarizes the year-over-year comparison of our consolidated revenue for the periods indicated (dollars in thousands):

           Three  months       Three  months           Decrease               Percentage change
               Ended               Ended           from same  period        from  the same period
           June 30, 2012       June 30, 2011       in the prior year          in the prior year
Revenue   $         7,292     $        10,831     $            (3,539 )                      (32.7 %)

Following is a breakdown of revenue by significant account for the three months ended June 30, 2012 and 2011 with the corresponding dollar and percent changes (dollars in thousands):

                                                        For the Three Months Ended June 30,
                                                    2012                                    2011
                                       Sales           % of Total Sales         Sales        % of Total Sales        $ Change         % Change

Walmart                              $    2,349                       32 %     $  2,393                     22 %     $     (44 )           (1.8 )%

RadioShack                                1,169                       16 %        1,035                     10 %           134             12.9 %

Belkin                                      354                        5 %        1,007                      9 %          (653 )          (64.8 )%

Office Depot                                217                        3 %          505                      5 %          (288 )          (57.0 )%

All other customers                       3,203                       44 %        5,891                     54 %        (2,688 )          (45.6 )%


                                     $    7,292                      100 %     $ 10,831                    100 %     $  (3,539 )          (32.7 )%

The decrease in revenue for the three months ended June 30, 2012 as compared to the three months ended June 30, 2011 was primarily due to declines in sales volume of power products to Belkin and Office Depot combined with a decline in average selling price for power products to Walmart, partially offset by an increase in sales volume to RadioShack, as indicated in the table above. The decline in sales to all other customers is primarily attributable to lower sales of power products in international markets and the wireless carrier channel. The decrease in power product revenue was also partially offset by an increase in sales of batteries of $144,000 to $435,000 for the three months ended June 30, 2012, compared to battery sales of $291,000 for the three months ended June 30, 2011. We are working to broaden our distribution base and expand sales of product categories other than power with the goal of reducing our dependence on sales of power products to Walmart and RadioShack.

Cost of revenue, gross profit and gross margin. Cost of revenue generally consists of costs associated with components, outsourced manufacturing, in-house labor for assembly, testing, packaging, shipping and quality assurance, depreciation of equipment and indirect manufacturing costs. Gross profit is the difference between revenue and cost of revenue. Gross margin is gross profit stated as a percentage of revenue. The following table summarizes the year-over-year comparison of our cost of revenue, gross profit and gross margin for the periods indicated (dollars in thousands):

                              Three months             Three months             Decrease from same              Percentage change from
                                  Ended                    Ended                period in the prior             the same period in the
                              June 30, 2012            June 30, 2011                   year                           prior year
Cost of revenue              $         5,855          $         8,031          $              (2,176 )                            (27.1 )%

Gross profit                 $         1,437          $         2,800          $              (1,363 )                            (48.7 )%

Gross margin                            19.7 %                   25.9 %                         (6.2 )%                              NA

The decrease in cost of revenue and gross profit is primarily due to the decline in overall sales, shift in product mix, and decline in average selling prices to Walmart and other customers. Labor and overhead expenses, which are mostly fixed, decreased by $400,000 to $1.4 million, or 18.7% of revenue, for the three months ended June 30, 2012, compared to $1.8 million, or 16.2% of revenue, for the three months ended June 30, 2011. The decline in gross margin is primarily due to the decline in selling price relating to power products, audio and other accessories. However, cost of revenue as a percentage of revenue increased to 80.3% for the three months ended June 30, 2012 from 74.1% for the three months ended June 30, 2011, primarily due to the decline in overall sales.

Sales and marketing. Sales and marketing expenses generally consist of salaries, commissions, other personnel-related costs of our sales, marketing and support personnel, advertising, public relations, promotions, printed media and travel. The following table summarizes the year-over-year comparison of our sales and marketing expenses for the periods indicated (dollars in thousands):

                               Three months            Three months                Decrease                  Percentage change
                                   Ended                   Ended               from same  period            from the same period
                               June 30, 2012           June 30, 2011           in the prior year             in the prior year
Sales and marketing           $         1,551         $         2,165         $              (614 )                         (28.4 %)

The decrease in sales and marketing expenses primarily resulted from decreases of approximately $214,000 in personnel-related expenses and $363,000 in advertising, market research, public relations and website development expenses for the three months ended June 30, 2012, compared to the three months ended June 30, 2011. As a percentage of revenue, sales and marketing expenses increased to 21.3% for the three months ended June 30, 2012 from 20.0% for the three months ended June 30, 2011.

Research and development. Research and development expenses consist primarily of salaries and personnel-related costs, outside consulting, lab costs and travel-related costs of our product development group. The following table summarizes the year-over-year comparison of our research and development expenses for the periods indicated (dollars in thousands):

                                 Three  months           Three  months             Increase from             Percentage change  from
                                     Ended                   Ended                  same period              the same period in the
                                 June 30, 2012           June 30, 2011           in the prior year                 prior year
Research and development        $           625         $           606         $                19                               3.1 %

The increase in research and development expenses primarily resulted from the increase of approximately $22,000 in personnel-related expenses for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. As a percentage of revenue, research and development expenses increased to 8.6% for the three months ended June 30, 2012 from 5.6% for the three months ended June 30, 2011. We anticipate increased research and development expenses in the remainder of 2012 compared to 2011.

General and administrative. General and administrative expenses consist primarily of salaries and other personnel-related expenses of our finance, human resources, information systems, corporate development and other administrative personnel, as well as facilities, legal and other professional fees, depreciation and amortization and related expenses. The following table summarizes the year-over-year comparison of our general and administrative expenses for the periods indicated (dollars in thousands):

                                  Three months            Three months                Decrease                   Percentage change
                                      Ended                   Ended               from same  period            from  the same period
                                  June 30, 2012           June 30, 2011           in the prior year              in the prior year
General and administrative       $         1,806         $         2,039         $              (233 )                          (11.4 %)

The decrease in general and administrative expenses primarily resulted from a decrease of $121,000 in personnel-related expenses and $170,000 in equity compensation, partially offset by an increase in bad debt expense of $80,000 during the three months ended June 30, 2012 compared to the three months ended June 30, 2011. General and administrative expenses as a percentage of revenue increased to 24.8% for the three months ended June 30, 2012 from 18.8% for the three months ended June 30, 2011.

Interest income, net. Interest income, net decreased by $19,000 to $2,000 for the three months ended June 30, 2012 compared to $21,000 for the three months ended June 30, 2011. The decrease was primarily due to decreased short-term investment balances during 2012. At June 30, 2012, the average yield on our cash and short-term investments was approximately 0%.

Other income (expense), net. Other income (expense), net was ($987,000) for the three months ended June 30, 2012 compared to $50,000 for the three months ended June 30, 2011. The decrease was primarily due to the recognition of other-than-temporary impairment charges related to long term investment securities, as discussed in Note 3 to the condensed consolidated financial statements in Part 1, Item 1.

Income taxes. No provision for income taxes was required for the three months ended June 30, 2012 or 2011. Based on historical operating losses and projections for future taxable income, it is more likely than not that we will not fully realize the benefits of the net operating loss carryforwards. We have not, therefore, recorded a tax benefit from our net operating loss carryforwards for either of the three months ended June 30, 2012 or June 30, 2011, which at June 30, 2012 totaled approximately $170 million.

Comparison of Six months Ended June 30, 2012 and 2011

Revenue. Revenue generally consists of sales of products, net of returns and allowances. To date, our revenues have come predominantly from sales of laptop chargers. The following table summarizes the year-over-year comparison of our consolidated revenue for the periods indicated (dollars in thousands):

            Six months          Six months             Decrease               Percentage change
               Ended               Ended           from same  period        from  the same period
          June  30, 2012      June  30, 2011       in the prior year          in the prior year
Revenue   $        15,539     $        20,059     $            (4,520 )                      (22.5 %)

Following is a breakdown of revenue by significant account for the six months ended June 30, 2012 and 2011 with the corresponding dollar and percent changes (dollars in thousands):

                                                    For the Six Months Ended June 30,
                                                2012                                   2011
                                                                                                                   $              %
                                   Sales          % of Total Sales         Sales        % of Total Sales         Change        Change

Walmart                          $    4,369                      28 %     $  4,595                     23 %     $   (226 )        (4.9 )%

RadioShack                            2,503                      16 %        1,540                      8 %          963          62.5 %
. . .