Edgar Filing: TIGER TELEMATICS INC

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

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003

Commission file number 001-15977

Tiger Telematics, Inc.
(Exact name of registrant as specified in its charter)

DELAWARE 13-4051167
(State of other jurisdiction of (I.R.S. Employee
incorporation or organization) Identification No.)

10201 Centurion Parkway N. Ste. 600 Jacksonville, FL 32256
(Address or principal executive offices) (Zip code)

(904) 279-9240
(Registrant's telephone number including area code)

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Indicate by check mark whether the registrant is an accelerated filer (as
defined by Exchange Act Rule 12b-2). Yes [ ] No [ X ]

Aggregate market value of common stock held by non-affiliates of the registrant
as of March 1, 2005 was $1,158,780,000.

Number of shares of common stock outstanding as of March 1, 2005 was 46.5
million.

DOCUMENTS INCORPORATED BY REFERENCE

None

TIGER TELEMATICS, INC.

ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

Table of Contents

Page
----

PART I........................................................................1

Item 1. BUSINESS.......................................................1

General.................................................................1
Industry Overview.......................................................2
Growth Strategy.........................................................3
Products and Services...................................................4
Gizmondo................................................................4
Telematics..............................................................5
Relationship with Major Customers.......................................5
Suppliers...............................................................5
Sales & Marketing.......................................................6
Competition.............................................................6
Intellectual Property...................................................6
Employees...............................................................6

Item 2. PROPERTIES.....................................................8

Item 3. LEGAL PROCEEDINGS..............................................8

Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY
HOLDERS......................................................9

PART II.......................................................................9

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED SHAREHOLDER MATTERS...................................9

Market Price and Dividend Information...................................9

Item 6. SELECTED FINANCIAL DATA.......................................10

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS...............11

General Overview.......................................................11
Results of Operations..................................................12
Liquidy and Capital Resources..........................................16
Critical Accounting Policies...........................................17
Recently Issued Accounting Standards...................................19

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK...........................................20

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
FINANCIAL DATA..............................................21

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.......................21

Item 9A. CONTROLS AND PROCEDURES.......................................21

PART III.....................................................................21

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT............21

Section 16(a) of the Beneficial Ownership Reporting Compliance.........23
Code of Ethics.........................................................23
Audit Committee Financial Expert.......................................24

Item 11. EXECUTIVE COMPENSATION........................................24

Summary Compensation...................................................24
Option Grants..........................................................25
Equity Compensation Plan Information...................................25
Compensation of Directors..............................................25
Stock Option Plan......................................................25
Employment Contracts and Termination and Change-In-Control
Arrangements........................................................28
Compensation Committee Interlocks and Insider Participation............28
Shareholder Return Performance.........................................28

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT........................................30

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................31

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES........................32

Audit Fees.............................................................33
Audit Related Services.................................................33
Tax Fees...............................................................33
All Other Fees.........................................................33

PART IV......................................................................33

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES....................33

SIGNATURES.............................................................33

III

PART I

ITEM 1. BUSINESS

General

Tiger Telematics, Inc. ("Tiger Telematics" or the "Company"), a Delaware
corporation, is the parent company of several subsidiaries the most noteworthy
of which is Gizmondo Europe Ltd, the developer of the multi-entertainment
wireless handheld gaming device now called the Gizmondo. The Company
historically has been in the retail flooring business and a designer, developer
and marketer of mobile telematics systems and services that combine global
positioning and voice recognition technology to locate and track vehicles and
people down to the street level in countries throughout the world. Telematics is
an emerging industry that uses a combination of computer, wireless and satellite
technology largely to provide communications between a central source and fleets
of vehicles. The systems were designed to operate on GSM networks, which is the
standard operating system for wireless carriers in the UK and in Continental
Europe. These projects have been dropped in favor of development of the
Gizmondo.

In 2003, the Company began developing a new multi-entertainment wireless
handheld gaming device that is now referred to as Gizmondo. While the Company
previously developed a variety of commercial telematics products, the Company's
primary business strategy has been since early 2005 to develop the Gizmondo. The
Company initially launched a limited production version of the Gizmondo in the
UK on October 29, 2004 and expects to launch the full scale production of
Gizmondo in 2005. The Gizmondo is powered by a Microsoft Windows CE.net
platform, has a 2.8-inch TFT color screen with a Samsung ARM9 400Mhz processor
and incorporates the GoForce 3D 4500 NVIDIA graphics accelerator. Gizmondo
provides cutting-edge gaming, multimedia messaging, an MP3 music player, Mpeg4
movie playing capability, a digital camera and a GPRS network link to allow
wide-area network gaming. Additionally, Gizmondo contains a GPS chip for
location based services, is equipped with Bluetooth for use in multi-player
gaming and accepts MMC card accessories. The Gizmondo represents the Company's
primary business segment.

In May 2001, the Company (formerly known as Floor Decor, Inc.) completed a
reverse shell merger with Media Communications Group, Inc. ("MCGI"). Prior to
the merger with the Company, MCGI was a "public shell" company, with no
significant operations or assets. The merger of the Company and MCGI was
accounted for as a reverse acquisition. Under a reverse acquisition, the Company
was treated for accounting purposes as having acquired MCGI and the historical
financial statements of the Company became the historical financial statements
of MCGI. Therefore, all references herein are to the activities of the Company.
On June 6, 2002, the Company changed its name from Floor Decor, Inc. to Tiger
Telematics, Inc. after deciding to exit the historical flooring business and
focus exclusively on mobile telematics systems and services, with the major
focus on Gizmondo.

The Company is the parent company of three wholly owned subsidiaries, Media
Flooring, Inc., Gizmondo Europe Ltd. and Tiger Telematics USA, Inc. The
Company's first subsidiary, Media Flooring, Inc. (now dormant), operated a

flooring products sales and service business through a wholly owned subsidiary
Floor Decor LLC. This business represented all of the business operations of the
Company during 2001 and early 2002. Floor Decor LLC operated a big box super
store located in Fort Lauderdale, Florida, with a wide selection of floor
coverings, including carpet, area rugs, wood, and laminates, at discount prices
to both commercial accounts and consumers. In June 2002, the Company
discontinued the flooring segment operation and in August 2002 sold the assets
of the Floor Decor LLC, and the use of the name Floor Decor LLC to an unrelated
third party. The operating results for this discontinued segment are classified
as operating results of discontinued operations in the current year and in all
prior years covered in this Report.

On February 4, 2002, the Company acquired Eagle Eye Scandinavia Distribution,
Ltd, an early stage UK company that distributed telematics products and
services. The Company subsequently changed the name from Eagle Eye Scandinavia
Distribution, Ltd to Tiger Telematics Ltd. Tiger Telematics Ltd. was the
exclusive distributor in Scandinavia and Yugoslavia of the Eagle Eye VCG2, a
vehicle communications gateway that combined telecommunications and Global
Positioning Systems (GPS) technologies to provide security and communications
solutions for fleet vehicle management. This telematics product was manufactured
by an unrelated UK based company Eagle Eye Telematics plc.

On December 17, 2002, the Company sold the shares of capital stock of Tiger
Telematics, Ltd. to a Swedish company, primarily to reduce debt and improve the
Company's working capital position.

In 2002, the Company organized a new subsidiary, Tiger Telematics Europe, Ltd.
to provide a variety of telematics products and services to customers in England
and Western Europe. Tiger Telematics Europe, Ltd. focused on developing new
telematics products, on developing child-tracking devices and on marketing
telematics products primarily to large fleet suppliers such as rental car
companies. In 2003, Tiger Telematics Europe, Ltd. began focusing primarily on
developing the Gizmondo. In early 2005, the Company changed the name of Tiger
Telematics Ltd. to Gizmondo Europe Ltd. to match the name of the Company's
primary product, the Gizmondo.

In June 2002, the Company formed a wholly owned subsidiary Tiger Telematics USA,
Inc. that was created to acquire the assets of a US telematics developer of
consumer automotive devices. This subsidiary was ultimately unable to
successfully launch the Port- IT products associated with this acquisition and
this subsidiary is now dormant.

The Company had difficult years in 2003 and 2002 due to extremely challenging
industry conditions and high development costs associated with developing
Gizmondo. The Company has earned limited revenues to date and has incurred net
losses of $ 7,812,449, $11,087,747 and $1,299,080 for the years ended December
31, 2003, 2002 and 2001, respectively. Additionally the Company reported an
operating loss in the first three quarters of 2004 of $16,838,170, principally
due to development costs for the Gizmondo.

Industry Overview

Gaming industry information

UK Games compared with other industries

Games market size (pound)1,081m
Cinema market size (pound) 755m
Video Rental market size (pound) 466m
Music (pound)2,016m

UK hardware data 2002

UK installed base of Playstation 2 3.7m
UK installed base of Playstation 6.8m

Market size comparison 2002

UK Euro 1,719m
Germany Euro 1,196m
France Euro 990m
Italy Euro 438m
Spain/Portugal Euro 415m

Source: ELSPA

Estimated world market value for the games and entertainment/reference software
is valued in excess of $28 billion annually.

Growth Strategy

While the Company previously developed a variety of commercial telematics
products designed for fleet management, anti-theft and security applications,
the Company's primary business strategy is to develop Gizmondo. During 2005, the
Company expects to launch Gizmondo first in England, then the European market
and then in the United States. The initial Gizmondo units were produced and
manufactured by a group consisting of Plextek, an independent electrical design
and consulting firm based in the UK, Intrinsyc Software International, a
Microsoft Gold Level Windows Embedded Partner and Xilinx, a software programmer
specializing in programmable logic. The initial Gizmondo units were displayed in
January 2004 at the 2004 Consumer Electronics Show in Las Vegas. Going forward,
the Company will utilize Flextronics as the new volume manufacturer of Gizmondo
units. By utilizing Flextronic's high-volume manufacturing capabilities and
global reach, the Company should be able to bring more units to market and
assure its ability to fill the growing number of sales orders. The Company
anticipates revenue from the sale of Gizmondo units as well as related sales of
hardware, software, music and video downloads, games, MNVO and Smart Ads.

To accomplish the difficult challenge of converting the Gizmondo idea into an
actual product, the Company, since the third quarter of 2003, has entered into a
number of agreements, joint ventures and strategic partnerships with recognized
design, engineering, software, manufacturing, marketing, public relations, and
distribution companies, including Plextek, an independent UK electrical design
and consulting firm; Microsoft, the maker of the Windows Net CE software
operating system used by Gizmondo; Synergenix Interactive AB, a game developer;
Intrinsyc Software International, a Microsoft Gold Level Windows Embedded
Partner; Xilinx, a software programmer specializing in programmable logic;
Fathammer Alliance, a supplier of advanced 3D graphics and game technologies for
mobile platforms; MINICK a premium messaging network in Europe; Samsung,
supplier of Gizmondo's Mobile Applications Processor; Micronas, supplier of
Gizmondo's single chip MIDI synthesizer; Flextronics, an electronics

manufacturer; CATIC, a State-Run Chinese conglomerate that provides sales,
distribution, technical support, and numerous other joint ventures for all
Chinese regions; Toys R Us, an authorized UK retailer of Gizmondo; Ogilvy Public
Relations Worldwide, the Company's Agency of Record; Renaissance Corp, an
electronics marketer and distributor; OD2, a European music distributor; Redline
Marketing and Tartan Sales, distributors of Gizmondo units throughout the US,
Canada, and Mexico; M-Systems, supplier of the mDiskOnChip G3 memory chip;
Daniels & Associates, the Company's Investment Banker; Playcom Software
Vertriebs GmBH, a German games wholesaler and distributor; John Lewis Department
Stores, an authorized UK retailer of Gizmondo; NVIDIA Corporation, supplier of
Gizmondo's GoForce 3D 4500 3D Wireless media processor; Indigo Pearl Ltd, a
gaming public relations agency; SCi Entertainment Group, a games publisher;
Ditan Corporation, a retail distribution provider; Mother, an advertising
agency; United Electronics SL, an electronics distributor; Microsoft Game
Studios, a gaming company; and Zi Corporation, supplier of the advanced test
input technology featured on Gizmondo.

In addition, to facilitate the launch of Gizmondo, the Company acquired game
developers Indie Studios and Warthog plc, and entered into an agreement to
acquire the software company Integra SP.

Products and Services

The Company features two types of products, along with related goods and
services for such products. The primary product is Gizmondo, a new
multi-entertainment wireless handheld gaming device targeted at the gaming
industry. The Company's secondary product is a telematics product designed for
vehicle fleet management.

Gizmondo

Gizmondo is a new multi-entertainment wireless handheld gaming device that will
compete with similar handheld gaming products offered by Nintendo, Nokia,
Tapwave and Sony. Gizmondo is powered by a Microsoft Windows CE.net platform,
has a 2.8-inch TFT color screen with a Samsung ARM9 400Mhz processor and
incorporates the GoForce 3D 4500 NVIDIA graphics accelerator. Gizmondo provides
cutting-edge gaming, multimedia messaging, an MP3 music player, Mpeg 4 movie
playing capability, a digital camera and a GPRS network link to allow wide-area
network gaming. Technical Specifications: 400 MHz Processor, GSM Tri-Band, GPRS
Class 10, SiRF GPS, TFT Screen - 320 x 240 Pixels, WAP 2.0, MMS Send and
Receive, MP3 Playback, Polyphonic MIDI, SMS / EMS, MPEG 4 Playback, JPEG Camera,
SD Flash Card Reader, Mini-USB Client, Bluetooth 2 (Multiplayer Gaming), 3D
Games Capability, GPS Tracking Application, GPS Mapping Application, Removable
SIM Card, Removable Battery, Polyphonic Ringtones, Stereo Headset Socket for MP3
and Games, Stop game play when battery near empty, Windows Media Player 9,
Flight Mode, Speaker, Vibrate Mode. Gizmondo is approximately 5.5 inches wide,
3.5 inches high, over an inch thick, and weighs 5.5 ounces (155 grams). The
outer shell is made of a durable and stain-resistant slate-colored composite
material with a rubbery feel. The rectangular screen, measuring 2.25 by 1.75
inches (a 2.8" TFT LCD display), sits right in the center of the console.

Aside from being a gaming device, the Gizmondo also performs the following
functions: movie player, allowing users to view full-feature videos in MPEG 4
format using the unit's built-in Windows Media Player 9 and SD Card slot; MP3
player permitting users to download and listen to audio files stored in either
MP3, MIDI & SP-MIDI, WMA, or WAV formats; SMS & MMS messaging facility that lets
users easily send text, image, and music files; and high-resolution digital
camera.

Gizmondo also is equipped with a unique global positioning system; it's wired
for GSM tri-band networks so it can be used on five continents; it supports
Bluetooth wireless technology; it has USB connection capabilities; and with its
removable memory cards, it provides users with unlimited storage. In addition to
having more features and functions than any competing units, Gizmondo is the
only device among this new generation of completely mobile gaming consoles that
uses a version of Microsoft Windows (CE.NET) as its operating system.

Telematics

The Company's secondary business strategy is to supply high value telematics
units to business users for fleet management, anti-theft and security
applications. Telematics products allow the wireless exchange or delivery of
communication, information, and other content between a vehicle and its
occupant, and external sources or recipients. The telematics industry aggregates
the functionality and content of various industries including consumer
electronics, cellular and security devices, among others, into a seamless
service offering. The Company's telematics products provide vehicle
communications gateways, combining telecommunications and Global Positioning
System (GPS) technologies to provide security and communications solutions for
fleet management. The Company primarily markets its fleet management products
and services to companies with multiple movable assets and or vehicles. The
Company believes that its telematics products should afford customers
significant operating and insurance cost savings.

Relationship with Major Customers

The Gizmondo is a developmental stage product that has only recently been
marketed and sold to the general public in a limited fashion. Consequently, the
Company has no current large customers but has entered into various distribution
and representation agreements as detailed in the Growth Strategy section above.

Suppliers

The Company developed the Gizmondo internally but the manufacture is completed
by outside parties. As discussed in the Growth Strategy section above,
Flextronics is the Company's volume manufacturer for Gizmondo units. Although
the Company believes that multiple sources of supply exist for nearly all of the
products and components purchased from outside suppliers, the Company generally
maintains only one supplier for each core product purchased for the manufacture
of Gizmondo units. Additionally, the Company relies on Flextronics as the sole
manufacturer of Gizmondo units. Therefore interruptions in supply or manufacture
or price changes in the items purchased by the Company could have a material
adverse effect on the Company's operations.

Sales & Marketing

The Company's sales and marketing approach leverages management's extensive
experience in both of its major market segments of commercial and retail buyers
and the use of other distributors.

The Company uses a combination of the following to drive commercial sales in the
Gizmondo segment:

o Direct sales via internal commissioned sales force

o Large representative agencies that specialize in retail sales and
customer base

During 2005, the Company expects to launch the Gizmondo in different geographic
markets starting in the UK initially, then in Continental Europe and then in the
US.

Competition

Competition in gaming mobile handheld products includes perennial leader
Nintendo with its gameboy advance, Nokia with its N-Gage and new product
offerings from Tapwave and Sony.

The handheld gaming market in the last ten years has been led by one dominant
player - `Nintendo Gameboy'. Since the introduction of Nokia N-Gage, the
handheld gaming market is beginning to evolve with the introduction of various
multi-functional devices.

Within the handheld gaming market category there are two principal competitors
who together control substantially all of the handheld gaming market:

o Sony Playstation Portable - A handheld gaming console with a 4.5"
screen that also has the ability to play video from Sony UMD discs.
Functionality is limited, and `add-on' components will be required in
order to extend functionality. In the management's view, Sony PSP will
secure market share during their launch period (Summer 2005 - Europe).

o Nintendo DS - Nintendo DS is the next generation gaming console within
the Gameboy family. Targeted at the under 16 age category, the
functionality is limited to gaming functions only. The unique selling
point of the Nintendo DS is its dual screen.

Intellectual Property

The Company markets its products under the name Tiger Telematics and Gizmondo.
The Company has devoted substantial time, effort and expense to the development
of brand name recognition and goodwill and has not received any notice that its
use of such marks infringes upon the rights of others, and is not aware of any
activities which would appear to constitute infringement of any of its marks.
The Company has filed to trademark its name and logo and has patents pending for
the Gizmondo.

Employees

As of March 1, 2005, the Company had approximately 158 employees and contract
agents, including 50 administrative, 15 sales and marketing, 90 game developers
and 3 persons responsible for warehouse and shipping activities. In many

instances, the Company utilizes agencies who actually employ the persons or
retain employees as consultants on an as needed basis. The Company has not
experienced any work stoppages and the Company's employees are not represented
by a union. The Company considers its relations with its employees to be good.

ITEM 2. PROPERTIES

The Company currently leases one facility in North Florida and three facilities
in the United Kingdom. The following table sets forth certain information
concerning the facilities of the Company.

AVERAGE RENEWAL
SQUARE ANNUALIZED EXPIRATION
LOCATION USE FEET LEASE COST OPTION
-------- --- ---- ---------- ------

Jacksonville, Florida Executive Office 400 $24,000 June 2005

Farnborough, Executive Office 5,000 $404,080 October 2005
Hampshire, UK
Operations Office 15,000 $265,477 March 2007

Manchester, UK Gizmondo Studios Office 5,000 $265,477 March 3, 2005 (1)

London, UK Retail Store 2,000 $334,250 March 2011

________________
(1) In negotiation for a 15 year extension.

The Company believes that its existing facilities are adequate to meet its
current needs and those additional facilities can be leased to meet future
needs.

ITEM 3. LEGAL PROCEEDINGS

In March 2004, Jordan Grand Prix Limited, filed suit against the Company in the
High Court of Justice, Queen's Bench Division (Central Office), London, UK,
alleging violation of a sponsorship agreement and dated letter agreement entered
into in July 2003. Jordan sued the Company for $30 million and alleged that the
Company defaulted on a payment of $500,000, due on January 1, 2004, under the
sponsorship agreement, and a payment for $250,000, due on the same date under
the letter agreement. On February 26, 2004, Jordan terminated both agreements.
In order to avoid summary judgment in favor of the plaintiff, the Company
escrowed with the court 70,000 shares of its common stock and prior to trial is
required to substitute $1.5 million for the escrowed shares. Trial is set for
May 2005. While the Company is unable to predict the outcome of this litigation,
it believes that it has good and meritorious defenses to the suit and intends to
defend vigorously the claims made against it.

In January 2005, the Company filed a lawsuit in the Circuit Court in and for the
County of Duval, Florida against D. Weckstein and Company and Donald E.
Weckstein, a former investment advisor to the Company, for breach of the
Company's agreement with the advisor. As payment for investment advisory
services to be rendered under the five year agreement, the Company originally
issued 40,000 (1,000,000 pre reverse split) shares of common stock in 2002. The

advisor subsequently alleged in December 2004 that as a result of the Company's
stock split in July 2004, the Company owed him an additional 960,000 shares of
common stock to maintain his ownership in the Company at 1,000,000 shares. The
Company is seeking a declaratory judgment from the Court that it is not required
to issue any additional shares to the advisor, as well as damages, fees and
costs as a result of the advisor's breach, including the return of the
previously issued shares. The advisor has filed counterclaims for the additional
shares, damages, fees and costs.

On March 22, 2005, the Board of Regents of the University of Texas System filed
an action against the Company and one of its subsidiaries, Gizmondo Europe, Ltd.
in the United States District Court for the Western District of Texas, Austin
Division, alleging that predictive text software used in the Company's Gizmondo
gaming device infringes a patent held by the Board of Regents. The Company
believes that its software does not infringe the Board of Regents' patent. The
Company licenses this software from another company, which under the license
agreement, has indemnified the Company for infringement claims. The Company and
its licensor intend to vigorously defend the infringement claims against the
Company and Gizmondo Europe, Ltd.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders of the Company during
the fourth quarter of the period covered by this report.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

Market Price and Dividend Information

The Company's Common Stock trades on the other over the counter market under the
symbol "TGTL". The other over the counter market sometimes referred to as pink
sheets, is a quotation system for equity securities not listed on the national
stock exchanges or the NASDAQ Stock Market, whose quotations reflect
inter-dealer prices, without retail mark-up, mark-down, or commission, and may
not necessarily represent actual transactions. The Company's Common Stock began
trading on the OTC Bulletin Board on May 22, 2001 as the result of a reverse
merger with a public shell company. It was delisted from the Bulletin Board in
May 2003.

As of March 1, 2005, the Company had issued and outstanding 46.5 million shares
of Common Stock, which were held by approximately 2,450 shareholders of record.

Following are the high and low closing stock prices in 2002, 2003 and 2004:

Fiscal Year Ended December 31,

2004 2003 2002 2001
---- ---- ---- ----
High Low High Low High Low High Low
---- --- ---- --- ---- --- ---- ---

1st Qtr. $ 14.75 $ 4.00 $ 2.13 $ .75 $ 36.00 $ 12.75 $ -- $ --

2nd Qtr. $ 14.75 $ 9.00 $ 1.00 $ .70 $ 13.50 $ 6.00 $250.00 $100.00

3rd Qtr. $ 14.70 $ 6.63 $ 2.00 $ .53 $ 7.00 $ 1.13 $187.50 $ 22.50
4th Qtr. $ 26.30 $ 11.10 $ 2.50 $ 1.35 $ 3.63 $ 1.25 $ 46.75 $ 5.75

All share prices have been restated to affect a 1 to 25 reverse stock split.

The Company has not paid cash dividends and does not intend for the foreseeable
future to declare or pay any cash dividends on its Common Stock and intends to
retain earnings, if any, for the future operation and planned expansion of the
Company's business. Any determination to declare or pay dividends will be at the
discretion of the Company's board of directors and will depend upon the
Company's future earnings, results of operations, financial condition, capital
requirements, considerations imposed by applicable law, and other factors deemed
relevant by the board of directors.

ITEM 6. SELECTED FINANCIAL DATA

The selected consolidated financial data as of and for the year ended December
31, 2003, 2002 and 2001, have been derived from the audited consolidated
financial statements of the Company. The selected consolidated financial data
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" (Item 7 of this report) and the
audited consolidated financial statements and related notes thereto included
elsewhere herein.

Year ended December 31, 2003, 2002 and 2001

2003 2002 2001
----------- ----------- -----------

OPERATING DATA:
(IN THOUSANDS, EXCEPT SHARE
AND PER SHARE AMOUNTS)

Net Sales $ 8 $ 284 $ --
Cost of goods sold 14 385 --
----------- ----------- -----------

Gross loss (6) (101) --
General and administrative 5,582 5,172 283
Selling and marketing 683 597 --
----------- ----------- -----------

Operating income (6,271) (5,870) (283)
Other income (expenses) (1,496) (4,827) --
Interest expense, net (45) (38) (145)
----------- ----------- -----------
Net loss from continuing operations (7,812) (10,735) (428)
----------- ----------- -----------

Net loss from discontinued operations (--) (353) (871)
----------- ----------- -----------
Net Loss (7,812) (11,088) (1,299)
=========== =========== ===========

Basic and diluted net loss per common share $ (1.6586) $ (3.9278) $ (0.5978)
=========== =========== ===========

Weighted average shares of outstanding 4,710,208 2,822,876 2,173,099
=========== =========== ===========

December 31,
2003 2002
---------- ----------
BALANCE SHEET DATA:
(IN THOUSANDS)
Working capital $ (8,755) $ (5,398)
Total assets 436 647
Total liabilities 9,004 5,952
Stockholders' deficit (8,567) (5,305)

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

This report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 23E of the Securities
Act of 1934, as amended. These statements relate to future events or future
financial performance. Any statements contained in this report that are not
statements of historical fact may be deemed to be forward-looking statements and
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. In some cases, forward-looking statements can be
identified by terminology such as "may," "will," "should," "expect," "plan,"
"anticipate," "intend", "believe," "estimate," "predict," "potential" or
"continue," or the negative of such terms or other comparable terminology. These
statements are only predictions. Actual events or results may differ materially.
Investors are cautioned that these forward-looking statements reflect numerous
assumptions and involve risks and uncertainties that may affect the Company's
business and prospects and cause actual results to differ materially from these
forward-looking statements. Among the factors that could cause actual results to
differ are the Company's operating history; competition; low barriers to entry;
reliance on strategic relationships; rapid technological changes; inability to
complete transactions on favorable terms; consumer demand for video game
hardware and software; the timing of the introduction of new generation
competitive hardware systems; pricing changes by key vendors for hardware and
software and the timing of any such changes, and the adequacy of supplies of new
software products.

Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, the Company cannot guarantee future
results, levels of activity, performance or achievements. Moreover, neither the
Company, nor any other person or entity, assumes responsibility for the accuracy
and completeness of the forward-looking statements. The Company is under no
obligation to update any of the forward-looking statements after the filing of
this Form 10-K to conform such statements to actual results or to changes in the
Company's expectations.

The following discussion should be read in conjunction with the Company's
financial statements, related notes and the other financial information
appearing elsewhere in this Form 10-K.

General Overview

In May 2001 the Company completed a reverse shell merger with Media
Communications Group, Inc. ("MCGI"). Prior to the merger, MCGI was a "public
shell" company, with no significant operations or assets. The merger was
accounted for as a reverse acquisition. Under a reverse acquisition, the Company
is treated for accounting purposes as having acquired MCGI and the historical
financial statements of the Company become the historical financial statements
of MCGI. Therefore, all references to the historical activities refer to the
historical activities of the Company. The Company changed its name to Tiger
Telematics, Inc. on June 6, 2002.

During 2001 and the first half of 2002, the Company's principal business was the
retail sale of flooring products, including carpet, area rugs, wood and
laminates, at discount prices, to commercial and retail customers. The Company
announced the discontinuation of the flooring business on June 6, 2002, and sold
the related assets on August 9, 2002. The flooring segment is treated as a
discontinued operation in the financial statements.

In February 2002, the Company acquired Eagle Eye Scandinavian Distributions,
Ltd., a developer and distributor of telematics products and services to the
business-to-business segment in Europe and changed its name to Tiger Telematics,
Ltd. During 2002, the Company's principal business, selling telematics products
and services, was conducted through Tiger Telematics, Ltd., which was sold on
December 17, 2002.

The Company started Tiger Telematics Europe, Ltd. (now known as Gizmondo Europe,
Ltd.) in late 2002 to focus on developing new telematics products including next
generation fleet telematics products, the Gizmondo, an electronic game product,
and to focus on marketing principally in the UK.

In early 2003, the Company began developing a new multi-entertainment wireless
handheld gaming device that is now referred to as Gizmondo. Since then the
Company's primary business strategy has been to develop and market Gizmondo. The
Company initially launched a limited production version of the Gizmondo in the
UK on October 29, 2004, and expects to launch the full scale production of
Gizmondo in 2005. The Gizmondo is powered by a Microsoft Windows CE.net
platform, has a 2.8-inch TFT color screen and a Samsung ARM9 400Mhz processor
and incorporates the GoForce 3D 4500 NVIDIA graphics accelerator. Gizmondo
provides cutting-edge gaming, multimedia messaging, an MP3 music player, Mpeg4
movie playing capability, a digital camera and a GPRS network link to allow
wide-area network gaming. Additionally, Gizmondo contains a GPS chip for
location based services, is equipped with Bluetooth for use in multi-player
gaming and accepts MMC card accessories.

Results of Operations

Twelve months-ended December 31, 2002 compared to the Twelve months ended
December 31, 2001.

Below is a summary of the results of the Company for the twelve months ended
December 31, 2002.

Net Sales: The Company's net sales were $283,730 in 2002, of which $102,047 was
shipped in fourth quarter. There are no comparables for the prior year since the
telematics unit was not acquired until February 2, 2002. This includes shipments
of its telematics products that are not a part of the company's strategic
business model. The Company defers income from connection fees from telecom
suppliers until the cancellation period expires on such contracts. This
represents deferred income that will be recorded prorated in future quarters.
The Company's business model at that time was based on deriving its sales and
subsequent income from annual and monthly fees from the telecom providers unlike
most of its competitors who derived most of their income from the sale of
hardware. The Company did experience some returns of product in the 2nd quarter
that were subsequently shipped to other customers in July 2002. Many of these
customers were in Scandinavian countries and did not continue in 2003 as the
Tiger Telematics, Ltd. business, focused mostly in Scandinavian countries, was
sold in December 2002.

Gross Loss: Gross loss was $(101,238) for the twelve months of 2002. The
telematics products reported a lower than anticipated gross profits as part of
the initial strategy used to introduce its new product in the marketplace
earlier in 2002. A critical mass of shipments is a key to improving the gross
profit margin. This was evident by results for fourth quarter where the gross
profit was $44,629 or about 40%. Although basic telematics devices are can be
built, the accompanying software is much more challenging. The Company has a
substantial expertise in this development, which could improve gross profit in
future quarters. The Company expended funds in hiring and retaining several new
executives and supporting staff with expertise in technology, telematics,
wireless and developing products in the telematics space. The Company has
expended funds in the development of an improved fleet product scheduled to ship
first units now in 2003, as opposed to 2002 as originally expected due to a
shortfall in funding during the current quarter. The Company has a substantial
expertise in software development, which might improve gross profit in future
quarters. The Company has expended funds in the 2002 in the development of an
improved fleet product with enhanced features scheduled to ship units in 2003.
The delay in finishing the product was caused primarily by serious funding
shortfalls during the current quarter. The Company has made an initial
investment in a new generation of child tracker products. Funding shortfalls
have delayed their completion.

Selling Expenses: Selling and marketing expenses for the 2002 were $597,188.
Most of this cost relates to the establishment of potential customers. The sale
of telematics products is a difficult and often lengthy process. The Company has
concentrated its marketing effort recently in the UK to large fleet holders
based throughout Europe. The Company enjoys a healthy interest in its products
but still lacks funding for working capital and has experienced some problems at
the manufacturer of the base units on delivery. The Company's Scandinavian order
book was a part of the sale of the Tiger Telematics Ltd. business in December
2002. The Company has expended funds in arranging strategic partnerships with
wireless telecom providers in order to implement its recurring revenue business
model.

General and Administrative Expenses: General and administrative expenses for the
twelve months ended December 31, 2002 were $5,171,731. $2,181,747 of this
related to write downs of intangible assets related to Tiger Telematics Ltd. and
its sale in December 2002. A significant reason for this increase is the costs
associated with being a public company, primarily fees for accounting, legal,
professional and consulting services. These fees were approximately $1,063,820
in the twelve months of 2002 including $180,000 of expenses incurred in the
costs of a financing effort with Jefferies and Co, Inc. that was not successful.
The Company also incurred costs during 2002 related to the evaluation of several
strategic opportunities. The purchase of Tiger Telematics, Ltd. and the
Comworxx, Inc.'s assets are two of the results of this evaluation.

In addition, the development of Tiger Telematics Ltd. (now sold) and Tiger
Telematics Europe Ltd. also contributed to the increase in the general and
administrative expenses of the Company. Expenditures were made to obtain to
obtain the coveted Thatcham Q class rating for the TT7000 product. This rating
may allow insurance companies to provide a discount in costs to users of Tiger's
telematics devices. Some costs related to the development of the infrastructure
for the telematics business including product development, engineering, training
of installers, and other administrative efforts to facilitate anticipated sales.
In addition, several companies conducted trials of the product in Europe that
costs the company currently but may result in the shipment of devices for entire

fleets of the customers currently in the trial stage. Expenditures have been
made in developing several new products including Child Tracker devices. Tiger
Telematics, Inc. anticipates a decrease in its general and administrative
expenses in future periods with the sale Tiger Telematics Ltd. In order to
reduce expenditures the Company has downsized and relocated its corporate office
in the U.S. and in England to smaller less expensive facilities. The Company
also incurred costs during the 3rd quarter of 2002 related to the evaluation and
the attempted but failed integration of the purchase of Comworxx, Inc.'s assets.
As discussed in note H to the Consolidated Financial Statements, the Company
wrote down the remaining assets acquired from Comworxx, Inc.

Other Expenses: Other expenses for the twelve months of 2002 were $5,171,731 as
compared to $145,607 in 2001. $4,884,733 of the amount relates to the non-cash
write-down of the impaired goodwill and other intangibles from acquisitions,
principally the assets of Comworxx, Inc. The company took a write-down in third
quarter of the intangible order book asset of $1,000,000 to reflect the
potential loss of orders from the delay in shipping product since the original
acquisition of the product and the impact of the new recurring revenue model on
the accounting for intangible assets. A subsequent write-down in fourth quarter
of $2,103,830 relates to the loss on sale of Tiger Telematics Ltd. where the
intangible assets carried on the Company's balance sheet of the order book and
Scandinavian distribution agreement were written off with the sale of the unit.
Other expenses consisted of interest expense on loans of $37,712 and a currency
transaction loss of $189,724. The currency transaction adjustment accounted for
virtually all of the change in this category and is due to the drop in the
dollar currency relative to the sterling since the acquisition of Tiger
Telematics Ltd. in February 2002 and the impact of the sale of Tiger Telematics
Ltd. in December 2002. Interest in 2002 of $37,712 is $107,888 or 74% less than
in 2001. This reflects the lower interest charged on shareholder debt as it was
mostly converted into equity in 2002.

Net Loss from continuing operations: The Company reported an operating loss of
$10,734,317. $4,884,733 of the loss is the non-cash write down of the impaired
goodwill, principally from of the assets of the Comworxx, Inc. acquisition.
$669,000 is the provision for the non-cash write-down of the remaining assets
from the assets of the Comworxx, Inc. acquisition. A $1,000,000 loss was taken
in third quarter to write-down the order book related to Tiger Telematics Ltd.
to realized value in light of the shipping problems created by the lack of
working capital. Additionally, $2,103,830 relates to the write-down of
intangible assets of remaining value of order book and distribution agreement
with the sale of Tiger Telematics Ltd. $1,152,713 reflected a provision for
potential liabilities related to the April 2003 bankruptcy and subsequent
liquidation of the buyer of Floor Decor LLC and its assets. The Company's
management staff has been right sized and has expertise and infrastructure to
grow the Company rapidly. Management considers these costs as an investment in
setting the Company in a position to grow rapidly in the near future.

Net Loss from discontinued operations: The Company reported a loss from
discontinued operations of $353,430. On August 9, 2002, the company sold the
assets of the flooring segment effectively eliminating that segment going
forward from that date.

Net Loss: The Company incurred a total loss of $11,087,747 for the twelve months
of 2002. $4,884,733 was the non-cash loss from the write down of impaired
goodwill, principally related to the acquisition of the assets of Comworxx ,
Inc. and a related $407,000 write-down of the remaining assets from the
Comworxx, Inc. purchase. $2,103,830 was the write down of the order book and
distribution agreement as a part of the loss on the sale of Tiger Telematics
Ltd. in December. $1,152,713 reflected a non-cash provision for the potential
contingent liabilities related to the bankruptcy and subsequent liquidation of
the buyer of Floor Decor LLC and its assets, which occurred in April 2003.

Twelve months-ended December 31, 2002 compared to the twelve months ended
December 31, 2003

Net Sales: Sales for 2002 were $283,730 and were from the entity that was sold
on December 17, 2002 as compared to sales of $8,317 for 2003. The sales drop was
due to returns from client trials. This reduction in sales from the twelve
months ended December 31, 2003 as compared to the twelve months ended December
31, 2002 is principally due to not having unit sales from the sold entity of
Tiger Telematics Ltd. (sold in December 2002) that reported sales in the
comparable period of 2002. With Gizmondo Europe Ltd., the Company was focused in
2003 on building its next generation of product with enhanced features and in
developing accounts and doing trails in the rental car business areas. In first
quarter 2003 trials were under way at a rental car a concern. Those trials were
concluded successfully in second quarter 2003 but a contract was not received
from the enterprise. The company was focused from the third quarter 2003 onward
on primarily developing its handheld wireless multi-entertainment device now
named Gizmondo.

Gross Loss: Similarly, gross losses were ($101,238) for 2002 and ($5,279) for
2003. The 2003 results reflect the change to a development company. The impact
of recording returns from trials created the negative gross margin in 2003. The
lower loss recorded was the result of not having the Tiger Telematics Ltd.
numbers in the 2003 results. The Company made an initial investment in a new
child tracker product that was abandoned later in 2003 when the focus switched
to a gaming handheld entertainment device now named Gizmondo.

Selling Expenses: Selling expenses for 2002 were $597,188. For 2003, expenses
were $683,708 due to marketing of the new Gizmondo product to be released later.
Much of the increase can be attributed to the transformation of the Company into
a development concern with a focus in early 2003 on selling to rental car
concerns and developing new products such as the Gizmondo. Most of this actual
cost related to the establishment of potential orders for rental car telematics
products and a UK based motor bike company that produced motor bikes in China.
Both of the projects have since been dropped from the Company's plans for the
future. The Company also made an initial investment in a new child tracker
product that was abandoned later in 2003 when the focus switched to gaming
handheld entertainment device.

General and Administrative Expenses: General and administrative expenses for
2003 were $5,581,750 as compared to $5,171,731 in 2002 or down over $400,000.
This decrease came from the lower costs with the divestiture of Tiger Telematics
Ltd. in December 2002 and the associated staff reductions from the sale. In
order to further reduce expenditures the Company downsized and relocated its
corporate office in late 2002 and continued to operate at a reduced cost rate in
2003 as compared to the same time period in 2002. These staff reductions reduced
costs and allowed the Company to sustain operations but it delayed certain
filings with regulatory bodies and made the Company's control system extremely
reliant on fewer persons than would normally be the case. Expenditures were made
to configure the Telematics products to obtain the coveted Thatcham Q class
rating for the product. This rating may allow insurance companies to provide a
discount in costs to users of the Company's telematics devices. Expenditures
have been made in developing several new products including Child Tracker
devices (since terminated) and the Gizmondo gaming handheld devices. All of
these specifically designated development expenses in 2003 were expensed as
incurred and were not capitalized for financial reporting purposes. The Company
anticipates an increase in its general and administrative expenses in future
periods as part of its product development strategy.

Other Expenses: Other expenses for 2003 were $1,541,712 as compared to
$4,864,160 when the write-off of goodwill was completed. Other expenses
consisted of interest expense on loans of $45,424 and currency transaction gains
of $47,442. The currency transaction gain is due to the drop in the dollar
currency relative to the sterling since the beginning of the year and carrying
foreign based assets on the balance sheet. Interest in 2003 of $45,424 is $7,712
higher than in 2002 as the Company had interest costs on UK notes payable.

Net Loss from continuing operations: The Company reported a net loss of
$(7,812,449) from continuing operations in 2003 as compared to a net loss of
$(10,734,317) in 2002. The primary improvement was not having the good will
write off in 2003. The loss was also lower due to the costs associated with the
divested Tiger Telematics Ltd. no longer included in operations since it was
sold, not having the write down of impaired goodwill and other intangible assets
that occurred in 2002 in the numbers for 2003 and the cost reductions undertaken
in late 2002. Management does anticipate that its losses in future quarters will
grow materially as it expenses development costs, content costs, and marketing
costs for the gaming device Gizmondo.

Net Loss from discontinued operations: Discontinued operations recorded a net
loss of $0 in 2003 as compared to a loss of $353,430 in 2002. The operation of
flooring segment was discontinued in June 2002. On August 9, 2002, the Company
sold the assets of the flooring segment effectively eliminating that segment
going forward from that date.

Net Loss: Although the Company reported an operating loss for 2003 of
$7,812,449, a substantial portion of the loss consists of expenses incurred in
developing the Gizmondo product line. The loss was 28% less in the prior year
when the goodwill and other intangibles write-offs were taken. The difference is
attributed the divestiture of Tiger Telematics Ltd. and not having its losses in
the 2003 results, the elimination of the write down of impaired goodwill and
other intangibles that occurred in 2002 and the cost reductions taken in late
2002 that helped results for the twelve months ended December 31, 2003. There
will be no discontinued operation impacting 2003 going forward. The UK
subsidiary will incur significant costs in the development of its new products
and in marketing them. Management anticipates that future net losses per quarter
will be considerable higher then recent quarters as the Company increases the
expenditures in product development and marketing for Gizmondo.

Liquidity and Capital Resources

The Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on its financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources that are material to investors.

In 2002 and during 2003 the Company funded its operating losses and start-up
costs principally with loans from stockholders or other parties and through the
issuance of shares of commons stock. Without such equity funding the Company
would not have been able to sustain operations. In the twelve months ended
December 31, 2003, the Company's working capital improved slightly. This was the
result of a decrease in current assets, consisting of decreases in accounts
receivable of $114,544, inventory of $127,919, prepaid expenses and other
current assets of $83,821 and liabilities of discontinued operations of $15,530,
offset by increases in current liabilities, consisting of increases in accounts
payable of $2,216,648, and decreased by reduction of accrued expenses of
$211,639 and decreased by a reduction of liabilities to stockholders of
$1,201,594. Approximately $1,000,000 of the payables relates to Tiger USA, and
reflects contingent liabilities allegedly assumed in the purchase agreement.

These liabilities are of the subsidiary Tiger USA and may not be the obligations
of Tiger Telematics, Inc. although they are carried as Accounts Payable on the
Consolidated Balance Sheet. As discussed in Note I. Acquisitions, the Company
believes that the seller may have misrepresented the nature of the assets and
the viability of the associated business at the time of the transaction. As a
result the Company retained legal counsel to advise it of its rights against the
shareholders of the seller to recover certain sums or to rescind the entire
transaction. In June 2004, the Company issued 160,000 (and $80,000 held in
escrow) of the contingent shares in full settlement of this matter.

Also, in the twelve months ended December 31, 2003 the amounts due stockholders
reduced $1,201,594 as a result of the debt conversions of certain stock holders
to equity not fully offset by continued loans from stockholders. There is also
certain pending litigation and other issues facing the Company as disclosed in
Note K Contingencies.

The Company does not have any bank loans or lending facilities. The Company has
obtained loans from stockholders and raised additional financing through private
placements of shares of common stock principally from accredited foreign
investors. See also Note D Equity. On August 9, 2002 the Company sold the assets
of the flooring division including this inventory, which improved liquidity
requirements during the balance of 2002 and in first quarter of 2003 as the
purchaser retired certain obligations which were removed from the Company's
balance sheet. The Company continued to issue shares of Common Stock in the
twelve months ended December 31, 2003 and in 2004 and in early 2005 to retire
certain obligations due for payment.

The Company incurred operating losses in 2002 and in 2003 of $(11,087,747) and
$(7,812,449) respectively. The losses were at a much lower rate in 2003 due to
cost reductions and divestures of unprofitable concerns. Since the Company was
not able to generate positive net cash flows from operations, additional capital
was needed. This capital has been provided by certain principal stockholders,
who have funded the Company through loans as needed, and primarily from the sale
of Common Stock and warrants through private placement and other share
subscription agreement transactions as detailed in Note C. Equity Transactions.

The Company will seek to raise additional equity capital and obtain trade or
bank financing as needed to fund the development and the launch of the Gizmondo
product in different regions as needed. However, there can be no assurance this
additional capital or other financing will be available, or if available on
terms reasonably acceptable to the Company. AS of December 31, 2004, the Company
has stockholder's deficiency of $8,567,467.

At December 31, 2003, 9,498,105 shares of common stock were issued and
outstanding. Since that date, the Company has issued an additional approximately
37 million shares in numerous private transactions (a) for cash, (b) upon
conversion of debt, accounts payable or other liabilities, (c) for goods or
services provided by vendors, strategic partners, professionals, consultants and
employees and (d) in connection with the acquisition of assets. In each case the
Company recorded capital surplus based upon the price of the Company's common
stock at the time of issuance or agreement to issue, discounted in some cases
due to restrictions on sale by recipients. The aggregate amount recorded was
approximately $172 million, including the above described shares. During such
periods the Company also issued warrants to purchase and aggregate of 495,525
shares of common stock at exercise prices ranging from $5.00 to $11.25 per
share.

Critical Accounting Policies

The preparation of financial statements in accordance with accounting principles
generally accepted in the U.S. requires management to make estimates and
assumptions that affect the amounts reported in our consolidated financial
statements and accompanying notes. Management bases its estimates on historical
experience and various other assumptions believed to be reasonable. Although
these estimates are based on management's best knowledge of current events and
actions that may impact the company in the future, actual results may be
different from the estimates. Our critical accounting policies are those that
affect our financial statements materially and involve difficult, subjective or
complex judgments by management. Those policies are stock-based compensation,
income taxes, goodwill impairment and revenue recognition.

Stock-Based Compensation
------------------------
We have chosen to account for stock options granted to employees and directors
under the recognition and measurement principles of Accounting Principles Board
Opinion No. 25 instead of the fair value recognition provisions of SFAS No. 123,
"Accounting for Stock-based Compensation," as amended by SFAS No. 148,
"Accounting for Stock-based Compensation Transition and Disclosure."

In addition, the Company has routinely exchanged shares of its common stock for
services and in satisfaction of debt owed by the Company to shareholders. Common
stock exchanged for services from unrelated parties and suppliers is valued at
the negotiated values for such common stock. Common stock exchanged for
shareholder debt is valued at recent market values for common stock sold to
unrelated investors. The difference between this "market value" and the amount
of the debt satisfied is charged to operations.

Income Taxes
------------
The calculation of the Company's income tax provision and related valuation
allowance is complex and requires the use of estimates and judgments in its
determination. As part of the Company's evaluation and implementation of
business strategies, consideration is given to the regulations and tax laws that
apply to the specific facts and circumstances for any transaction under
evaluation. This analysis includes the amount and timing of the realization of
income tax liabilities or benefits. Management closely monitors tax developments
in order to evaluate the effect they may have on the Company's overall tax
position.

Impairment of Goodwill and Other Intangible Assets
--------------------------------------------------
Goodwill represents the excess of the cost of an acquisition over the fair value
of the net assets acquired. The Company tests goodwill and other intangible
assets on an annual basis, or more frequently if events or circumstances
indicate that there may have been impairment. The goodwill impairment test
estimates the fair value of each reporting unit, through the use of a discounted
cash flows model, and compares this fair value to the reporting unit's carrying
value. The goodwill impairment test requires management to make judgments in
determining the assumptions used in the calculations. Management believes
goodwill is not impaired and is properly recorded in the financial statements.

Revenue recognition
-------------------
The Company enters into agreements to sell products (hardware or software),
services, and other arrangements that include combinations of products and
services. Revenue from product sales, net of trade discounts and allowances, is
recognized provided that persuasive evidence of an arrangement exists, delivery
has occurred, the price is fixed or determinable, and collectibility is
reasonably assured. Delivery is considered to have occurred when title and risk
of loss have transferred to the customer. Revenue is reduced for estimated

product returns and distributor price protection, when appropriate. For sales
that include customer-specified acceptance criteria, revenue is recognized after
the acceptance criteria have been met. For products that include installation,
if the installation meets the criteria to be considered a separate element,
product revenue is recognized upon delivery, and recognition of installation
revenue occurs when the installation is complete. Otherwise, neither the product
nor the installation revenue is recognized until the installation is complete.
Revenue from services is deferred and recognized over the contractual period or
as services are rendered and accepted by the customer. When arrangements include
multiple elements, we use objective evidence of fair value to allocate revenue
to the elements and recognize revenue when the criteria for revenue recognition
have been met for each element. The amount of product revenue recognized is
affected by our judgments as to whether an arrangement includes multiple
elements and if so, whether vendor-specific objective evidence of fair value
exists for those elements. Changes to the elements in an arrangement and the
ability to establish vendor-specific objective evidence for those elements could
affect the timing of the revenue recognition. Most of these conditions are
subjective and actual results could vary from the estimated outcome, requiring
future adjustments to revenue.

Recently Issued Accounting Standards

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 141, "Business Combinations". SFAS
No. 141 requires that the purchase method of accounting be used for all business
combinations transacted after June 30, 2001. SFAS No. 141 also specifies
criteria that intangible assets acquired in a business combination must meet to
be recognized and reported separately from goodwill. The Company utilized SFAS
No. 141 to account for business acquisitions completed in 2002.

In June 2001, the FASB also issued SFAS No. 142, "Goodwill and Other Intangible
Assets," which eliminates amortization of goodwill and intangible assets that
have indefinite useful lives and requires annual tests of impairment of those
assets. The provisions of SFAS No. 142 are required to be applied starting in
2002, and will also be utilized for future business acquisitions.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations". SFAS No 143 requires the Company to record the fair value of an
asset retirement obligation as a liability in the period in which it incurs a
legal obligation associated with the retirement of tangible long-lived assets
that result from acquisition, construction, development and/or normal use of
assets. The Company also records a corresponding asset, which is depreciated
over the life of the asset. Subsequent to the initial measurement of the asset
retirement obligation, the obligation will be adjusted at the end of each period
to reflect the passage of time and changes in the estimated future cash flows
underlying the obligation. The Company is required to adopt SFAS No. 143 on
January 1, 2003, and is currently evaluating the effect that implementation of
the new standard may have on its results of operations and financial position.

No. 144 requires companies to separately report discontinued operations and
extends that reporting to a component of an entity that either has been disposed
of (by sale, abandonment, or in a distribution to owners) or is classified as
held for sale. Assets to be disposed of are reported at the lower of carrying
amount or fair value less costs of sale. The Company adopted SFAS No. 144 on
January 1, 2002.

SFAS 146 addresses financial accounting and reporting for costs associated with
exit or disposal activities and nullifies Emerging Issues Task Force (EITF)
Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." SFAS No. 146 was effective for disposal activities initiated
after December 31, 2002.

SFAS 148 amends FASB Statement No. 123, Accounting for Stock-Based Compensation,
to provide alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation. In
addition, this Statement amends the disclosure requirements of Statement 123 to
require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. SFAS No. 148 became effective
after December 31, 2002.

SFAS 149 amends and clarifies financial accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives) and for hedging activities
under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging
Activities. The Company believes it has no derivative instruments. SFAS No. 149
became effective for hedging arrangements entered into after June 30, 2003.

SFAS150 establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). Many of those instruments
were previously classified as equity. Some of the provisions of this Statement
are consistent with the current definition of liabilities in FASB Concepts
Statement No. 6, Elements of Financial Statements. The remaining provisions of
this Statement are consistent with the Board's proposal to revise that
definition to encompass certain obligations that a reporting entity can or must
settle by issuing its own equity shares, depending on the nature of the
relationship established between the holder and the issuer. For public
companies, SFAS No. 150 became effective after June 15, 2003. The Company
believes that, at the present time, it has no instruments that fall within the
scope of this pronouncement.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

No market risk sensitive instruments

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL DATA

The response to this item is submitted on pages F1 - F18 of this Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES.

(a) Evaluation of disclosure controls and procedures. As required by Rule 13a-15
under the Exchange Act, as of December 31, 2003, the Company carried out an
evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures. This evaluation was carried out under the
supervision and with the participation of the Company's management, including
the Company's President and Chief Executive Officer, and the Company's Chief
Financial Officer. Based upon that evaluation, the Company's President and Chief
Executive Officer, and Chief Financial Officer have concluded that the Company's
disclosure controls and procedures are effective in timely alerting them to
material information relating to the Company required to be included in the
Company's periodic SEC filings. Disclosure controls and procedures are controls
and other procedures that are designed to ensure that information required to be
disclosed in Company reports filed or submitted under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission's rule and forms. Disclosure controls
and procedures include, without limitation, controls procedures designed to
ensure that information required to be disclosed in Company reports filed under
the Exchange Act is accumulated and communicated to management, include the
Company's Chief Executive Officer, and Chief Financial Officer as appropriate,
to allow timely decisions regarding required disclosures.

(b) Changes in internal controls. There have been no changes in internal
controls or in other factors during our most recent fiscal quarter that has
significantly affected or is reasonably likely to significantly affect our
internal controls over financial reporting, including any corrective actions
with regard to significant deficiencies and material weaknesses.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information on the directors of the Company as of March 1, 2005 is provided
below. All executive officers of the Company are also directors of the Company
whose term expires May 30, 2006.

Michael Carrender
Director since 2002

Mr. Carrender, age 51, has been the Chief Executive Officer and Chief Financial
Officer of the Company since August 2003 and was previously Executive Vice
President and Chief Financial Officer of the Company since February 2002. Mr.
Carrender served as President and Chief Executive Officer of Crowe Rope, a unit
of JPBE, Inc., a manufacturer of cordage products, from January 1999 until he
joined the Company in February 2002. He was an independent consultant for
various companies prior to joining Crowe. He was Vice President and General
Manager of Mail Well Inc., a New York Stock Exchange printing Company, from 1997

to 1998. Before he became a consultant, he was with Consolidated Packaging, a
publicly traded multi-plant paper converting company, for seventeen years during
which he held positions of Treasurer (1979-1983), Chief Financial Officer
(1984-1989), Chief Operating Officer (1988-1989), and President and Chief
Executive Officer (1989-1996). Mr. Carrender holds a BA and an MBA in Finance.

Carl Freer
Director since August 2004

Mr. Freer, age 34, has served as Chairman since August 2004 and has been
Managing director of the Company's Gizmondo Europe Ltd. subsidiary based in the
UK since summer of 2003. He was the founder in 1999 of Eagle Eye Scandinavian
Ltd. that was acquired by the Company in February 2002. He founded and served as
Sales Director of ARE Media AB, a private media sales company in Stockholm, a
Director of Performance Films SA, a film production company in Malaga, Spain and
a Director of Rivera Auto Forum, a specialty auto dealership in Cannes, France.
He was a co-founder of software company Vxtreme that pioneered the highly
successful video compression lab technique. Mr. Freer is a director of WEG
Entertainment and a trustee of several charities, including Kings Medical
Research Trust.

Steve Carroll
Director since August 2004

Mr. Carroll, age 47, has served as Chief Technology Officer and as a Director
since August 2004. He has also been the Chief Technology Director of the
Company's Gizmondo Europe Ltd. Since its inception in December 2002. He has been
with the Company, at the sold Tiger Telematics, Ltd. unit since September 2002.
He was formerly Director of Maxon, a Korean-high volume telecommunications
equipment manufacturer from 1996 to 2002. He was previously employed at
Marconi/MOD/GEC, telecommunication equipment manufacturers, in various positions
from 1981 to 1996. He has a Masters Degree MSc from Cambridge in the UK.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and executive officers, and persons who own
more than 10% of the outstanding shares of the Company's common stock, to file
initial reports of beneficial ownership and reports of changes in beneficial
ownership of shares of common stock with the Securities and Exchange Commission
(the "Commission"). Such persons are required by regulations promulgated under
the Exchange Act to furnish the Company with copies of all Section 16(a) forms
filed with the Commission.

Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Company during the year ended December 31, 2003, and upon a review of Forms
5 and amendments thereto furnished to the Company with respect to the year ended
December 31, 2003, or upon written representations received by the Company from
certain reporting persons that such persons were not required to file Forms 5,
the Company believes that no director, executive officer or holder of more than
10% of the outstanding shares of common stock failed to file on a timely basis
the reports required by Section 16(a) of the Exchange Act during, or with
respect to, the year ended December 31, 2003.

Code of Ethics

As of the date of this filing, the Company has adopted a code of ethics that
applies to the Company's executive officers.

Audit Committee Financial Expert

The Company's board of directors has determined that the Company did not have an
audit committee financial expert serving on its audit committee during the time
period covered by this filing. The Company did not have an audit financial
expert serving on its audit committee because it was not a requirement for the
time period covered by this filing.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation

The following table provides information on the total compensation paid or
accrued during the fiscal years indicated below to the Company's chief executive
officer. The table also lists the former chief executive officers of the Company
who would have been included had he remained an executive officer of the Company
at December 31, 2001 and the former Chief Executive Officer who resigned as CEO
on June 28, 2002 and resigned as a Director in August 2002.

Summary Compensation Table
Annual Compensation (1)

Restricted Securities
Name and Principal Other Annual Stock Underlying LTIP All Other
Position Year Salary Bonus Compensation Awards Options/Shares Payouts Compensation
-------- ---- ------ ----- ------------ ------ -------------- ------- ------------

Michael W. Carrender 2003 $200,000.00 (2) $ - - - - - -

Chief Executive 2002 $ 78,564.83 $ - - - 144,000 (3) - -
Officer

A. J. Nassar 2003 $ - $ - - - - - -
Former Chief 2002 $ - $ - - - - - -
Executive Officer 2001 $ 50,000.00 $ - - - - - -
and Chairman of the $ 37,266.00 (4) $ - - - - - -
Board until July
2003

Jonathan Landers (5) 2003 $ - $ - - - - - -
Former President and 2002 $ - $ - - - - - -
Chief Executive 2001 $ - $ - - - - - -
Officer

_____________________
(1) No officer received perquisites in an amount greater than the lesser of (a)
$50,000 or (b) 10% of such officer's total salary plus bonus.
(2) Mr. Carrender joined the Company in February 2002. Represents salary earned
by Mr. Carrender, $38,008.12, which was accrued and unpaid as of December
31, 2002.
(3) 144,000 shares granted in August 2002 at market price on date of issuance
and vest per schedule below.
(4) Represents salary earned by Mr. Nassar from May 22, 2001 through December
31, 2001, $35,343 of which was accrued and unpaid as of December 31, 2001.
The salary level at the time of resignation was at $100,000 per annum. Mr.
Nassar resigned as CEO on June 28, 2002.
(5) Mr. Landers resigned as President and Chief Executive Officer on May
22,2001.

Option Grants

As of December 31, 2003, there were no stock options granted pursuant to the
Company's stock option plan.

The following table sets forth certain information concerning the exercise of
options and the value of unexercised options held under the 2001 Plan and
outside of the 2001 Plan at December 31, 2003 by the individuals listed in the
Summary Compensation Table.

Aggregated Option Exercises In Last Fiscal Year and Fiscal Year-End Option Values

Number of Securities Value of unexercised
Underlying Unexercised In-the-Money Options
Shares Options/Shares Fiscal Shares at Fiscal
Acquired on Value Year-End(%) Year-End($) Acquired on
Name Exercise Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
---- -------- ----------- ------------------------- -------------------------

Michael W.
Carrender -- -- 72,000/72,000 $72,000/$72,000

_________________
(1) In negotiation for a 15 year extension.

(2) Represents the difference between the last reported sale price of the
common stock on December 31, 2003 ($2.50) and the exercise price of the
shares of the options at $1.50 multiplied by the number of options
exercised.

Compensation of Directors

The directors of the Company are not compensated for serving as members of the
Company's Board of Directors.

Stock Option Plan

The Company adopted its stock option plan (the "2001 Plan") on July 31, 2001.

The stock incentive plan provides for the granting of incentive stock related
awards to officers, employees and other individuals so that the Company will be
able to attract and retain the services of highly qualified individuals. The
essential features of the 2001 Plan are set forth below.

Shares Authorized for Grant. Subject to the anti-dilution provisions discussed
below, there are 8,000,000 shares of common stock reserved for issuance upon the
exercise of options (now 320,000 following the 25 for 1 reverse split of July
30, 2004). Such shares may be authorized, but unissued shares of common stock,
or reacquired shares. Shares subject to options granted under the 2001 Plan,
which have lapsed or terminated may again be subject to options under the 2001
Plan. No options to purchase shares of common stock have been granted under the
2001 Plan as of December 31, 2001 but 144,000 were granted in 2002 and none were
granted in 2003.

Administration of the 2001 Plan. The 2001 Plan is administered by the Board of
Directors or by a committee consisting of two (2) or more outside directors who
are appointed by the Board (the "Committee"). Subject to the express provisions
of the 2001 Plan, the Board or such Committee has the authority to interpret the
2001 Plan, to prescribe, amend and rescind rules and regulations relating to the
2001 Plan, to determine the terms and provisions of option agreements and to
make all other determinations necessary or advisable for the administration of
the 2001 Plan. Any controversy or claim arising out of or related to the 2001
Plan, or the options granted thereunder, is determined unilaterally by, and at
the sole discretion of, the Committee.

Option Grants to Eligible Individuals. All employees and other individuals who
provide services to the Company are eligible to receive options under the 2001
Plan. Employees are eligible to receive either "incentive" stock options,
subject to the limitations of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code") or "non-statutory" stock options. The 2001 Plan confers
discretion on the Committee to select employees or other individuals that the
Committee determines to receive options, to determine the number of shares
subject to each option, the term of each option and the exercise price of the
options granted, except that the exercise price may not be less than 100% of the
fair market value of the underlying common stock for an incentive stock option
as of the date of grant. In addition, the exercise price may not be less than
110% of the fair market value of the common stock for an incentive stock option
granted to a person who owns more than 10% of the total combined voting power or
value of all classes of stock of the Company. No option may have a term in
excess of ten (10) years from the date of grant.

The Committee has the authority to determine the vesting requirements and the
permissible methods of payment of the exercise price. The Committee may also
make such other provisions in the options, consistent with the terms of the 2001
Plan, as it may deem desirable. Options granted under the 2001 Plan are not
exercisable until six (6) months after grant.

To the extent that such an option is an incentive stock option, upon termination
of an optionee's employment with the Company for any reason, such optionee's
options shall immediately terminate, except that upon termination, the Committee
in its discretion may allow the optionee to exercise any vested options owned by
the optionee within ninety (90) days after termination. In no event are options
exercisable beyond their stated term.

Change in Control. All options granted under the 2001 Plan become fully vested
and immediately exercisable upon the occurrence of a "Change of Control."

The 2001 Plan defines Change of Control to mean the occurrence of any of the
following: (i) the acquisition (other than from the Company directly) by any
"person" group or entity within the meaning of Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934) of beneficial ownership of thirty-five (35%)
percent or more of the outstanding common stock of the Company; (ii) if the
individuals who serve on the Board as of the date of stockholder approval of the
2001 Plan, no longer constitute a majority of the members of the Board of
Directors; provided, however, any person who becomes a director subsequent to
such date, who was elected to fill a vacancy by a majority of the directors then
serving on the Board of directors shall be considered a member prior to such
date; (iii) the stockholders of the Company approve a merger reorganization or
consolidation of the Company whereby the stockholders of the Company immediately
prior to such approval do not, immediately after consummation of such
reorganization, merger or consolidation, own more than 50% of the voting stock
of the surviving entity; or (iv) a liquidation or dissolution of the Company, or
the sale of all or substantially all of the Company's assets.

Nontransferability of Options. Options granted under the 2001 Plan are not
transferable other than by will or the laws of descent and distribution, and may
be exercised during the optionee's lifetime only by the optionee. Upon such
optionee's death, the beneficiary of the optionee's estate shall have the lesser
of (a) the remaining term of such option or (b) one year for the optionee's
death within which to exercise such options.

Anti-dilution Provisions. In the event of a change, such as a stock split or
stock dividend, in the Company's capitalization, which results in a change in
the number of outstanding shares of common stock, without receipt of
consideration, an appropriate adjustment will be made in the exercise price of,
and the number of shares subject to, all outstanding options. An appropriate
adjustment will also be made in the total number of shares authorized for
issuance under the 2001 Plan.

Dissolution or Liquidation. Upon the dissolution or liquidation of the Company,
or upon a reorganization, merger or consolidation of the Company with one (1) or
more corporations as a result of which the Company is not the surviving
corporation, or upon a sale of substantially all the property or more than fifty
(50%) percent of the then outstanding shares of common stock of the Company to
another corporation, the Company shall either: (a) provide for the assumption by
the successor corporation of the options theretofore granted or the substitution
by such corporation for such options of new options covering the stock of the
successor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; or (b) give to each
optionee at the time of adoption of the plan of liquidation, dissolution, merger
or sale, notice of the adoption of the plan of liquidation, merger or sale (i) a
reasonable time thereafter within which to exercise all such options owned by
such individuals prior to the effective date of such liquidation, dissolution,
merger or sale; or (ii) the right to exercise the option as to an equivalent
number of shares of common stock of the successor corporation by reason of such
liquidation, dissolution, merger, consolidation or reorganization.

Tax Consequences to Grantees. Under present tax law, the Federal income tax
treatment of options granted under the 2001 Plan is as generally described
below.

Incentive Stock Options. With respect to options, which qualify as incentive
stock options, an optionee will not recognize income for federal income tax
purposes at the time options are granted or exercised. If the optionee disposes
of shares of common stock acquired upon exercise of the options before the
expiration of two years from the date the options are granted, or within one
year after the issuance of shares upon exercise of the options, the optionee
will recognize, in the year of disposition (a) ordinary income, to the extent
that the lesser of either (i) the fair market value of the shares on the date of
option exercise or (ii) the amount realized on disposition, exceeds the option
price; and (b) capital gain (or loss), to the extent that the amount realized on
disposition differs from the fair market value of the shares on the date of
option exercise. If the shares are sold after expiration of these holding
periods, the optionee will realize capital gain or loss (assuming the shares are
held as capital assets) equal to the difference between the amount realized on
disposition and the option price.

Non-Qualified Stock Options. Non-qualified stock options are all options, which
do not qualify for incentive stock option treatment under Section 422 of the
Code. If a non-qualified stock option has a readily ascertainable fair market
value at the time of grant, the optionee realizes ordinary income either (a)
when his rights in the option becomes transferable; or (b) when the right to an
option is not subject to a substantial risk of forfeiture. Ordinary income will
be equal to the fair market value of the option less any amount paid by the
optionee. If the option does not have an ascertainable fair market value at the
time of grant, income is realized at the time the option is exercised. Such
income would be the positive difference between the fair market value of the
common stock received at the time of exercise and the exercise price paid. Upon
the sale of the common stock received upon exercise, the difference between the
sale price and the fair market value on the date of exercise will be treated as
capital gain or loss.

Tax Consequences to the Company. The Company will be entitled to a deduction for
federal income tax purposes at the same time and in the same amount as an
optionee is required to recognize ordinary income as described above. To the
extent an optionee realizes capital gains as described above, the Company will
not be entitled to any deduction for Federal income tax purposes.

Accounting Considerations. Currently, there is no charge to the Company's
operations in connection with the grant or exercise of an option under the 2001
Plan, unless the fair market value of the shares at the date of grant exceeds
the exercise price of the option, in which case there will be a charge to
operations in the amount of such excess. Earnings per share may be affected by
the 2001 Plan by the effect on the calculation, as prescribed under generally
accepted accounting principles, of the number of outstanding shares of common
stock of the Company. This calculation reflects the potential dilutive effect,
using the treasury stock method, of outstanding stock options anticipated to be
exercised even though shares have not yet been issued upon exercise of these
options. When shares are actually issued as a result of the exercise of stock
options, additional dilution of earnings per share may result.

Reload Options. The 2001 Plan provides for the automatic grant of reload options
to an optionee who would pay all, or part of, an option exercise price by the
delivery of shares of common stock already owned by such optionee. Reload
options would be granted for each share so tendered. The exercise price of such
reload option is the fair market value of the common stock on the date the
original option is exercised. All other terms of the reload options are
identical to the terms of the original option.

Employment Contracts and Termination and Change-In-Control Arrangements

As of December 31, 2003, the Company has not entered into any employment,
termination or change-in-control agreement with any of its executive officers.

Compensation Committee Interlocks and Insider Participation

No executive officer of the Company serves as a member of the board of directors
or compensation committee of any entity that has one or more executive officers
serving as a member of the Company's Board of Directors or Compensation
Committee. The individuals who served as members of the Compensation, Stock
Option and Benefits Committee (the "Compensation Committee") during the year
ended December 31, 2002 were Paul Renn and Frank Habib.

Shareholder Return Performance

This graph compares the Company total stockholder returns and the Standard and
Poor's 500 Composite Stock Index, The graph assumes $100 invested at the per
share closing price of the common stock of the Company on the other over the
counter market from December 31, 2001 forward. Prior to the reverse shell merger
in May 2001, there was no established public trading market for the Company's
stock.

12/31/2001 12/31/2002 12/31/2003
-------------- -------------- --------------

TGTL 100.00 63.13 43.48

S&P 500 173.12 130.53 163.51

Comparison of initial $100 investment the Standard and Poor's Composite Stock
Index versus the common stock of the Company.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth certain information with respect to the
beneficial ownership of the Company's common stock as of March 1, 2005 for (a)
the chief executive officer, (b) each of the Company's directors, (c) all of the
Company's current directors and executive officers as a group and (d) each
stockholder known by us to own beneficially more than 5% of the Company's common
stock.

Beneficial ownership is determined in accordance with the rules of the
Commission and includes voting or investment power with respect to the
securities.

Shares of common stock that may be acquired by an individual or group within 60
days of March 1, 2005, pursuant to the exercise of options or warrants are
deemed to be outstanding for the purpose of computing the percentage ownership
of such individual or group, but are not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person shown in the
table. Except as indicated in footnotes to this table, the Company believe that
the stockholders named in this table have sole voting and investment power with
respect to all shares of common stock shown to be beneficially owned by them
based on information provided to us by such stockholders. Percentage of
ownership is based on 46.5 million shares of common stock outstanding on March
1, 2005.

Amount and Nature Percent
Name of Beneficial Owner of Beneficial Owner of Class
------------------------ ------------------- --------

Directors and Executive Michael W. Carrender (1) 1,924,036 4.0%
Officers:

Carl Freer (2) 2,729,500 6.0%

Steve Carroll (3) 565,000 *

All directors and 5,218,536 11.0%
executive officers as a
group (3 persons)

_______________________
1 Includes 144,000 shares issuable upon exercise of incentive stock options,
shares held in joint account with spouse and individually. The address of
Mr. Carrender is 10201 Centurian Parkway N., Suite 600, Jacksonville, FL
32256.
2 Includes shares held by spouse and in the names of three dependent
children. The address of Mr. Freer is One Meadow Gate Park, Farnborough
Business Park, Farnborough, Hampshire, UK GU14 6FG.
3 Mr. Carroll's address is One Meadow Park, Farnborough Business Park,
Farnborough, Hampshire, UK GU14 6FG.

Equity Compensation Plan Information

The following table reflects the number of shares of the Company's common stock
that, as of March 1, 2005, were outstanding and available for issuance under
compensation plans that have previously been approved by our stockholders. The
Company has no equity compensation plans that have not approved by stockholders.

Number of Securities
Number of Securities to Remaining Available for Future
be Issued Upon Exercise Weighted-Average Exercise Issuance Under Equity
of Outstanding Options, Price of Outstanding Options, Compensation Plans (Excluding
Plan Category Warrants and Rights Warrants and Rights Securities Previously Issued)
------------- ------------------- ------------------- ----------------------------

Equity Compensation 216,000 (4) 144,000 --
Plans Approved by
Security Holders

Equity Compensation -- -- --
Plans not Approved by
Security Holders

Total 216,000 144,000 --

__________________
4 Consists of options issuable under the 2001 Plan to purchase a total of
144,000 shares issued to Mr. Carrender in August 2002.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company had a 10% demand note payable to Alvin J. Nassar, its former
Chairman and Chief Executive Officer, in the amount of $852,789 and $841,064 as
of December 31, 2001 and 2000, respectively. Interest expense related to this
note amounted to $86,337 and $19,499 for the periods ended December 31, 2001 and
2000, respectively. Also, as of December 31, 2001 and 2000, the Company owed a
total of $180,382 to Mr. Nassar on a non-interest bearing demand note. The
amount of $554,500 of this debt was converted to equity subsequent to December
31, 2001 for a total of 1,386,250 (pre reverse split) shares of common stock and
warrants exercisable for 1,250,000 (pre reverse split) shares of common stock at
a price of $.75. The warrants expired in December 2003 and were not exercised.

In the fourth quarter of 2002, the Company issued 182,070 shares to two
shareholders, Mr. Nassar and Mr. Ed Kinney, the Company's President until May
2002 to convert $455,761 of debt to equity at $2.50 per share. No warrants were
issue in this transaction.

Prior to the merger in 2001, Mr. Nassar the Company's former Chief Executive
Officer and a Director purchased shares of common stock of Floor Decor for
$448.88 (including $270.00 from the Alvin Nassar Family Limited Partnership).
Upon merger of such company into the Company he received 15,415,000 pre reverse
split shares of common stock, 5,915,000 pre-reverse split shares that are held
by the Alvin Nassar Family Limited Partnership.

In 2002, the obligations under the employment contract of then President and COO
Robert Francis was settled in November 2002 in an agreement whereby the Company
issued 40,000 post reverse split shares of its common stock in full satisfaction
of all obligations.

As of December 31, 2002 the Company owed Michael W. Carrender $38,008 in salary
and $12,000 in reimbursable expenses. As of December 31, 2003 the Company owed
Mr. Carrender $136,570 in accrued salary.

During the fourth quarter of 2003, the Company converted $1,400,000 of debt to
Carl Freer, a stockholder of the Company and an officer of a subsidiary of the
Company, to 2,800,000 shares of common stock at the rate of $.50 per share, the
market price of the common stock as of the date that the agreements were entered
into. Mr. Freer later became a director and Chairman of Board of the Company. In
addition, during the fourth quarter the Company converted $226,730 of debt owed
to a shareholder into 453,460 shares of common stock valued at $.50 per share
and issued 800,000 shares to such shareholder in 2004 for services rendered to
the Company. That person became affiliated with the Company in April 2004 as a
Head of Investor Relations in an agreement unrelated to the above transactions.

In January 2004, prior to becoming a director, the Company issued 200,000 shares
of common stock to Steve Carroll as a performance bonus. In October 2004, the
Company issued an additional 200,000 shares of common stock to Mr. Carroll as a
performance bonus for completing the Gizmondo.

For additional information regarding related party transactions, see Note J to
the Company's financial statements.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

For the fiscal years ended December 31, 2002 and 2001, the fees were $75,000 and
$75,000 respectively, for professional services rendered for the audit of the
Company's financial statements. There was a change of the Company's auditors in
November 2002.

Audit Related Services

The Company have was billed $40,000 and $60,000 for the years ended December 31,
2003 and 2002, respectively, for the review of financial statements included in
our periodic and other reports filed with the Securities and Exchange
Commission. In addition, the UK audit firm billed $47,000 in 2003 for reviews of
Gizmondo Europe Ltd. subsidiary for inclusion in the Company's quarterly
filings.

Tax Fees

The Company was also billed $0 and $0 for the years ended December 31, 2003 and
2002, respectively, for various income tax returns although amounts may be
required to file the 2002/2003 tax return.

Additional Fees

The Company was not billed any fee for the years ended 2003 and 2002 for any
products and fees related to accounting services, including financial
information systems design and implementation.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of the report:

1. and 2. The financial statements filed as part of this report are
listed separately in the index to Financial Statements beginning on page F-1 of
this report.

3. List of Exhibits

Exhibit
No. Description

2.1 Agreement and Articles of Merger, Plan of Merger, Share sale and Merger
Agreement Floor Decor Inc and Media Communications Group Corporation*

2.2 Stock Purchase Agreement among Floor Decor, Inc., Eagle Eye
Scandinavian Distribution Ltd. and the stockholders of Eagle Eye dated
December 2001 as amended by an Amendment to Stock Purchase Agreement
attached hereto******

2.3 The Asset Purchase Agreement among Tiger Telematics, Inc., Comworxx,
Inc. and the stockholders of Comworxx dated June 13, 2002.(1)

2.4 Asset Purchase Agreement dated August 9, 2002 between the Company and
MINIME Inc. and related Assignment and Assumption, Security Agreement
and 2 Lease Assignment and Assumption Agreements.(2)

2.5 Stock Purchase Agreement dated December 20, 2002 between Norrtulls
Mobileextra Akliebolag and Tiger Telematics, Inc. and Tiger Telematics,
Ltd. and related Royalty Agreement.(3)

2.6 Asset Purchase Agreement to buy assets and subsidiaries of Warthog Plc.
Dated November 3,2004.(4)

2.7 Stock Purchase Agreement to buy shares of Integra Sp dated October 29,
2004 subject to their shareholder approval.(5)

3.1.1 Certificate of Incorporation of the Company****

3.1.2 Bylaws of the Company****

3.2.3 The Certificate of Amendment amending the Certificate of Incorporation
of the Company. Name change to Tiger Telematics, Inc.(6)

4.1 Form of specimen certificate for Common Stock of the Company*****

4.1 Form of Subscription Agreement******

4.2 Form of Registration Rights Agreement******

4.3 Form of Warrant Agreement(7)

4.4 Risk Factors******

5.1 Stock Option Plan***

10.1 Building Lease Agreement for the Company's "big box superstore" located
at 6001 Powerline Road, Ft. Lauderdale, FL.**

10.2 Building Lease Agreement for 700 S. Military trail, Lake Worth, FL
33163**

14 Certificate of Ethics+

21 Subsidiaries of the Company+

21.1 Eagle Eye exclusive distributor Agreement - Scandinavia and
Yugoslavia.*****

21.2 Automotive Software Agreement - Tiger Telematics Subsidiary*****

21.3 Purchase of Games from SCi License Agreement(7)

21.4 Signing of 3 year Games Agreement for Gizmondo and Disney's Buena Vista
Games.(8)

31 Rule 13a-14(a)Certification Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002+

32 Section 1350 Certifications

_______________________
* Incorporated by reference to Exhibit of the same number filed with the
Company's Form 8K dated June 25, 2000.
****** Incorporated by reference to Form 8K dated February 19, 2002.
1 Incorporated by reference to Form 8K dated June 27, 2002.
2 Incorporated by reference to Form 8K dated August 9, 2002.
3 Incorporated by reference to Form 8K dated January 20, 2003.
4 Incorporated by reference to Form 8K dated November 5, 2004.
5 Incorporated by reference to form 8K dated November 3, 2004.
**** Incorporated by reference to Form 10SB12 B/A filed on October 19, 2000.
**** Incorporated by reference to Form 10SB12 B/A filed on October 19, 2000.
6 Incorporated by reference to Form 8K dated June 6, 2002.
***** Incorporated by reference to Company's Annual Report on Form 10-KSB for
the year ended December 31, 2001.
*** Incorporated by reference to Proxy Statement - July 11, 2001.
** Incorporated by reference to Form 10Q second quarter June 30, 2001 filed on
August 14, 2001.
+ Filed herewith.
7 Incorporated by reference to form 8K dated October 6, 2004.
8 Incorporated by reference to Form 8K dated December 29, 2004.

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Jacksonville, State of Florida, on March 30, 2005.

Tiger Telematics, Inc.

By: /S/ Michael W. Carrender
----------------------------
Michael W. Carrender
Chief Executive Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Michael Carrender his true and lawful attorney-in-fact
and agents, with full power of substitution and resubstitution for him in his
name, place and stead, in any and all capacities, to sign all amendments to this
report, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
or his substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant and in the
capacities indicated on March 30, 2005.

Signature Title
--------- -----

/s/ Michael W. Carrender Chief Executive Officer, Chief Financial
------------------------------- Officer and Director (Principal Executive
Michael W. Carrender Officer, Principal Financial Officer and
Principal Accounting Officer)

/s/ Carl Freer Chairman and Director
-------------------------------
Carl Freer

/s/ Steve Carroll Director
-------------------------------
Steve Carroll

INDEX TO FINANCIAL STATEMENTS
Page
----

Financial Statements

Report of Independent Registered Public Accounting Firm F-2

Consolidated Balance Sheets F-4

Consolidated Statements of Operations F-5

Consolidated Statements of Stockholders' Deficiency F-6

Consolidated Statements of Cash Flows F-7

Notes to Consolidated Financial Statements F-9

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
Tiger Telematics, Inc. and Subsidiaries, Inc.

We have audited the accompanying consolidated balance sheets of Tiger
Telematics, Inc. and Subsidiaries, Inc. as of December 31, 2003 and 2002 and the
related consolidated statements of operations, stockholder's deficiency, and
cash flows for the each of the two years in the period ended December 31, 2003.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standard require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Tiger Telematics,
Inc. and Subsidiaries, Inc. as of December 31, 2003 and 2002, and the results of
their operations and their cash flows for each of the two years in the period
ended December 31, 2003 in conformity with accounting principles generally
accepted in the United States of America.

GOLDSTEIN GOLUB KESSLER LLP
New York, New York
January 26, 2005, except for the last paragraph of Note K,
as to which the date is March 22, 2005.

F-2

Report of Independent Registered Public Accounting Firm

To the Board of Directors
Tiger Telematics, Inc.
Jacksonville, Florida

We have audited the related statements of operations, stockholders' deficit and
cash flow of Tiger Telematics, Inc. (formerly Floor Decor, Inc. and
Subsidiaries) for the year ended December 31, 2001. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the results of operations and cash flow of
Tiger Telematics, Inc. as of December 31, 2001 in conformity with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has suffered
losses from operations since inception, and will need to raise additional equity
or debt in order to accomplish its business plan. This raises substantial doubt
about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

McGladrey & Pullen, LLP
Fort Lauderdale, Florida
February 25, 2002

F-3

TIGER TELEMATICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2003 and 2002

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

ASSETS
Current Assets
Cash $ 8,959 $ --
Accounts receivable 2,104 116,648
Inventories 35,570 163,488
Prepaid expenses 45,383 129,204
------------ ------------
92,016 409,340

Total current assets 344,376 237,196
------------ ------------

Property and Equipment, net $ 436,392 $ 646,537
------------ ------------

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities

Accounts payable 3,667,646 1,450,998
Amount due stockholders 9,191 1,210,785
Notes payable - Current portion 37,140 30,602
Accrued expenses 1,750,005 1,961,644
Deposits on common stock 2,247,891 --
Liabilities of discontinued Operations 1,168,244 1,152,713
------------ ------------

Total current liabilities 8,880,116 5,806,742
------------ ------------

Notes payable after one year 123,741 145,134
------------ ------------

Total Liabilities $ 9,003,859 $ 5,951,876
------------ ------------

Stockholders' Deficiency
Common stock - 0.001 par value
authorized 250,000,000 and 100,000,000 shares in 2003 and
2002 respectively. Issued and outstanding 9,498,105 and
3,227,457 in 2003 and 2004 respectively 9,498 3,227
Additional paid-in-capital 13,051,547 7,743,765
Accumulated other comprehensive loss (763,732) --
Deficit (20,864,780) (13,052,331)
------------ ------------
Stockholders' deficiency (8,567,467) (5,305,339)
------------ ------------

$ 436,392 $ 646,537
============ ============

See Notes to Consolidated Financial Statements

F-4

TIGER TELEMATICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 2003, 2002 and 2001

2003 2002 2001
------------ ------------ ------------

Net Sales $ 8,317 $ 283,730 $ --
Cost of goods sold 13,596 384,968 --
------------ ------------ ------------

Gross Loss (5,279) (101,238) --
------------ ------------ ------------

Operating expenses
Selling Expense 683,708 597,188 --
General and administrative 5,581,750 5,171,731 282,745
------------ ------------ ------------

Total Operating Expenses 6,265,458 5,768,919 282,745
------------ ------------ ------------

Operating Loss (6,270,737) (5,870,157) (282,745)
------------ ------------ ------------

Other income (expense)
Impairment of Goodwill -- (4,884,733) --
Loss on conversion of debt instruments (1,543,730) -- --
Gain on sale of Subsidiaries -- 248,009 --
Currency translation gain (loss) 47,442 (189,724) --
Interest expense (45,424) (37,712) (145,607)
------------ ------------ ------------

Net Loss (1,541,712) (5,350,159) (145,607
------------ ------------ ------------

Loss from continuing Operations (7,812,449) (11,220,316) (428,352)

Loss from discontinued Operations -- (353,430) (870,728)
------------ ------------ ------------

Net Loss $ (7,812,449) $(11,573,746) $ (1,299,080)
============ ============ ============

Basic and diluted net loss per common share:

Loss from continuing operations $ (1.6586) $ (3.8026) $ (0.1975)
============ ============ ============

Loss from discontinued operations $ -- $ (0.1252) $ (0.4025)
============ ============ ============

Net Loss $ (1.6586) $ (3.9278) $ (0.6000)
============ ============ ============

Weighted average shares outstanding (basic
and diluted) 4,710,208 2,822,876 2,173,099
============ ============ ============

See Notes to Consolidated Financial Statements

F-5

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
For the years ended December 31, 2003, 2002 and 2001

Accumulated
Additional other Total
Common Stock Paid-in Comprehensive Accumulated Stockholders'
Share Amount Capital loss Deficiency Deficiency
------------ ------------ ------------ ------------ ------------ ------------

Balance (deficiency) at January 1, 2001 15 -- $ 100 -- $ (665,504) $ (665,404)

Issuance of common stock, January 1, 2001 25 -- 586 -- -- 586
Recapitalization of common stock upon
reverse acquisition on May 22, 2001 2,169,427 2,169 (7,100) -- -- (4,931)
Issuance of common stock and warrants 66,000 66 574,134 -- -- 574,200

Net Loss -- -- -- -- (1,299,080) (1,299,080)
------------ ------------ ------------ ------------ ------------ ------------

Balance (deficiency) December 31, 2001 2,235,467 2,235 567,720 -- (1,964,584) (1,394,629)

Issuance of common stock and warrants:
Private placement 100,498 100 876,573 -- -- 876,673
Conversion of notes payable and
amounts due Stockholders 335,361 350 1,987,754 -- -- 1,988,089
Acquisition of Tiger Telematics 280,000 280 2,799,720 -- -- 2,800,000
Limited
Acquisition of Comworxx Inc. 170,531 171 1,065,646 -- -- 1,065,817
Services 105,600 106 446,352 -- -- 446,458

Net Loss -- -- -- -- (11,087,747) (11,087,747)
------------ ------------ ------------ ------------ ------------ ------------
Balance (deficiency) December 31, 2002 3,227,457 3,227 7,743,765 -- (13,052,331) (5,305,339)

Issuance of common stock:
Private placement 2,372,034 2,372 1,742,718 -- -- 1,745,090
Conversion of notes payable and amounts
due stockholders 3,471,514 3,472 1,727,286 -- -- 1,730,758
Services 427,100 427 294,084 -- -- 294,475
Other comprehensive loss:
Foreign currency translation adjustment -- -- -- (763,732) -- (763,732)

Total comprehensive loss -- -- -- (8,576,181) -- --

Net Loss -- -- -- -- $ (7,812,449) $ (7,812,449)
------------ ------------ ------------ ------------ ------------ ------------

Balance (deficiency) December 31, 2003 9,498,105 $ 9,498 $ 13,051,547 $ (763,732) $(20,864,780) $ (8,567,467)
============ ============ ============ ============ ============ ============

See Notes to Consolidated Financial Statements

F-6

TIGER TELEMATICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2003, 2002 and 2001

2003 2002 2001
------------ ------------ ------------

Cash Flows for Operating Activities:

Loss from continuing operations $ (7,812,449) $(10,734,317) $ (428,352)
Loss from discontinued operations $ -- $ (353,430) $ 870,728)
------------ ------------ ------------
Net Loss (7,812,449) (11,087,747) 1,299,080)
Other comprehensive loss (763,732) -- --

Adjustments to reconcile net loss from continuing
operations to net cash used:
Depreciation 74,173 63,924 --
Amortization of intangible assets -- 115,762 --
Loss (gain) on currency transactions -- 189,724 --
Non-cash expenses 294,475 446,458 --
Gain of sale of subsidiary -- (248,009) --
Write down of assets of acquired company -- 407,000 --
Impairment of intangible asset -- 4,884,733 --
Loss on conversion of debt 1,543,730 -- --

Changes in assets and liabilities:
Decrease in assets of discontinued operations -- 1,278,443 (447,970)
Increase (Decrease) in liabilities of
discontinued operations 15,530 (735,409) 861,359

(Increase) decrease in assets:
Accounts receivable 114,544 (116,648) --
Inventories 127,919 (163,488) --
Prepaid expenses 83,821 (129,204) --

Increase (decrease) in liabilities:
Accounts payable 2,216,648 1,450,998 --
Accrued expenses (211,639) 1,961,644 --
Net liabilities related to sold operations -- 1,152,713 --

Net cash used in operating activities (4,316,980) (529,106) (885,691)
------------ ------------ ------------

Cash Flows From Investing Activities:
Purchase of property and equipment (181,353) (237,196) --
------------ ------------ ------------
Net cash used in investing activities (181,353) (237,196) --
------------ ------------ ------------

Cash Flows From Financing Activities:
Issuance of common stock and warrants 1,745,090 876,673 569,855
Deposits on common stock 2,247,891 -- --
Loans and advances from stockholders 1,334,075 204,014 629,421
Repayment to stockholders (804,911) (534,281) (349,255)
Interest on notes payable and stockholder loans
capitalized to principal balance -- 23,829 56,001
Proceeds from notes payable -- 184,400 --
Payments on debt
(14,853) (8,664) --

Cash provided by financing activity 4,507,292 745,971 906,022
------------ ------------ ------------

Net change in cash (8,959) (20,331) 20,331

See Notes to Consolidated Financial Statements

F-7

TIGER TELEMATICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Continued

2003 2002 2001
----------- ----------- -----------

Cash:
Beginning of year -- 20,331 --
----------- ----------- -----------
End of year $ 8,959) $ -- $ 20,331
=========== =========== ===========

Supplemental disclosure of Cash Flow Information:
Cash paid for interest $ 45,424 $ 19,489 $ 96,541
=========== =========== ===========

Supplemental Disclosure of Non-cash investing and
Operating Activities:
Stock issued for operating expenses $ 294,475 $ 474,999 $ --
=========== =========== ===========

Investing Activities:
Acquisition of businesses, net $ -- $ 5,845,190 $ --
=========== =========== ===========

Financing Activities:
Conversion of stockholder debt to common stock $ 3,274,488 $ 1,988,089 $ --
=========== =========== ===========

Acquisition of Tiger Telematics:

Distribution Agreement $ -- $ 2,800,000 $ --
Order Book -- 463,050 --
Property and equipment -- 1,436 --
Amounts due stockholders -- (944,962) --
Accounts Receivable -- 479,688 --
Common stock issued -- (2,800,000) --
----------- ----------- -----------
Cash received $ -- $ 788 --
=========== =========== ===========

Acquisition of Comworxx, Inc.

Property and equipment $ -- $ 280,629 $ --
Accounts receivable -- 27,619 --
Goodwill -- 3,714,818 --
Inventory -- 105,472 --
Prepaid expenses -- 9,368 --
Other assets -- 15,470 --
Notes payable -- (8,664) --
Accounts payable -- (882,968) --
Accrued expenses -- (216,554) --
Liability for unissued shares -- (1,979,373) --
Common stock issued -- (1,065,817) --
----------- ----------- -----------
Cash received $ -- $ -- $ --
=========== =========== ===========

See Notes to Consolidated Financial Statements

F-8

NOTE A - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business:

Tiger Telematics, Inc. (the Company or Tiger) and its wholly owned subsidiaries,
Tiger Telematics USA, Inc. (Tiger USA) and Gizmondo Europe, Ltd. (Gizmondo) are
principally engaged in the business of developing and marketing the Gizmondo
wireless handheld multi-entertainment gaming device. During 2002 the Company's
principal business was developing and marketing telematics products principally
in Western Europe.

Prior to its sale in August of 2002 and its classification as a discontinued
operation the Company's primary business was retail floor covering. The Company
(which was previously known as Floor Decor, Inc.) and its then wholly owned
subsidiaries, Media Flooring, Inc. and Floor Decor LLC owned and operated retail
stores in Florida. The Company offered a wide selection of floor coverings
including carpet, area rugs, wood, and laminates at discount prices to both
commercial accounts and retail customers. The Company also provided installation
of flooring. In June 2002, the Company discontinued these operations (see Note
L) and changed its name from Floor Decor, Inc. to Tiger Telematics, Inc.

In February 2002, the Company acquired Eagle Eye Scandinavian Distributions,
Ltd., a developer and distributor of telematics products and services to the
business-to-business segment in Europe and changed its name to Tiger Telematics,
Ltd. During most of 2002, the Company's principal business was developing and
selling telematics products and services, conducted through Tiger Telematics,
Ltd. This subsidiary was sold on December 17, 2002.

The Company started Tiger Telematics Europe, Ltd. (now known as Gizmondo Europe,
Ltd.) in late 2002 to focus on developing new telematics products including next
generation fleet telematics products, the Gizmondo electronic game product, and
to market these products principally in the UK.

In early 2003 the Company began developing a new multi-entertainment wireless
handheld gaming device that is now referred to as Gizmondo. Since then the
Company's primary business strategy has been to develop and market Gizmondo. The
Company initially launched a limited production version of the Gizmondo in the
UK on October 29, 2004, and expects to launch the full-scale production of
Gizmondo in 2005. The Gizmondo is powered by a Microsoft Windows CE.net
platform, has a 2.8-inch TFT color screen and a Samsung ARM9 400Mhz processor
and incorporates the GoForce 3D 4500 NVIDIA graphics accelerator. Gizmondo
provides cutting-edge gaming, multimedia messaging, an MP3 music player, Mpeg 4
movie playing capability, a digital camera and a GPRS network link to allow
wide-area network gaming. Additionally, Gizmondo contains a GPS chip for
location based services, is equipped with Bluetooth for use in multi-player
gaming and accepts MMC card accessories.

F-9

Significant Accounting Policies:

Liquidity:

The Company has sustained net losses over the past three years and at December
31, 2003 had a net working capital deficit of $8,788,100.

Management has sold off its unprofitable flooring business and is pursuing its
telematics business, of which it entered via an acquisition in February 2002.
The Company anticipates issuing equity securities to meet working capital
requirements and to fund development costs incurred in connection with
developing Telematics related products that the Company believes will enhance
its operations.

Principles of Consolidation:

The consolidated financial statements include the accounts of Tiger Telematics,
Inc. (Company), and its subsidiaries, Tiger Telematics USA, Inc. (USA) and Tiger
Telematics Europe LTD (Tiger Europe). Tiger Telematics Ltd. (Tiger Ltd) is
included through December 17, 2002 (date of divestiture) and the discontinued
operations of Floor Decor Inc. and its subsidiaries through the date of their
divestiture. All intercompany transactions are eliminated in consolidation.
Except as otherwise noted, all amounts and disclosures only include continuing
operations.

Prior to June 2002, the Company was named Floor Decor, Inc. The name was changed
when the Company exited the flooring business. See Note L DISCONTINUED
OPERATIONS.

Use of Estimates:

In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management is required to
make certain estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of the 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.

Foreign Currency Translation:

Results of operations and cash flows are translated at average exchange rates
and assets and liabilities are translated at end-of-period exchange rates for
operations outside the United States that prepare financial statements in other
than the US dollar (generally in the UK). Translation adjustments are included
in other comprehensive income until such time as the entity that generated the
adjustments is sold. Gains and losses from foreign currency transactions are
reflected in other income (loss), net.

Inventories:

Inventories are stated at the lower of cost (specific identification basis) or
market, and consist of electronic components.

F-10

Property and Equipment:

Property and equipment is stated at cost. Depreciation is provided by
straight-line methods over their estimated service lives. Leasehold improvements
are amortized over the shorter of the term of the lease or their expected useful
life. Vehicles and furniture, fixtures and equipment are depreciated over
periods of from 3 to 7 years.

Income Taxes:

Deferred taxes are provided on a liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss and tax
credit carry forwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some or all of the deferred tax assets will not
be realized. Deferred tax assets and liabilities are adjusted for the effects of
changes in tax laws and dates on the date of enactment.

For periods prior to January 1, 2001, the Company, with the consent of its
stockholders, had elected to be taxed under sections of federal income tax law
which provide that, in lieu of corporation income taxes, the stockholders
separately account for their pro-rata share of the Company's items of income,
losses, and credits. This election was terminated effective January 1, 2001.

Accounts Receivable:

Accounts receivable consists of amounts due from customers, none of whom are
considered to be major customers.

Stock-Based Compensation:

On July 1, 2001, the stockholders approved the adoption of the Company's 2001
Employee Stock Option Plan (the Plan). Stock options are granted at a price
equal to the market value of the Common Stock at the date of grant, generally
expire 10 years from the date of the grant and vest equally over a three-year
service period.

2003 2002 2001
--------- --------- ---------

Total common shares available for grant 320,000 320,000 320,000
Options to purchase common shares granted at $1.50 per share
$1.50 per share -- 144,000 --
Options exercised -- -- --
Options forfeited/expired -- -- --
Options available for grant 176,000 176,000 320,000
Shares vested during the year 36,000 36,000 --
Shares granted but unvested 72,000 108,000 --

The 144,000 stock options awarded in 2002 were all to one person at an exercise
price of $1.50 per share.

The Company uses the intrinsic-value method of accounting for the Plan. Under
this method, compensation cost is the excess, if any, of the quoted market price
over the amount an employee must pay to acquire the stock at the date of the
grant. The Company generally grants options with an exercise price equal to the
market value of the common stock at the date of grant.

F-11

The Black-Scholes option price model was used to estimate the fair value as of
the date of grant using the following assumptions:

2002
-----------
Dividend yield 0%
Risk-free interest rates 4.35%
Volatility 163.00%
Expected option term (years) 9.61
Weighted-average fair value of options granted during the year $ 1.50

If the Company had determined compensation expense for the Plan based on the
fair value at the grant dates consistent with the method of SFAS No. 123 and
SFAS No. 148, the Company's pro-forma net loss and basic loss per share would
have been as follows:

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

Net loss as reported $ (7,812,449) $(11,087,747)

Stock based compensation expense under
the fair value based method, net of tax ($0) $ (54,000) $ (54,000)
Pro forma net loss $ (7,866,449) $(11,141,747)
Net loss per share, as reported $ (1.6586) $ (3.9278)
Pro forma net loss per share $ (1.6701) $ (3.9469)

Goodwill and Other Intangible Assets:

Goodwill is recorded as the difference, if any, between the aggregate
consideration paid for an acquisition and the fair value of the net tangible and
intangible assets acquired. The Company adopted the provisions of SFAS No. 142,
"Goodwill and Other Intangible Assets" as of January 1, 2002.

SFAS 142 also requires that intangible assets with definite useful lives be
amortized over their respective useful lives to their residual values, and all
intangible assets be reviewed for impairment.

The Company tests goodwill for impairment on an annual basis or more frequently
if the Company believes indicators of impairment exist. The performance of the
test involves a two-step process. The first step involves comparing the fair
values of the applicable reporting units with their aggregate carrying value,
including goodwill. The Company generally determines the fair value of its
reporting units using the income approach methodology of valuation that includes
the discounted cash flow method. If the carrying amount of a reporting unit
exceeds the reporting unit's fair value, the Company performs the second step.
The second test involves comparing the implied fair value of the affected
reporting unit's goodwill with the carrying value of that goodwill. If the
carrying amount of the reporting unit goodwill exceeds the implied fair value of
that goodwill, an impairment loss is recorded.

Circumstances that could trigger an impairment test include but are not limited
to: a significant adverse change in the business climate or legal factors; an
adverse action or assessment by a regulator; unanticipated competition; loss of
key personnel; the likelihood that a reporting unit or significant portion of a
reporting unit will be sold or otherwise disposed of; results of testing for

F-12

recoverability of a significant asset group within a reporting unit and
recognition of a goodwill impairment loss in the financial statements of a
subsidiary that is a component of a reporting unit.

Impairment:

SFAS No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets,"
provides a single accounting model for long-lived assets to be disposed of,
changes the criteria for classifying an asset as held for sale, broadens the
scope of businesses to be disposed of that qualify for reporting as discontinued
operations and changes the timing of recognizing losses on such operations. The
Company adopted SFAS 144 on January 1, 2002.

In accordance with SFAS No. 144, the Company reviews its long-lived assets for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets
held and used is measured by a comparison of the carrying amount of an asset to
estimated undiscounted future cash flows expected to be generated by the asset.
If such assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds their
fair value. Assets to be disposed of are separately presented on the balance
sheet and reported at the lower of their carrying amount or fair value less
costs to sell, and are no longer depreciated.

Earnings (Loss) per Share:

Basic earnings (loss) per share is computed using the weighted average number of
common shares outstanding during the period. Diluted earnings (loss) per share
is computed using the weighted average number of common shares and potential
common shares outstanding during the period. Potential common shares, including
stock options and warrants, are excluded from the computation since their
effect, for all years presented, are anti-dilutive.

Revenue Recognition:

Sales are recognized when merchandise is delivered and accepted by the customer,
net of estimated sales returns, discounts and allowances.

Advertising Cost:

Advertising costs are included in selling expense and are expensed in the period
incurred. Such costs were $0 and $18,489 for 2003 and 2002. For 2001 $506,921
was included in discontinued operations.

Fair Value of Financial Instruments:

Statement of Financial Accounting Standards (SFAS) No.107, "Disclosures about
Fair Value of Financial Statements" requires disclosure of fair value
information about financial instruments, whether or not recognized in the
balance sheet, for which it is practicable to estimate that value. In cases
where quoted market prices are not available, fair values are based on estimates
using present value or other valuation techniques. Those techniques are
significantly affected by the assumptions used, including the discount rate and
estimates of future cash flows. In that regard, the derived fair value estimates

F-13

cannot be substantiated by comparison to independent markets and, in many cases,
could not be realized in immediate settlement of the instrument. SFAS No 107
excludes certain financial instruments and all non-financial assets and
liabilities from its disclosure requirements. The fair value of financial
instruments recorded on the balance sheet approximate the carrying amounts. The
Company has no off balance sheet financial instruments.

Recently Issued Accounting Standards:

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations". SFAS No 143 requires the Company to record the fair value of an
asset retirement obligation as a liability in the period in which it incurs a
legal obligation associated with the retirement of tangible long-lived assets
that result from acquisition, construction, development and/or normal use of
assets. The Company also records a corresponding asset that is depreciated over
the life of the asset. Subsequent to the initial measurement of the asset
retirement obligation, the obligation will be adjusted at the end of each period
to reflect the passage of time and changes in the estimated future cash flows
underlying the obligation. The Company is required to adopt SFAS No. 143 on
January 1, 2003, and is currently evaluating the effect that implementation of
the new standard may have on its results of operations and financial position.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets". SFAS No. 144 addresses financial accounting and
reporting for the impairment or disposal of long-lived assets. This Statement
requires that long-lived assets be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by the asset. If the carrying amount of an asset exceeds its
estimated future cash flows, an impairment charge is recognized by the amount by
which the carrying amount of the asset exceeds the fair value of the asset. SFAS
No. 144 requires companies to separately report discontinued operations and
extends that reporting to a component of an entity that either has been disposed
of (by sale, abandonment, or in a distribution to owners) or is classified as
held for sale. Assets to be disposed of are reported at the lower of carrying
amount or fair value less costs of sale. The Company adopted SFAS No. 144 on
January 1, 2002.

SFAS 146 addresses financial accounting and reporting for costs associated with
exit or disposal activities and nullifies Emerging Issues Task Force (EITF)
Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." FSAS No. 146 was effective for disposal activities initiated
after December 31, 2002.

F-14

SFAS 150 establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). Many of those instruments
were previously classified as equity. Some of the provisions of this Statement
are consistent with the current definition of liabilities in FASB Concepts
Statement No. 6, Elements of Financial Statements. The remaining provisions of
this Statement are consistent with the Board's proposal to revise that
definition to encompass certain obligations that a reporting entity can or must
settle by issuing its own equity shares, depending on the nature of the
relationship established between the holder and the issuer. For public
companies, SFAS No. 150 became effective after June 15, 2003. The Company
believes that, at the present time, it has no instruments that fall within the
scope of this pronouncement.

In December 2004, the FASB issued Statement of Financial Accounting Standards
No. 123R (Revised 2004), Share-Based Payment ("SFAS No. 123R"), which requires
that the compensation cost relating to share-based payment transactions be
recognized in financial statements based on alternative fair value models. The
share-based compensation cost will be measured based on the fair value of the
equity or liability instruments issued. The Company currently disclosed pro
forma compensation expense quarterly and annually by calculating the stock
option grants' fair value using Black-Scholes model and disclosing the impact on
net income and net income per share in a Note to the Consolidated Financial
statements. Upon adoption, pro forma disclosure will no longer be an
alternative. The table above reflects the estimated impact that such a change in
accounting treatment would have had on the Company's net loss and net loss per
share if it had been in effect during the year ended December 31, 2003. SFAS No.
123R also requires the benefits of tax deductions in excess of recognized
compensation cost to be reported as financing cash flows and increase net
financing cash flows in periods after adoption. The Company will begin to apply
SFAS No. 123R using the most appropriate fair value model as of the interim
reporting period ending September 30, 2005.

NOTE B - REVERSE STOCK SPLIT AND INCREASE IN AUTHORIZED SHARES

In July 2004, the Company's shareholders approved a 1 for 25 reverse stock
split. The number of authorized shares and par value were unchanged. All common
stock amounts have been adjusted to reflect this change for all periods
presented.

In May 2003, the Company's shareholders approved an increase in the number of
authorized shares from 100 million shares to 250 million shares. In January
2004, the authorized shares were increased to 500 million shares.

F-15

NOTE C - REVERSE ACQUISITION

On May 22, 2001, a purchasing group acquired 2,169,467 shares of Media Flooring
Inc. (MCGI) in exchange for all of the outstanding common shares of the Company
to become the owner of approximately 40% of the issued and outstanding common
stock of MCGI. The agreement included the merger of the Company into a newly
formed wholly owned subsidiary. Prior to the acquisition, MCGI was a "Public
Shell" Company with no significant operations or assets.

The acquisition of the Company was accounted for as a reverse acquisition and
the Company was treated for accounting purposes as the acquiring entity. The
historical financial statements of the Company became the historical financial
statements of MCGI. Additional paid in capital was adjusted on May 22, 2001 as
follows:

Common Stock - 2,169,467 shares at par value of $0.001 $ (2,169)
Common Stock prior to reverse acquisition - 40 shares --
Vendor obligation assumed (4,931)
----------
Recapitalization to additional paid-in capital $ (7,100)
==========

NOTE D - EQUITY TRANSACTIONS

During 2003, the Company entered into various private placement transactions
with individual investors and sold 2,372,034 shares of its common stock at per
share prices ranging from $.25 to $1.25. No warrants were issued in 2003.

The Company entered into private placement transactions with individual
investors and sold 100,498 and 66,000 shares of its common stock during the
first quarter of 2002 and December 2001, respectively, for $10.00 per share. For
each share of common stock purchased, each investor received a warrant
representing the right to purchase one additional share of common stock for
$18.75 per share. The warrants expired unexercised on December 31, 2003. Net
proceeds from these sales were $876,673 and $574,200 in 2002 and 2001,
respectively.

Shares issued for services (none in 2001)
Shares Amount
---------- ----------
During the first quarter of 2002 the Company
purchased consulting services $ 12,000 $ 120,000

During the second quarter of 2002 the Company
paid rental expenses in the UK for a subsidiary $ 20,000 $ 182,635

During the fourth quarter of 2002 the Company
purchased services from six vendors $ 73,600 $ 143,823
---------- ----------

Total for 2002 $ 105,600 $ 446,458
========== ==========

During 2003 the Company purchased various
Services, primarily consulting services,
from unrelated parties 427,100 294,475
========== ==========

During May of 2002, the Company entered into an agreement with an advisor for
consulting services under which the Company agreed to issue 96,000 shares of
Common Stock for services rendered. The Company originally recorded consulting
expense of $736,000, representing the market value of the stock at the date of
the agreement. Because the shares were not issued until May of 2003, the Company

F-16

revalued the liability at the end of each quarter, based on the market value of
the stock at those dates, as follows:

Per Share Value Liability Decrease
--------------- --------- ---------

September 2002 $ 2.88 $ 276,000 $ 460,000
December 2002 2.03 194,400 81,600
March 2003 .95 91,200 103,200

In October 2002, certain stockholders converted $455,176 of debt to 182,070
shares of common stock. The conversion of these stockholders was done at the
prevailing market price as of the date of the conversion.

In October 2002, several former Tiger Telematics Ltd. shareholders agreed to
convert $610,190 of their shareholder debt into common stock and warrants to
purchase common stock at a price of $18.75 per share. The conversion rate was
one share of common stock and one warrant for every $10.00 of debt. The debt of
was converted in October 2002 into 61,019 shares of common stock and 61,019
warrants. The warrants expired unissued on December 31, 2003.

On May 19, 2003, the Company issued 96,000 shares of common stock in payment of
the liability. The stock was valued at $.25 per share. The excess of the accrual
over the value of the shares issues ($67,200) was credited to operations in
2003.

During the fourth quarter of 2003, certain shareholders and others converted $
1,727,286 of notes payable into 3,471,514 shares of common stock. The Company
recorded a loss of such conversion totaling $1,543,730. No warrants were issued
in 2003.

F-17

During the first quarter of 2002, certain shareholders and others converted
$922,723 of notes payable and amounts due shareholders into 92,272 shares of
common Stock. For each share of common stock received, they also received a
warrant representing the right to purchase one additional share of common stock
at $18.75 per share. The warrants expired unexercised on December 31, 2003.

See NOTE - J RELATED PARTY TRANSACTIONS for a description of debt converted to
common shares in 2003, 2002 and 2001.

See NOTE I - ACQUISITIONS for descriptions of equity transactions for the
acquisition of COMWORXX and Tiger Telematics (UK) Ltd.

NOTE E - PROPERTY AND EQUIPMENT

Property and equipment as of December 31, 2002, was as follows:

2003 2002
---- ----

Vehicles $ 226,826 $ 188,837
Furniture, fixtures and equipment 191,723 48,359
---------- ----------
418,549 237,196
Less accumulated depreciation 74,173 --
---------- ----------
$ 344,376 $ 237,196
========== ==========

Depreciation expense for the year ended December 31, 2003 amounted to $74,173.

Property and equipment reclassified to discontinued operations are described in
NOTE L - DISCONTINUED OPERATIONS

NOTE F - INCOME TAX MATTERS

The Company has net operating loss carry forwards for United States Tax purposes
as of December 31, 2003 for federal income tax purposes of approximately
$23,000,000, expiring through 2023. Any future benefit to be realized from these
net operating loss and contribution carry forwards is dependent upon the Company
earning sufficient future income taxable in the United States during the periods
that the carry forwards are available. The loss carry forwards also contain
restrictions on the type of taxable income that they can be used to offset. Due
to these uncertainties, the Company has fully offset any deferred tax benefits
otherwise relating to the net operating loss carry forward with a valuation
allowance of approximately $7,640,000. The Company also has undetermined losses
that may be off set against future income in the UK, expiring in 2021, due to
the sale of Tiger Ltd. Any future benefits to be realized from the losses is
dependent upon the company earnings sufficient future taxable income in the UK
during the periods that the losses off settable are available. Due to these
uncertainties the Company has fully offset any deferred tax benefits relating to
the losses.

F-18

2003 2002
----------- -----------
Income Tax Benefit

Tax provision at statutory rates $ 2,600,000 $ 4,600,000
State income taxes - net 240,000 420,000
Effect of lower tax brackets (13,000) (13,000)
Other (227,000) (407,000)
----------- -----------
2,600,000 4,600,000
Balance at beginning of year 5,040,000 440,000
----------- -----------

Balance at end of year $ 7,640,000 $ 5,040,000
=========== ===========

Valuation allowance $ 7,640,000 $ 5,040,000
=========== ===========

NOTE G - OPERATING LEASES

The Company leases office space in Jacksonville, Florida and in London, England
on a month-to-month basis. Rent expense for 2003 and 2002 was $173,213 and
$295,779, respectively. This was after reclassification of $241,280 of flooring
rental expenses to discontinued operations in 2002. Rent expenses for 2001 was
$526,196, is included as discontinued operations.

NOTE H - NOTES PAYABLE

2003 2002
---- ----
The notes are payable to a bank in
36 equal monthly installments, with
interest ranging from 10.4% to 11% and
are collateralized by two automobiles $ 160,883 $ 175,736

Less amount due within one year 37,140 30,602
---------- ----------

Long term portion of notes payable $ 123,743 $ 145,134
========== ==========

Principal payments for the next three years are as follows 2004 $37,140, 2005
$49,504 and 2006 $74,239.

Other notes payable in 2002 have been reclassified to discontinued operations.
See NOTE L - DISCONTINUED OPERATIONS

NOTE I - ACQUISITIONS

Tiger Telematics (UK) Ltd. (Tiger Ltd)

On February 4, 2002, the Company purchased Eagle Eye Scandinavian Distribution
Limited, an English private limited Company, and its name was changed to Tiger
Telematics (UK) Ltd. The Company purchased all of the outstanding stock of Eagle
Eye in exchange for 280,000 shares of the Company's common stock valued at
$2,800,000. Tiger Telematics Ltd. was an early stage company engaged in the
distribution of telematics products.

F-19

The 280,000 shares of stock issued were valued at $10.00 per share. This price
is the same price as the private placement transactions with investors that were
entered into from December 2001 through March 2002. The negative equity of Tiger
Telematics Ltd. of $463,050 as of the acquisition date resulted in an excess of
acquisition cost over tangible asset value of $3,263,050.

The excess of the acquisition price over the tangible asset valuation was
allocated to intangible assets consisting of $2,800,000 to an order backlog of
pending orders for product to be shipped over future periods and $463,050 to
distribution rights to be amortized quarterly over the remaining life of the
distribution agreement.

During the quarter ended September 30, 2002, the Company after determining that
the value of the order book was impaired, wrote-off $1,000,000. The impairment
was based on the failure to ship orders as originally projected and the change
in Tiger Telematics Ltd.'s business model to derive its income from monthly
revenue generated by its wireless telecom provider's partnership arrangements as
opposed to generating revenue primarily from the sale of hardware. In the fourth
quarter of 2002, the Company wrote off the remainder of the intangible asset of
$2,147,288 (net of $115,762 of accumulated amortization).

In fourth quarter the Company sold the common stock of Tiger Telematics Ltd. to
an unrelated third party. The agreement called for the transfer of certain
assets and debt from Tiger Telematics Ltd. to Tiger Europe prior to closing. The
transaction was done in exchange for a Royalty Agreement from the buyer and
Tiger Telematics Ltd. to pay a percentage of sales over the next 10 years. Due
to the uncertainty of the future payments, the Company placed a zero value on
the agreement and did not record the future stream of payments on the balance
sheet. The Company recorded a $ 248,009 gain of the sale representing the excess
of liabilities over assets transferred to the buyer.

Comworxx, Inc.

On June 25, 2002, pursuant to a Purchase Agreement between the Company's wholly
owned subsidiary, Tiger USA and Comworxx, Inc. ("Comworxx"), a private Florida
Company, Tiger USA purchased all of the assets of Comworxx in exchange for
170,531 shares of the Company's common stock valued at $6.25 per share or
$1,065,819.

The purchase agreement provided however, that if the price per share of Tiger
common stock sold in the next equity financing raising gross proceeds of at
least $3 million, is less than $25.00 per share, the assumed purchase price
shall be reduced to the price per share in the next equity financing and
provided further however, that if the new equity financing is not consummated by
September 1, 2002 the assumed price shall be reduced to $.875. If the purchase
price is reduced to less than $25.00 per share of Tiger common stock, Tiger will
have to issue such additional shares as necessary so that the total number of
shares of Tiger common stock issued pursuant to this provision, is equal to the
quotient, rounded to the nearest whole number, of $4,263,266 divided by the
final assumed purchase price. The maximum number of shares that would be issued
under this formula would be 487,230. Accordingly, 316,700 shares were subject to
this contingency.

In 2004, the Company entered into a settlement agreement by which 160,000 shares
plus 80,000 shares held in escrow would be issued in satisfaction of the full
contingent share issuance.

F-20

Based on a post acquisition review of assets, inventory, receivables and
property plant and equipment were written down to the current estimated value as
of the acquisition date. The write-downs created an additional excess of
liabilities over tangible assets of $669,628.

The acquisition price over the tangible asset valuation was assigned to three
intangible assets. Although the acquisition included other intellectual property
and license agreements, due to the position in the marketplace and funding
issues associated with the acquisition, the Company believed that the goodwill
was impaired as of June 30, 2002 and wrote off all of the goodwill of $1,735,445
in the quarter ended June 30, 2002.

In the third quarter of 2002, based on its evaluation, the Company took a
further write-down of the remaining assets purchased of $407,000, effectively
writing off its entire investment in the purchase agreement.

Assets (net of reserves) and liabilities acquired consisted of the following:

Accounts receivable $ 27,619
Inventory 105,472
Prepaid items 9,368
Computer equipment 280,629
Security deposits 15,470
------------
438,558

Note payable 8,664
Accounts payable 882,968
Other accruals 216,554
------------
1,108,186
Excess of liabilities over assets $ 669,628
============

Goodwill 1,065,817
------------
Total goodwill (all written off on June 30) $ 1,735,445
============
Net assets written off in the third quarter of 2002 $ 407,000
============

The Company believes that the seller may have misrepresented the nature of the
assets and the viability of the associated business at the time of the
transaction. As a result the Company has retained legal counsel to advise it of
its rights against the shareholders of the seller to recover certain sums or to
rescind the entire transaction. As mentioned above, in June 2004 the Company
issued 160,000 of the contingent shares in settlement of this matter.

Proforma information: The following proforma information reflects the net sales,
net loss, and per share amounts for the year and three months ended December 31,
2002 and 2001 as if the Tiger Telematics, Ltd and Comworxx acquisitions had been
completed on January 1, 2001:

Year Ended
----------
2002 2001
------------ ------------

Proforma net Sales $ 319,613 $ --
Proforma net loss $(13,453,091) $ (3,980,321)
Proforma basic and diluted net loss per common share $ (4.6201) $ (1.5096)
Weighted average shares outstanding -basic and diluted $ 2,911,298 $ 2,636,630

See NOTE Q - SUBSEQUENT EVENTS for description of acquisitions and pending
acquisitions for 2003.

F-21

NOTE J - RELATED PARTY TRANSACTIONS

Notes Payable to Stockholders are as follows:

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

Stockholders without interest $ 9,191 $1,210,785
========== ==========

During the third and fourth quarter of 2003, the Company, at the request of
certain stockholder of Tiger Europe, Ltd., issued 148,000 shares at a rate of
$.50 per share to reduce $75,000 of indebtedness owed by the Company to such
stockholders and (ii) converted $1,400,000 of debt to a stockholders of to
2,800,000 shares of common stock at the rate of $.50 per share, the market price
of the common stock as of the date that the agreements were entered into. The
debt conversion involved certain officers and directors of the Company and or
its Gizmondo subsidiary. In addition, during the fourth quarter the Company
converted $226,730 of debt owed to another shareholder into 453,460 shares of
common stock valued at $.50 per share and issued 800,000 shares in 2004 to such
shareholder for services rendered to the Company. That person subsequently
became an employee of a subsidiary of the Company in April 2004, as Head of
Investor Relations

During 2002, notes payable and other amounts due stockholders amounting to
$1,998,089 were converted to equity for 335,361 shares.

Total interest expense on stockholder debt was $10,000, $43,079 and $37,112 for
years ended December 31, 2003, 2002 and 2001 respectively. The weighted average
interest rate on amounts due to stockholders was 10% and 10.6% as of December
31, 2003 and 2002 respectively.

The Company owed an executive officer and director approximately $136,600 and
$50,000 at December 31, 2003 and 2002, respectively, for back salary and
reimbursable expenses incurred on behalf of the Company.

NOTE K - CONTINGENCIES

A shareholder of the Company borrowed some of the funds advanced to the Company
(with funds going to the Tiger Ltd subsidiary) from a private investment bank,
London International Mercantile Bank (LIM), based in London. The shareholder
failed to repay the note when due and LIM made demand on the subsidiary, Tiger
Telematics Ltd., to repay the funds since Tiger Telematics Ltd. was the
beneficiary of the funds. The Company maintained that it was not responsible for
that obligation and responded to the demand accordingly. Tiger Telematics Ltd.
entered into a settlement agreement the Court approved as a Tomblin Order where
the demand note payable to the shareholder was forgiven in exchange for the
Company entering into an installment note for approximately $475,000, to be paid
over time directly to LIM. The shareholder remained contingently obligated for
the sum owed plus interest in event that the payment was not made timely by
Tiger Telematics Ltd. The Company issued a limited guaranty for the obligation
to LIM.

The settlement agreement called for monthly payments at a variable interest
rate. Tiger Telematics Ltd. repaid approximately $80,000 prior to the sale of
the business on December 17, 2002. Following the sale of Tiger Telematics Ltd.,

F-22

the Company was apprised that Tiger Telematics Ltd. was placed in liquidation
insolvency under the laws of the United Kingdom for failure to make the payments
required under this arrangement.

LIM made demand on the Company for approximately $450,000 under the guarantee
but has made no attempt to collect on the guaranty as it pursues its direct
remedies against the original borrower of the funds. LIM also holds 140,000
shares of the Company's common stock and certain real estate provided by the
original borrower as collateral. The Company has reserved an amount that it
believes will cover any obligation that may arise.

On April 26, 2002, the Company entered into a Lease Agreement with Christian and
Timbers UK Ltd (C&T) for office premises for its subsidiary for a term of five
years. The Company paid the first year's rent by issuing 20,000 shares of common
stock. The subsidiary subsequently defaulted on the lease arrangement. In the
summer of 2003, C&T sued the Company pursuant to the Company's guarantee. In
October 2003, the Company entered into a judgment stipulation for $300,000 to
settle all obligations under the guarantee. The Company has issued shares of
common stock to C&T, that it believes will satisfy the amount of the outstanding
judgment.

In March 2004, Jordan Grand Prix Ltd. filed suit against the Company in the UK
alleging violation of the Sponsorship Agreement entered into between the Company
and Jordan Racing in July 17, 2003 and a related Letter Agreement dated in July
2003. The sponsorship agreement was meant to assist in marketing the Company's
new hand held gaming device and to correspond with its launch. The launch was
delayed from its anticipated time frame. Jordan sued the Company for $3 million
and alleged that the Company defaulted on a payment of $500,000, due on January
1, 2004, under the sponsorship agreement, and a payment for $250,000, due on the
same date under a separate letter agreement. On February 26, 2004, Jordan sent
the Company a letter where they formally and officially terminated both
agreements for the aforementioned alleged defaults. The Company believes that it
has defenses to the suit and has filed a defense in UK courts.

The Company is considering filing a countersuit against both the plaintiff and
Jordan Racing. The plaintiff filed a motion for summary judgment against the
Company. The Court denied the plaintiff's motion and the Company was permitted
to defend the lawsuit on the condition that it makes a substantial payment to be
held by the Court. In January 2005, the Court reduced the amount of the payment
and allowed the Company to deposit 70,000 shares of its stock in escrow to
satisfy this requirement. Prior to commencement of the trial, the Company is to
substitute $1.5 million in exchange for the escrowed shares. While the Company
is unable to predict the outcome of this litigation, it intends to vigorously
defend the plaintiff's claims.

In January 2005, the Company filed a lawsuit against a former investment advisor
of the Company, based on a breach of the agreement between the advisor and the
Company. As payment for investment advisory services, the Company originally
issued 40,000 (1,000,000 pre reverse split) shares of common stock in 2002 and
2003. The advisor subsequently alleged in December 2004 that the Company owed
him an additional 960,000 shares of common stock to maintain his ownership in
the Company at 1,000,000 shares. The Company is seeking a declaratory judgment
from the court that it is not required to issue additional shares to the
advisor, as well as damages, fees and costs as a result of the advisor's breach
including the return of the previously issued shares.

In October 2004, Gizmondo Europe Ltd, (Gizmondo), a subsidiary of the Company
signed a contract with SCi Entertainment Group Plc (SCi), a leading games
publisher, under which Gizmondo has licensed the right to develop and publish
twelve SCi products for the Gizmondo platform. The agreement covers both

F-23

currently released titles as well as those in the pipeline, and establishes the
structure for continuing collaboration between the two companies.

The agreement has Gizmondo paying a minimum guarantee of approximately
$1,250,000 allocated by and among 12 products. The guarantee, which has been
paid, is non-refundable but fully recoverable against earned royalties of each
product. An earned royalty of 50% of net receipts is to be paid on each product.

NOTE L - DISCONTINUED OPERATIONS

In June 2002 the Company entered into a plan to dispose of its flooring business
and, as of June 30, 2002, accounted for the flooring segment as a discontinued
segment. The Company has estimated that the net loss on the discontinued
operations from June 30, 2002 through the date of sale, August 9, 2002 to be
$35,000, and the estimated gain on sale and included that amount in the
liabilities of the discontinued segment.

On August 9, 2002, the Company sold its flooring business to a purchasing group
headed up by a former officer of the Company. The Company sold assets
aggregating $1,152,698, in consideration for the assumption by the buyer of
liabilities totaling $1,243,135. The Company will remain contingently liable on
the liabilities until such time as the buyers pay them off. In addition, the
buyer has assumed operating leases described above. In April 2003, the buyer of
the flooring assets filed a Chapter 11 bankruptcy proceeding and was liquidated
as of April 30, 2003. As of December 31, 2002, the Company has made a provision
for loss of approximately $1,153,000.

Revenue included in loss from discontinued operations amounted to $2,163,158 and
$3,777,000 for the years ended December 31, 2002 and 2001.

A summary of the liabilities the Company may be obligated to pay, as of December
31, 2003 and 2002 is as follows:

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

Liabilities - Leases and various payables
and accruals related to failure of
Floor Decor, and other dispositions

Total Liabilities $1,168,244 $1,152,713
========== ==========

F-24

NOTE M - WARRANTS

The Company issued warrants to purchase 253,789 and 66,000 shares of the
Company's common stock at $18.75 per share in 2002 and 2001 respectively. The
warrants were exercisable at any time until December 31, 2003. None of the
warrants were exercised or cancelled. All expired, unexercised, at December 31,
2003. At December 31, 2002 and 2001 there were 319,789 and 66,000 warrants
issued and outstanding, respectively.

In 2004 the Company also issued warrants to purchase 495,525 shares of the
Company's common stock at an exercise prices ranging from $5.00 to $11.25 per
share.

NOTE N - PREPAYMENTS

Prepayment consists of the following:
December 31,
-----------------------

2003 2002
---------- ----------
Prepaid expenses at are as follows:
Rent $ 45,383 $ 117,080

Insurance -- 12,124
---------- ----------

TOTAL $ 45,383 $ 129,204
========== ==========

NOTE O - ACCRUED EXPENSES

Accrued expenses consists of the following: December 31,
-----------------------

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

Payroll and related taxes $ 150,054 $ 40,832
Consulting 302,100 194,000

Amounts accrued related to acquisitions, bankruptcy
of acquiring companies and rent and advisor fees
related to events described in NOTE K - CONTINGENCIES 1,297,851 1,726,812
---------- ----------

$1,750,005 $1,916,644
========== ==========

NOTE P - SEGMENT INFORMATION

The Company now focuses all of its business in one segment, the telematics
product development and distribution business in Europe.

F-25

NOTE Q - SUBSEQUENT EVENTS

ISIS Models, Ltd.

In May 2004 Gizmondo Europe, Ltd. acquired 75% interest in ISIS Models Ltd. for
$310,000 settled by the issue of common stock of the Company of 40,000 shares
valued at $7.75 per agreement. The transaction resulted in $310,000 of goodwill
to reflect the intangible order book.

Warthog Plc

The Company executed an Asset Purchase Agreement contract dated November 3, 2004
and closed the transaction on that date, for the acquisition of Warthog Plc's
subsidiaries, intellectual properties and assets, in a move to further expand
the Company's games development agenda and management infrastructure. Within two
days of closing, the Company injected approximately $1.3 million into the
Warthog subsidiaries for working capital purposes.

As a result the Company paid $1,113,000 in cash and issued 497,866 shares of its
restricted common stock on November 3, 2004. The shares were valued at $14.06
per share pursuant to the terms of the agreement ($7,000,000), which was the
average closing price in the 14 days prior to closing. For financial statement
purposes, the company recorded approximately $850,000 in goodwill to reflect the
excess purchase price over tangible assets acquired.

Indie Studios

On August 2, 2004, Gizmondo Europe, Ltd. purchased Indie Studios on a
transaction agreed to on May 20, 2004 Purchase Agreement, following an April 29,
2004 Letter of Intent, for one million shares of common stock of the Company
valued at $7.50. There are 600,000 contingent shares reserved. For financial
statement purposes the Company assumed the shares issued and recorded $12
million in goodwill to reflect the excess of purchase price over tangible
assets.

Integra SP

The Company executed a share Purchase Agreement contract dated October 29, 2004
to buy the shares of Integra SP (Integra), which owns several UK subsidiaries
that provide software for process management and integration of real-time
systems. Integra's domain expertise and Altio product set enable businesses to
provide integration to various financial services institutions supporting a wide
range of formats and protocols. For the fiscal year ended June 30, 2004, Integra
had unaudited revenues of $4.1 million.

The transaction has not closed. When approved, the Company will issue 625,250
shares at closing and escrow 2,794,785 shares for payouts over two years, based
on an earn out formula. The maximum number of shares to be issued under the two
year payout is 1,984,469 and under the earn-out is 3,420,035.

F-26

NOTE R - QUARTERLY DATA (UNAUDITED)
(In thousands except for per share amounts)

Year ended December 31, 2003
----------------------------

Fourth Third Second First
Quarter Quarter Quarter Quarter
--------- --------- --------- ---------
Net sales $ 17 $ -- $ (9) $ 1
Cost of goods sold 20 (9) 1 3
--------- --------- --------- ---------
Gross profit (loss) (3) (9) (10) (2)

Selling, general and
Administrative 4,873 1,142 407 545
Other income (expense) 242 (287) 52 (32)
--------- --------- --------- ---------

Net loss $ (4,634) $ (1,438) $ (365) $ (579)
========= ========= ========= =========

Net loss per share $ (1.0571) $ (0.4004) $ (0.1088) $ (0.1773)
========= ========= ========= =========

Year ended December 31, 2002
----------------------------

Fourth Third Second First
Quarter Quarter Quarter Quarter
--------- --------- --------- ---------

Net sales $ 130 $ 152 $ 1 $ 1
Cost of goods sold 117 223 42 3
--------- --------- --------- ---------
Gross profit (loss) 13 (71) (41) (2)

Selling, general and
Administrative 1,256 1,410 2,149 954
Other income (expense) (521) (1,027) (3,288) (28)
--------- --------- --------- ---------

Loss from continuing
Operations (1,764) (2,508) (5,478) (984)
Loss from discontinued
Operations -- -- (164) (189)
--------- --------- --------- ---------

Net loss (1,764) (2,508) (5,642) (1,173)
========= ========= ========= =========

Net loss per share $ (0.6249) $ (0.8885) $ (1.9986) $ (0.4155)
========= ========= ========= =========

F-27