Filed Pursuant to Rule 424(b)(3)
                                                     Registration No. 333-108249


                           PROSPECTUS SUPPLEMENT NO. 4
                  Island Pacific, Inc., a Delaware corporation
                     (formerly known as SVI Solutions, Inc.)
                                  Common Stock


         This Prospectus Supplement relates to the resale by the holders of
Common Stock.

         The prospectus dated September 26, 2003, as supplemented by prospectus
supplement no. 1 dated November 25, 2003, prospectus supplement no. 2 dated
December 17, 2004 and prospectus supplement no. 3 dated February 4, 2004 (the
"Prospectus"), is hereby amended by the information contained in the attached
report on Form 10-Q dated February 13, 2004. If the information in the attached
report is inconsistent with any information contained in the Prospectus or any
prospectus supplement dated earlier than the date of this Supplement, the
Prospectus or earlier supplement shall be deemed superceded by this Supplement.
In all other ways, the Prospectus and any prior supplement shall remain
unchanged.

         This Prospectus Supplement should be read in conjunction with, and may
not be delivered or utilized without, the Prospectus.

         This Prospectus Supplement is dated February 13, 2004.







================================================================================

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

                                    FORM 10-Q

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2003
         OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO ________


Commission file number  0-23049

                              ISLAND PACIFIC, INC.
                              --------------------
                         (Formerly, SVI Solutions, Inc.)
                         -------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

            DELAWARE                                   33-0896617
  ----------------------------           ---------------------------------------
(STATE OR OTHER JURISDICTION OF          (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
 INCORPORATION OR ORGANIZATION)

19800 MACARTHUR BOULEVARD, 12TH FLOOR, IRVINE, CALIFORNIA         92612
---------------------------------------------------------         -----
(Address of principal executive offices)                        (Zip Code)

                                 (949) 476-2212
                                 --------------
              (Registrant's telephone number, including area code)

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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date. Common Stock, $0.0001 Par Value -
50,551,943 shares as of February 5, 2004.

================================================================================


                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
PART I. - FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements

         Condensed Consolidated Balance Sheets as of December 31, 2003
               and March 31, 2003 ............................................3

         Condensed Consolidated Statements of Operations for the Three
               Months and Nine Months Ended December 31, 2003 and 2002........4

         Condensed Consolidated Statements of Cash Flows for the Nine
               Months Ended December 31, 2003 and 2002 .......................5

         Notes to Condensed Consolidated Financial Statements.................6

Item 2.  Management's Discussion and Analysis of Financial Condition
               and Results of Operations......................................14

Item 3.  Quantitative and Qualitative Disclosures About Market Risk...........32

Item 4.  Controls and Procedures..............................................32

PART II. - OTHER INFORMATION

Item 1.  Legal Proceedings....................................................33

Item 2.  Changes in Securities and Use of Proceeds............................33

Item 3.  Defaults Upon Senior Securities......................................33

Item 4.  Submission of Matters to a Vote of Security Holders..................33

Item 5.  Other Information....................................................33

Item 6.  Exhibits and Reports on Form 8-K.....................................34

SIGNATURES....................................................................36

CERTIFICATIONS................................................................37


                                       2



PART I. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

                                     ISLAND PACIFIC, INC. AND SUBSIDIARIES
                                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                     (in thousands, except share amounts)



                                                                                     DECEMBER 31,    MARCH 31,
                                                                                        2003           2003
                                                                                      ---------      ---------
                                                                                               
ASSETS
Current assets:
   Cash and cash equivalents                                                          $  5,131       $  1,319
   Accounts receivable, net of allowance for doubtful accounts of $260 and $372,
     respectively                                                                        5,500          3,974
   Other receivables, including $0 and $3 from related parties, respectively               113             97
   Inventories                                                                              84             91
   Current portion of non-compete agreements                                               748            917
   Net assets from discontinued operations                                                  --            309
   Prepaid expenses and other current assets                                               965            225
                                                                                      ---------      ---------
       Total current assets                                                             12,541          6,932

Note receivable                                                                            162             --
Property and equipment, net                                                                367            380
Purchased and capitalized software, net                                                 19,854         14,804
Goodwill, net                                                                           14,795         14,795
Non-compete agreements, net                                                                149            668
Other assets                                                                                29             58
                                                                                      ---------      ---------
       Total assets
                                                                                      $ 47,897       $ 37,637
                                                                                      =========      =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Debt due to stockholders                                                           $     --       $  1,320
   Convertible note                                                                        500            500
   Current portion of long-term debts                                                       --            149
   Accounts payable                                                                        667          2,941
   Accrued expenses                                                                      2,454          4,517
   Deferred revenue                                                                      3,242          1,561
   Income tax payable                                                                       64             --
                                                                                      ---------      ---------
       Total current liabilities                                                         6,927         10,988

Convertible debentures, net of debt discount of $0 and $625, respectively                   --          2,726
Other long-term liabilities                                                                 65             81
                                                                                      ---------      ---------
       Total liabilities                                                                 6,992         13,795
                                                                                      ---------      ---------

Commitments and contingencies

Stockholders' equity:
   Preferred Stock, $.0001 par value; 5,000,000 shares authorized; Series A
   Convertible Preferred, 7.2% cumulative 141,100 shares authorized and
     outstanding with a stated value of $100 per share, dividends in arrears of
     $1,716 and $1,269, respectively                                                    14,100         14,100
   Committed common stock - 2,500,000 shares                                                --          1,383
   Common stock, $.0001 par value; 100,000,000 shares authorized; 47,681,344 and
     42,199,632 shares issued; and 47,681,344 and 31,499,632 shares outstanding,
     respectively                                                                            5              4
   Additional paid in capital                                                           66,652         57,751
   Accumulated deficit                                                                 (39,852)       (40,490)
   Treasury stock, at cost; shares - 10,700,000                                             --         (8,906)
                                                                                      ---------      ---------
       Total stockholders' equity                                                       40,905         23,842
                                                                                      ---------      ---------

       Total liabilities and stockholders' equity                                     $ 47,897       $ 37,637
                                                                                      =========      =========


                                The accompanying notes are an integral part of
                              these condensed consolidated financial statements.

                                                      3



                                          ISLAND PACIFIC, INC. AND SUBSIDIARIES
                                     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                          (in thousands, except per share data)


                                                                      Three Months Ended            Nine Months Ended
                                                                         December 31,                  December 31,
                                                                     2003           2002           2003           2002
                                                                   ---------      ---------      ---------      ---------
                                                                                                    
Net sales                                                          $  5,128       $  7,118       $ 17,273       $ 15,808
Cost of sales                                                         1,411          2,173          4,139          5,835
                                                                   ---------      ---------      ---------      ---------
    Gross profit                                                      3,717          4,945         13,134          9,973

Expenses:
  Application development                                               361            650          1,044          2,894
  Depreciation and amortization                                         922          1,040          2,688          3,122
  Selling, general and administrative                                 2,918          2,671          8,715          6,498
                                                                   ---------      ---------      ---------      ---------
    Total expenses                                                    4,201          4,361         12,447         12,514
                                                                   ---------      ---------      ---------      ---------

Income (loss) from operations                                          (484)           584            687         (2,541)

Other income (expense):
  Interest income                                                         7             --             16              1
  Other income (expense)                                                112             15            (66)            17
  Interest expense                                                       --           (209)          (521)          (894)
                                                                   ---------      ---------      ---------      ---------
    Total other income (expenses)                                       119           (194)          (571)          (876)
                                                                   ---------      ---------      ---------      ---------

Income (loss) before provision for income taxes                        (365)           390            116         (3,417)

Provision for income tax benefits                                       (19)            (1)          (522)            --
                                                                   ---------      ---------      ---------      ---------
Income (loss) before cumulative effect of a change in
     accounting principle                                              (346)           391            638         (3,417)
     Cumulative effect of changing accounting principle -
         goodwill valuation under SFAS 142                               --             --             --           (627)
                                                                   ---------      ---------      ---------      ---------
Income (loss) from continuing operations                               (346)           391            638         (4,044)

    Income (loss) from discontinued operations of the SVI
         Training Products Inc, subsidiary, net of applicable
         income taxes                                                    --             (7)            --            152
                                                                   ---------      ---------      ---------      ---------
Net income (loss)                                                      (346)           384            638         (3,892)

    Cumulative preferred dividends                                      184            253            738            761
                                                                   ---------      ---------      ---------      ---------
Net income (loss) available to common stockholders                 $   (530)      $    131       $   (100)      $ (4,653)
                                                                   =========      =========      =========      =========

Basic earnings (loss) per share:
    Income (loss) before cumulative effect of a change in
        accounting principle                                       $  (0.01)      $   0.01       $   0.02       $  (0.12)
    Cumulative effect of a change in accounting principle -
        goodwill Valuation under SFAS 142                                --             --             --          (0.02)
                                                                   ---------      ---------      ---------      ---------
    Income (loss) from continuing operations                          (0.01)          0.01           0.02          (0.14)
    Income from discontinued operations                                  --             --             --           0.01
    Cumulative preferred dividends                                       --           0.01           0.02           0.03
                                                                   ---------      ---------      ---------      ---------
        Net income (loss) available to common stockholders         $  (0.01)      $     --       $     --       $  (0.16)
                                                                   =========      =========      =========      =========

Diluted earnings (loss) per share:
    Income (loss) before cumulative effect of a change in
        accounting principle                                       $  (0.01)      $   0.01       $   0.02       $  (0.12)
    Cumulative effect of a change in accounting principle -
        goodwill valuation under SFAS 142                                --             --             --          (0.02)
                                                                   ---------      ---------      ---------      ---------
    Income (loss) from continuing operations                          (0.01)          0.01           0.02          (0.14)
    Income from discontinued operations                                  --             --             --           0.01
    Cumulative preferred dividends                                       --           0.01           0.02           0.03
                                                                   ---------      ---------      ---------      ---------
        Net income (loss) available to common stockholders         $  (0.01)      $     --       $     --       $  (0.16)
                                                                   =========      =========      =========      =========

Weighted-average common shares outstanding:
     Basic                                                           46,172         30,395         38,656         29,257
     Diluted                                                         46,172         58,734         38,656         29,257



                                The accompanying notes are an integral part of
                              these condensed consolidated financial statements.

                                                           4



                                     ISLAND PACIFIC, INC. AND SUBSIDIARIES
                                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                (in thousands)


                                                                                     NINE MONTHS ENDED DECEMBER 31,
                                                                                          2003            2002
                                                                                        ---------      ---------
                                                                                                 
Cash flows from operating activities:
   Net income (loss)                                                                    $    638       $ (3,892)
   Adjustments to reconcile net income (loss) to net cash used for operating
    activities:
     Depreciation and amortization                                                         2,688          3,122
     Cumulative effect of a change in accounting principle - goodwill
       valuation under SFAS 142                                                               --            627
     Gain on disposal of furniture and equipment                                             169             --
     Amortization of debt discount and conversion option                                     267            171
     Changes in allowance for doubtful accounts                                             (112)            74
     Stock-based compensation                                                                195              8
     Common stock issued for services rendered and settlement cost                           385            390
   Changes in assets and liabilities net of effects from acquisitions:
     Accounts receivable and other receivables                                            (6,713)        (2,771)
     Inventories                                                                               7             15
     Prepaid expenses and other assets                                                      (710)             5
     Accounts payable and accrued expenses                                                (4,141)         1,014
     Income tax payable                                                                       64            (98)
     Accrued interest on stockholders' loans, convertible notes and term loan                187            664
     Deferred revenue                                                                      1,682           (603)
                                                                                        ---------      ---------
Net cash used for operating activities                                                    (5,394)        (1,274)
                                                                                        ---------      ---------

Cash flows from investing activities:
   Proceeds received from note receivable                                                     18             --
   Purchases of furniture and equipment                                                     (301)           (39)
   Capitalized software development costs                                                 (3,002)           (93)
                                                                                        ---------      ---------
Net cash used for investing activities                                                    (3,285)          (132)
                                                                                        ---------      ---------

Cash flows from financing activities:
   Sale of common stock, net of offering costs                                            11,929             --
   Decrease in amount due to stockholders, net                                                --           (287)
   Proceeds from committed stock                                                             700          1,383
   Payments on term loan and debentures                                                     (135)          (336)
   Proceeds from short-term loan from related party                                           --            120
   Payments on short-term loan from related party                                             --           (120)
                                                                                        ---------      ---------
Net cash provided by financing activities                                                 12,494            760
                                                                                        ---------      ---------

Effect of exchange rate changes on cash                                                       (3)            (4)
                                                                                        ---------      ---------

Net increase (decrease) in cash and cash equivalents                                       3,812           (650)
Cash and cash equivalents, beginning of period                                             1,319          1,309
                                                                                        ---------      ---------
Cash and cash equivalents, end of period                                                $  5,131       $    659
                                                                                        =========      =========

Supplemental disclosure of cash flow information:
   Interest paid                                                                        $    135       $    408

Supplemental schedule of non-cash investing and financing activities:
   Issued 4,103,161 shares of common stock upon conversion of the 9% debentures         $  4,200             --
   Purchased software license rights by offsetting payment against
     account receivable                                                                 $  3,900             --
   Repaid a convertible note by offsetting against outstanding account receivable       $  1,382             --
   Issued 2,287,653 shares of common stock upon conversion of the note due to
     stockholders                                                                       $  1,374             --
   Issued 500,000 shares of common stock as payment for dividend on preferred
     stock                                                                              $    421             --
   Retired 1,070,000 shares of treasury stock                                           $ (8,905)            --
   Issued 1,010,000 shares of common stock to repay in full a stockholder's note        $     --            388
   Issued 231,021 shares of common stock upon exercise of stock options                 $      1             --
   Issued 100,000 shares of common stock for services in connection with an
     equity financing in December 2000                                                        --       $     45
   Issued 140,000 shares of common stock to pay for penalty for late
     effectiveness of the registration statement                                              --       $     60
   Received 262,500 shares of common stock related to early termination
     of a service contract                                                                    --       $   (210)
   Issued 84,849 and 1,223,580 shares of common stock as payments for bonuses
     and services rendered in prior periods                                             $     83       $    657



                                The accompanying notes are an integral part of
                              these condensed consolidated financial statements.

                                                      5


                      ISLAND PACIFIC, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - ORGANIZATION AND BASIS OF PREPARATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles applicable
to interim financial statements. Accordingly, they do not include all of the
information and notes required for complete financial statements. In the opinion
of management, all adjustments necessary to present fairly the financial
position, results of operations and cash flows at December 31, 2003 and for all
the periods presented have been made.

Certain amounts in the prior periods have been reclassified to conform to the
presentation for the three and nine months ended December 31, 2003. The
financial information included in this quarterly report should be read in
conjunction with the consolidated financial statements and related notes thereto
in our Form 10-K/A for the year ended March 31, 2003.

The results of operations for the three and nine months ended December 31, 2003
and 2002 are not necessarily indicative of the results to be expected for the
full year.


NOTE 2 - DISCONTINUED OPERATIONS

Effective April 1, 2003, we sold our wholly-owned subsidiary, SVI Training
Products, Inc. ("Training Products"), to its former president, for the sale
price of $180,000 plus earn-out payments equal to 20% of the total gross
revenues of Training Products in each of its next two fiscal years, to the
extent the revenues in each of those years exceed certain targets. We received a
promissory note for the amount of $180,000 and the earn-out payments, if any,
will be made in quarterly installments following each fiscal year, bearing an
annual interest rate of 5%. We agreed to postpone the payments due January 1,
2004 and April 1, 2004 until July 1, 2004. The note has a balance of $162,000 at
December 31, 2003.

The sale of the Training Products subsidiary resulted in a loss of $129,000, net
of estimated income taxes, which was accrued for at March 31, 2003. Accordingly,
the operating results of the Training Products subsidiary for the three and nine
months ended December 31, 2002 were restated as discontinued operations.


NOTE 3 - INVENTORIES

Inventories consist of finished goods and are stated at the lower of cost or
market, on a first-in, first-out basis.


NOTE 4 - PURCHASED AND CAPITALIZED SOFTWARE

In December 2003, we entered into an agreement to purchase from QQQ Systems Pty
Limited ("QQQ Systems") exclusive ownership and rights to use, market, reproduce
and license QQQ Systems' point of sale software (the "Technology") in Europe and
North and South America for the purchase price of $3.9 million. In addition, a
portion of the future revenues from our sales of the Technology will be payable
to QQQ Systems as follows: (a) $150,000 for unlimited number of copies from
December 31, 2004 through June 30, 2004; (b) $150,000 for unlimited number of
copies from July 1, 2004 through April 30, 2005; (c) $150,000 for unlimited
number of copies from May 1, 2005 through April 30, 2006; (d) 20% of net revenue
per copy thereafter; and (e) effective from the third anniversary of December
31, 2003, 20% of the net revenue earned by us during the previous year. We will
continue sharing revenue until the total of all such shared revenue paid to QQQ
Systems has reached $2,850,000. However, at any time after April 30, 2006, we
may elect in our sole discretion to either to continue paying 20% revenue split
until the total of all shared revenues is paid equal to $2,850,000 or make a
final, single payment to QQQ Systems of $200,000. The $3.9 million purchase
price was paid by offsetting it against the outstanding account receivable due
to us from QQQ systems.

                                       6


NOTE 5 - CONVERTIBLE DEBT

Pursuant to the Discounted Loan Payoff Agreement dated March 31, 2003, we issued
to Union Bank of California a $500,000 unsecured, non-interest bearing
convertible note payable in either cash or shares of common stock, at our
option. The maturity date would have been March 31, 2004. In July 2003, the bank
assigned the note to Roth Capital Partners, LLC ("Roth Capital"), who was the
placement agent for the financings in June and November 2003. In January 2004,
we elected to repay the note in shares of common stock and issued 239,739 shares
at a price of $2.08 per share which was 80% of the average share closing price
of our common stock for the ten trading day period immediately preceding the
payoff date.


NOTE 6 - COMMITTED STOCK

In November 2003, we entered an agreement with Toys "R" Us, Inc. ("Toys") to
terminate the software development and services agreement. Pursuant to the
agreement, the $1.3 million outstanding convertible note, which would have been
converted solely for equity. Pursuant to the termination agreement, this note
was settled in full by offsetting against account receivable due to us from
Toys, as opposed to issuance of common stock, and the warrant to purchase
2,500,000 shares of our common stock was cancelled.


NOTE 7 - CHANGE IN ACCOUNTING PRINCIPLE

In July 2001, the FASB issued Statement of Financial Accounting Standards No.
142 ("SFAS 142"), "Goodwill and Other Intangible Assets," which is effective for
fiscal years beginning after December 15, 2001. SFAS 142 prohibits the
amortization of goodwill and intangible assets with indefinite useful lives but
requires that these assets be reviewed for impairment at least annually or on an
interim basis if an event occurs or circumstances change that could indicate
that their value has diminished or been impaired. Other intangible assets will
continue to be amortized over their estimated useful lives. In addition, the
standard includes provisions for the reclassification of certain existing
recognized intangibles as goodwill, reassessment of the useful lives of existing
recognized intangibles, reclassification of certain intangibles out of
previously reported goodwill and the identification of reporting units for
purposes of assessing potential future impairments of goodwill.

Effective April 1, 2002, we adopted SFAS 142 and ceased amortization of goodwill
recorded in business combinations prior to June 30, 2001. We evaluate the
remaining useful lives of these intangibles on an annual basis to determine
whether events or circumstances warrant a revision to the remaining period of
amortization.

Pursuant to SFAS 142, we completed the transitional analysis of goodwill
impairment as of April 1, 2002 and recorded an impairment of $627,000 as a
cumulative effect of a change in accounting principle in the quarter ended June
30, 2002.


NOTE 8 - PREFERRED STOCK

The Series A Convertible Preferred Stock (the "Series A Preferred") has a stated
value of $100 per share and is redeemed at our option any time prior to the
maturity date of December 31, 2006 for 107% of the stated value and accrued and
unpaid dividends. The preferred shares are entitled to cumulative dividends of
7.2% per annum, payable semi-annually, and have cumulative dividends of $1.7
million, or $12.17 per share, and $1.0 million, or $7.33 per share, at December
31, 2003 and 2002, respectively. The holders may convert each share of Series A
Preferred at any time into the number of shares of our common stock determined
by dividing the stated value plus all accrued and unpaid dividends, by a
conversion price initially equal to $0.80. The conversion price increases at an
annual rate of 3.5% calculated on a semi-annual basis. The conversion price as
of January 1, 2004 is $0.86. The Series A Preferred is entitled upon liquidation
to an amount equal to its stated value plus accrued and unpaid dividends in
preference to any distributions to common stockholders. The Series A Preferred
has no voting rights prior to conversion into common stock, except with respect
to proposed impairments of the Series A Preferred rights and preferences, or as
provided by law. We have the right of first refusal to purchase all but not less
than all of any shares of Series A Preferred or shares of common stock received
on conversion which the holder may propose to sell to a third party, upon the
same price and terms as the proposed sale to a third party.

An option agreement (the "Option Agreement") was prepared and agreed upon by
Softline Limited ("Softline") and Steven Beck, our president, chief operating
officer and director, as trustee of a certain group of our management (the
"Optionees"). Under the Option Agreement, Softline agreed to grant the Optionees
the right to purchase from Softline 8,000,000 shares of our common stock and
such number of shares of Series A Preferred convertible into 17,125,000 shares
of our common stock for a price of $0.80 per option share. The Option Agreement
expires on the earlier of March 24, 2004 and the date on which an Optionee's
full-time employment as our officer or director is terminated for any reason.

                                       7


On November 14, 2003, the Sage Group plc (the "Sage Group") acquired
substantially all the assets of Softline, including Softline's 141,000 shares of
our Series A Preferred, 8,923,915 shares of our common stock and options to
purchase 71,812 shares of our common stock. In connection with the acquisition,
certain agreements of Softline, including the rights and obligations respecting
and arising from the Option Agreement were also assigned to and assumed by the
Sage Group. Accordingly, the Optionees now have the right to purchase the option
shares from the Sage Group for a price of $0.80 per option share. The right to
exercise the option is to be distributed as determined by our Board to the
Optionees, who may include Mr. Beck and other members of our management, as an
incentive to continue service for us. It is the current intent of the Optionees
to transfer their rights under the Option Agreement to us. On September 17,
2003, 500,000 shares of common stock constituting accrued dividends on our
Series A Preferred were issued in the names of various financial institutions.


NOTE 9 - PRIVATE PLACEMENTS

In June 2003, we sold various institutional investors ("June 2003 Institutional
Investors") 5,275,000 shares of common stock at a per share price of $1.50 for
an aggregate purchase price of $7.9 million. In connection with this financing,
we paid Roth Capital, as placement agent, cash compensation of 8% of the
proceeds and issued a five-year warrant to purchase 527,500 shares of common
stock at an exercise price of $1.65 per share, with a fair market value of
$859,000. We also issued five-year warrants to purchase 375,000 shares of common
stock at an exercise price of $1.65, with a fair market value of $620,000, to
the holders of our 9% convertible debentures in order to obtain their requisite
consents and waivers of rights they possessed to participate in the financing.
In accordance with the warrant agreements, these warrants were adjusted to $1.55
due to the sale of common stock at the price of $1.55 on November 7, 2003. We
filed a registration statement covering the shares sold and common stock
underlying the warrants issued in connection with this transaction. The
registration statement was declared effective on September 26, 2003.

On November 7, 2003, we sold various institutional investors ("November 2003
Institutional Investors") 3,180,645 shares of common stock at a price of $1.55
per share for an aggregate purchase price of $4.9 million. In connection with
this financing, we paid Roth Capital, as placement agent, compensation of
$179,000 in cash and 115,226 shares of our common stock and issued a five-year
warrant to purchase 282,065 shares of our common stock at an exercise price of
$1.71 per share, with a fair market value of $388,000. Roth Capital was granted
the registration rights similar to those granted to the November 2003
Institutional Investors. Pursuant to a registration rights agreement, we filed a
registration statement covering the shares sold and common stock underlying the
warrants issued in connection with this transaction. The registration statement
was declared effective on February 3, 2004.


NOTE 10 - EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per common share are calculated by dividing net income
(loss) by the weighted average number of common shares outstanding during the
reporting period. Diluted earnings per common shares ("diluted EPS") reflect the
potential dilutive effect, determined by the treasury method, of additional
common shares that would have been outstanding if the dilutive potential common
shares had been issued. Earnings per share for the three and nine months ended
December 31, 2003 and 2002 is calculated as follows (in thousands):



                                          Three months ended            Nine months ended
                                              December 31,                 December 31,
                                          2003           2002          2003           2002
                                       ---------      ---------     ---------      ---------
                                                                       
Net income (loss) available to
common stockholders                    $   (530)      $    131      $   (100)      $ (4,653)
                                       =========      =========     =========      =========

Basic weighted average shares            46,172         30,395        38,656         29,257

Dilutive common stock equivalent             --         28,339            --             --
                                       ---------      ---------     ---------      ---------
Diluted weighted average shares          46,172         58,734        38,656         29,257
                                       =========      =========     =========      =========

Basic earnings (loss) per share        $  (0.01)      $     --      $     --       $  (0.16)
Diluted earnings (loss) per share      $  (0.01)      $     --      $     --       $  (0.16)



                                       8


The following potential common shares have been excluded from the computation of
diluted net loss per share for the three and nine months ended December 31, 2003
and nine months ended December 31, 2002, because the effect would have been
anti-dilutive:


                                                                             Three and
                                                                         Nine months ended      Nine months ended
                                                                            December 31,           December 31,
                                                                                2003                  2002
                                                                         -------------------    -----------------
                                                                                                
         Outstanding options under our stock option plans                         4,371,974            4,835,367
         Outstanding options granted outside our stock option plans               4,994,312            5,054,312
         Warrants issued in conjunction with private placements                   3,830,281            1,732,000
         Warrants issued for services rendered                                    1,108,898              804,002
         Warrant issued to a major customer                                              --            2,500,000
         Convertible notes due to stockholders                                           --            2,083,333
         Convertible note due to a major customer                                        --            2,500,000
         Convertible note                                                           239,739                   --
         Series A Convertible Preferred Stock                                    18,449,674           18,894,000
                                                                         -------------------    -----------------
              Total                                                              32,994,878           38,403,014
                                                                         ===================    =================


NOTE 11 - BUSINESS SEGMENTS AND GEOGRAPHIC DATA

We are a leading provider of software solutions and services to the retail
industry. We provide high value innovative solutions that help retailers
understand, create, manage and fulfill consumer demand. Our solutions and
services have been developed specifically to meet the needs of the retail
industry. Our solutions help retailers improve the efficiency and effectiveness
of their operations and build stronger, longer lasting relationships with their
customers. We currently operate in the United States and the United Kingdom. The
geographic distribution of our net sales and long-lived assets are as follows
(in thousands):



                                       Three months ended       Nine months ended
                                           December 31,             December 31,
                                       2003         2002         2003         2002
                                     --------     --------     --------     --------
                                                                
         Net sales:
             United States           $ 3,513      $ 6,238      $14,627      $13,891
             United Kingdom            1,615          880        2,646        1,917
                                     --------     --------     --------     --------
                Total net sales      $ 5,128      $ 7,118      $17,273      $15,808
                                     ========     ========     ========     ========



                                                                        December 31,
                                                                    2003             2002
                                                               -------------    -------------
                                                                          
         Identifiable assets from continuing operations:
            United States                                      $     45,246     $     37,081
            United Kingdom                                            2,651            1,063
                                                               -------------    -------------
               Total identifiable assets                       $     47,897     $     38,144
                                                               =============    =============


For the three and nine months ended December 31, 2003 and 2002, net sales to
major customers are as follows (in thousands):



                                      Three months ended                   Nine months ended
                                         December 31,                         December 31,
                                    2003              2002                2003             2002
                                 ------------     -------------       -------------    -------------
                                                                                    
         The Perfume Shop                15%               --%                  5%              --%
         QQQ Systems Ltd.                --%               --%                 23%              --%
         Toys                            --%               25%                  9%              31%


                                       9


The account receivable balances from the Perfume Shop at December 31, 2003
represent 13% of total accounts receivable. The account receivable balances from
Toys at December 31, 2003 and 2002 represent 12% and 15%, respectively, of total
accounts receivable. The account receivable balance from QQQ Systems Ltd. at
December 31, 2003 represents 0% of total accounts receivable.

 We organize our business into two segments as follows:

         o        RETAIL MANAGEMENT SOLUTIONS - offers suite of applications,
                  which builds on our long history in retail software design and
                  development. We provide our customers with an extremely
                  reliable, widely deployed, comprehensive and fully integrated
                  retail management solution. Retail Management Solutions
                  include merchandise management that optimizes workflow and
                  provides the highest level of data integrity. This module
                  supports all operational areas of the supply chain including
                  planning, open-to-buy purchase order management, forecasting,
                  warehouse and store receiving distribution, transfers, price
                  management, performance analysis and physical inventory. In
                  addition, Retail Management Solutions include a comprehensive
                  set of tools for analysis and planning, replenishment and
                  forecasting, event and promotion management, warehouse,
                  ticketing, financials and sales audit. Through collaborations
                  with strategic partners, Retail Management Solutions offers
                  tools for loss prevention, communication with stores and
                  vendors, integration needs, purchase and allocation decisions,
                  analysis of weather impact, control and management of business
                  processes, consumer research, tracking consumer shopping
                  patterns, forecasting and replenishment, and analyzing store
                  people productivity.

         o        STORE SOLUTIONS - offers suite of applications builds on our
                  long history of providing multi-platform, client server
                  in-store solutions. We market this set of applications under
                  the name "OnePointe," and "OnePointe International" which is a
                  full business to consumer software infrastructure encompassing
                  a range of integrated store solutions. "OnePointe" is a
                  complete application providing all point-of-sale ("POS") and
                  in-store processor (server) functions for traditional "brick
                  and mortar" retail operations.

A summary of the revenues and operating income (loss), excluding depreciation
and amortization, attributable to each of these business units and identifiable
assets is as follows (in thousands):



                                                              Three months ended            Nine months ended
                                                                  December 31,                  December 31,
                                                              2003           2002           2003           2002
                                                            ---------      ---------      ---------      ---------
                                                                                             
Net sales:
          Retail Management Solutions                       $  4,840       $  6,383       $ 16,209       $ 14,355
          Store Solutions                                        288            735          1,064          1,453
                                                            ---------      ---------      ---------      ---------
               Total net sales                              $  5,128       $  7,118       $ 17,273       $ 15,808
                                                            =========      =========      =========      =========

Operating income (loss):
          Retail Management Solutions                       $  1,205       $  1,778       $  6,024       $  2,313
          Store Solutions                                        (48)           462           (240)           121
          Other (see below)                                   (1,641)        (1,656)        (5,097)        (4,975)
                                                            ---------      ---------      ---------      ---------
               Total operating income (loss)                $   (484)      $    584       $    687       $ (2,541)
                                                            =========      =========      =========      =========

Other operating loss:
          Amortization of intangible assets                 $   (879)      $   (955)      $ (2,538)      $ (2,864)
          Depreciation                                           (42)           (84)          (150)          (258)
          Administrative costs and other non-allocated
            expenses                                            (720)          (617)        (2,409)        (1,853)
                                                            ---------      ---------      ---------      ---------
               Total other operating loss                   $ (1,641)      $ (1,656)      $ (5,097)      $ (4,975)
                                                            =========      =========      =========      =========

Identifiable assets:
          Retail Management Solutions                       $ 39,651       $ 32,948       $ 39,651       $ 32,948
          Store Solutions                                      4,036          4,914          4,036          4,914
                                                            ---------      ---------      ---------      ---------
               Total identifiable assets                    $ 43,687       $ 37,862       $ 43,687       $ 37,862
                                                            =========      =========      =========      =========


                                       10


Operating income (loss) in Retail Management Solutions and Store Solutions
includes direct expenses for software licenses, maintenance services,
programming and consulting services, sales and marketing expenses, product
development expenses, and direct general and administrative expenses. The
"Other" caption includes depreciation, amortization of intangible assets,
non-allocated costs and other expenses that are not directly identified with a
particular business unit and which management does not consider in evaluating
the operating income of the business unit.


NOTE 12 - RECENT ACCOUNTING PRONOUNCEMENTS

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148 ("SFAS 148"), "Accounting for Stock-Based Compensation-Transition and
Disclosure." This Statement amends SFAS 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, SFAS 148 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. The
transition guidance and annual disclosure provisions of SFAS 148 are effective
for fiscal years ending after December 15, 2002, with earlier application
permitted in certain circumstances. The interim disclosure provisions are
effective for financial reports containing financial statements for interim
periods beginning after December 15, 2002. We are currently evaluating which
method of transition to fair value accounting we will elect.

The following table presents pro forma disclosures required by SFAS 148 of net
income (loss) and basic and diluted earnings (loss) per share as if stock-based
employee compensation had been recognized during the nine months ended December
31, 2003 and 2002. The compensation expense for these periods has been
determined under the fair value method using the Black-Scholes pricing model,
and assumes graded vesting.



                                                             NINE MONTHS ENDED
                                                         DECEMBER 31,    DECEMBER 31,
                                                             2003            2002
                                                        -------------   -------------
                                                   (in thousands, except per share amounts)
                                                                  (unaudited)
                                                                  
Net income (loss) as reported                           $        638    $     (3,892)
Less: stock-based compensation expense,
     net of related tax effects                               (1,621)         (1,285)
                                                        -------------   -------------
Pro forma net loss                                      $       (983)   $     (5,177)
                                                        =============   =============

Basic earnings (loss) per share - as reported           $       0.02    $      (0.13)
Diluted earnings (loss) per share - as reported         $       0.02    $      (0.13)
Basic earnings (loss) per share - pro forma             $      (0.03)   $      (0.18)
   Diluted earnings (loss) per share - pro forma        $      (0.03)   $      (0.18)


In April 2003, the FASB issued Statement of Financial Accounting Standards No.
149 ("SFAS 149"), "Amendment of Statement 133 on Derivative Instruments and
Hedging Activities." SFAS 149 further clarifies accounting for derivative
instruments. We believe the adoption of this statement will have no material
impact on our consolidated financial statements.

In May 2003, the FASB issued Statement of Financial Accounting Standards No.
150, "Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity," ("SFAS 150"). 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. SFAS 150 is effective for financial instruments entered
into or modified after May 31, 2003, and otherwise is effective at the beginning
of the first interim period beginning after June 15, 2003. We do not believe the
adoption of SFAS 150 will have a material impact on our consolidated financial
statements.


NOTE 13 - ACQUISITIONS

On January 30, 2004, we acquired Page Digital Incorporated ("Page Digital"), a
developer of multi-channel commerce software, through a merger transaction for
total consideration of $7.0 million, consisting of $2.0 million in cash and 2.5
million shares of our common stock valued at $2.00. Upon the consummation of
this transaction Lawrence Page and Dave Joseph became executive officers of
Island Pacific. Mr. Page received total consideration of $1.4 million and


                                       11


1,755,784 shares of our common stock in connection with the acquisition. Mr.
Joseph received total consideration of $200,000 and 249,649 shares of our common
stock in connection with the acquisition. The balance of $395,755 and 494,526
shares of common stock were paid to the remaining shareholders of Page Digital.
We also entered two year employment agreements with both Mr. Page and Mr.
Joseph, and a two year non-competition agreement with Mr. Page. Page Digital has
total assets of approximately $2.0 million (unaudited) and generates annual
revenues of approximately $6.0 million (unaudited). Page Digital has
approximately 37 employees, all of whom were based in the United States.

On January 6, 2004, we executed a letter of intent to acquire Retail
Technologies International, Inc. ("RTI"), a provider of management systems for
retailers, for a purchase price of $11 million, consisting of $5 million in
cash, and $6 million in shares of our common stock determined by dividing $6
million by the average closing price of our common stock over the ten day period
immediately preceding the closing of the transaction. In addition, we will
assume approximately $2.5 million in debt owed to certain RTI security holders.
The closing of the transaction is subject to securing financing, due diligence,
the execution of a definitive agreement, the approval of our board of directors
and the approvals of the board of directors and the shareholders of RTI. There
can be no assurance that we will be able to secure the necessary financing to
complete the acquisition of RTI. RTI has total assets of approximately $4.3
million (unaudited) and generates annual revenues of approximately $8.0 million
(unaudited). RTI has approximately 59 employees, all of whom are based in the
United States.


NOTE 14 - COMMITMENTS AND CONTINGENCIES

In June 2003, we entered into a development and marketing license agreement with
a software and services company affiliated with our former officer. Under this
agreement, we obtain an exclusive right to sell and distribute this company's
software. In return, we committed to fund $1.2 million toward development of
this product. We also agreed to pay a royalty of 30% of the software license
sales up until we have recuperated all the development funding, at which point
the royalty will increase to 50% thereafter. As of December 31, 2003, we've
funded $545,000 toward development which is included in prepaid expenses.

In April of 2002, our former CEO, Thomas Dorosewicz, filed a demand with the
California Labor Commissioner for $256,250 in severance benefits allegedly due
under a disputed employment agreement, plus attorney's fees and costs. Mr.
Dorosewicz's demand was later increased to $283,894. On June 18, 2002, we filed
an action against Mr. Dorosewicz, Michelle Dorosewicz and an entity affiliated
with Mr. Dorosewiczin San Diego Superior Court, Case No. GIC790833, alleging
fraud and other causes of action relating to transactions Mr. Dorosewicz caused
us to enter into with his affiliates and related parties without proper board
approval. On July 31, 2002, Mr. Dorosewicz filed cross-complaints in that action
alleging breach of statutory duty, breach of contract, fraud and other causes of
action related to his employment with us and other transactions he entered into
with us. This dispute was heard by an arbitrator the week of October 3, 2003.
The arbitrator issued an award on November 7, 2003, resolving most of the
disputed issues in favor of the Company as follows: (a) the Company was awarded
a refund of rental payments amounting to $66,950.76; (b) the excessive equipment
leasing financing charges by Mr. Dorosewicz were recast substantially reducing
the Company's unpaid balance; (c) Mr. Dorosewicz was ordered to repay attorneys'
fees reimbursement he had previously been provided by the Company; (d) Mr.
Dorosewicz was denied severance benefits; (e) Mr. Dorosewicz's claims with
respect to options were denied; and (f) Mr. Dorosewicz was awarded his unpaid
bonus in the amount of $56,719. The net amount awarded to Mr. Dorosewicz was
$85,339.09 which was paid in January 2004.

We decided in the third quarter of fiscal 2002 to sell certain assets of our
Australian subsidiary to the former management of such subsidiary, and then
cease Australian operations. Such sale was, however, subject to the approval of
National Australia Bank, the subsidiary's secured lender. The bank did not
approve the sale and the subsidiary ceased operations in February 2002. The bank
caused a receiver to be appointed in February 2002 to sell substantially all of
the assets of the Australian subsidiary and pursue collections on any
outstanding receivables. The receiver proceeded to sell substantially all of the
assets for $300,000 in May 2002 to an entity affiliated with the former
management, and is actively pursuing the collection of receivables. If the sale
proceeds plus collections on receivables are insufficient to discharge the
indebtedness to National Australia Bank, we may be called upon to pay the
deficiency under our guarantee to the bank. We have reserved $187,000 as our
potential exposure. The receiver has also claimed that we are obligated to it
for inter-company balances of $636,000, but we do not believe any amounts are
owed to the receiver, who has not as of the date of this report acknowledged the
monthly corporate overhead recovery fees and other amounts charged by us to the
Australian subsidiary offsetting the amount claimed to be due.

On May 15, 2002, an employee who is currently out on disability/worker's
compensation leave, Debora Hintz, filed a claim with the California Labor
Commissioner seeking $41,000 in alleged unpaid commissions. On or about December
of 2002, Ms. Hintz filed a discrimination claim against us with the Department
of Fair Employment and Housing, alleging harassment and sexual orientation
discrimination. We have responded appropriately to both the wage claim and the
discrimination allegations, which we believe lack merit based on present
information. On December 1, 2003, the Department of Fair Housing and Employment
closed the case on the basis of no probable cause to prove violation of statue,
and gave notice of right to sue.

                                       12


On August 30, 2002, Cord Camera Centers, Inc., an Ohio corporation ("Cord
Camera"), filed a lawsuit against one of our subsidiaries, SVI Retail, Inc.
("SVI Retail") as the successor to Island Pacific Systems Corporation, in the
United States District Court for the Southern District of Ohio, Eastern
Division, Case No. C2 02 859. The lawsuit claimed damages in excess of $1.5
million, plus punitive damages of $250,000, against SVI Retail for alleged
fraud, negligent misrepresentation, breach of express warranties and breach of
contract. These claims pertained to the following agreements between Cord Camera
and Island Pacific: (i) a License Agreement, dated December 1999, as amended,
for the use of certain software products, (ii) a Services Agreement for
consulting, training and product support for the software products and (iii) a
POS Software Support Agreement for the maintenance and support services for a
certain software product. The parties settled this matter in September 2003. The
terms of the settlement agreement are covered by a confidentiality covenant.

In mid-2002, we were the subject of an adverse judgment entered against us in
favor of Randall's Family Golf Centers, ("Randall") in the approximate sum of
$61,000. The judgment was entered as a default judgment, and is based on
allegations that we received a preferential transfer of funds within 90 days of
the filing by Randall of a chapter 11 case in the United States Bankruptcy Court
for the Southern District of New York. We settled this matter by an agreement to
pay $12,500 to Randall.

On November 22, 2002, UDC Homes, Inc and UDC Corporation now known as Shea
Homes, Inc. served Sabica Ventures, Inc. ("Sabica"), our wholly-owned
subsidiary, and Island Pacific, then an operating division of SVI Solutions,
Inc. (now our retail management solutions division) with a cross-complaint for
indemnity on behalf of an entity identified in the summons as Pacific Cabinets.
Sabica and Island Pacific filed a notice of motion and motion to quash service
of summons on the grounds that neither Sabica nor Island Pacific has ever done
business as Pacific Cabinets and has no other known relation to the construction
project that is the subject of the cross-complaint and underlying complaint. Our
motion to quash was denied in a hearing on May 22, 2003.

Except as set forth above, we are not involved in any material legal
proceedings, other than ordinary routine litigation proceedings incidental to
our business, none of which are expected to have a material adverse effect on
our financial position or results of operations. However, litigation is subject
to inherent uncertainties, and an adverse result in existing or other matters
may arise from time to time which may harm our business.


NOTE 15 - RELATED-PARTY TRANSACTIONS

We retain our former CEO and Chairman of the Board to provide consulting
services starting August 2003. For the three and nine months ended December 31,
2003, the expense for this service was $113,000 and $187,000, respectively.

We retained an entity owned by an immediate family member of our current CEO and
Chairman to provide recruiting and marketing services. For the three and nine
months ended December 31, 2003, the expense for this service was $10,000 and
$118,000.

In June 2003, we entered into a development and marketing license agreement with
a software and services company affiliated with a former officer. Under this
agreement, we obtain an exclusive right to sell and distribute this company's
software. In return, we committed to fund $1.2 million toward development of
this product. We also agreed to pay a royalty of 30% of the software license
sales up until we have recuperated all the development funding, at which point
the royalty will increase to 50% thereafter. As of December 31, 2003, we've
funded $545,000 toward this development.

                                       13


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

FORWARD-LOOKING STATEMENTS

THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION
27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT
OF 1934 AND THE COMPANY INTENDS THAT CERTAIN MATTER DISCUSSED IN THIS REPORT ARE
"FORWARD-LOOKING STATEMENTS" INTENDED TO QUALIFY FOR THE SAFE HARBOR FROM
LIABILITY ESTABLISHED BY THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
THESE FORWARD-LOOKING STATEMENTS CAN GENERALLY BE IDENTIFIED BY THE CONTEXT OF
THE STATEMENT WHICH MAY INCLUDE WORDS SUCH AS THE COMPANY ("IPI", "WE" OR "US")
"BELIEVES", "ANTICIPATES", "EXPECTS", "FORECASTS", "ESTIMATES" OR OTHER WORDS
SIMILAR MEANING AND CONTEXT. SIMILARLY, STATEMENTS THAT DESCRIBE FUTURE PLANS,
OBJECTIVES, OUTLOOKS, TARGETS, MODELS, OR GOALS ARE ALSO DEEMED FORWARD-LOOKING
STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
FORECASTED OR ANTICIPATED AS OF THE DATE OF THIS REPORT. CERTAIN OF SUCH RISKS
AND UNCERTAINTIES ARE DESCRIBED IN CLOSE PROXIMITY TO SUCH STATEMENTS AND
ELSEWHERE IN THIS REPORT INCLUDING ITEM 2, "MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS." STOCKHOLDERS, POTENTIAL
INVESTORS AND OTHER READERS ARE URGED TO CONSIDER THESE FACTORS IN EVALUATING
THE FORWARD-LOOKING STATEMENTS AND ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON
SUCH FORWARD-LOOKING STATEMENTS OR CONSTRUE SUCH STATEMENTS TO BE A
REPRESENTATION BY US THAT OUR OBJECTIVES OR PLANS WILL BE ACHIEVED. THE
FORWARD-LOOKING STATEMENTS INCLUDED IN THIS REPORT ARE MADE ONLY AS OF THE DATE
OF THIS REPORT, AND WE UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE SUCH
FORWARD-LOOKING STATEMENTS TO REFLECT SUBSEQUENT EVENTS OR CIRCUMSTANCES.

THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR CONSOLIDATED
FINANCIAL STATEMENTS AND THE RELATED NOTES AND OTHER FINANCIAL INFORMATION
APPEARING ELSEWHERE IN THIS FORM 10-Q. READERS ARE ALSO URGED TO CAREFULLY
REVIEW AND CONSIDER THE VARIOUS DISCLOSURES MADE BY US WHICH ATTEMPT TO ADVISE
INTERESTED PARTIES OF THE FACTORS WHICH AFFECT OUR BUSINESS, INCLUDING WITHOUT
LIMITATION THE DISCLOSURES MADE UNDER THE CAPTION "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS," AND THE AUDITED
CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED IN OUR ANNUAL
REPORT FILED ON FORM 10-K/A FOR THE YEAR ENDED MARCH 31, 2003, AND THE
DISCLOSURES UNDER THE HEADING "RISK FACTORS" IN THE FORM 10-K/A, AS WELL AS
OTHER REPORTS AND FILINGS MADE WITH THE SECURITIES AND EXCHANGE COMMISSION.

OVERVIEW

We are a provider of software solutions and services to the retail industry. We
provide innovative solutions that help retailers understand, create, manage and
fulfill consumer demand. Our solutions and services have been developed
specifically to meet the needs of the retail industry. Our solutions help
retailers improve the efficiency and effectiveness of their operations and build
stronger, longer lasting relationships with their customers. We market our
software solutions through direct and indirect sales channels primarily to
retailers who sell to their customers through traditional retail stores,
catalogs and/or Internet-enabled storefronts. To date, we have licensed our
solutions to more than 200 retailers across a variety of retail sectors. Our
operations are conducted principally in the United States and the United
Kingdom.

We currently derive the majority of our revenues from the sale of application
software licenses and the provision of related professional and support
services. Application software license fees are dependent upon the sales volume
of our customers, the number of users of the application(s), and/or the number
of locations in which the customer plans to install and utilize the
application(s). As the customer grows in sales volume, adds additional users
and/or adds additional locations, we charge additional license fees. We
typically charge for support, maintenance and software updates on an annual
basis pursuant to renewable maintenance contracts. We typically charge for
professional services including consulting, implementation and project
management services on an hourly basis. Our sales cycles for new license sales
historically ranged from three to twelve months, but new license sales were
limited during the past two fiscal years and sales cycles are now difficult to
estimate. Our long sales cycles have in the past caused our revenues to
fluctuate significantly from period to period.

RECENT DEVELOPMENTS

In October 2003, Donald Radcliffe resigned as a member of our Board Directors.
Mr. Radcliffe was hired in December 2003 as a part-time employee handling
investor relations.

In November 2003, we entered into an agreement with various institutional
investors for the sale of 3,180,645 shares of common stock at a price of $1.55
per share for an aggregate purchase price of $4.9 million. See "Liquidity and
Capital Resources -- Financing Transactions" below.

                                       14


In November 2003, we entered into an agreement with Toys "R" Us, Inc. ("Toys")
to terminate the software development and services agreement. Pursuant to the
agreement, the outstanding convertible note was settled in full and the
outstanding warrant was cancelled. For further details, see "Indebtedness - Toys
"R" Us, Inc." below.

In December 2003, we purchased from QQQ Systems Pty Limited an exclusive right
to use, market and license a point-of-sale software in Europe and North and
South America for a purchase price of $3.9 million.

In January 2004, we issued 239,739 shares of common stock to repay a $500,000
convertible note. This note was originally issued to Union Bank of California in
March 2003 and subsequently assigned by Union Bank of California to Roth Capital
Partners, LLC.

Upon the consummation of the acquisition of Page Digital Incorporated ("Page
Digital") on January 30, 2004, Lawrence Page and Dave Joseph were appointed to
the positions of Chief Technology Officer and Senior Vice President-Sales and
Marketing, respectively.

ACQUISITION OF PAGE DIGITAL

On January 30, 2004, we acquired Page Digital, a developer of multi-channel
commerce software, through a merger transaction for total consideration of $7.0
million, consisting of $2.0 million in cash and 2,500,000 shares of our common
shares valued at $2.00. Upon the consummation of this transaction, Lawrence Page
and Dave Joseph became executive officers of Island Pacific. Mr. Page received
total consideration of $1,404,630 and 1,755,784 shares of our common stock in
connection with the acquisition. Mr. Joseph received total consideration of
$199,722 and 249,649 shares of our common stock in connection with the
acquisition. The balance of $395,755 and 494,526 shares of common stock were
paid to the remaining shareholders of Page Digital. We also entered two year
employment agreements with both Mr. Page and Mr. Joseph, and a two year
non-competition agreement with Mr. Page. Page Digital has total assets of
approximately $2.0 million (unaudited) and generates annual revenues of
approximately $6.0 million (unaudited). Page Digital has approximately 37
employees, all of whom are based in the United States.

The legitimization of business to business and business to consumer direct
commerce (Internet, brick-and-mortar, catalog, and other) has rapidly created a
substantial market for the Page Digital suite of direct commerce applications.
According to the United States Department of Commerce, the market for
multi-channel direct commerce applications was just $15 billion in 1999, grew to
$27.28 billion in 2000, and to $32.6 billion in 2001, and it is growing at a
rate 2.5 times greater than traditional retailing (Source: Internet Retailer,
April 2002). The acquisition of Page Digital will enable us to continue to
provide our customers with Page Digital's e-commerce, customer relations
management, and Catalog Management solutions. We expect to further integrate
these solutions into our offerings to enable customers to complete the
multi-channel retail distribution and customer service chain. In addition, the
acquisition will also allow us to offer Page Digital's customers the IP
Merchandising solution, as well as Point of Sale, Loss Prevention, and IPI's
other alliance solutions.

ACQUISITION OF RTI

On January 6, 2004, we executed a Letter of Intent/Term Sheet pursuant to which
we intend to acquire RTI, a provider of management systems for retailers, for a
purchase price of $11 million, consisting of $5 million in cash, and $6 million
in shares of our common stock determined by dividing $6 million by the average
closing price of the Company's common stock over the ten day period immediately
preceding the closing of the transaction. In addition, we will assume
approximately $2.5 million in debt owed to certain RTI security holders. The
closing of the transaction is subject to securing financing, due diligence, the
execution of a definitive agreement, the approval of the board of directors of
the Company and the approvals of the board of directors and the shareholders of
RTI. There can be no assurance that the Company will be able to secure the
necessary financing to complete the acquisition of RTI. RTI has total assets of
approximately $4.3 million (un-audited) and generates annual revenues of
approximately $8.0 million (un-audited.) RTI has approximately 59 employees, all
in the United States.

The combination of Island Pacific, RTI and Page Digital, will enable us to offer
a fully integrated solution to mid-tier retailers that will be unique in the
marketplace. As a result of this transaction, smaller retailers will now be able
to cost-effectively acquire a solution that provides both front and back-end
support. We anticipate that RTI will assume responsibility to market IP Express
through its distribution channel, including 64 resellers, which will expand our
ability to effectively market IP Express, while Island Pacific will continue to
market our enterprise applications to our traditional market, mid-tier
retailers. The combination instantly expands our products, services offerings
and distribution channels.

                                       15


OPTION AGREEMENT

An option agreement (the "Option Agreement") was prepared and agreed upon by
Softline Limited ("Softline") and Steven Beck, our president, chief operating
officer and director, as trustee of a certain group of our management (the
"Optionees"). Under the Option Agreement, Softline agreed to grant the Optionees
the right to purchase from Softline 8,000,000 shares of our common stock and
such number of shares of Series A Convertible Preferred Stock convertible into
17,125,000 shares of our common stock for a price of $0.80 per option share. The
Option Agreement expires on the earlier of March 24, 2004 and the date on which
an Optionee's full-time employment as our officer or director is terminated for
any reason.

On November 14, 2003, the Sage Group plc (the "Sage Group") acquired
substantially all the assets of Softline, including Softline's 141,000 shares of
our Series A Convertible Preferred Stock, 8,923,915 shares of our common stock
and options to purchase 71,812 shares of our common stock. In connection with
the acquisition, certain agreements of Softline, including the rights and
obligations respecting and arising from the Option Agreement were also assigned
to and assumed by the Sage Group. Accordingly, the Optionees now have the right
to purchase the option shares from the Sage Group for a price of $0.80 per
option share. The right to exercise the option is to be distributed as
determined by our Board to the Optionees, who may include Mr. Beck and other
members of our management, as an incentive to continue service for us. It is the
current intent of the Optionees to transfer their rights under the Option
Agreement to us. On September 17, 2003, 500,000 shares of common stock
constituting accrued dividends on our Series A Convertible Preferred Stock were
issued in the names of various financial institutions.

DISCONTINUED OPERATIONS

Effective April 1, 2003, we sold our wholly-owned subsidiary, SVI Training
Products, Inc. ("Training Products") to its former president for the sale price
of $180,000 plus earn-out payments equal to 20% of the total gross revenues of
Training Products in each of its next two fiscal years, to the extent the
revenues in each of those years exceed certain targets. We received a promissory
note for the amount of $180,000 and the earn-out payments, if any, will be made
in quarterly installments following each fiscal year, bearing an annual interest
rate of 5%. The sale of the Training Products subsidiary resulted in a loss of
$129,000, net of estimated income taxes, which was accrued for at March 31,
2003. The operating results of Training Products for the prior periods are
restated as discontinued operations. The note has a balance of $162,000 as of
February 5, 2004.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of financial condition and results of operations are
based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis, we evaluate our estimates, based on
historical experience, and various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

We believe the following critical accounting policies affect significant
judgments and estimates used in the preparation of our consolidated financial
statements:

         o        REVENUE RECOGNITION. Our revenue recognition policy is
                  significant because our revenue is a key component of our
                  results of operations. In addition, our revenue recognition
                  determines the timing of certain expenses such as commissions
                  and royalties. We follow specific and detailed guidelines in
                  measuring revenue; however, certain judgments affect the
                  application of our revenue policy.

                                       16


                  We license software under non-cancelable agreements and
                  provide related services, including consulting and customer
                  support. We recognize revenue in accordance with Statement of
                  Position 97-2 (SOP 97-2), Software Revenue Recognition, as
                  amended and interpreted by Statement of Position 98-9,
                  Modification of SOP 97-2, Software Revenue Recognition, with
                  respect to certain transactions, as well as Technical Practice
                  Aids issued from time to time by the American Institute of
                  Certified Public Accountants.

                  Software license revenue is generally recognized when a
                  license agreement has been signed, the software product has
                  been delivered, there are no uncertainties surrounding product
                  acceptance, the fees are fixed and determinable, and
                  collection is considered probable. If a software license
                  contains an undelivered element, the fair value of the
                  undelivered element is deferred and the revenue recognized
                  once the element is delivered. In addition, if a software
                  license contains customer acceptance criteria or a
                  cancellation right, the software revenue is recognized upon
                  the earlier of customer acceptance or the expiration of the
                  acceptance period or cancellation right. Typically, payments
                  for our software licenses are due in installments within
                  twelve months from the date of delivery. Where software
                  license agreements call for payment terms of twelve months or
                  more from the date of delivery, revenue is recognized as
                  payments become due and all other conditions for revenue
                  recognition have been satisfied. Deferred revenue consists
                  primarily of deferred license, prepaid services revenue and
                  maintenance support revenue. Consulting services are
                  separately priced, are generally available from a number of
                  suppliers, and are not essential to the functionality of our
                  software products. Consulting services, which include project
                  management, system planning, design and implementation,
                  customer configurations, and training are billed on both an
                  hourly basis and under fixed price contracts. Consulting
                  services revenue billed on an hourly basis is recognized as
                  the work is performed. On fixed price contracts, consulting
                  services revenue is recognized using the percentage of
                  completion method of accounting by relating hours incurred to
                  date to total estimated hours at completion. We have from time
                  to time provided software and consulting services under fixed
                  price contracts that require the achievement of certain
                  milestones. The revenue under such arrangements is recognized
                  as the milestones are achieved.

                  Customer support services include post contract support and
                  the rights to unspecified upgrades and enhancements.
                  Maintenance revenues from ongoing customer support services
                  are billed on a monthly basis and recorded as revenue in the
                  applicable month, or on an annual basis with the revenue being
                  deferred and recognized ratably over the maintenance period.
                  If an arrangement includes multiple elements, the fees are
                  allocated to the various elements based upon vendor-specific
                  objective evidence of fair value.

         o        ACCOUNTS RECEIVABLE. We typically extend credit to our
                  customers. Software licenses are generally due in installments
                  within twelve months from the date of delivery. Billings for
                  customer support and consulting services performed on a time
                  and material basis are due upon receipt. From time to time
                  software and consulting services are provided under fixed
                  price contracts where the revenue and the payment of related
                  receivable balances are due upon the achievement of certain
                  milestones. Management estimates the probability of collection
                  of the receivable balances and provides an allowance for
                  doubtful accounts based upon an evaluation of our customers'
                  ability to pay and general economic conditions.

         o        VALUATION OF LONG-LIVED AND INTANGIBLE ASSETS AND GOODWILL.
                  For fiscal 2003, we have adopted SFAS 142 resulting in a
                  change in the way we value long-term intangible assets and
                  goodwill. We completed the initial transitional analysis of
                  goodwill impairment as of April 1, 2002 and recorded an
                  impairment of $0.6 million as a cumulative effect of a change
                  in accounting principle in the first quarter of fiscal 2003.
                  We no longer amortize goodwill, but instead test goodwill for
                  impairment on an annual basis or more frequently if certain
                  events occur. Goodwill is to be measured for impairment by
                  reporting units, which currently consist of our operating


                                       17


                  segments. At each impairment test for a business unit, we are
                  required to compare the carrying value of the business unit to
                  the fair value of the business unit. If the fair value exceeds
                  the carrying value, goodwill will not be considered impaired.
                  If the fair value is less than the carrying value, we will
                  perform a second test comparing the implied fair value of
                  reporting unit goodwill with the carrying amount of that
                  goodwill. The difference if any between the carrying amount of
                  that goodwill and the implied fair value will be recognized as
                  an impairment loss, and the carrying amount of the associated
                  goodwill will be reduced to its implied fair value. These
                  tests require us to make estimates and assumptions concerning
                  prices for similar assets and liabilities, if available, or
                  estimates and assumptions for other appropriate valuation
                  techniques.

                  For our intangible assets with finite lives, including our
                  capitalized software and non-compete agreements, we assess
                  impairment at least annually or whenever events and
                  circumstances suggest the carrying value of an asset may not
                  be recoverable based on the net future cash flows expected to
                  be generated from the asset on an undiscounted basis. When we
                  determine that the carrying value of intangibles with finite
                  lives may not be recoverable, we measure any impairment based
                  on a projected discounted cash flow method using a discount
                  rate determined by our management to be commensurate with the
                  risk inherent in our current business model.


RECENT ACCOUNTING PRONOUNCEMENTS

A number of new pronouncements have been issued for future implementation as
discussed in the footnotes to our interim financial statements (see Note 12). As
discussed in the notes to the interim financial statements, the implementation
of some of these new pronouncements is not expected to have a material effect on
our financial position or results of operations.

THREE MONTHS ENDED DECEMBER 31, 2003 COMPARED TO THREE MONTHS ENDED DECEMBER 31,
2002

NET SALES

Net sales decreased by $2.0 million, or 28%, to $5.1 million in the three months
ended December 31, 2003 from $7.1 million in the three months ended December 31,
2002. The decrease is due to a $2.1 million decrease in modification and
services sales on the Toys contract and $1.6 million decrease in software
license sales; offset in part by $1.6 million increase in sales of alliance
software license and services.

COST OF SALES/GROSS PROFIT

Cost of sales decreased by $0.8 million, or 36%, to $1.4 million in the quarter
ended December 31, 2003 from $2.2 million in the quarter ended December 31,
2002. Gross profit as a percentage of net sales increased to 72% in the quarter
ended December 31, 2003 from 69% in the prior comparative period. The decrease
in cost of sales and the increase in gross profit as a percentage of net sales
were due to the decrease in low-margin software modification and professional
services sales. During the quarter ended December 31, 2003 and 2002,
modifications and services revenues represented 14% and 41% of net sales,
respectively.

APPLICATION DEVELOPMENT EXPENSE

Application development expense decreased by $0.3 million, or 43%, to $0.4
million in the quarter ended December 31, 2003 from $0.7 million in the quarter
ended December 31, 2002. The decrease is primarily due to capitalizing $0.8
million development costs for new products. We've made significant investments
in our new products in the current year. We anticipate these new products will
be launched during the second half of the fiscal 2004. In the prior comparative
period, research and development efforts were spent on enhancing existing
products.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization decreased by $0.1 million, or 10%, to $0.9 million
in the quarter ended December 31, 2003 from $1.0 million in the quarter ended
December 31, 2002. The decrease is mainly due to a decrease in amortization of
purchased and capitalized software.

                                       18


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses increased by $0.2 million, or 7%,
to $2.9 million in the three months ended December 31, 2003 from $2.7 million in
the three months ended December 31, 2002. The increase is due to increasing
efforts and spending in marketing and sales activities, public and investor
communications and professional fees.

OPERATING INCOME

Operating loss from continuing operations, which included depreciation and
amortization expense, was $0.5 million for the quarter ended December 31, 2003,
compared to an operating profit of $0.6 million for the quarter ended December
31, 2002. Earnings from continuing operations before interest, provision for
income taxes, depreciation, amortization and change in accounting principle was
$0.4 million for the quarter ended December 31, 2003 compared to $1.6 million
for the quarter ended December 31, 2002.

INTEREST EXPENSE

Interest expense was $1,000 and $209,000 in the quarters ended December 31, 2003
and 2002, respectively. The decrease is mainly due to no interest-bearing debts
outstanding in the quarter ended December 31, 2003.

PROVISION FOR INCOME TAXES

Provision for income taxes for the quarters ended December 31, 2003 and 2002 are
benefits of $19,000 and $0, respectively.

CUMULATIVE PREFERRED DIVIDENDS

Cumulative dividends on the outstanding preferred stock attributable to the
quarter ended December 31, 2003 and 2002 were $0.2 million and $0.3 million,
respectively.


NINE MONTHS ENDED DECEMBER 31, 2003 COMPARED TO NINE MONTHS ENDED DECEMBER 31,
2002

NET SALES

Net sales increased by $1.5 million, or 9%, to $17.3 million in the nine months
ended December 31, 2003 from $15.8 million in the nine months ended December 31,
2002. Included in net sales for nine months ended December 31, 2003 is a
one-time sale of software technology rights of $3.9 million. Excluding this
non-recurring sale, net sales would have decreased by $2.4 million, or 15%, as
compared to comparable prior year period. The decrease is due to $3.3 million
decrease in modification and services sales relating to the Toys contract and
$1.3 million decrease in software license sales; offset in part by $2.2 million
increase in sales of alliance software license and services.

COST OF SALES/GROSS PROFIT

Cost of sales decreased by $1.7 million, or 29%, to $4.1 million in the nine
months ended December 31, 2003 from $5.8 million in the nine months ended
December 31, 2002. Gross profit as a percentage of net sales increased to 76% in
the nine months ended December 31, 2003 from 63% in the prior comparative
period. The decrease in cost of sales and the increase in gross profit as a
percentage of net sales were due to decrease in low margin software modification
and professional services. During the nine months ended December 31, 2003 and
2002, modification and professional services revenues represented 22% and 45% of
net sales, respectively.

APPLICATION DEVELOPMENT EXPENSE

Application development expense decreased by $1.9 million, or 66%, to $1.0
million in the nine months ended December 31, 2003 from $2.9 million in the nine
months ended December 31, 2002. The decrease is primarily due to capitalizing
$2.6 million development costs for new products. We've made significant
investments in our new products in the first nine months of the current year. We
anticipate these new products will be launched during the last quarter of the
fiscal 2004 and first quarter of the fiscal 2005. In the prior comparative
period, research and development efforts were spent on enhancing existing
products and properly charged to expense.

                                       19


DEPRECIATION AND AMORTIZATION

Depreciation and amortization decreased by $0.4 million, or 13%, to $2.7 million
in the nine months ended December 31, 2003 from $3.1 million in the nine months
ended December 31, 2002. The decrease is mainly due to a decrease in
amortization of purchased and capitalized software.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses increased by $2.2 million, or 34%,
to $8.7 million in the nine months ended December 31, 2003 from $6.5 million in
the nine months ended December 31, 2002. The first nine months of fiscal 2003
included a $0.6 million reversal of excess amount accrued in prior periods for a
litigation settlement. In addition, much of the fiscal 2004 was spent building
infrastructure, developing our sales organization and increasing marketing
efforts.

OPERATING INCOME

Operating income from continuing operations, which included depreciation and
amortization expense, was $0.7 million for the nine months ended December 31,
2003, compared to a loss from continuing operations of $2.5 million for the
comparable period in the prior year. Earnings from continuing operations before
interest, provision for income taxes, depreciation, amortization and change in
accounting principle was $3.4 million for the nine months ended December 31,
2003 compared to $0.6 million for the nine months ended December 31, 2002.

INTEREST EXPENSE

Interest expense decreased by $0.4 million, or 44%, to $0.5 million in the nine
months ended December 31, 2003 from $0.9 million in the nine months ended
December 31, 2002. The decrease is due to $6.6 million decrease in average
balance of interest-bearing debts.

PROVISION FOR INCOME TAXES

Provision for income taxes represents $0.6 million income tax refund and $0.1
million provision for state income taxes in the nine months ended December 31,
2003. The income tax refund of $0.6 million at December 31, 2003 results from
amending prior years' income tax returns to carry back net operating losses
incurred in the past two years.

CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE

Pursuant to SFAS 142, we completed the transitional analysis of goodwill
impairment as of April 1, 2002 and recorded an impairment of $0.6 million as the
cumulative effect of a change in accounting principle in the quarter ended June
30, 2002. We also evaluated the remaining useful lives of our intangibles in the
quarter ended June 30, 2002 and no adjustments have been made to the useful
lives of our intangible assets. There have been no such charges in the quarter
ended June 30, 2003.

CUMULATIVE PREFERRED DIVIDENDS

Cumulative dividends on the outstanding preferred stock attributable to the nine
months ended December 31, 2003 and 2002 were $0.7 million and $0.8 million,
respectively.


LIQUIDITY AND CAPITAL RESOURCES

CASH FLOWS

During the nine months ended December 31, 2003, we financed our operations using
cash on hand, internally generated cash, proceeds from the sale of common stock
and proceeds from sale of convertible debentures. At December 31, 2003 and March
31, 2003, we had cash of $5.1 million and $1.3 million, respectively.

Operating activities used cash of $5.4 million in the nine months ended December
31, 2003 and $1.3 million in the nine months ended December 31, 2002. Cash used
for operating activities in the nine months ended December 31, 2003 resulted
from $6.7 million increase in accounts receivable and other receivables and $4.1
million decrease in accounts payable and accrued expenses; offset in part by
$0.6 million net income, $1.7 million increase in deferred revenue and $2.7
million of non-cash depreciation and amortization.

                                       20


Investing activities used cash of $3.3 million in the nine months ended December
31, 2003 and $0.1 million in the nine months ended December 31, 2002. Cash used
for investing activities in the current quarter was primarily for capitalization
of $2.6 million software development costs, $0.4 million purchase of capitalized
software and $0.3 million purchases of furniture and equipment.

Financing activities provided cash of $12.5 million and $0.8 million in the nine
months ended December 31, 2003 and 2002, respectively. The financing activities
in the nine months ended December 31, 2003 included net proceeds of $12.0
million from the sale of common stock and $0.7 million from the issuance of
convertible debentures.

Accounts receivable increased to $5.5 million at December 31, 2003 from $4.0
million at March 31, 2003. The increase is primarily due to current receivables
for semi-annual maintenance contracts billed in the quarter ended December 31,
2003.

We believe that our cash and cash equivalent and funds generated from operations
will provide adequate liquidity to meet our normal operating requirements for at
least the next twelve months.

FINANCING TRANSACTIONS

In June 2003, we sold various institutional investors ("June 2003 Institutional
Investors") 5,275,000 shares of common stock at a per share price of $1.50 for
an aggregate purchase price of $7.9 million. In connection with this financing,
we paid Roth Capital Partners, LLC ("Roth Capital"), as placement agent, cash
compensation of 8% of the proceeds and issued a warrant to purchase 527,500
shares of common stock at an exercise price of $1.65 per share, with a fair
market value of $859,000. We also issued warrants to purchase 375,000 shares of
common stock at an exercise price of $1.65, with a fair market value of
$620,000, to certain holders of our 9% convertible debentures in order to obtain
their requisite consents and waivers of rights they possessed to participate in
the financing. Pursuant to a registration rights agreement, we filed a
registration statement respecting the shares sold to the June 2003 Institutional
Investors and common stock underlying the warrants issued in connection with
this transaction. The registration statement was declared effective on September
26, 2003 by the SEC.

On November 7, 2003, we sold various institutional investors ("November 2003
Institutional Investors") 3,180,645 shares of common stock at a price of $1.55
per share for an aggregate purchase price of $4.9 million. In connection with
this financing, we paid Roth Capital, as placement agent, compensation of
$179,000 in cash and 115,226 shares of our common stock and issued a five-year
warrant to purchase 282,065 shares of our common stock at an exercise price of
$1.71 per share, with a fair market value of $388,000. Pursuant to a
registration rights agreement, we filed a registration statement respecting to
the shares sold to the November 2003 Institutional Investors and common stock
underlying the warrant issued in connection with this transaction. This
registration statement was declared effective on February 3, 2004.

INDEBTEDNESS

UNION BANK

Pursuant to the Discounted Loan Payoff Agreement dated March 31, 2003, we issued
to Union Bank of California a $500,000 unsecured, non-interest bearing
convertible note payable in either cash or shares of common stock, at our
option. The maturity date would have been March 31, 2004. The bank assigned the
right of this note to Roth Capital. In January 2004, we elected to repay this
note by issuing to Roth Capital 239,739 shares of common stock at a price of
$2.09 which was 80% of the average share closing price of our common stock for
the ten trading day period immediately preceding payoff date.

NATIONAL AUSTRALIA BANK LIMITED

We decided in the third quarter of fiscal 2002 to sell certain assets of the
Australian subsidiary to the former management of such subsidiary, and then
cease Australian operations. The sale was subject to the approval of National
Australia Bank, the subsidiary's secured lender. The bank did not approve the
sale and the subsidiary ceased operations in February 2002. The bank caused a
receiver to be appointed in February 2002 to sell substantially all of the
assets of the Australian subsidiary and pursue collections on any outstanding
receivables. The receiver proceeded to sell substantially all of the assets for
$300,000 in May 2002 to an entity affiliated with former management, and is
actively pursuing the collection of receivables. If the sale proceeds plus
collections on receivables are insufficient to discharge the indebtedness to
National Australia Bank, we may be called upon to pay the deficiency under our
guarantee to the bank. At June 30, 2002, we have accrued $187,000 as the maximum
amount of our potential exposure. The receiver has also claimed that we are
obligated to it for inter-company balances of $636,000, but we do not believe
any amounts are owed to the receiver, who has not as of the date of this report
acknowledged the monthly corporate overhead recovery fees and other amounts
charged by us to the Australian subsidiary offsetting the amount claimed to be
due.

                                       21


TOYS "R" US, INC.

In May 2002, Toys agreed to invest $1.3 million for the purchase of a
non-recourse convertible note and a warrant to purchase 2,500,000 common shares
at $0.553 per share. The note was non-interest bearing, and the face amount was
either convertible into shares of our stock valued at $0.553 per share or
payable in cash at our option, at the end of the term. In November 2002, the
Board decided that this note would be converted solely for equity and would not
be repaid in cash. The note would have been due May 29, 2009, or if earlier than
that date, three years after the completion of the development project
contemplated in the development agreement between us and Toys entered into at
the same time. We did not have the right to prepay the convertible note before
the due date.

In November 2003, we entered into an agreement with Toys to terminate the
software development and services agreement. Pursuant to that agreement, the
note was settled in full and the warrant was cancelled.


CONTRACTUAL OBLIGATIONS

The following table summarizes our contractual obligations, including purchase
commitments at December 31, 2003, and the effect such obligations are expected
to have on our liquidity and cash flow in future periods.



                                                                Payment due by period
                                                                ---------------------
                                                            Less than 1
Contractual Cash Obligations                      Total         year       1-3 years   3-5 years    Thereafter
----------------------------                      -----         ----       ---------   ---------    ----------
                                                                       (in thousands)
                                                                                        
Operating leases                                 $ 1,850       $   958       $ 849        $ 43         $ --
Purchase obligations                               1,188         1,130         58           --           --
                                                 -------       -------       -----        ----         ----
     Total contractual cash obligations          $ 3,038       $ 2,088       $ 907        $ 43         $ --
                                                 =======       =======       =====        ====         ====


BUSINESS RISKS

INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS AND ALL OTHER
INFORMATION CONTAINED IN OUR FORM 10-K/A FOR THE YEAR ENDED MARCH 31, 2003 AND
FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 2003. INVESTING IN OUR COMMON STOCK
INVOLVES A HIGH DEGREE OF RISK. IN ADDITION TO THOSE DESCRIBED BELOW, RISKS AND
UNCERTAINTIES THAT ARE NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY BELIEVE
ARE IMMATERIAL MAY ALSO IMPAIR OUR BUSINESS OPERATIONS. IF ANY OF THE FOLLOWING
RISKS OCCUR, OUR BUSINESS COULD BE HARMED, THE PRICE OF OUR COMMON STOCK COULD
DECLINE AND OUR INVESTORS MAY LOSE ALL OR PART OF THEIR INVESTMENT. SEE THE NOTE
REGARDING FORWARD-LOOKING STATEMENTS INCLUDED AT THE BEGINNING OF ITEM 2 -
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS IN THIS FORM 10-Q.

OUR SALES CYCLES ARE LONG AND PROSPECTS ARE UNCERTAIN. THIS MAKES IT DIFFICULT
FOR US TO PREDICT REVENUES AND BUDGET EXPENSES.

The length of sales cycles in our business makes it difficult to evaluate the
effectiveness of our sales strategies. Our sales cycles historically have ranged
from three to twelve months, which has caused significant fluctuations in
revenues from period to period. Due to our difficulties in completing new
application software sales in recent periods and our refocused sales strategy,
it is difficult to predict revenues and properly budget expenses.

Our software applications are complex and perform or directly affect
mission-critical functions across many different functional and geographic areas
of the retail enterprise. In many cases, our customers must change established
business practices when they install our software. Our sales staff must dedicate
significant time consulting with a potential customer concerning the substantial
technical and business concerns associated with implementing our products. The
purchase of our products is often discretionary, so lengthy sales efforts may
not result in a sale. Moreover, it is difficult to predict when a license sale
will occur. All of these factors can adversely affect our business, financial
condition and results of operations.

                                       22


OUR OPERATING RESULTS HAVE FLUCTUATED SIGNIFICANTLY IN THE PAST, AND THEY MAY
CONTINUE TO DO SO IN THE FUTURE, WHICH COULD ADVERSELY AFFECT OUR STOCK PRICE.

Our quarterly operating results have fluctuated significantly in the past and
may fluctuate in the future as a result of several factors, many of which are
outside of our control. If revenue declines in a quarter, our operating results
will be adversely affected because many of our expenses are relatively fixed. In
particular, sales and marketing, application development and general and
administrative expenses do not change significantly with variations in revenue
in a quarter. It is likely that in some future quarter our net sales or
operating results will be below the expectations of public market analysts or
investors. If that happens, our stock price will likely decline.

OUR REVENUE MAY VARY FROM PERIOD TO PERIOD, WHICH MAKES IT DIFFICULT TO PREDICT
FUTURE RESULTS.

Factors outside our control that could cause our revenue to fluctuate
significantly from period to period include:

         o        the size and timing of individual orders, particularly with
                  respect to our larger customers;

         o        general health of the retail industry and the overall economy;

         o        technological changes in platforms supporting our software
                  products; and

         o        market acceptance of new applications and related services.

In particular, we usually deliver our software applications when contracts are
signed, so order backlog at the beginning of any quarter may represent only a
portion of that quarter's expected revenues. As a result, application license
revenues in any quarter are substantially dependent on orders booked and
delivered in that quarter, and this makes it difficult for us to accurately
predict revenues. We have experienced, and we expect to continue to experience,
quarters or periods where individual application license or services orders are
significantly larger than our typical application license or service orders.
Because of the nature of our offerings, we may get one or more large orders in
one quarter from a customer and then no orders the next quarter.

OUR EXPENSES MAY VARY FROM PERIOD TO PERIOD, WHICH COULD AFFECT QUARTERLY
RESULTS AND OUR STOCK PRICE.

If we incur additional expenses in a quarter in which we do not experience
increased revenue, our results of operations would be adversely affected and we
may incur losses for that quarter. Factors that could cause our expenses to
fluctuate from period to period include:

         o        the extent of marketing and sales efforts necessary to promote
                  and sell our applications and services;

         o        the timing and extent of our development efforts; and

         o        the timing of personnel hiring.

IT IS DIFFICULT TO EVALUATE OUR PERFORMANCE BASED ON PERIOD TO PERIOD
COMPARISONS OF OUR RESULTS.

The many factors, which can cause revenues and expenses to vary, make meaningful
period to period comparisons of our results difficult. We do not believe period
to period comparisons of our financial performance are necessarily meaningful,
and you cannot rely on them as an indication of our future performance.

WE MAY EXPERIENCE SEASONAL DECLINES IN SALES, WHICH COULD CAUSE OUR OPERATING
RESULTS TO FALL SHORT OF EXPECTATIONS IN SOME QUARTERS.

We may experience slower sales of our applications and services from October
through December of each year as a result of retailers' focus on the holiday
retail-shopping season. This can negatively affect revenues in our third fiscal
quarter and in other quarters, depending on our sales cycles.

                                       23


WE MAY NEED TO RAISE CAPITAL TO GROW OUR BUSINESS. OBTAINING THIS CAPITAL COULD
IMPAIR THE VALUE OF YOUR INVESTMENT.

We may need to raise further capital to:

         o        support unanticipated capital requirements;

         o        take advantage of acquisition or expansion opportunities;

         o        continue our current development efforts;

         o        develop new applications or services; or

         o        address working capital needs.

Our future capital requirements depend on many factors including our application
development, sales and marketing activities. We do not know whether additional
financing will be available when needed, or available on terms acceptable to us.
If we cannot raise needed funds for the above purposes on acceptable terms, we
may be forced to curtail some or all of the above activities and we may not be
able to grow our business or respond to competitive pressures or unanticipated
developments.

We may raise capital through public or private equity offerings or debt
financings. To the extent we raise additional capital by issuing equity
securities or convertible debt securities, our stockholders may experience
substantial dilution and the new securities may have greater rights, preferences
or privileges than our existing common stock.

INTANGIBLE ASSETS MAY BE IMPAIRED MAKING IT MORE DIFFICULT TO OBTAIN FINANCING.

Goodwill, capitalized software, non-compete agreements and other intangible
assets represent approximately 74% of our total assets as of December 31, 2003.
We may have to impair or write-off these assets, which will cause a charge to
earnings and could cause our stock price to decline. Any such impairment will
also reduce our assets, as well as the ratio of our assets to our liabilities.
These balance sheet effects could make it more difficult for us to obtain
capital, and could make the terms of capital we do obtain more unfavorable to
our existing stockholders.

FOREIGN CURRENCY FLUCTUATIONS MAY IMPAIR OUR COMPETITIVE POSITION AND AFFECT OUR
OPERATING RESULTS.

Fluctuations in currency exchange rates affect the prices of our applications
and services and our expenses, and foreign currency losses will negatively
affect profitability or increase losses. Approximately 15% and 12% of our net
sales were in the United Kingdom, in the nine months ended December 31, 2003 and
2002, respectively. Many of our expenses related to foreign sales, such as
corporate level administrative overhead and development, are denominated in U.S.
dollars. When accounts receivable and accounts payable arising from
international sales and services are converted to U.S. dollars, the resulting
gain or loss contributes to fluctuations in our operating results. We do not
hedge against foreign currency exchange rate risks.

WE HAVE CUSTOMERS REPRESENTING SIGNIFICANT AMOUNTS OF OUR BUSINESS.

Toys accounted for 9% and 31% of our net sales for the nine months ended
December 31, 2003 and 2002, respectively. In November 2003, Toys terminated
their software development and services agreement with us. QQQ Systems Ltd.
("QQQ Systems") accounted for 23% and 0% of our net sales for the nine months
ended December 31, 2003 and 2002, respectively. The software license sale to QQQ
Systems was a one-time transaction. We cannot provide any assurances that QQQ
Systems or any of our current customers will continue at current or historical
levels or that we will be able to obtain orders from new customers.

                                       24


IF WE LOSE THE SERVICES OF ANY MEMBER OF OUR SENIOR MANAGEMENT OR KEY TECHNICAL
AND SALES PERSONNEL, OR IF WE ARE UNABLE TO RETAIN OR ATTRACT ADDITIONAL
TECHNICAL PERSONNEL, OUR ABILITY TO CONDUCT AND EXPAND OUR BUSINESS WILL BE
IMPAIRED.

We are heavily dependent on our Chairman and Chief Executive Officer, Harvey
Braun, and our President and Chief Operating Officer, Steven Beck. We do not
have any written employment agreements with Mr. Braun or Mr. Beck. We are also
heavily dependent on our former Chairman, Barry Schechter, who remains a
consultant to us. We do not have a written consulting agreement with Mr.
Schechter. We also believe our future success will depend largely upon our
ability to attract and retain highly-skilled software programmers, managers, and
sales and marketing personnel. Competition for personnel is intense,
particularly in international markets. The software industry is characterized by
a high level of employee mobility and aggressive recruiting of skilled
personnel. We compete against numerous companies, including larger, more
established companies, for our personnel. We may not be successful in attracting
or retaining skilled sales, technical and managerial personnel. The loss of key
employees or our inability to attract and retain other qualified employees could
negatively affect our financial performance and cause our stock price to
decline.

WE ARE DEPENDENT ON THE RETAIL INDUSTRY, AND IF ECONOMIC CONDITIONS IN THE
RETAIL INDUSTRY FURTHER DECLINE, OUR REVENUES MAY ALSO DECLINE. RETAIL SALES
HAVE BEEN AND MAY CONTINUE TO BE SLOW.

Our future growth is critically dependent on increased sales to the retail
industry. We derive the substantial majority of our revenues from the licensing
of software applications and the performance of related professional and
consulting services to the retail industry. Demand for our applications and
services could decline in the event of consolidation, instability or more
downturns in the retail industry. This decline would likely cause reduced sales
and could impair our ability to collect accounts receivable. The result would be
reduced earnings and weakened financial condition, each or both of which would
likely cause our stock price to decline.

The success of our customers is directly linked to economic conditions in the
retail industry, which in turn are subject to intense competitive pressures and
are affected by overall economic conditions. In addition, the retail industry
may be consolidating, and it is uncertain how consolidation will affect the
industry. The retail industry as a whole is currently experiencing increased
competition and weakening economic conditions that could negatively impact the
industry and our customers' ability to pay for our products and services. Such
consolidation and weakening economic conditions have in the past, and may in the
future, negatively impact our revenues, reduce the demand for our products and
may negatively impact our business, operating results and financial condition.
Uncertain economic conditions and the specter of terrorist activities have
adversely impacted sales of our software applications, and we believe mid-tier
specialty retailers may be reluctant during the current economic climate to make
the substantial infrastructure investment that generally accompanies the
implementation of our software applications, which may adversely impact our
business.

THERE MAY BE AN INCREASE IN CUSTOMER BANKRUPTCIES DUE TO WEAK ECONOMIC
CONDITIONS.

We have in the past and may in the future be impacted by customer bankruptcies.
During weak economic conditions, such as those currently being experienced in
many geographic regions around the world, there is an increased risk that
certain of our customers will file bankruptcy. When our customers file
bankruptcy, we may be required to forego collection of pre-petition amounts
owed, and to repay amounts remitted to us during the 90-day preference period
preceding the filing. Accounts receivable balances related to pre-petition
amounts may in certain of these instances be large due to extended payment terms
for software license fees, and significant billings for consulting and
implementation services on large projects. The bankruptcy laws, as well as the
specific circumstances of each bankruptcy, may severely limit our ability to
collect pre-petition amounts, and may force us to disgorge payments made during
the 90-day preference period. We also face risk from international customers who
file for bankruptcy protection in foreign jurisdictions, in that the application
of foreign bankruptcy laws may be less certain or harder to predict. Although we
believe that we have sufficient reserves to cover anticipated customer
bankruptcies, there can be no assurance that such reserves will be adequate, and
if they are not adequate, our business, operating results and financial
condition would be adversely affected.

                                       25


WE MAY NOT BE ABLE TO MAINTAIN OR IMPROVE OUR COMPETITIVE POSITION BECAUSE OF
THE INTENSE COMPETITION IN THE RETAIL SOFTWARE INDUSTRY.

We conduct business in an industry characterized by intense competition. Most of
our competitors are very large companies with an international presence. We must
also compete with smaller companies which have been able to develop strong local
or regional customer bases. Many of our competitors and potential competitors
are more established, benefit from greater name recognition and have
significantly greater resources than us. Our competitors may also have lower
cost structures and better access to the capital markets than us. As a result,
our competitors may be able to respond more quickly than we can to new or
emerging technologies and changes in customer requirements. Our competitors may:

         o        introduce new technologies that render our existing or future
                  products obsolete, unmarketable or less competitive;

         o        make strategic acquisitions or establish cooperative
                  relationships among themselves or with other solution
                  providers, which would increase the ability of their products
                  to address the needs of our customers; and

         o        establish or strengthen cooperative relationships with our
                  current or future strategic partners, which would limit our
                  ability to compete through these channels.

We could be forced to reduce prices and suffer reduced margins and market share
due to increased competition from providers of offerings similar to, or
competitive with, our applications, or from service providers that provide
services similar to our services. Competition could also render our technology
obsolete.

OUR MARKETS ARE SUBJECT TO RAPID TECHNOLOGICAL CHANGE, SO OUR SUCCESS DEPENDS
HEAVILY ON OUR ABILITY TO DEVELOP AND INTRODUCE NEW APPLICATIONS AND RELATED
SERVICES.

The retail software industry is characterized by rapid technological change,
evolving standards and wide fluctuations in supply and demand. We must
cost-effectively develop and introduce new applications and related services
that keep pace with technological developments to compete. If we do not gain
market acceptance for our existing or new offerings or if we fail to introduce
progressive new offerings in a timely or cost-effective manner, our financial
performance will suffer.

The success of application enhancements and new applications depends on a
variety of factors, including technology selection and specification, timely and
efficient completion of design, and effective sales and marketing efforts. In
developing new applications and services, we may:

         o        Fail to respond to technological changes in a timely or
                  cost-effective manner;

         o        Encounter applications, capabilities or technologies developed
                  by others that render our applications and services obsolete
                  or non-competitive or that shorten the life cycles of our
                  existing applications and services;

         o        Experience difficulties that could delay or prevent the
                  successful development, introduction and marketing of these
                  new applications and services; or

         o        Fail to achieve market acceptance of our applications and
                  services.

The life cycles of our applications are difficult to estimate, particularly in
the emerging electronic commerce market. As a result, new applications and
enhancements, even if successful, may become obsolete before we recoup our
investment.

OUR PROPRIETARY RIGHTS OFFER ONLY LIMITED PROTECTION AND OUR COMPETITORS MAY
DEVELOP APPLICATIONS SUBSTANTIALLY SIMILAR TO OUR APPLICATIONS AND USE SIMILAR
TECHNOLOGIES WHICH MAY RESULT IN THE LOSS OF CUSTOMERS. WE MAY HAVE TO BRING
COSTLY LITIGATION TO PROTECT OUR PROPRIETARY RIGHTS.

Our success and competitive position is dependent in part upon our ability to
develop and maintain the proprietary aspects of our intellectual property. Our
intellectual property includes our trademarks, trade secrets, copyrights and
other proprietary information. Our efforts to protect our intellectual property
may not be successful. Effective copyright and trade secret protection may be
unavailable or limited in some foreign countries. We hold no patents.
Consequently, others may develop, market and sell applications substantially
equivalent to ours or utilize technologies similar to those used by us, so long
as they do not directly copy our applications or otherwise infringe our
intellectual property rights.

                                       26


We may find it necessary to bring claims or initiate litigation against third
parties for infringement of our proprietary rights or to protect our trade
secrets. These actions would likely be costly and divert management resources.
These actions could also result in counterclaims challenging the validity of our
proprietary rights or alleging infringement on our part. The ultimate outcome of
any litigation will be difficult to predict.

OUR APPLICATIONS MAY BE SUBJECT TO CLAIMS THEY INFRINGE ON THE PROPRIETARY
RIGHTS OF THIRD PARTIES, WHICH MAY EXPOSE US TO LITIGATION.

We may become subject to litigation involving patents or proprietary rights of
third parties. Patent and proprietary rights litigation entails substantial
legal and other costs, and we do not know if we will have the necessary
financial resources to defend or prosecute our rights in connection with any
such litigation. Responding to and defending claims related to our intellectual
property rights, even ones without merit, can be time consuming and expensive
and can divert management's attention from other business matters. In addition,
these actions could cause application delivery delays or require us to enter
into royalty or license agreements. Royalty or license agreements, if required,
may not be available on terms acceptable to us, if they are available at all.
Any or all of these outcomes could have a material adverse effect on our
business, operating results and financial condition.

DEVELOPMENT AND MARKETING OF OUR OFFERINGS DEPENDS ON STRATEGIC RELATIONSHIPS
WITH OTHER COMPANIES. OUR EXISTING STRATEGIC RELATIONSHIPS MAY NOT ENDURE AND
MAY NOT DELIVER THE INTENDED BENEFITS, AND WE MAY NOT BE ABLE TO ENTER INTO
FUTURE STRATEGIC RELATIONSHIPS.

Since we do not possess all of the technical and marketing resources necessary
to develop and market our offerings to target markets, our business strategy
substantially depends on our strategic relationships. While some of these
relationships are governed by contracts, most are non-exclusive and all may be
terminated on short notice by either party. If these relationships terminate or
fail to deliver the intended benefits, our development and marketing efforts
will be impaired and our revenues may decline. We may not be able to enter into
new strategic relationships, which could put us at a disadvantage to those of
our competitors, who do successfully exploit strategic relationships.

OUR PRIMARY COMPUTER AND TELECOMMUNICATIONS SYSTEMS ARE IN A LIMITED NUMBER OF
GEOGRAPHIC LOCATIONS, WHICH MAKES THEM MORE VULNERABLE TO DAMAGE OR
INTERRUPTION. THIS DAMAGE OR INTERRUPTION COULD HARM OUR BUSINESS.

Substantially all of our primary computer and telecommunications systems are
located in two geographic areas. These systems are vulnerable to damage or
interruption from fire, earthquake, water damage, sabotage, flood, power loss,
technical or telecommunications failure or break-ins. Our business interruption
insurance may not adequately compensate us for our lost business and will not
compensate us for any liability we incur due to our inability to provide
services to our customers. Although we have implemented network security
measures, our systems are vulnerable to computer viruses, physical or electronic
break-ins and similar disruptions. These disruptions could lead to
interruptions, delays, loss of data or the inability to service our customers.
 Any of these occurrences could impair our ability to serve our customers and
harm our business.

IF PRODUCT LIABILITY LAWSUITS ARE SUCCESSFULLY BROUGHT AGAINST US, WE MAY INCUR
SUBSTANTIAL LIABILITIES AND MAY BE REQUIRED TO LIMIT COMMERCIALIZATION OF OUR
APPLICATIONS.

Our business exposes us to product liability risks. Any product liability or
other claims brought against us, if successful and of sufficient magnitude,
could negatively affect our financial performance and cause our stock price to
decline.

Our applications are highly complex and sophisticated and they may occasionally
contain design defects or software errors that could be difficult to detect and
correct. In addition, implementation of our applications may involve
customer-specific customization by us or third parties, and may involve
integration with systems developed by third parties. These aspects of our
business create additional opportunities for errors and defects in our
applications and services. Problems in the initial release may be discovered
only after the application has been implemented and used over time with
different computer systems and in a variety of other applications and
environments. Our applications have in the past contained errors that were
discovered after they were sold. Our customers have also occasionally
experienced difficulties integrating our applications with other hardware or
software in their enterprise.

                                       27


We are not currently aware of any defects in our applications that might give
rise to future lawsuits. However, errors or integration problems may be
discovered in the future. Such defects, errors or difficulties could result in
loss of sales, delays in or elimination of market acceptance, damage to our
brand or to our reputation, returns, increased costs and diversion of
development resources, redesigns and increased warranty and servicing costs. In
addition, third-party products, upon which our applications are dependent, may
contain defects which could reduce or undermine entirely the performance of our
applications.

Our customers typically use our applications to perform mission-critical
functions. As a result, the defects and problems discussed above could result in
significant financial or other damage to our customers. Although our sales
agreements with our customers typically contain provisions designed to limit our
exposure to potential product liability claims, we do not know if these
limitations of liability are enforceable or would otherwise protect us from
liability for damages to a customer resulting from a defect in one of our
applications or the performance of our services. Our product liability insurance
may not cover all claims brought against us.

THE SAGE GROUP HAS THE RIGHT TO ACQUIRE A SIGNIFICANT PERCENTAGE OF OUR COMMON
STOCK, WHICH IF ACQUIRED BY THE SAGE GROUP, MAY ENABLE THE SAGE GROUP TO
EXERCISE EFFECTIVE CONTROL OF US.

On November 14, 2003, the Sage Group acquired substantially all of the assets of
Softline, including Softline's 141,000 shares of our Series A Convertible
Preferred Stock, which are convertible into 18,700,185 shares of our common
stock within 60 days of January 8, 2004 (the 18,700,185 shares consist of
18,478,789 shares issuable as of January 8, 2004 and 221,396 shares that will be
issuable within 60 days of January 8, 2004 on account of accrued and unpaid
dividends during that 60 day period), 8,923,915 shares of our common stock and
options to purchase 71,812 shares of our common stock. The Sage Group
beneficially owns approximately 41.7% of our outstanding common stock, including
shares the Sage Group has the right to acquire upon conversion of its Series A
Convertible Preferred Stock and exercise of its outstanding options. Although
the Series A Convertible Preferred Stock is redeemable by us and 25,125,000
shares of common stock beneficially owned by the Sage Group are subject to an
option held by Steven Beck, as trustee of a certain management group of the
Company, if the Sage Group converts its Series A Convertible Preferred Stock, it
may have effective control over all matters affecting us, including:

         o        The election of all of our directors;

         o        The allocation of business opportunities that may be suitable
                  for the Sage Group and us;

         o        Any determinations with respect to mergers or other business
                  combinations involving us;

         o        The acquisition or disposition of assets or businesses by us;

         o        Debt and equity financing, including future issuance of our
                  common stock or other securities;

         o        Amendments to our charter documents;

         o        The payment of dividends on our common stock; and

         o        Determinations with respect to our tax returns.

THE SAGE GROUP'S POTENTIAL INFLUENCE ON OUR COMPANY COULD MAKE IT DIFFICULT FOR
ANOTHER COMPANY TO ACQUIRE US, WHICH COULD DEPRESS OUR STOCK PRICE.

The Sage Group beneficially owns a significant percentage of our common stock.
In addition, two of the current members of our board of directors are employed
by a subsidiary of the Sage Group. The Sage Group's potential effective voting
control could discourage others from initiating any potential merger, takeover
or other change of control transaction that may otherwise be beneficial to our
business or our stockholders. As a result, the Sage Group's potential effective
control could reduce the price that investors may be willing to pay in the
future for shares of our stock, or could prevent any party from attempting to
acquire us at any price.

                                       28


OUR STOCK PRICE HAS BEEN HIGHLY VOLATILE.

The market price of our common stock has been, and is likely to continue to be,
volatile. When we or our competitors announce new customer orders or services,
change pricing policies, experience quarterly fluctuations in operating results,
announce strategic relationships or acquisitions, change earnings estimates,
experience government regulatory actions or suffer from generally adverse
economic conditions, our stock price could be affected. Some of the volatility
in our stock price may be unrelated to our performance. Recently, companies
similar to ours have experienced extreme price fluctuations, often for reasons
unrelated to their performance.

WE HAVE NEVER PAID A DIVIDEND ON OUR COMMON STOCK NOR DO WE INTEND TO PAY
DIVIDENDS ON OUR COMMON STOCK IN THE FORESEEABLE FUTURE.

We have not previously paid any cash or other dividend on our common stock. We
anticipate that we will use our earnings and cash flow for repayment of
indebtedness, to support our operations, and for future growth, and we do not
have any plans to pay dividends in the foreseeable future. Holders of our Series
A Convertible Preferred Stock are entitled to dividends in preference and
priority to common stockholders. Future equity financing(s) may further restrict
our ability to pay dividends.

THE TERMS OF OUR PREFERRED STOCK MAY REDUCE THE VALUE OF YOUR COMMON STOCK.

We are authorized to issue up to 5,000,000 shares of preferred stock in one or
more series. We issued 141,000 shares of Series A Convertible Preferred Stock in
May 2002. Our board of directors may determine the terms of subsequent series of
preferred stock without further action by our stockholders. If we issue
additional preferred stock, it could affect your rights or reduce the value of
your common stock. In particular, specific rights granted to future holders of
preferred stock could be used to restrict our ability to merge with or sell our
assets to a third party. These terms may include voting rights, preferences as
to dividends and liquidation, conversion and redemption rights, and sinking fund
provisions. We are actively seeking capital, and some of the arrangements we are
considering may involve the issuance of preferred stock.

FAILURE TO COMPLY WITH THE AMERICAN STOCK EXCHANGE'S LISTING STANDARDS COULD
RESULT IN OUR DELISTING FROM THAT EXCHANGE AND LIMIT THE ABILITY TO SELL ANY OF
OUR COMMON STOCK.

Our stock is currently traded on the American Stock Exchange. The Exchange has
published certain guidelines it uses in determining whether a security warrants
continued listing. These guidelines include financial, market capitalization and
other criteria, and as a result of our financial condition or other factors, the
American Stock Exchange could in the future determine that our stock does not
merit continued listing. If our stock were delisted from the American Stock
Exchange, the ability of our stockholders to sell our common stock could become
limited, and we would lose the advantage of some state and federal securities
regulations imposing lower regulatory burdens on exchange-traded issuers.

DELAWARE LAW AND SOME PROVISIONS OF OUR CHARTER AND BYLAWS MAY ADVERSELY AFFECT
THE PRICE OF YOUR STOCK.

Special meetings of our stockholders may be called only by the Chairman of the
Board, the Chief Executive Officer or the Board of Directors. Stockholders have
no right to call a meeting. Stockholders must also comply with advance notice
provisions in our bylaws in order to nominate directors or propose matters for
stockholder action. These provisions of our charter documents, as well as
certain provisions of Delaware law, could delay or make more difficult certain
types of transactions involving a change in control of the Company or our
management. As a result, the price of our common stock may be adversely
affected.

SHARES ISSUABLE UPON THE EXERCISE OF OPTIONS, WARRANTS, DEBENTURES AND
CONVERTIBLE NOTES OR UNDER ANTI-DILUTION PROVISIONS IN CERTAIN AGREEMENTS COULD
DILUTE YOUR STOCK HOLDINGS AND ADVERSELY AFFECT OUR STOCK PRICE.

We have issued options and warrants to acquire common stock to our employees and
certain other persons at various prices, some of which are or may in the future
have exercise prices at below the market price of our stock. We currently have
outstanding options and warrants for 14,548,183 shares. Of these options and
warrants, as of February 5, 2004, 1,392,915 have exercise prices above the
recent market price of $2.19 per share , and 13,155,268 have exercise prices at
or below that recent market price. If exercised, these options and warrants will
cause immediate and possibly substantial dilution to our stockholders.

                                       29


Our existing stock option plan currently has approximately 1,821,829 shares
available for issuance as of February 5, 2004. Future options issued under the
plan may have further dilutive effects.

Under a securities purchase agreement dated November 7, 2003 between the Company
and various institutional investors, for a six-month period the Company is
obligated to issue the investors additional shares of common stock, if the
Company or any subsidiary or affiliate of the Company sells any of the Company's
common stock for an aggregate purchase price of $1 million for a per share price
that is less than 120% of the then current per share purchase price paid by such
investors. The number of shares issued pursuant to the anti-dilution provision
when aggregated with all prior issuances pursuant to the November 7, 2003
securities purchase agreement can not exceed 7,600,000 without stockholder
approval.

Sales of shares issued pursuant to exercisable options, warrants, convertible
notes or anti-dilution provisions could lead to subsequent sales of the shares
in the public market, and could depress the market price of our stock by
creating an excess in supply of shares for sale. Issuance of these shares and
sale of these shares in the public market could also impair our ability to raise
capital by selling equity securities.


WE MAY BE UNABLE TO SUCCESSFULLY INTEGRATE OUR OPERATIONS WITH PAGE DIGITAL OR
RTI OR REALIZE ALL OF THE ANTICIPATED BENEFITS OF THESE ACQUISITIONS.

On January 30, 2004, we acquired Page Digital (see "Acquisition of Page Digital"
above). On January 6, 2004, we executed a Letter of Intent/Term Sheet pursuant
to which we intend to acquire RTI, subject to securing financing, due diligence,
the execution of a definitive agreement, the approval of the board of directors
of the Company and the approvals of the board of directors and shareholders of
RTI. These acquisitions involve integrating two companies that previously
operated independently into Island Pacific. These integrations will be complex,
costly and time-consuming processes. The difficulties of combining these
companies' operations include, among other things:

         o        Coordinating geographically disparate organizations, systems
                  and facilities;

         o        Strain on management resources due to integration demands;

         o        Integrating personnel with diverse business backgrounds;

         o        Consolidating corporate and administrative functions;

         o        Coordinating product development;

         o        Coordinating sales and marketing functions;

         o        Retaining key employees; and

         o        Preserving relationships with key customers.


SATISFYING CLOSING CONDITIONS MAY DELAY OR PREVENT THE COMPLETION OF THE RTI
TRANSACTION.

The closing of the RTI acquisition is conditioned, among other things, upon our
securing financing, completion of due diligence, executing definitive agreements
and securing the approval of the board of directors of Island Pacific and the
approvals of the board of directors and the shareholders of RTI. Satisfying all
these conditions is a complicated and time consuming process. We will have to
dedicate significant financial and managerial resources to completing this
transaction. It is possible that one of these conditions may become difficult or
impossible to satisfy delaying or frustrating the consummation of the
acquisition. There can be no assurance that the Company will be able to secure
the necessary financing to complete the acquisition of RTI.


BUSINESS RISKS FACED BY PAGE DIGITAL COULD DISADVANTAGE OUR BUSINESS.

Page Digital is a developer of multi-channel commerce software and faces several
business risks that could disadvantage our business if the proposed transaction
is consummated. These risks include many of the risks that we face, described
above, as well as:

                                       30


         o        LONG AND VARIABLE SALES CYCLES MAKE IT DIFFICULT TO PREDICT
                  OPERATING RESULTS - Historically, the period between initial
                  contact with a prospective customer and the licensing of Page
                  Digital's products has ranged from one to twelve months. Page
                  Digital's average sales cycle is currently three months. The
                  licensing of Page Digital's products is often an enterprise
                  wide decision by customers that involves a significant
                  commitment of resources by Page Digital and its prospective
                  customer. Customers generally consider a wide range of issues
                  before committing to purchase Page Digital's products,
                  including product benefits, cost and time of implementation,
                  ability to operate with existing and future computer systems,
                  ability to accommodate increased transaction volume and
                  product reliability. As a part of the sales process, Page
                  Digital spends a significant amount of resources informing
                  prospective customers about the use and benefits of Page
                  Digital products, which may not result in a sale, therefore
                  increasing operating expenses. As a result of this sales
                  cycle, Page Digital's revenues are unpredictable and could
                  vary significantly from quarter to quarter causing our
                  operating results to vary significantly from quarter to
                  quarter.

         o        DEFECTS IN PRODUCTS COULD DIMINISH DEMAND FOR PRODUCTS AND
                  RESULT IN LOSS OF REVENUES - From time to time errors or
                  defects may be found in Page Digital's existing, new or
                  enhanced products, resulting in delays in shipping, loss of
                  revenues or injury to Page Digital's reputation. Page
                  Digital's customers use its products for business critical
                  applications. Any defects, errors or other performance
                  problems could result in damage to Page Digital's customers'
                  businesses. These customers could seek significant
                  compensation from Page Digital for any losses. Further, errors
                  or defects in Page Digital's products may be caused by defects
                  in third-party software incorporated into Page Digital
                  products. If so, Page Digital may not be able to fix these
                  defects without the assistance of the software providers.

         o        FAILURE TO FORMALIZE AND MAINTAIN RELATIONSHIPS WITH SYSTEMS
                  INTEGRATORS COULD REDUCE REVENUES AND HARM PAGE DIGITAL'S
                  ABILITY TO IMPLEMENT PRODUCTS - A significant portion of Page
                  Digital's sales are influenced by the recommendations of
                  systems integrators, consulting firms and other third parties
                  who assist with the implementation and maintenance of Page
                  Digital's products. These third parties are under no
                  obligation to recommend or support Page Digital's products.
                  Failing to maintain strong relationships with these third
                  parties could result in a shift by these third parties toward
                  favoring competing products, which could negatively affect
                  Page Digital's software license and service revenues.

         o        PAGE DIGITAL'S PRODUCT MARKETS ARE SUBJECT TO RAPID
                  TECHNOLOGICAL CHANGE, SO PAGE DIGITAL'S SUCCESS DEPENDS
                  HEAVILY ON ITS ABILITY TO DEVELOP AND INTRODUCE NEW
                  APPLICATIONS AND RELATED SERVICES - The retail software
                  industry is characterized by rapid technological change,
                  evolving standards and wide fluctuations in supply and demand.
                  Page Digital must cost-effectively develop and introduce new
                  applications and related services that keep pace with
                  technological developments to compete. If Page Digital fails
                  to gain market acceptance for its existing or new offerings or
                  if Page Digital fails to introduce progressive new offerings
                  in a timely or cost-effective manner, our financial
                  performance may suffer.

         o        FAILURE TO PROTECT PROPRIETARY RIGHTS OR INTELLECTUAL
                  PROPERTY, OR INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS AGAINST
                  PAGE DIGITAL COULD RESULT IN PAGE DIGITAL LOSING VALUABLE
                  ASSETS OR BECOMING SUBJECT TO COSTLY AND TIME-CONSUMING
                  LITIGATION - Page Digital's success and ability to compete
                  depend on its proprietary rights and intellectual property.
                  Page Digital relies on trademark, trade secret and copyright
                  laws to protect its proprietary rights and intellectual
                  property. Page Digital also has one issued patent. Despite
                  Page Digital's efforts to protect intellectual property, a
                  third party could obtain access to Page Digital's software
                  source code or other proprietary information without
                  authorization, or could independently duplicate Page Digital's
                  software. Page Digital may need to litigate to enforce


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                  intellectual property rights. If Page Digital is unable to
                  protect its intellectual property it may lose a valuable
                  asset. Further, third parties could claim Page Digital has
                  infringed their intellectual property rights. Any claims,
                  regardless of merit, could be costly and time-consuming to
                  defend.

         o        COMPETITION IN THE SOFTWARE MARKET IS INTENSE AND COULD REDUCE
                  PAGE DIGITAL'S SALES OR PREVENT THEM FROM ACHIEVING
                  PROFITABILITY - The market for Page Digital's products is
                  intensely competitive and subject to rapid technological
                  change. Competition is likely to result in price reductions,
                  reduced gross margins and loss of Page Digital's market share,
                  any one of which could reduce future revenues or earnings.
                  Further, most of Page Digital's competitors are large
                  companies with greater resources, broader customer
                  relationships, greater name recognition and an international
                  presence. As a result, Page Digital's competitors may be able
                  to better respond to new and emerging technologies and
                  customer demands.


ITEM 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of loss that may impact our consolidated
financial position, results of operations or cash flows. We are exposed to
market risks, which include changes in foreign currency exchange rate as
measured against the U.S. dollar.

INTEREST RATE RISK

We do not have debt or borrowings with variable rate term.

FOREIGN CURRENCY EXCHANGE RATE RISK

We conduct business in various foreign currencies, primarily in Europe. Sales
are typically denominated in the local foreign currency, which creates exposures
to changes in exchange rates. These changes in the foreign currency exchange
rates as measured against the U.S. dollar may positively or negatively affect
our sales, gross margins and retained earnings. We attempt to minimize currency
exposure risk through decentralized sales, development, marketing and support
operations, in which substantially all costs are local-currency based. There can
be no assurance that such an approach will be successful, especially in the
event of a significant and sudden decline in the value of the foreign currency.
We do not hedge against foreign currency risk. Approximately 31% and 12% of our
total net sales were denominated in currencies other than the U.S. dollar for
the three months ended December 31, 2003 and 2002, respectively. Approximately
15% and 12% of our total net sales were denominated in currencies other than the
U.S. dollar for the nine months ended December 30, 2003 and 2002, respectively.

EQUITY PRICE RISK

We have no direct equity investments.


ITEM 4. - CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Based on their evaluation of
our disclosure controls and procedures, as such term is defined under Rule
13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as of a date (the "Evaluation Date") within 90 days of the
filing date of this Quarterly Report on Form 10-Q, our principal executive
officer and financial and accounting officer have concluded that our disclosure
controls and procedures are designed to ensure that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms and are operating in an effective manner.

CHANGES IN INTERNAL CONTROLS. There were no significant changes in our internal
controls, as such term is defined under Section 13 (b) of the Exchange Act, or
to our knowledge, in other factors that could significantly affect these
controls subsequent to the Evaluation Date.

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                          PART II. - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Except as discussed in the footnotes to our interim financial statements (see
Note 14), we are not involved in any material legal proceedings, other than
ordinary routine litigation proceedings incidental to our business, none of
which are expected to have a material adverse effect on our financial position
or results of operations. However, litigation is subject to inherent
uncertainties, and an adverse result in existing or other matters may arise from
time to time which may harm our business.


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

During the quarter ended December 31, 2003, we issued:

         o        100,000 shares of common stock to Cord Camera Centers, Inc. as
                  part of the settlement costs valued at $300,000.
         o        3,180,645 shares of common stock to the November 2003
                  Institutional Investors in a private placement pursuant to a
                  securities purchase agreement dated November 7, 2003.
         o        115,226 shares of common stock, valued at $179,000, and a
                  five-year warrant to purchase 282,065 shares of our common
                  stock at an exercise price of $1.71 per share, valued at
                  $388,000, to Roth Capital as placement agent fee for the sale
                  of 3,180,645 shares of our common stock.
         o        15,000 shares of common stock, valued at $26,000, to
                  Richardson & Patel, LLP for legal services related to the
                  acquisition of Page Digital, Inc.
         o        30,000 shares of common stock to a consultant firm for
                  investor relation services rendered in the nine months ended
                  December 31, 2003.
         o        37,294 shares of common stock upon exercise of options, which
                  were granted outside of our incentive stock option plan, to
                  consultants in prior periods.
         o        Warrant to purchase an aggregate of 91,000 shares of common
                  stock at exercise prices of $2.06 and $2.10 per share to a
                  consulting firm for investor relation services rendered.

The foregoing securities were offered and sold without registration under the
Securities Act of 1933 to sophisticated investors who had access to all
information which would have been in a registration statement, in reliance upon
the exemption provided by Section 4(2) under such Act and Regulation D
thereunder.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
         Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         Not applicable

ITEM 5.  OTHER INFORMATION
         Not applicable

                                       33


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS

2.1               Business Sale Agreement dated May 3, 2002 among the receivers
                  and managers of the assets of SVI Retail (Pty) Limited and QQQ
                  Systems PTY Limited, incorporated by reference to exhibit 2.3
                  to the Company's Form 10-K for the fiscal year ended March 31,
                  2002.

2.2               Securities Purchase Agreement dated March 31, 2003 by and
                  among the Company, Midsummer Investment, Ltd., Omicron Master
                  Trust, and Islandia, L.P., incorporated by reference to
                  exhibit 2.1 to the Company's Form 8-K filed April 15, 2003

2.3               Securities Purchase Agreement dated April 1, 2003 by and among
                  the Company and MBSJ Investors, LLC, incorporated by reference
                  to exhibit 2.2 to the Company's Form 8-K filed on April 15,
                  2003.

2.4               Agreement dated May 6, 2003 by and among the Company,
                  Crestview Capital Fund I, L.P., Crestview Capital Fund II,
                  L.P. and Crestview Capital Offshore Fund, Inc., incorporated
                  by reference to exhibit 2.12 to Company's Form S-1 filed May
                  12, 2003.

2.5               Securities Purchase Agreement dated June 27, 2003 by and among
                  the Company and the purchasers named therein, incorporated by
                  reference to exhibit 2.1 to the Company's Form 8-K filed on
                  July 2, 2003.

2.6               Securities Purchase Agreement dated November 7, 2003 by and
                  among the Company and the purchasers named therein,
                  incorporated by reference to exhibit 2.1 to the Company's Form
                  8-K filed on November 12, 2003.

2.7               Agreement of Merger and Plan or Reorganization by and among
                  Island Pacific, Inc., Page Digital Incorporated and IPI
                  Acquisition, Inc. dated November 20, 2003, incorporated by
                  reference to exhibit 2.1 to the Company's Form 8-K filed
                  November 24, 2003.

2.8               Deed of Appointment dated February 20, 200between the bank and
                  the receivers of SVI Retail (Pty) Limited, incorporated by
                  reference to exhibit 2.2 to the Company's 10-K filed July 16,
                  2002. Exhibits and schedules have been omitted pursuant to
                  Item 601(b)(2) of Regulation S-K, but a copy will be furnished
                  supplementally to the Securities and Exchange Commission upon
                  request.

3.1               Amended and Restated Certificate of Incorporation,
                  incorporated by reference to exhibit 3.1 to the Company's 8-K
                  filed on July 15, 2003.

3.2               Certificate of Designation, incorporated by reference to
                  exhibit 4.1 of the Company's Form 8-K filed May 16, 2002.

3.3               Restated Bylaws, incorporated by reference to exhibit 3.2 to
                  the Company's Form 10-K for the fiscal year ended March 31,
                  2001.

4.1               Registration Rights Agreement dated as of March 31, 2003 by
                  and among the Company, Midsummer Investment, Ltd., Omicron
                  Master Trust, and Islandia, L.P., incorporated by reference to
                  exhibit 4.1 to the Company's Form 8-K filed April 15, 2003.

4.2               Registration Rights Agreement dated as of April 1, 2003
                  between the Company and MBSJ Investors LLC., incorporated by
                  reference to exhibit 4.2 to the Company's Form 8-K filed April
                  15, 2003.

4.3               Registration Rights Agreement dated June 27, 2003 by and among
                  the Company and the parties named therein, incorporated by
                  reference to exhibit 4.1 to the Company's Form 8-K filed on
                  July 2, 2003

4.4               Registration Rights Agreement dated November 7, 2003 by and
                  among the Company and the parties named therein, incorporated
                  by reference to exhibit 4.1 to the Company's Form 8-K filed on
                  November 12, 2003.

                                       34


4.5               Settlement Agreement, Mutual Release and Covenant Not to Sue
                  by and among the Company and Cord Camera Centers, Inc. dated
                  September 30, 2003, incorporated by reference to exhibit 4.5
                  to the Company's Form S-1 filed on December 8, 2003.

4.6               Investors' Rights Agreement among SVI Holdings, Inc., Koyah
                  Leverage Partners, L.P. and Koyah Partners, L.P. dated July
                  19, 2002, incorporated by reference to exhibit 10.25 to the
                  Company Form S-1 filed on May 12, 2003.

10.1              Incentive Stock Option Plan, as amended April 1, 1998,
                  incorporated by reference to exhibit 10.1 to the Company's
                  10-QSB for the quarter ended September 30, 1998.

10.2              1998 Incentive Stock Plan, as amended, incorporated by
                  reference to exhibit 10.4 to the Company's 10-K for the fiscal
                  year ended March 31, 2001.

10.3              Discounted Loan Payoff Agreement dated March 31, 2003 by and
                  amoung Union Bank of California, N.A., SVI Solutions, Inc.,
                  SVI Retail, Inc., Sabica Ventures, Inc. and SVI Training
                  Products, Inc., incorporated by reference to exhibit 10.3 to
                  the Company's Form 8-K filed on April 15, 2003.

10.4              Unsecured Promissory Note dated March 31, 2003 in favor of
                  Union Bank of California, N.A., incorporated by reference to
                  exhibit 10.47 to the Company's Form S-1 filed on May 12, 2003.

10.5              Amendment Agreement between the Company, Koyah Leverage
                  Partners, Koyah Partners, L.P., Raven Partners, L.P., Nigel
                  Davey, and Brian Cathcart dated July 15, 2002, incorporated by
                  reference to exhibit 10.11 to the Company's Form 10-K for the
                  fiscal year ended March 31, 2002.

10.6              First Amendment to Amendment Agreement between the Company,
                  Koyah Leverage Partners, Koyah Partners, L.P., Raven Partners,
                  L.P., Nigel Davey, and Brian Cathcart dated December 5,
                  2002.Summary of loan transactions between the Company and
                  World Wide Business Centres, incorporated by reference to
                  exhibit 10.12 to the Company's Form 10-K for the fiscal year
                  ended March 31, 2002.

10.7              Second Amendment to Amendment Agreement between the
                  Company,Koyah Leverage Partners, Koyah Partners, L.P., Raven
                  Partners, L.P., Nigel Davey, and Brian Cathcart dated March
                  14, 2003, incorporated by reference to exhibit 10.29 to the
                  Company's Form S-1 filed on May 12, 2003.

10.8              Third Amendment to Amendment Agreement between the Company,
                  Koyah Leverage Partners, Koyah Partners, L.P., Raven Partners,
                  L.P., Nigel Davey, and Brian Cathcart dated March 28, 2003,
                  incorporated by reference to exhibit 10.30 to the Company's
                  Form S-1 filed on May 12, 2003.

10.9              Fourth Amendment to Amendment Agreement between the Company,
                  Koyah Leverage Partners, Koyah Partners, L.P., Raven Partners,
                  L.P., Nigel Davey, and Brian Cathcart dated April 3, 2003,
                  incorporated by reference to exhibit 10.31 to the Company's
                  Form S-1 filed on May 12, 2003.

10.10             Fifth Amendment to Amendment Agreement between the Company,
                  Koyah Leverage Partners, Koyah Partners, L.P., Raven Partners,
                  L.P., Nigel Davey, and Brian Cathcart dated June 27, 2003 ,
                  incorporated by reference to exhibit 10.32 to the Company's
                  Form S-3 filed on July 31, 2003.

10.11             Purchase Agreement between the Company and Toys "R" Us, Inc.
                  dated May 29, 2002, incorporated by reference to exhibit 10.14
                  to the Company's Form 10-K for the fiscal year ended March 31,
                  2002.

10.12             Convertible Note in favor of Toys "R" Us, Inc. dated May 29,
                  2002, incorporated by reference to exhibit 10.15 to the
                  Company's Form 10-K for the fiscal year ended March 31, 2002.

10.13             Warrant in favor of Toys "R" Us, Inc. dated May 29, 2002,
                  incorporated by reference to exhibit 10.16 to the Company's
                  Form 10-K for the fiscal year ended March 31, 2002.

                                       35


10.14             Development Agreement between the Company and Toys "R" Us,
                  Inc. dated May 29, 2002, incorporated by reference to exhibit
                  10.17 to the Company's Form 10-K for the fiscal year ended
                  March 31, 2002. Portions of this exhibit (indicated by
                  asterisks) have been omitted pursuant to a request for
                  confidential treatment pursuant to Rule 24b-2 of the
                  Securities Exchange Act of 1934.

10.15             Warrant in favor of UNIONBANCAL EQUITIES, Inc. dated January
                  2, 2003, incorporated by reference to exhibit 10.4 to the
                  Company's 10-Q filed on February 14, 2003.

10.16             Summary of loan transactions between the Company and World
                  Wide Business Centres, incorporated by reference to exhibit
                  10.12 to the Company's 10-K filed on July 16, 2002.

10.17             Option Agreement between Softline Limited and Steven Beck, as
                  trustee of a certain management group of Island Pacific, Inc.

31.1              Rules 13a-14 and 15d-14 certification from Principal Executive
                  Officer.

31.2              Rules 13a-14 and 15d-14 certification from Principal Financial
                  and Accounting Officer

32.1              Section 1350 Certification of Principal Executive Officer.

32.2              Section 1350 Certification of Chief Executive Officer.


(b) REPORTS ON FORM 8-K

On November 12, 2003, we filed a Form 8-K disclosing as Item 5 the sale of
3,180,645 shares of our common stock to a group of institutional investors.

On November 24, 2003, we filed a Form 8-K disclosing as Item 5 the execution of
an Agreement of Merger and Plan of Reorganization pursuant to which we will
acquire Page Digital.

On December 2, 2003, we filed a Form 8-K disclosing as Item 1 the acquisition by
the Sage Group plc of Sofltine Limited's 141,000 shares of our Series A
Convertible Preferred Stock, 8,923,915 shares of our common stock and 71,812
shares of our common stock issuable on the exercise of options.

On February 4, 2004, we filed a Form 8-K disclosing as Item 5 the completion of
the acquisition of Page Digital Incorporated.





                                   SIGNATURES

Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly cause this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                    Island Pacific, Inc.
                                    Registrant

                                    /S/ Ran Furman
                                    -----------------------
Date: February 13, 2004             Ran Furman
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)

                                    Signing on behalf of the registrant



                                       36