# SECURITIES AND
EXCHANGE COMMISSION

# Washington, D. C.20549

# FORM 10-QSB

# QUARTERLY REPORT UNDER
SECTION 13 OR 15(d) OF THE

# SECURITIES EXCHANGE
ACT OF 1934

# For the quarterly period ended:
                 
                 
                 
March 31, 2004

# Commission File No.  000-29587

IBSG INTERNATIONAL, INC.

(Name
of small business issuer in its charter)

|Florida                                                  | 65-0705328                         
|-------------------------------------------------------- | -----------------------------------
|(State or other jurisdiction of 
        incorporation ) | (I.R.S.Employer identification No.)

1132 Celebration
Blvd., Celebration, FL 34747

(Address and Zip Code
of Principal Executive Offices)

Registrants
Telephone Number: (321) 939-6321

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
as the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [ ] NO [X]

# APPLICABLE ONLY TO
CORPORATE ISSUERS

State the number of shares
outstanding of each of the issuers classes of common equity, as of the latest
practicable date:  33,054,707 shares as of April 30, 2004.

Transitional Small
Business Format:No

# PART I - 
FINANCIAL INFORMATION

ITEM 1.      
FINANCIAL STATEMENTS

The financial statements included
herein have been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission.  Certain information and
footnote disclosures normally included in financial statements prepared in accordance with
the accounting principles generally accepted in the United States have been omitted.
However, in the opinion of management, all adjustments (which include only normal
recurring accruals) necessary to present fairly the financial position and results of
operations for the period presented have been made.  The results for interim periods
are not necessarily indicative of trends or of results to be expected for the full
year.

-2-

# IBSG INTERNATIONAL,
INC. AND SUBSIDIARY (Formerly Optical Concepts
of America Inc.)

# CONSOLIDATED FINANCIAL
STATEMENTS

# March 31, 2004

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

F-1

# IBSG INTERNATIONAL,
INC. AND SUBSIDIARY (Formerly Optical Concepts
of America Inc.)

Consolidated Balance
Sheet

ASSETS

|                                      | March 31,
2004
(Unaudited)
|------------------------------------- | --------------------------
|CURRENT ASSETS                        |                           
|Cash                                  |                           
|                                      |                           
|Total Current Assets                  |                           
|                                      |                           
|Furniture, Fixtures and Software, Net |                           
|                                      |                           
|OTHER ASSETS                          |                           
|Deposits                              |                           
|                                      |                           
|Total Other Assets                    |                           
|                                      |                           
|TOTAL ASSETS                          |                           
|                                      |                           

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

F-2

IBSG INTERNATIONAL,
INC. AND SUBSIDIARY (Formerly Optical Concepts
of America Inc.) Consolidated Balance
Sheet (Continued)

|LIABILITIES AND STOCKHOLDERS' EQUITY           | March 31,
2004
(Unaudited)
|---------------------------------------------- | --------------------------
|CURRENT LIABILITIES                            |                           
|Accounts payable and accrued expenses          |                           
|Note payable-related party (Note 2)            |                           
|                                               |                           
|Total Current Liabilities                      |                           
|                                               |                           
|Long Term Liabilities                          |                           
|Note payable-related party (Note 2)            |                           
|                                               |                           
|Total Long Term Liabilities                    |                           
|                                               |                           
|TOTAL LIABILITIES                              |                           
|                                               |                           
|STOCKHOLDERS' EQUITY                           |                           
|Common stock authorized 100,000,000 shares at  |                           
|$0.001 par value; 32,114,707 shares issued and |                           
|outstanding                                    |                           
|Additional paid-in capital                     |                           
|Stock subscription payable                     |                           
|Deferred consulting expense (Note 3)           |                           
|Stock subscription receivable                  |                           
|Accumulated deficit                            |                           
|                                               |                           
|Total Stockholders' Equity                     |                           
|                                               |                           
|TOTAL LIABILTIES AND STOCKHOLDERS' EQUITY      |                           
|                                               |                           

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

F-3

# IBSG INTERNATIONAL,
INC. AND SUBSIDIARY (Formerly Optical Concepts
of America Inc.)

Consolidated Statements
of Operations (Unaudited)

|                                              | For the Three Months Ended
March 31, | 
|--------------------------------------------- | ------------------------------------ | 
|
|REVENUES                                      |                                      | 
|EXPENSES                                      |                                      | 
|Bad debt expense                              |                                      | 
|Services paid for with Common Stock           |                                      | 
|Amortization of deferred consulting fees      |                                      | 
|General and administrative                    |                                      | 
|                                              |                                      | 
|Total Expenses                                |                                      | 
|                                              |                                      | 
|Loss from operations                          |                                      | 
|                                              |                                      | 
|OTHER EXPENSES                                |                                      | 
|Interest expense                              |                                      | 
|                                              |                                      | 
|Total Other Expenses                          |                                      | 
|                                              |                                      | 
|NET LOSS                                      |                                      | 
|                                              |                                      | 
|BASIC LOSS PER SHARE                          |                                      | 
|                                              |                                      | 
|WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING |                                      | 
|                                              |                                      | 

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

F-4

# IBSG INTERNATIONAL,
INC. AND SUBSIDIARY (Formerly Optical Concepts
of America Inc.)

Consolidated Statements
of Cash Flows

|                                                  | For the Three Months Ended
March 31, | 
|------------------------------------------------- | ------------------------------------ | 
|
|CASH FLOW FROM OPERATING ACTIVITIES:              |                                      | 
|Net loss                                          |                                      | 
|Adjustments to reconcile net loss to net          |                                      | 
|cash used by operating activities:                |                                      | 
|Common stock issued for services                  |                                      | 
|Amortization of deferred consulting expenses      |                                      | 
|Bad debt expense                                  |                                      | 
|Depreciation expense                              |                                      | 
|Changes in operating assets and liabilities:      |                                      | 
|Increase in deposits                              |                                      | 
|Increase in accounts payable and accrued expenses |                                      | 
|                                                  |                                      | 
|Net Cash Used by Operating Activities             |                                      | 
|                                                  |                                      | 
|CASH FLOWS FROM INVESTING ACTIVITIES:             |                                      | 
|Loan to Commerce, Inc.                            |                                      | 
|Purchase of fixed assets                          |                                      | 
|Advances to IBSG Group prior to consolidation     |                                      | 
|                                                  |                                      | 
|Net Cash Used by Investing Activities             |                                      | 
|                                                  |                                      | 
|CASH FLOWS FROM FINANCING ACTIVITIES:             |                                      | 
|Common stock issued for cash                      |                                      | 
|Proceeds from stock subscription payable          |                                      | 
|Payments on notes payable                         |                                      | 
|                                                  |                                      | 
|Net Cash Provided by Financing Activities         |                                      | 
|                                                  |                                      | 
|NET INCREASE IN CASH                              |                                      | 
|CASH AT BEGINNING OF PERIOD                       |                                      | 
|                                                  |                                      | 
|CASH AT END OF PERIOD                             |                                      | 
|                                                  |                                      | 

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

F-5

# IBSG INTERNATIONAL,
INC. AND SUBSIDIARY (Formerly Optical Concepts
of America Inc.)

Consolidated Statements
of Cash Flows (Continued)

|                                                     | For the Three Months Ended
March 31, | 
|---------------------------------------------------- | ------------------------------------ | 
|
|SUPPLEMENTAL DISCLOSURE OF                           |                                      | 
|CASH FLOW INFORMATION                                |                                      | 
|Interest paid                                        |                                      | 
|Income taxes paid                                    |                                      | 
|SCHEDULE OF NON-CASH                                 |                                      | 
|FINANCING ACTIVITIES                                 |                                      | 
|Common stock issued for deferred consulting expenses |                                      | 
|Common stock issued for services                     |                                      | 

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

F-6

# IBSG INTERNATIONAL,
INC. AND SUBSIDIARY (Formerly Optical
Concepts of America Inc.)

Notes to the
Consolidated Financial Statements March 31, 2004

NOTE 1      BASIS OF FINANCIAL STATEMENT PRESENTATION

| | The
accompanying unaudited condensed consolidated financial statements have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted in accordance with such rules and
regulations. The information furnished in the interim condensed consolidated financial
statements includes normal recurring adjustments and reflects all adjustments, which, in
the opinion of management, are necessary for a fair presentation of such financial
statements. Management believes the disclosures and information presented are adequate to
make the information not misleading, it is suggested that these interim condensed
consolidated financial statements be read in conjunction with the Companys most
recent 8-K filings and audited financial statements and notes thereto included in its
December 31, 2003 Annual Report on Form 10-KSB. Operating results for the three months
ended March 31, 2004 and 2003 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2004.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Pursuant
to a Share Exchange Agreement dated November 10, 2003, which was effective on February 13,
2004, the Company acquired 100% of the outstanding capital stock of Intelligent Business
Systems Group, Inc. a Delaware corporation, in exchange for 15,000,000 shares of its
common stock. These shares were issued to the stockholders of Intelligent Business Systems
Group, Inc. in exchange for their wholly owned interest in Intelligent Business Systems
Group, Inc. At the time of acquisition, the stockholders of Intelligent Business Systems
Group, Inc. acquired control of the Company and accordingly, for accounting purposes,
Intelligent Business Systems Group, Inc. was treated as the acquiring entity. There was no
adjustment to the carrying value of the assets or liabilities of Intelligent Business
Systems Group, Inc.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Accordingly,
at March 31, 2004 the consolidated financial statements include those of IBSG
International, Inc. (formerly Optical Concepts) (IBSG, Inc) and Intelligent Business
Systems Group, Inc. (Group) together are referred to as the Company.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Concurrent
with the Share Exchange Agreement, M&K Trust (a trust controlled by the wife of the
president and chairman of the Company) (Trust) sold certain assets to the Company. in
exchange for a note payable of $958,659. The note bears interest at 8.00% per annum and is
secured by a security agreement naming all of the tangible and intangible assets of IBSG,
Inc. The assets sold to the Company include the software and source codes for the
Companys proprietary software as well as various license/maintenance agreements with
the users of such software and accounts receivable generated under such
license/maintenance agreements. Group assumed the obligations of Commerce, Inc. as
licensor under such agreements. The trust obtained these assets from a company named
Commerce Thru Digital Technologies, Inc. (Commerce, Inc.) a company that was controlled by
the president and chairman of IBSG, Inc. Because of the related party nature of this
transaction, the assets were valued at predecessor costs and represent actual cash which
was paid to Commerce Inc. by the Trust for the development and commercialization of the
software. At the time that the assets were sold to the IBSG, Inc. the accounts receivable
balance was approximately $3,983,000. Of this amount, $2,500,000 was deemed to be deferred
revenue. The balance of $1,483,000 of revenue would have been recognized by either
Commerce, Inc. or the Trust during the time that these entities owned the contracts. Since
the Trust had no basis in the generation of the accounts receivable, they have not been
recorded.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-7

# IBSG INTERNATIONAL,
INC. AND SUBSIDIARY (Formerly Optical
Concepts of America Inc.)

Notes to the
Consolidated Financial Statements (Continued) March 31, 2004

NOTE 1 -     BASIS OF FINANCIAL STATEMENT PRESENTATION (Continued)

| | When
the Company receives any cash for the $1,483,000 portion of the accounts receivable, the
Company will recognize an addition to paid in capital. The Company will recognize revenue
on the remaining lives of the contracts of $2,500,000 in accordance with the revenue
recognition policy in Note 2. This includes $671,000 of receivables for the first quarter
of 2004 (customization work completed, additional licenses billed to customer and deferred
revenue) which are also not reflected. Because of the slow pay nature of these contracts,
the sporadic nature of the prior cash collections of both Commerce, Inc. and the Trust,
the Company will recognize this revenue as the cash is collected. A number of current
contract assets assumed by IBSG, Inc. have written confirmation from the customer
acknowledging the contract and outstanding payables
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 2       CRITICAL
ACCOUNTING POLICIES

a.
Revenue Recognition

| | Our
license agreements typically run for five years. A first year license fee, inclusive of
installation, integration and training, is payable at the initiation of the license.
License maintenance is payable on the second through fifth anniversary date of the
license. Each fee covers the license/maintenance fee for one year. Such fees are accounted
as unearned revenue and recognized as revenue ratably over each annual period. We
recognize revenue in accordance with Statement of Position, or SOP 97-2, Software
Revenue Recognition, as amended. We recognize license revenues when all of the
following criteria are met: persuasive evidence of an arrangement exists, the fee is fixed
or determinable, collection of the related receivables is reasonably assured, delivery of
the product has occurred and the customer has accepted the product (including the
expiration of an acceptance period) if the terms of the contract include an acceptance
requirement. In the event that we grant a customer the right to specified upgrades and
vendor-specific objective evidence of fair value exists for such upgrades, we defer
license revenue in an amount equal to this fair value until we have delivered the
specified upgrade. If vendor-specific objective evidence of fair value does not exist,
then we defer recognition of the entire license fee until we deliver the specified
upgrade. If professional services are essential to the functionality of the other elements
of the arrangement, we defer recognition of revenue until we have satisfied our
professional services obligations. To date, professional services have not been essential
to the functionality of the other elements, and thus have been accounted for separately.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We
consider a non-cancelable agreement signed by the customer and us to be evidence of an
arrangement. Delivery is considered to occur when media containing the licensed programs
is provided to a common carrier, or the customer is given electronic access to the
licensed software. Our typical end user license agreements do not contain acceptance
clauses. We consider the fee to be fixed or determinable if the fee is not subject to
refund or adjustment. If the fee is not fixed or determinable, we recognize revenue as the
amounts become due and payable. Reasonable assurance of collection is based upon our
assessment of the customers financial condition through review of their current
financial statements or credit reports. Additional consideration is given to the type of
customer. Most of our customers are government or quasi-government agencies and are thus
considered low collection risk although payments could take as long as 12 months to be
brought current by the customer due to the slow pay nature of such entities. Late payments
and interest are assessed based on unpaid balances on a monthly basis. A number of current
contract assets assumed by IBSG have written confirmation from the customer acknowledging
the contract and outstanding payables
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-8

# IBSG INTERNATIONAL,
INC. AND SUBSIDIARY (Formerly Optical
Concepts of America Inc.)

Notes to the
Consolidated Financial Statements (Continued)

March 31, 2004

NOTE 2       CRITICAL ACCOUNTING
POLICIES (Continued)

| | a. Revenue Recognition (Continued)
| | ----------------------------------

| | due
to the Company. For follow-on sales to existing customers, prior payment history is also
used to evaluate probability of collection. If we determine that collection is not
reasonably assured, we defer the revenue and recognize the revenue upon cash collection.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | When
our software licenses contain multiple elements, we allocate revenue to each element based
on the relative fair values of the elements. Multiple element arrangements generally
include post-contract support (PCS or maintenance), software products, and end-user
subscriptions with billings recorded as received and in some cases, other professional
services. Revenue from multiple-element arrangements is allocated to undelivered elements
of the arrangement, such as PCS, based on the relative fair values of the elements
specific to us. Our determination of fair value of each element in multi-element
arrangements is based on vendor-specific objective evidence, which is generally determined
by sales of the individual element to third parties or by reference to a renewal rate
specified in the related arrangement.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Where
vendor-specific objective evidence of fair-value exists for all undelivered elements, but
evidence does not exist for one or more delivered elements, we account for the delivered
elements in accordance with the Residual Method prescribed by SOP 98-9. Under the residual
method, the fair value of the undelivered elements is deferred and the remaining portion
of the arrangement fee is recognized as revenue. In most cases, the bundled multiple
elements include PCS and the software product. In such cases, when vendor-specific
objective evidence of fair value exists for all of the undelivered elements (most commonly
PCS), the residual or remaining amount is recognized as revenue and the PCS is recognized
ratably over the PCS term, which is typically 12 months.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Revenues
from professional services consist of training and implementation services. Training
revenues are recognized as the services are performed. Professional services are not
considered essential to the functionality of the other elements of the arrangement and are
accounted for as a separate element. Professional services are recognized as the services
are performed for time and materials contracts or upon achievement of milestones on fixed
price contracts. A provision for estimated losses on fixed-price professional services
contracts is recognized in the period in which the loss becomes known.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Deferred
revenues include amounts received from customers for which revenue has not yet been
recognized that generally results from deferred maintenance, consulting or training
services not yet rendered and license revenue deferred until all requirements under SOP
97-2 are met. Deferred revenue is recognized upon delivery of our products, as services
are rendered, or as other requirements requiring deferral under SOP 97-2 are satisfied.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-9

# IBSG INTERNATIONAL,
INC. AND SUBSIDIARY (Formerly Optical
Concepts of America Inc.)

Notes to the
Consolidated Financial Statements (Continued) March 31, 2004

NOTE 2  CRITICAL ACCOUNTING
POLICIES (Continued)

a.       
          Revenue Recognition (Continued)

Allowance
for Doubtful Accounts and Sales Returns

| | We
maintain an allowance for doubtful accounts and a sales return allowance to reduce amounts
to their estimated realizable value. A considerable amount of judgment is required when we
assess the realization of accounts receivables, including assessing the probability of
collection and the current credit-worthiness of each customer. If the financial condition
of our customers were to deteriorate, resulting in an impairment of their ability to make
payments, an additional provision for doubtful accounts may be required. We initially
record a provision for doubtful accounts based on our historical experience, and then
adjust this provision at the end of each reporting period based on a detailed assessment
of our accounts receivable and allowance for doubtful accounts. In estimating the
provision for doubtful accounts, we consider (i) the type of entity (government,
commercial, retail) and the aging of the accounts receivable; (ii) trends within and
ratios involving the age of the accounts receivable; (iii) the customer mix in each of the
aging categories and the nature of the receivable, such as whether it derives from
license, professional services or maintenance revenue; (iv) our historical provision for
doubtful accounts; (v) the credit worthiness of the customer; and (vi) the economic
conditions of the customers industry, whether the entity is government, as well as general
economic conditions, among other factors.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Should
any of these factors change, the estimates that we make may also change, which could
impact our future provision for doubtful accounts. For example, if the financial condition
of our customers were to deteriorate, affecting their ability to make payments, an
additional provision for doubtful accounts could be required.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

b.
Equity Transactions

| | The
Company records the values for the common stock issuances based on the closing prices of
the common stock on the date of authorization for services, extinguishments of debt or any
other consideration other than cash. From time to time, the Company will enter the equity
market and raise cash from unaffiliated 3rd party investors. These issuances are valued at
the cash prices that the Company is able to sell the stock for.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

c.
Depreciation and Amortization

| | The
Company is depreciating its furniture and equipment on a straight-line basis over a 5-year
period. The software acquired (Note 1) is being amortized on a straight line over a 3-year
period.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 3        EQUITY
ISSUANCES

| | During
January 2004, the Company issued 415,333 shares of common stock for cash of $121,200
pursuant to private placements. The shares were valued at an average price of $0.29 per
share
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-10

# IBSG INTERNATIONAL,
INC. AND SUBSIDIARY (Formerly Optical
Concepts of America Inc.)

Notes to the
Consolidated Financial Statements (Continued) March 31, 2004

NOTE 3       EQUITY ISSUANCES
(Continued)

| | During
January 2004, the Company issued 250,000 shares of common stock as stock offering costs.
The shares were valued at $1.28 per share, which was the closing price on the date of
issue. The costs associated with the stock offering costs were deducted from additional
paid in capital.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
January 2004, the Company issued 50,000 shares of common stock for services relating to
the reverse merger. The shares were valued at $1.28 per share, which was the closing price
on the date of issue.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
January 2004, the Company issued 5,895,000 shares of common stock to several entities for
deferred consulting services. The shares were valued at $1.28 per share, which was the
closing price on the date of issue. Deferred consulting expenses of $7,545,600 were
established and are being amortized over a 60-month period, which is the expected term of
the services. Amortization expense of $314,400 was recorded as of March 31, 2004.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
January 2004, the Company issued 840,000 shares of common stock to several individuals for
services rendered. The shares were valued at $1.28 per share, which was the closing price
on the date of issue. The Company recorded service expense of $1,074,360.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
February 2004, the Company issued 880,966 shares of common stock for cash of $393,290
pursuant to private placements. The shares were valued at an average price of $0.45 per
share.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
February 2004, the Company issued 250,000 shares of common stock as stock offering costs.
The shares were valued at $1.40 per share, which was the closing price on the date of
issue. The costs associated with the stock offering costs were deducted from additional
paid in capital.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
February 2004, the Company issued 15,000,000 shares of common stock for the reverse merger
between IBSG International, Inc. and IBSG Group, Inc.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
February 2004, the Company issued 43,500 shares of common stock for the extinguishments of
debt valued at $43,065. The shares were valued at $0.99 per share, which was the closing
price on the date of issue.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
February 2004, the Company issued 1,417,104 shares of common stock to several individuals
for services rendered. The shares were valued at $0.99 per share, which was the closing
price on the date of issue. The Company recorded service expense of $1,402,933
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
March 2004, the Company issued 430,000 shares of common stock for cash of $215,000
pursuant to private placements. The shares were valued at an average price of $0.50 per
share. The Company received $185,000 of the cash prior to the March 31, 2004, and the
remaining $30,000 was received in April 2004.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-11

# IBSG INTERNATIONAL,
INC. AND SUBSIDIARY (Formerly Optical
Concepts of America Inc.)

Notes to the
Consolidated Financial Statements (Continued) March 31, 2004

NOTE 3       EQUITY ISSUANCES
(Continued)

| | Pursuant
to the private placements for cash mentioned previously, the Company was required to issue
additional shares of common stock to the various parties because the closing bid price of
the Companys stock was not $1.00 at March 31, 2004. Accordingly, the Company issued
an additional 664,032 shares of common stock to the private placement investees for their
cash purchases. These individuals did not contribute any services or other items to the
Company. These shares were valued at $0.00 per share.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 4       GOING
CONCERN

| | The
Companys condensed consolidated financial statements are prepared using accounting
principles generally accepted in the United States of America applicable to a going
concern which contemplates the realization of assets and liquidation of liabilities in the
normal course of business. The Company has incurred cumulative operating losses through
March 31, 2004 of $4,850,157, and has a working capital deficit at March 31, 2004 of
$110,266. Revenues have not been sufficient to cover its operating costs and to allow it
to continue as a going concern. The potential proceeds from the sale of common stock,
other contemplated debt and equity financing, and increases in operating revenues from new
development would enable the Company to continue as a going concern. There can be no
assurance that the Company can or will be able to complete any debt or equity financing.
If these are not successful, management is committed to meeting the operational cash flow
needs of the Company.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 5       SUBSEQUENT
EVENTS

| | Subsequent
to March 31, 2004, the Company collected the $30,000 stock subscription receivable.
| | ----------------------------------------------------------------------------------------------

| | Subsequent
to March 31, 2004, the Company issued 264,000 shares of common stock for the stock
subscription payable.
| | -------------------------------------------------------------------------------------------------------------------

| | Subsequent
to March 31, 2004, the Company issued 656,000 shares of common stock for cash of $327,080
or $0.50 per share.
| | ------------------------------------------------------------------------------------------------------------------------

| | Subsequent
to March 31, 2004, the Company issued 20,000 shares of common stock for services rendered.
| | -----------------------------------------------------------------------------------------------------

F-12

ITEM 2.     
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The following discussion of our
results of operations and liquidity and capital resources should be read in conjunction
with our Financial Statements and related Notes thereto appearing elsewhere in this
report. The Company adopted at managements discretion, the most conservative
recognition of revenue based on the most astringent guidelines of the SEC in terms of
recognition of software licenses and recurring revenue. Management will select additional
changes to revenue recognition to comply with the most conservative SEC recognition of on
a forward going accrual basis as the model is replicated with other similar markets (i.e.
SBDC).

The  Company (IBSG
or the Company), through Intelligent Business Systems Group, Inc. which
became a wholly owned subsidiary of the company on February 13, 2004, is in the business
of selling enterprise solutions that enhance the operating efficiency and create revenue
for State Small Business Development Centers, business associations (e.g. Chambers of
Commerce) and other organizations through the licensing of its unique turn-key digital
service center software, which provides a broad range of digital budgetary, administrative
and commercial services (B2B, e-commerce, government to business and enterprise business
services) on a single platform known as the NetPool Data System.

As a software provider, system
integrator and Application Service Provider, IBSG generates its revenue from license
sales, system modifications, system support, and a percentage of monthly customer fees.

The NetPool Data System provides
IBSGs licensees with the ability to operate a turnkey digital service center
that integrates a number of vertical market entities (clients or sub-licensees) on a
single platform without requiring the business to have a pre-existing web site or digital
catalogue.  Branded and administered by the customer, the system is installed on a
customers server or hosted by IBSG and accessed via their web site. Utilizing the
NetPool Data System, the licensees are able to offer a broad spectrum of services,
including sales (services and products), sales management, formal bid management
(B2B/G2B), sub-contracting & strategic alliance searches, fiscal management, inventory
control, regional market analysis and employment services.

Each license holder can create
individualized business models through the systems comprehensive on-line billing
functions and generate revenue through system services and sub-license sales. Typically
the licensees charge their customers monthly usage and transaction-based fees. The host
licensee may also sell sub-licenses to other entities in their states or vertical markets
and provide those entities with the ability to offer similar services to their
customer/member/consumer base.

The market for the NetPool Data
System includes any entity that has a customer, vendor or membership base comprised
of small to mid size business enterprises (SMEs).

IBSG currently markets the system to
state operated Small Business Development Centers (SBDCs), business organizations
(chambers of commerce), Internet Service Providers, financial institutions), Economic and
Workforce Development projects (including local and state government agencies), and
educational institutions (i.e. community colleges, universities). These entities share a
common goal to enhance SME growth, secure cost effective vendor management, and offer a
wide range of business services and opportunities to their business constituents and to
generate revenue or recover costs from the provision of such services. In practice,
IBSGs contracts have the opportunity to grow exponentially over time due to the
interrelationships that exist within the foregoing market areas. When IBSG sells a master
host license to a state SBDC or state chamber, that entity can sell
sub-licenses to the other vertical markets in their respective states or
markets, from which the Company receives incremental revenue.

-3-

Each license holder can create
individualized business models through the systems comprehensive on-line billing
functions and generate revenue through system services and sub-license sales. Typically
the licensees charge their customers monthly usage and transaction-based fees. The host
licensee may also sell sub-licenses to other entities in their states or vertical markets
and provide those entities with the ability to offer similar services to their
customer/member/consumer base.

In 2004 the Company acquired from a
related party the current license agreements with chambers of commerce and SBDCs and has
been fulfilling the obligations of licensor under such agreements as well as accounts
receivable generated on such licenses.  At the time that the assets were acquired the
accounts receivable balance was approximately $3,983,000.  Of this amount, $2,500,000
was deemed to be deferred revenue of which $1, 100, 000 of revenue would have been
recognized for the first quarter of 2004 as deferred revenue. The balance of $1,483,000 of
revenue would have been recognized prior to the time that the Company acquired these
contracts. Due the acquisition from a related party that had no basis in the generation of
the accounts receivable, they have not been recorded. When the Company receives any cash
for the $1,483,000 portion of the accounts receivable, the Company will recognize an
addition to paid in capital. Due to the nature of government contracts paying slowly,
and the largest receivable represented by a state that has gone through a substantial
restructuring, the Company anticipates that payments will continue to be slow paid over
the next 6-8 months. As the result of the majority of the contract being paid by allocated
federal funds, the 5 year contract being paid current on its maintenance fees and the
written commitment by the customer to continue to make payments as contracted, management
feels this contract will be on an accrual basis before the end of the 3rd
quarter of 2004.

The Company will recognize revenue on
the remaining lives of the contracts of $2,500,000 in accordance with the revenue
recognition policy in Note 2 of the financial statements filed in this quarterly
report.  This includes $671,000 of receivables for the first quarter of 2004
(customization work completed, additional licenses billed to customer and deferred
revenue) which are also not reflected.   Because of the slow pay nature of these
contracts, the sporadic nature of the prior cash collections since their initiation, the
Company will recognize this revenue as the cash is collected.  A number of current
contract assets assumed by IBSG, Inc. have written confirmation from the customer
acknowledging the contract and outstanding payables. Results of Operations 
Quarter ended March 31, 2004 and 2003  Due to the Companys policy of not
recognizing revenue on its license agreements until payment, the Company reflects no
revenues on the $671,000 of customization work completed, additional licenses billed to
customer and deferred revenue in quarter ending March 31, 2004 quarter.  There was
also no revenue recognized in the 2003 quarter.  The Company had expenses of
$4,632,422 in the 2004 quarter and $5,000 in the 2003 quarter.  In 2004, the expenses
were primarily services paid for with issuance of common stock, amortization of consulting
services, general and administrative expenses and bad debt expense from the write off of a
receivable. The payment of services with stock and amortization of consulting services is
a non-cash charge to the Companys operations.

-4-

Liquidity and Capital
Resources  The Company undertook a private placement of its common stock from
January to April 2004. As of March 31, 2004 the company had cash of $249,776 and received
additional proceeds from the placement in April 2004.  The Company has incurred
cumulative operating losses through March 31, 2004 of $4,850,157, and has a working
capital deficit at March 31, 2004 of $110,266. All of the loss is attributed to the
payment of stock in exchange for services in building the Company, and management does not
anticipate that this will negatively impact the Companys year-end projections of
operating earnings. The Company believes that it will begin to collect the substantial
receivables from its customers and will have sufficient other capital resources available
to continue as a going concern. However, it has no agreements for additional capital and
may have to curtail its operations if sufficient capital is not received from its
operations or otherwise. CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The SEC has recently issued Financial Reporting Release No. 60, Cautionary
Advice Regarding Disclosure About Critical Accounting Policies (FRR 60),
suggesting companies provide additional disclosure and commentary on those accounting
policies considered most critical. A critical accounting policy is one that is both very
important to the portrayal of our financial condition and results, and requires
managements most difficult, subjective or complex judgments. Typically, the
circumstances that make these judgments difficult, subjective and/or complex have to do
with the need to make estimates about the effect of matters that are inherently uncertain.
We believe the accounting policies below represent our critical accounting policies as
contemplated by FRR 60.  Revenue Recognition  Recognition of revenue on the
Companys software licenses requires estimates of the amounts to be recognized in the
current period and estimates as set forth in Note 2 to the financial statements filed with
this quarterly report.  Allowance for Doubtful Accounts and Sales Returns We
maintain an allowance for doubtful accounts and a sales return allowance to reduce amounts
to their estimated realizable value. A considerable amount of judgment is required when we
assess the realization of accounts receivables, including assessing the probability of
collection and the current credit-worthiness of each customer.  RELATED PARTY
TRANSACTIONS  The Companys enterprise solutions software is owned by M & K
Trust, the Companys largest shareholder,  and is provided to the Company
pursuant to an agreement to pay M & K Trust $1,000,000 in 120 monthly installments of
$12,132.76 until November 30, 2015.  Such obligation is secured by substantially all
of the Companys assets. M&K Trust is a trust controlled by the wife  of the
president of the Company.  The Company also acquired from M & K Trust the rights
as licensor under certain license agreements which provide substantially all of the
Companys revenues.  The Company also acquired certain accounts receivable
generated under such license agreements. FACTORS THAT COULD AFFECT FUTURE
RESULTS Because of the following factors, as well as other variables
affecting our operating results, past financial performance may not be a reliable
indicator of future performance, and historical trends should not be used to anticipate
results or trends in future periods.  We have no arrangements or sources of
additional capital and may have to curtail our operations if additional capital is needed
but is not available.

-5-

Our customers who are generally state government agencies or quasi government chambers of
commerce can be exceedingly tardy in paying their obligations to us.  We may have to
curtail our operations if we do not have sufficient funds to pay for the expenses of
operating our business. The Company will use additional commercial market opportunities to
offset the slow pay nature of the lucrative government contract market. The Companys
current and projected acquisitions will expand the Companys retail and private
sector markets which should create a blend of payment cycles between the secured
government markets and the commercial markets.

We acquired our enterprise software
and began servicing licensees of such software in 2004.   Prior financial
information reflects a profitable operation. Our prospects must be considered in light of
the risks, expenses and difficulties frequently encountered by companies in relatively new
and rapidly evolving markets. These risks may include:

   uncertain commercial acceptance of our products;

   technological obsolescence; and

   competition

We cannot assure you that we will
succeed in addressing these risks. If we fail to do so, our revenue and operating results
could be materially harmed.

Our software products are subject to
rapid technological change and to compete, we must offer products that achieve market
acceptance.

The software industry is
characterized by rapid technological change.  To remain competitive, we must continue
to improve our existing products to meet the needs of our customers.  We cannot
assure you that new products offered by our competitors may not prove attractive to our
clients and potential clients and adversely affect our future revenues.

Our failure to adequately protect our
proprietary rights could adversely affect our ability to compete effectively.

We rely on a combination of
contracts, copyrights, continued evolution of our core product (s) and other security
measures in order to establish and protect our proprietary rights. We can offer no
assurance that the measures we have taken or may take in the future will prevent
misappropriation of our technology or that others will not independently develop similar
products, design around our proprietary technology or duplicate our products.

-6-

# ITEM 3.  CONTROLS
AND PROCEDURES

The Company maintains disclosure
controls and procedures that are designed to ensure that information required to be
disclosed in the Companys Exchange Act reports is recorded, processed, summarized
and reported within the time periods specified in the SECs rules and forms, and that
such information is accumulated and communicated to the Companys management,
including its Chief Executive Officer and Executive and Accounting Officer, as
appropriate, to allow timely decisions regarding required disclosure based closely on the
definition of disclosure controls and procedures in Rule 13a-14(c). In
designing and evaluating the disclosure controls and procedures, management recognized
that any controls and procedures, no matter how well designed and operated, can provide
only reasonable assurance of achieving the desired control objectives, and management
necessarily was required to apply its judgment in evaluating the cost-benefit relationship
of possible controls and procedures.

As of the end of the period covered
in this report, the Company carried out an evaluation, under the supervision and with the
participation of the Companys Executive and Accounting Officer, of the effectiveness
of the design and operation of the Companys disclosure controls and procedures.
Based on the foregoing, the Companys Executive and Accounting Officer concluded that
the Companys disclosure controls and procedures were effective.

There have been no significant
changes in the Companys internal controls or in other factors that could
significantly affect the internal controls subsequent to the date the Company completed
its evaluation.

-7-

# PART II. OTHER
INFORMATION

ITEM 2. CHANGES IN SECURITIES AND
SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES  Recent sales of
unregistered securities   From January 1, 2004 to March 31, 2004 the Company undertook a private
placement of its common stock.  As a result the Company sold 1,911,229 shares in the
offering for $.25 to $.50 per share.  The offering was limited to persons who are
Accredited Investors as defined in SEC Regulation D.  The total offering price of the
shares was $759,400 and the Company paid sales commissions of
$119,635 in connection with the offering.

Under the offering, the Company
agreed to issue additional shares to investors if the Companys common stock traded
at a bid  price of less than $1.00 per share on March 31, 2004.  Since the
Companys stock price did not mintain that level on March 31, 2004 the Company was
required to issue an additional 664,030 shares of its common stock in the offering.

In connection with such sales the
Company issued 500,000 shares of its common stock to finders and $669,500 for
placement agent fees.  The Company engaged Westcap Securities, Inc. as placement
agent for a portion of sales and finders for the remainder.

During February 2004, the Company
issued 15,000,000 shares of common stock for the reverse merger between IBSG
International, Inc. and IBSG Group, Inc. During January 2004, the Company issued 50,000
shares of common stock for services relating to the reverse merger.  During January
2004, the Company issued 5,895,000 shares of common stock to several entities for deferred
consulting services.

During January 2004, the Company
issued 840,000 shares of common stock to several individuals for services rendered. 
During February 2004, the Company issued 43,500 shares of common stock for the
extinguishments of debt valued at $43,065.

During February 2004, the Company
issued 1,417,104 shares of common stock to several individuals for services rendered. The
foregoing shares were exempt from registration under the Securities Act of 1933 pursuant
to the exemption of Section 4(2) for offerings not involving any public offering.

-8-

ITEM 6. EXHIBITS AND REPORTS ON
FORM 8-K  (a) Exhibits:

| | 31.1 | Rule
13a-14(a)/15d-14(a) Certifications of the Chief  Executive Officer and Chief
Financial Officer
| | ---- | ---------------------------------------------------------------------------------------------------

| | 32.1 | Section
1350 Certification of the Chief Executive Officer
| | ---- | ---------------------------------------------------------

| | 32.2 | Section
1350 Certification of the Chief Financial Officer
| | ---- | ---------------------------------------------------------

|(b) | Reports
on Form 8-K:
|--- | --------------------

The following reports on Form 8-K
were filed during the quarterly period ended March 31, 2004.   A Form 8-K was
furnished on February 12, 2004, under Item 1, relating to acquisition of  
Intelligent Business Systems Group, Inc.

A
Form 8-K was filed on February 13, 2004, under Item 5 and 7, relating to press release
announcing closing of acquisition of Intelligent Business Systems Group, Inc.

A
Form 8-K was filed on February 25, 2004, under Items 4 and 7, relating to change in
certifying accountants.

A
Form 8-K/A was filed on March 29, 2004, under Items 4 and 7, related to change in
certifying accountants.

# SIGNATURES

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

IBSG INTERNATIONAL, INC.

s/ Michael RiversPresident
(Principal executive officer)

s/Geoffrey BirchTreasurer (Principal accounting
officer)

-9-