U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 FORM 10-KSB/A3

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

                     FOR FISCAL YEAR ENDED OCTOBER 31, 2003.

                                   000-027619
                             Commission File Number

                              iBIZ TECHNOLOGY CORP.

                 (Name of small business issuer in its charter)

           Florida                                                86-0933890
State or other jurisdiction                                      IRS Employer
     of incorporation                                         Identification No.

           2238 West Lone Cactus Drive, #200, Phoenix, Arizona 85021,
                 (623) 492-9200 (Address and telephone number of
                          principal executive offices)

      Securities registered under Section 12(b) of the Exchange Act: None.

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

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act, during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X].

The registrant's revenues from continuing operations for the year ended October
31, 2003 were $485,382.

As of February 11, 2004, the aggregate market value of the common stock held by
non-affiliates computed by reference to the average bid and asked prices of such
stock was $65,283,038.72

As of February 11, 2004, the registrant had 2,521,123,225 shares of common
stock, par value $.001 per share, outstanding.

<PAGE>

                                     PART I

RECENT DEVELOPMENTS

Spinoff

On July 20, 2003, the Board of Directors of iBIZ Technology, Corp. ("iBIZ" or
the "Compnay") approved the spin-off of iBIZ, Inc., a wholly owned subsidiary,
into a separate company. Management estimates that the transaction should be
completed by the second quarter in 2004

iBIZ Technology, Corp. proposes to issue without consideration non-restricted
shares of common stock in iBIZ, Inc. pro rata to all its shareholders as of
September 25, 2003 at the ratio of one share of iBIZ, Inc. for each 500 shares
of iBIZ Technology Corp. common stock. Approximately 1.1 million shares of iBIZ,
Inc. will be distributed to iBIZ Technology, Corp.'s shareholders. As of date,
no shares have been issued. The purpose of the spin-off of iBIZ, Inc. is that it
will allow management of each business to focus solely on that business. In
addition, it should enhance access to financing by allowing the financial
community to focus separately on each business. Post spin-off, iBIZ Technology
Corp., will retain all of its assets and liabilities.

iBIZ Technology Corp. will continue to distribute its product line in the North
and South America providing sub-licenses for all products to iBIZ, Inc. for
worldwide distribution, except in North and South America. iBIZ, Inc. and iBIZ
Technology Corp. are in the process of negotiating the license and distribution
agreements for distribution of its products in the United States. It is
currently planned that iBIZ, Inc. will support iBIZ Technology Corp. in
engineering, production, and business development, through synergetic agreements
(to be negotiated) using Enterprises Capital AG and its affiliates
infrastructure in Europe and Israel.

Acquisition of Synosphere

On January 20, 2004, iBIZ Technology Corp. entered into an acquisition agreement
with the interestholders of Synosphere, LLC, a Texas limited liability company.
The members are the owners of all the issued and outstanding membership
interests of equity of Synosphere. Under the terms of this agreement, on the
closing date, Synosphere sold to iBIZ Technology Corp all 5,000,000 Interests
and iBIZ Technology Corp in turn sold to the shareholders 6 shares of its common
stock for each Interest (an aggregate of 30,000,000 shares of common stock).
Synosphere specializes in the development of handheld computer technologies.

ITEM 1. DESCRIPTION OF BUSINESS.

iBIZ Technology Corp., through it's wholly-owned operating subsidiary iBIZ Inc.,
designs, manufactures and distributes personal digital assistant (PDA)
accessories and other handheld computing devices. Our expanding product line for
the growing PDA market is distributed through retail chains and distributors
throughout the United States.

In March 2000, we introduced the Keysync Keyboard and a line of products
specific to the personal digital assistant market. On July 11, 2002, iBIZ
Technology Corp acquired the intellectual property and marketing rights for the
Xela Case Keyboard.

In 2002 the Company began selling the Pocket Radio. The Pocket Radio is
compatible with all Palm-based operating systems and is available in Compact
Flash ("CF"; for pocket personal computers) and Securred Digital ("SD"; for Palm
products).

In 2004, the Company will begin selling it Virtual Laser Keyboard product. The
Virtual Laser Keyboard leverages the power of laser and infrared technology and
projects a full-size keyboard onto any flat surface. As you type on the laser
projection; it analyzes what you're typing by the coordinates of that location.
Unlike many small snap-on keyboards for PDAs, the Virtual Laser Keyboard
provides a full-size keyboard. It is also smaller and more convenient to use
than the folding-type keyboards made by some manufacturers and similar to them
in functionality. There are no mechanical moving parts whatsoever in the Virtual
Laser Keyboard. It provides a projected image that is the perfect portable input
device for PDAs. It's similar in responsiveness to regular keyboards, but
extremely futuristic looking. The light weight device weighs two ounces and is
similar in size to a disposable cigarette lighter. The Virtual Laser Keyboard
includes a self-contained, rechargeable lithium ion battery. It provides the
Virtual Laser Keyboard with its own internal power supply, so it doesn't drain
any battery power from the PDA or PC(personal computers). The battery lasts
three to four hours, more than enough time to do some instant messaging and SMS
messaging from the handheld device or to update calendar and phone book entries.

Through February 2004, we have expanded our product mix to more than eighty
different individual PDA products manufactured to iBIZ's specifications by
various overseas manufacturers.

iBIZ Technology Corp's principal offices are located at 2238 West Lone Cactus,
#200, Phoenix, Arizona 85021. iBIZ Technology Corp maintains a website at
www.ibizcorp.com. The information on the website is not part of this report.

Statements regarding the various hardware products offered by the Company, joint
ventures, marketing agreements and web-hosting services are forward-looking and
you should not rely on them or assume that the products discussed will ever be
shipped in quantities sufficient to generate material revenue or that marketing
agreements will generate any revenue. Many products discussed in this report may
ultimately not be sold or may only be sold in limited quantities. Technology
used in computer products is subject to rapid obsolescence, changing consumer
preferences, software advancements, and competitors' products time to market.
These factors, among others, may result in unforeseen changes in the types of
products ultimately sold and services offered by the Company.

<PAGE>

                              PRODUCTS AND SERVICES

iBIZ success is dependent upon the introduction of new products and the
enhancement of existing products. iBIZ is actively engaged in the design and
development of additional peripherals to augment its present product line.
Currently, iBIZ designs many of its products in-house.

Because of the rapid pace of technological advances in the personal computer
industry, iBIZ must be prepared to design, develop, manufacture and market new
and more powerful hardware products in a relatively short time span.

iBIZ also provides third-Party Hardware, Software, and Related Supplies in an
effort to provide our customers a wider range of products.

                        MARKETING, SALES AND DISTRIBUTION

iBIZ markets and distributes products directly to end users through a direct
sales force, regional resellers, value-added providers in the banking and
point-of-sale ("POS") market and Internet commerce sites.

In addition to direct sales, iBIZ also markets its full range of products
directly to retail customers through its website at www.ibizcorp.com or
www.ibizpda.com. To date, iBIZ has recognized only nominal revenues from
Internet retail sales; however, we are continuing to see moderate revenue
increases through this venue. Management believes that direct sales to end users
should allow iBIZ to more efficiently and effectively meet customer needs by
providing products which are tailored for the customer's individual requirements
at a more economical price.

iBIZ also distributes its products to regional resellers and, to a lesser
extent, national distributors and to retail stores such as CompUSA, Inc. and
Fry's Electronics, Staples, Mobileplanet, Micro Center, RC Willeys, Baillios,
Pdamart and Outpost.com.

                                  MANUFACTURING

iBIZ products are engineered and manufactured by various entities in Taiwan and
mainland China. Currently, these manufacturers build iBIZ products to iBIZ
specifications with non-proprietary components. The vast majority of parts used
in iBIZ products are available to iBIZ competitors. Although iBIZ has not
experienced difficulties in the past relating to engineering and manufacturing,
the failure of iBIZ' manufacturers to produce products of sufficient quantity
and quality could adversely affect iBIZ's ability to sell the products its
customers' demand.

iBIZ engages in final assembly, functional testing and quality control of its
products in its Phoenix, Arizona facility. Management believes iBIZ' completion
of the final stages of manufacturing allows iBIZ to ensure quality control for
its products manufactured overseas.

iBIZ has an agreement with Catronics, a Chinese manufacturer to build the Xela
Case Keyboard. The engineering and manufacturing of the Xela Case Keyboard is
done entirely by Catronics. Management believes this relationship allows iBIZ to
offer a broader range of products to its customers without the cost of research
and development and manufacturing.

                                    LICENSES

In June 1999, iBIZ entered into an agreement with Microsoft, Inc. to become an
OEM system builder. Participation in this program allows iBIZ to install genuine
Microsoft operating systems in selected applications with full support from
Microsoft. In addition, this agreement entitles iBIZ to pre-production versions
of Microsoft products and enables iBIZ to provide input into development and
design of new products.

KeyLink Software License. iBIZ has an exclusive, perpetual license to use,
distribute and offer for sale with associated hardware the software that
facilitates the connection between the KeySync keyboard and PDAs.

                             PATENTS AND TRADEMARKS

iBIZ holds United States and foreign patents for its products. iBIZ filed a
patent application for its Lapboard keyboard and was awarded patent 09/765169 on
January 3, 2002. In general, iBIZ believes that its success will depend
primarily upon the technical expertise, creative skills, and management
abilities of its officers, directors, and key employees rather than on patent
ownership.

iBIZ has filed an application with the United States Patent and Trademark Office
for the use of the names "iBIZ" and "KeySync" and received a trademark award for
the iBIZ name on January 8, 2002.

On July 11, 2002 iBIZ purchased intellectual property assets for the Xela Case
Keyboard including the patent application S/N T001 P00547-US1, trademark
application S/N: 78/139,898 and resale rights from ttools, LLC, a Rhode Island
limited liability company. Currently Patent and Trademark applications are in
due process with the United States Patent and Trademark Office. The trademark
application for XELA was published by the Patent and Trademark office in the
Official Gazette on January 7, 2003 for the purpose of opposition.

<PAGE>

                               SERVICE AND SUPPORT

iBIZ provides its customers with a comprehensive service and support program.
Technical support is provided to customers via a toll-free telephone number as
well as through the iBIZ website. The number is available Monday through Friday
8:00 a.m. to 5:00 p.m., Mountain Standard Time.

Also available on iBIZ's website are links to files for software patches and
drivers used for software updates.

                                   COMPETITION

The handheld computer industry is highly competitive. iBIZ competes at the
product level with various other handheld computer manufacturers and at the
distribution level primarily with computer retailers, on-line marketers and the
direct sales forces of large PDA manufacturers.

At the product level, the PDA industry is characterized by rapid technological
advances in both hardware and software development and by the frequent
introduction of new and innovative products. There are approximately 14
manufacturers of personal computers, the majority of which have greater
financial, marketing and technological resources than iBIZ. Competitors at this
level include Palm, HP, Dell, Sony, and Handspring, however, most key PDA
manufacturers outsource or private label PDA accessory products from companies
similar to iBIZ.

Competitive factors include product quality and reliability, price to
performance characteristics, marketing capability, and corporate reputation. In
addition, a segment of the industry competes primarily for customers on the
basis of price. Although iBIZ' products are price competitive, iBIZ does not
attempt to compete solely on the basis of price.

The intense nature of competition in the computer industry subjects iBIZ to
numerous competitive disadvantages and risks. For example, many major companies
will exclude consideration of iBIZ' products due to limited size of the company.
Moreover, iBIZ' current revenue levels cannot support a high level of national
or international marketing and advertising efforts. This, in turn, makes it more
difficult for iBIZ to develop its brand name and create customer awareness.
Additionally, iBIZ products are manufactured by third parties in Taiwan or
China. As such, iBIZ is subject to numerous risks and uncertainties of reliance
on offshore manufacturers, including, taxes or tariffs, non-performance, quality
control, and civil unrest. Also, as iBIZ holds few patents, the vast majority of
parts used in its products are available to its competitors.

Management believes that it can compete effectively by providing PDA accessories
utilizing unique designs and space-saving qualities. Although Management
believes it has been successful to date, there can be no assurance that iBIZ
will be able to compete successfully in the future.

                             CUSTOMERS FOR PRODUCTS

Throughout its history, iBIZ's ability to deliver innovative product designs and
quality customer service has enabled it to provide products to major retailers
and distributors. We are highly dependent on a few major customers for a
significant portion of our business. For the year ended October 31, 2003, we had
2 customers, Comp USAand Synnex that accounted for 35% ($168,000) and 13%
($61,000), respectively, of our total revenues. For the year ended October 31,
2002, we had 2 customers, Daisy Tek International and Mobile Planet, that
accounted for 21% ($75,000) and 18% ($66,000), respectively, of our total
revenues. The loss of one of our major retailer customers would materially
affect our viability as a company.

                        USE OF TRADEMARKS AND TRADENAMES

All trademarks and tradenames used in this report are the property of their
respective owners.

                                    EMPLOYEES

As of February 11, 2004, iBIZ had approximately 5 full-time employees. No
employee of iBIZ is represented by a labor union or is subject to a collective
bargaining agreement. iBIZ has never experienced a work-stoppage due to labor
difficulties and believes that its employee relations are good.

ITEM 2. DESCRIPTION OF PROPERTY.

On February 1, 2002, iBIZ began leasing approximately 4,343 square feet of
custom built office space located at 2238 West Lone Cactus, #200, Phoenix,
Arizona. The facility is used for administration, design, engineering and
assembly of products. iBIZ's lease is for a term of 3 years, with monthly rental
payments from $2,172 to $4,343 plus taxes and operating costs.

ITEM 3. LEGAL PROCEEDINGS.

iBIZ has been assessed approximately $62,000 in penalties and interest by the
IRS in connection with payroll taxes due through the first quarter of 1999. The
Company has paid the taxes, interest, and some portion of the penalty, but has
requested an abatement of the remaining penalty imposed. The Company is awaiting
a final disposition by the IRS.

<PAGE>

On February 28, 2001, the Securities and Exchange Commission (the "Commission")
commenced an administrative proceeding against the Company. The Company has
negotiated and submitted a settlement offer, which has been formally approved by
the Commission itself. This settlement has resulted in an administrative order
being issued which orders the Company to cease and desist from committing or
causing any future violations of Section 10(b) of the Securities and Exchange
Act of 1934 and Rule 10b-5 thereunder. No other relief against the Company is
being sought.

This administrative proceeding is based on the Commission's allegations that the
Company, through its President and CEO Ken Schilling, referenced certain reports
prepared by Michael A. Furr in its press releases, and posted hyperlinks to
Furr's reports on its website. The Commission alleges that the Furr reports
contained false revenue and stck price projections. The Commission also alleges
that the Company falsely characterized Furr as independent of the Company. The
Company neither admits nor denies the allegations as part of the settlement
offer.

On February 28, 2001, the Securities and Exchange Commission filed a federal
court action in the District of Arizona against Ken Schilling, CEO of the
Company. Mr. Schilling, however, has reached a settlement with the Commission in
which he neither admits nor denies the allegations made against him. Pursuant to
this settlement, Mr. Schilling will be permanently enjoined from violating
Section 10(b) of the Exchange Act or Rule 10b-5 thereunder. Mr. Schilling was
required to pay a $20,000 civil penalty. The allegations relate to those
referred to above.

On August 5, 2003, Douglas A. Dragoo and Elizabeth W. Dragoo counterclaimed and
named iBIZ Technology as a defendent in the superior court of the state of
Arizona county of Maricopa. The defendents allege breach of contract, Fraud,
Negligent misrepresentation, and seek compensatory and, punitive damages as well
as legal fees.

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

On July 20, 2003, a majority of our stockholders took action by written consent
in lieu of a special meeting and approved a spin-off of iBIZ, Inc., a
wholly-owned subsidiary, to its shareholders. This action was approved by a
majority of iBIZ Technology's shareholders. Management estimates that the
transaction should be completed in the second quarter of 2004.

<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

                            MARKET FOR COMMON EQUITY

Our common stock is currently traded on the Over The Counter Bulletin Board. The
common stock was initially listed under the symbol "EVCV" on June 3, 1998, and
trading began on July 16, 1998. On October 26, 1998, we changed our trading
symbol to "iBIZ" and then to "IBZT" on September 30, 2003 as a result of a 1 for
10 reverse stock split. The following charts indicate the high and low sales
price for our common stock for each of our fiscal quarters for the past two
years, and subsequent interim period, as quoted on the Over The Counter Bulletin
Board. These quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission, and may not represent actual transactions.

                Quarter Ended                 High         LOW
          --------------------------- --------------- ----------------
                January 31, 2002             0.015        0.004
                  April 30, 2002             0.014        0.005
                   July 31, 2002             0.007        0.0015
                October 31, 2002             0.006        0.0001
                January 31, 2003             0.035        0.00381
                  April 30, 2003             0.005        0.0119
                   July 31, 2003             0.065        0.00313
                October 31, 2003             0.0058       0.003
                January 31, 2004             0.0618       0.003
          --------------------------- --------------- ----------------

* Table reflects a 1 for 10 reverse stock split of our common stock effectuated
on September 30, 2002.

As of February 10, 2004, management believes there to be approximately 7,142
holders of record of iBIZ's common stock. To date, iBIZ has not paid any
dividends on its common stock. iBIZ does not currently intend to pay dividends
in the future. iBIZ is prohibited from declaring or paying dividends while
certain debentures or warrants are outstanding.

                     RECENT SALES OF UNREGISTERED SECURITIES

The shares described below represent certain equity securities of iBIZ sold by
iBIZ during the period covered by this report that were not registered under the
Securities Act, all of which were issued by iBIZ pursuant to exemptions under
the Securities Act. Underwriters were involved in none of these transactions. In
each case, the securities were sold to accredited investors, as determined by an
investor questionnaire executed in conjunction with the respective subscription
agreements.

PRIVATE PLACEMENTS OF COMMON STOCK AND WARRANTS FOR CASH

None.

SALES OF DEBT AND WARRANTS FOR CASH

To obtain funding for our ongoing operations, we entered into a Securities
Purchase Agreement with three accredited investors on January 31, 2003 for the
sale of (i) $500,000 in convertible debentures and (ii) warrants to buy
2,500,000 shares of our common stock. This registration statement covers the
resale of the common stock underlying these securities. The investors are
obligated to provide us with the funds as follows:

- $300,000 was disbursed on January 31, 2003

- $100,000 was disbursed on March 20, 2003

- $100,000 was disbursed on May 9, 2003.

The debentures bear interest at 12%, mature one year from the date of issuance,
and are convertible into our common stock, at the investors' option, at the
lower of (i) $0.01 or (ii) 50% of the average of the three lowest intraday
trading prices for the common stock on a principal market for the 20 trading
days before but not including the conversion date. The full principal amount of
the convertible debentures are due upon default under the terms of the
convertible debentures. The warrants are exercisable until seven years from the
date of issuance at an exercise price of $0.01 per share.

<PAGE>

To obtain funding for our ongoing operations, we entered into a Securities
Purchase Agreement with three accredited investors on June 12, 2003 for the sale
of (i) $150,000 in convertible debentures and (ii) warrants to buy 750,000
shares of our common stock. This registration statement covers the resale of the
common stock underlying these securities. The investors are obligated to provide
us with the funds as follows:

- $150,000 was disbursed on June 12, 2003.

The debentures bear interest at 12%, mature one year from the date of issuance,
and are convertible into our common stock, at the investors' option, at the
lower of (i) $0.01 or (ii) 50% of the average of the three lowest intraday
trading prices for the common stock on a principal market for the 20 trading
days before but not including the conversion date. The full principal amount of
the convertible debentures are due upon default under the terms of the
convertible debentures. The warrants are exercisable until seven years from the
date of issuance at an exercise price of $0.01 per share.

OPTION GRANTS

None.

ISSUANCES OF STOCK FOR SERVICES OR IN SATISFACTION OF OBLIGATIONS

During the year ending October 31, 2003, we issued an aggregate of 253,063,228
shares of our common stock to 6 employees in lieu of salaries equaling $695,188.

On August 1, 2003, we issued 3,308,823 shares of common stock valued at $0.001
per share to a consultant for financial services

On August 1, 2003, we issued 5,000,000 shares of common stock valued at $0.001
per share to special counsel for legal work to be performed.

On August 14, 2003, we issued 3,000,000 shares of common stock valued at $0.0055
per share to Sichenzia Ross Friedman Ference for legal services rendered.

On August 14, 2003, we issued 5,000,000 shares of common stock valued at $0.001
per share to Lavi Arasney for services rendered in connection with our virtual
keyboard.

The above offerings and sales were deemed to be exempt under Regulation D and
Section 4(2) of the Securities Act. No advertising or general solicitation was
employed in offering the securities. The offerings and sales were made to a
limited number of persons, all of whom were business associates of iBiz or
executive officers and/or directors of iBiz, and transfer was restricted by iBiz
in accordance with the requirements of the Securities Act.

<PAGE>

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

                          CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations
are based upon our financial statements, which have been prepared in accordance
with accounting principles generally accepted in the United States. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses. In consultation with our Board of Directors, we have identified eight
accounting principles that we believe are key to an understanding of our
financial statements. These important accounting policies require management's
most difficult, subjective judgments.

(1) ACCOUNTS RECEIVABLE

Accounts receivable are reported at the customer's outstanding balances less any
allowance for doubtful accounts and provision for returned merchandise. We do
not normally require collateral to support receivables and interest is not
accrued thereon.

(2) ALLOWANCE FOR DOUBTFUL ACCOUNTS AND PROVISION FOR RETURNED MERCHANDISE

The allowance for doubtful accounts on accounts receivables is charged to income
in amounts sufficient to maintain the allowance for uncollectible accounts at a
level management believes is adequate to cover any probable losses. We determine
the adequacy of the allowance based on historical write-off percentages and
information collected from individual customers. Accounts receivable are charged
off against the allowance when collectibility is determined to be permanently
impaired (bankruptcy, lack of contact, age of account balance , etc.). We also
provide a provision for returned merchandise based on our history of returns as
a percentage of sales.

(3) INVENTORIES

Inventories are stated at the lower of cost (determined principally by average
cost) or market.

(4) ACCOUNTING FOR CONVERTIBLE DEBT SECURITIES

We have issued convertible debt securities with non-detachable conversion
features. The Company has recorded the fair value of the beneficial conversion
features as interest expense and an increase to Additional Paid in Capital.

(5) REVENUE RECOGNITION

We recognize revenue when persuasive evidence of an arrangement exists, title
transfer has occurred, the price is fixed or readily determinable, and
collectibility is probable. Sales are recorded net of sales discounts. We
recognize revenue in accordance with Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements," (SAB 101). Our revenues are recorded under
two categories:

Product Sales Product sales represent primarily sales of PDA accessories to
retailers. Revenue is recorded when the goods are shipped and title passes to
the customer. We provide a reserve for sales returns based on our history of
returns as a percentage to sales.

During the year we will provide rebates on selected products for a limited sale
period, normally 7 days. We contract with a company to process and track the
rebates. We provide a reserve for outstanding rebates based on our history of
rebates submitted as a percentage of applicable sales.

Maintenance Agreements We continue to sell service agreements to maintain and
service computers and printers that were a part of our product line several
years ago. We no longer sell such products but continue to offer renewals of
maintenance agreements. Income from maintenance agreements is being recognized
on a straight-line basis over the life of the service contracts, which range
from 3 months to 1 year. The unearned portion is recorded as deferred income.

(6) CONSULTING AGREEMENTS

We issued common stock for payment of consulting services. The cost of the
consulting services was determined by multiplying the common shares issued by
the market price for the shares at the inception date of the agreement.

<PAGE>

                          SELECT FINANCIAL INFORMATION

                                                            Years Ended
                                                     10/31/03          10/31/02
                                                     --------          --------

Statement of Operations Data
   Total revenue                                  $   485,382       $   356,278
   Operating income (loss)                         (2,818,163)       (1,539,938)
   Net earnings (loss) after tax                   (4,462,182)       (6,490,465)
   Net earnings (loss) per share                        (0.02)            (0.25)

Balance Sheet Data
   Total assets                                       330,619           439,120
   Total liabilities                                7,047,304         5,380,902
   Stockholders' deficit                           (6,716,685)       (4,941,782)

                              RESULTS OF OPERATIONS

The year ended  October 31, 2003  compared to the year months ended  October 31,
2002.

Revenues
--------

Revenues increased by approximately 36% to $485,382 in the year ended October
31, 2003 from $356,278 in the year ended October 31, 2002. The increase was in
product sales resulting from the addition of new customers, the increase in
volume sales to an existing national retailer and introduction of new products.
The largest impact on our sales in 2003 was from the introduction of the "Pocket
Radio" accessory for PDAs. The Pocket Radio consists of card with software that
inserts into the PDA which converts it to an FM stereo receiver.

Our maintenance revenues remained relatively comparable at approximately $32,000
in 2003 and 2002. We are not actively pursuing this area of business and do not
expect this to be significant in subsequent periods.

Cost of Revenues
----------------

The cost of revenues of $519,003 (107% of sales) in the year ended October 31,
2003 increased from $379,440 (106% of revenues) for the year ended October 31,
2002. Cost of revenues in 2003 consists of approximately $301,000 (62% of
revenues) of direct material, packaging and freight, provision for obsolete
inventories totaling $53,000 (11% of revenues) and $165,000 (34% of revenues) of
salaries and employee related costs. Cost of sales in 2002 consists of $180,000
(51% of revenues) of direct material, packaging and freight, provision for
obsolete inventories totaling $90,000 (25% of revenues) and $109,000 (31% of
sales) of salaries and employee related costs. The increase in the direct
material, packaging and freight costs as a percentage from 2002 to 2003 is due
to the change in product mix from higher margin chargers and travel kits to the
lower margin Pocket Radios. As noted, a significant portion of the components of
our cost of revenues is wages and benefits which, in our business, are generally
fixed in nature. Because of our cash flow problems we were unable to retain
employees to support our production and servicing and, accordingly, our Vice
president, Mark Perkins, devoted approximately 25% of his time to this area in
2003.

The Company's products experience a high degree of technological obsolescence
based on the rapidly changing market for PDA-related products and the
introduction of new PDAs. The Company evaluates its inventories based on sales
over a rolling six-month period and industry publications of PDA-related product
changes in order to determine the write-off of slow-moving and obsolete
inventories.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased approximately 1% to
$1,526,660 in the year ended October 31, 2003 from $1,516,776 in the year ended
October 31, 2002. The main components in these expenses are salaries and wages
for its key employees and officers (2003-$683,000; 2002-$700,000), professional
fees (2003-$255,000; 2002-$219,000) and consulting fees (2003-$206,000;
2002-$199,000).

<PAGE>

Officer Bonuses
---------------

During 2003 we paid our officers and certain key employees $1,132,882 in stock
and cash in order to retain their services despite reduced revenues over the
last two years and delays in payment of wages due to cash flow problems. The
following table indicates the retention bonuses buy officer in 2003:

------------------------------ -------------- ------------- -------------
Name                                Stock         Cash          Total
------------------------------ -------------- ------------- -------------
Ken Schilling                       $523,652        $4,798      $528,449
Mark Perkins                         521,635         4,798       526,432
Other employees as a
group                                 78,000                      78,000
------------------------------ -------------- ------------- -------------
Total                             $1,123,287        $9,595    $1,132,882
------------------------------ -------------- ------------- -------------

Write-off of Intangible Assets
------------------------------

During 2003 we wrote off 50% of the value of Intellectual Property Rights
acquired in 2002 in order to value it at its estimated fair value.

Interest Expense
----------------

Interest expense increased 41% to $353,516 in the year ended October 31, 2003
from $250,057 in the year ended October 31, 2002. The increase is a result of
additional convertible debentures issued in 2002 and 2003.

Beneficial Interest Expense
---------------------------

We record the excess of the fair value of the stock price at the date of
issuance of convertible debentures over the conversion price on the same date as
interest expense-beneficial conversion feature. The amount decreased to
$1,379,077 in 2003 from $4,283,930 in 2002 due to the amount of debentures
issued, the conversion formula and the relative stock prices during the dates of
grant..

Liquidity and Capital Resources
-------------------------------

As of October 31, 2003, we had a working capital deficit of $6,093,514 as
compared to a working capital deficit of $4,247,020 at October 31, 2002. The
increase in the deficit is primarily due approximately $690,000 in convertible
debentures issued in 2003, a $735,000 increase in additional unpaid wages and
bonuses and $312,000 in additional interest due on the convertible debentures.
We have $3,265,837 and $750,000 of debt payments related to convertible
debentures due within the next year and next two to five years, respectively.
Subsequent to October 31, 2003, $2,023,150 of these debt payments were converted
in full to common stock and the remaining balance of $1,992,687 was renegotiated
to more favorable terms. Accrued wages and bonuses totaling $1,248,000 were also
satisfied subsequent to year end.

Cash Flows from Operations

Our cash flow from operations used $793,646 in 2003 compared to $671,211 in
2002. The increase in cash used is primarily due to increased receivables in the
fourth quarter of 2003 versus 2002 (revenues were $200,000 in the fourth quarter
of 2003 versus $50,000 in 2002), partially offset by the increase in accounts
payable and accrued expenses resulting from our tight cash flows during the
year. Our primary suppliers are based in Asia and require advance payment on all
orders. Based on the initial reception of our new product, the "Virtual
Keyboard" (set to be delivered to retailers in April 2004) and the continued
success of our Pocket Radio product, we are confident that our cash flows will
be positive in 2004. We currently have a backlog of orders totaling $650,000. As
with other technology-related products, our success depends on acceptance of our
products in the market and introduction of new products. If our products do not
continue to receive acceptance in the market our cash flows can quickly turn
negative.

Cash Flows from Investing Activities

Cash used for investing activities was $-0- in 2003 versus $201,000 in 2002
(primarily the purchase of Intellectual Property Rights and tooling related to a
new product line in 2002. As discussed above, we wrote-off 50% of the value of
this product line value in 2003. due If we are successful in raising additional
equity capital in 2004, we expect to incur significant investing activity
related to the acquisition of additional product lines and complimentary
businesses.

Cash Flows from Financing Activities

Cash provided by financing activities consisted of a $90,000 loan from a foreign
company (Enterprise Capital AG) and the issuance of convertible debentures
totaling $686,813. We may need to raise additional capital through the issuance
of common stock and/or debt, which will be used to expand our infrastructure and
acquire additional product lines and complimentary businesses.

<PAGE>

In January 2004 we entered into an agreement to purchase the assets of
Synosphere LLC for 30 million shares of common stock valued at $1.2 million .We
currently have no other material commitments for capital expenditures.

Spin-off

On October 20, 3003, the Board of Directors approved the spin-off of iBIZ, Inc.,
a wholly owned subsidiary of the Company, into a separate public company.

The Company proposes to issue without consideration non-restricted shares of
common stock in iBIZ, Inc. pro rata to all shareholders of the Company as of
September 25, 2003 at the ratio of one share of iBIZ, Inc. for each 500 shares
of the Company common stock.

The purpose of the spin-off of iBIZ, Inc. is that it will allow management of
each business to focus solely on that business. In addition, it should enhance
access to financing by allowing the financial community to focus separately on
each business.

iBIZ Technology Corp. will continue to distribute its product line in the United
States providing sub-licenses for all products to iBIZ, for worldwide
distribution. iBIZ, Inc. and iBIZ Technology Corp. are in the process of
negotiating the license and will sign distribution agreements with iBIZ
Technology Corp. for distribution of its products in the United States. . It is
currently planned that iBIZ, Inc. will support iBIZ Technology Corp. in
engineering, production, and business development, through synergetic agreements
(to be negotiated) using Endeavour Capital and its affiliates infrastructure in
Europe and Israel.

Current funds available to iBIZ will not be adequate for it to be competitive in
the areas in which it intends to operate. iBIZ's continued operations, as well
as the implementation of its business plan, therefore will depend upon its
ability to raise additional funds through bank borrowings, equity or debt
financing. iBIZ estimates that it will need to raise up to approximately
$1,000,000 over the next 12 months for these purposes.

There is no guarantee that these funding sources, or any others, will be
available in the future, or that they will be available on favorable terms. In
addition, this funding amount may not be adequate for iBIZ to fully implement
its business plan. Thus, the ability of iBIZ to continue as a going concern is
dependent on additional sources of capital and the success of iBIZ's business
plan. Regardless of whether iBIZ's cash assets prove to be inadequate to meet
iBIZ's operational needs, iBIZ might seek to compensate providers of services by
issuance of stock in lieu of cash.

If funding is insufficient at any time in the future, iBIZ may not be able to
take advantage of business opportunities or respond to competitive pressures,
any of which could have a negative impact on the business, operating results and
financial condition. In addition, if additional shares were issued to obtain
financing, current shareholders may suffer a dilutive effect on their percentage
of stock ownership in iBIZ.

Acquisition

On January 20, 2004, the Company acquired 5,000,000 Interests, representing all
of the Interests, of Synosphere, LLC, ("Synosphere"), in exchange for 30,000,000
shares of common stock. Synosphere is a Plano, Texas based corporation
specializing in the development of innovative handheld computer technologies.

The Company entered into employment agreements with two of the current
directors/officers of Synosphere. The term of these employee agreements shall be
two years following the closing and transferable in the event of a sale of
Synosphere to another entity or if Synosphere is spun-off. The employees shall
receive annual base salaries of $112,000 and $102,000, respectively, per year
with healthcare benefits. In addition, each employee shall receive a sign on
bonus of 2,500,000 shares of common stock. Furthermore, the employees shall each
receive an Earn Out bonus of common stock in eight payments, each made
quarterly, in the amount of $62,500. A "golden parachute" clause shall be put in
place such that if either of the employee agreements are terminated by the
Company or any successor they are payable in full at the date of their
termination. Finally, one of the employees shall be appointed to the Company's
Board of Directors.

Increase in Cash Subsequent to October 31, 2003

On November 1, 2003, the Company granted an individual the option to purchase
200,000,000 shares of common stock at the exercise price of the average closing
price for the three days prior to exercise less a 40% discount. The option is
exercisable commencing November 1, 2003 and expires after January 15, 2004.

On December 15, 2003, the Company granted an individual the option to purchase
50,000,000 shares of common stock at the exercise price of market value at the
date of exercise less a 15% discount. The option expires 5 years from the date
of grant.

On January 28, 2004, the Company granted Pangea Investments GmbH the option to
purchase 100,000,000 shares of common stock at the exercise price of market
value at the date of exercise less a 50% discount. The option is exercisable
commencing January 28, 2004 and expires after January 28, 2014.

<PAGE>

As of February 4, 2004, the Company has received approximately $1,098,000 cash
as a result of the Company's Option holders exercising their options to purchase
shares of common stock.

RECENT ACCOUNTING PRONOUNCEMENTS

The FASB recently issued the following statements:

In April 2003, the FASB issued 145 "Rescission of FASB Statements No. 4, 44, and
64, Amendment of FASB Statement No. 13, and Technical Corrections." This
Statement rescinds SFAS 4, Reporting Gains and Losses from Extinguishment of
Debt and an amendment of that statement, SFAS 64, Extinguishments of Debt Made
to Satisfy Sinking-Fund Requirements. The rescission of these Statements alters
the financial reporting requirements from gains and losses resulting from the
extinguishments of debt. These gains or losses should now be reported before
extraordinary items, unless the two requirements for extraordinary items are
met. This statement also rescinds SFAS 44, Accounting for Intangible Assets of
Motor Carriers and amends SFAS 13, Accounting for Leases, to eliminate an
inconsistency between the required accounting for sale-leaseback transactions
and the required accounting for certain lease modifications that have economic
effects that are similar to sale-leaseback transactions. This statement also
amends other existing authoritative pronouncements to make various technical
corrections, clarify meanings, or describe their applicability under changed
conditions. The provisions of this statement related to the rescission of
Statement 4 shall be applied in fiscal years beginning after May 15, 2002. Any
gain or loss on extinguishments of debt that was classified as an extraordinary
item in prior periods presented that does not meet the criteria in Opinion 30
for classification as an extraordinary shall be reclassified. The provision of
this Statement related to Statement 13 shall be effective for transactions
occurring after May 15, 2002.

In June of 2002, the FASB issued SFAS 146, "Accounting for Costs Associated with
Exit or Disposal Activities," which nullifies EITF Issue 94-3. SFAS 146 is
effective for exit and disposal activities that are initiated after December 31,
2002 and requires that a liability for a cost associated with an exit or
disposal activity be recognized when the liability is incurred, in contrast to
the date of an entity's commitment to an exit plan, as required by EITF Issue
94-3. The Company adopted the provisions of SFAS 146 effective January 1, 2003.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure". This Statement amends SFAS No. 123,
"Stock-Based Compensation", to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, this Statement amends the disclosure
requirements of SFAS No. 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
alternative methods of transition of SFAS 148 are effective for fiscal year
ending after December 15, 2002. The Company follows APB 25 in accounting for its
employee stock options. The disclosure provision of SFAS 148 is effective for
years ending after December 15, 2002 and has been incorporated into these
consolidated financial statements and accompanying footnotes.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity". This Statement
establishes standards for how an issuer of debt classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify certain financial instruments as a liability
(or an asset in some circumstances) instead of equity. The Statement 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. The Company adopted this Statement on July 1,
2003.

The Company does not believe that any of these recent accounting pronouncements
will have a material impact on their financial position or results of
operations.

<PAGE>

ITEM 7. FINANCIAL STATEMENTS.

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

                                TABLE OF CONTENTS

                                                                        PAGE NO.
                                                                        --------

INDEPENDENT AUDITORS' REPORT......................................        F1

FINANCIAL STATEMENTS

       Consolidated Balance Sheet.................................        F2

       Consolidated Statements of Operations......................      F3 - F4

       Consolidated Statement of Stockholders' (Deficit)..........      F5 - F6

       Consolidated Statements of Cash Flows......................      F7 - F8

       Notes to Consolidated Financial Statements.................      F9 - F29

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To The Board of Directors and Stockholders of iBIZ Technology Corp. and
Subsidiaries

We have audited the accompanying consolidated balance sheet at October 31, 2003
and the related consolidated statements of operations, stockholders' (deficit)
and cash flows of iBIZ Technology Corp. and Subsidiaries for the years ended
October 31, 2003 and 2002. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respect, the financial position of the Company at
October 31, 2003 and the results of its operations and its cash flows for the
years ended October 31, 2003 and 2002, in conformity with accounting principles
generally accepted in the United States of America.


                            /s/ Farber & Hass, LLP.
                            -----------------------
                            Oxnard, California

January 21, 2004

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                OCTOBER 31, 2003

<TABLE>
<S>                                                               <C>                <C>
                                     ASSETS

CURRENT ASSETS

   Cash                                                           $      2,140
   Cash, pledged for letter of credit                                   10,000
   Accounts receivable, net                                            123,751
   Inventories                                                          43,842
   Prepaid expenses                                                     24,057
                                                                  ------------
             TOTAL CURRENT ASSETS                                                    $     203,790

PROPERTY AND EQUIPMENT, NET OF
   ACCUMULATED DEPRECIATION                                                                 63,329

OTHER ASSETS
     Intellectual Properties Rights, net                                                    61,000
     Note receivable, officer                                     $    373,159
        Less allowance for doubtful collection                         373,159                   0
                                                                  ------------
     Deposits                                                                                2,500
                                                                                     -------------

           TOTAL OTHER ASSETS                                                               63,500
                                                                                     -------------

            TOTAL ASSETS                                                             $     330,619
                                                                                     =============

                     LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
      Accounts payable and accrued expenses                       $    694,562
      Note payable, Gammage and Burnham                                 30,000
      Loan payable, Enterprise Capital AG                               90,000
      Accrued wages                                                    670,077
      Accrued bonuses                                                  578,000
      Accrued interest                                                 741,398
      Taxes payable                                                    216,940
      Deferred income                                                    5,570
      Convertible debentures, current portion                        3,265,837
      Note payable, other, current portion                               4,920
                                                                  ------------
              TOTAL CURRENT LIABILITIES                                              $   6,297,304

LONG -TERM LIABILITIES
       Convertible debentures payable, long-term portion               750,000
                                                                  ------------
              TOTAL LONG-TERM LIABILITIES                                                  750,000

STOCKHOLDERS' (DEFICIT)
       Preferred stock
          Authorized - 50,000,000 shares, par
            value $.001 per share
                        Issued and outstanding -0- shares
          3,500,000 shares reserved                                          0
       Common stock
          Authorized - 5,000,000,000 shares, par
            value $.001 per share
          Issued and outstanding - 649,893,721 shares                  649,894
       Additional paid in capital                                   17,431,753
       Accumulated deficit                                         (24,798,332)
                                                                  ------------

              TOTAL STOCKHOLDERS' (DEFICIT)                                             (6,716,685)
                                                                                     -------------

              TOTAL LIABILITIES AND
                 STOCKHOLDERS' (DEFICIT)                                             $     330,619
                                                                                     =============
</TABLE>

                             See Accompanying Notes.


                                       F2

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  FOR THE YEARS ENDED OCTOBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                       2003           2002
                                                                   -----------     -----------
<S>                                                                <C>             <C>
SALES                                                              $   485,382     $   356,278
COST OF REVENUES                                                       519,003         379,440
                                                                   -----------     -----------

       GROSS (LOSS)                                                    (33,621)        (23,162)
                                                                   -----------     -----------
SELLING, GENERAL AND ADMINISTRATIVE
   EXPENSES
     Selling, general and administrative expenses                    1,526,660       1,516,776
     Officer bonuses                                                 1,132,882               0
     Write-off of intangible assets                                    125,000               0
                                                                   -----------     -----------

        TOTAL OPERATING EXPENSE                                      2,784,542       1,516,776
                                                                   -----------     -----------

OPERATING (LOSS)                                                    (2,818,163)     (1,539,938)
                                                                   -----------     -----------

OTHER INCOME (EXPENSE)
       Cancellation of debt                                             85,733          44,754
       Interest income                                                       0          18,310
       Interest expense                                               (353,516)       (250,057)
       Interest expense - convertible debentures-beneficial
        conversion feature                                          (1,379,077)     (4,283,930)
       Other income                                                      2,891               0
                                                                   -----------     -----------

        TOTAL OTHER INCOME (EXPENSE)                                (1,643,969)     (4,470,923)
                                                                   -----------     -----------

(LOSS) FROM CONTINUING OPERATIONS
   BEFORE INCOME TAXES                                              (4,462,132)     (6,010,861)

INCOME TAXES                                                                50              50
                                                                   -----------     -----------

(LOSS) FROM CONTINUING OPERATIONS                                   (4,462,182)     (6,010,911)
                                                                   -----------     -----------

DISCONTINUED OPERATIONS
       (Loss) from operations of discontinued business segments              0        (383,168)
       (Loss) from abandoned equipment                                       0         (96,386)
                                                                   -----------     -----------

(LOSS) FROM DISCONTINUED OPERATIONS                                          0        (479,554)
                                                                   -----------     -----------

NET (LOSS)                                                         $(4,462,182)    $(6,490,465)
                                                                   ===========     ===========
</TABLE>

                             See Accompanying Notes.

                                       F3

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
                  FOR THE YEARS ENDED OCTOBER 31, 2003 AND 2002



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

NET (LOSS) PER COMMON SHARE

       Basic and Diluted:

        Continuing operations             $         (0.02)   $         (0.23)

        Discontinued operations                       N/A              (0.02)
                                          ---------------    ---------------

           NET (LOSS)                     $         (0.02)   $         (0.25)
                                          ===============    ===============

WEIGHTED AVERAGE NUMBER OF COMMON
   SHARES OUTSTANDING

       Basic and diluted                      231,553,359         26,404,820
                                          ===============    ===============



                             See Accompanying Notes.

                                       F4

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT)
                  FOR THE YEARS ENDED OCTOBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                     Preferred Stock          Common Stock            Additional
                                  -------------------    ------------------------      Paid in       Accumulated
                                   Shares     Amount       Shares         Amount       Capital         Deficit          Total
                                  --------   --------    -----------    ---------    ------------   -------------   -------------
<S>                                   <C>     <C>         <C>          <C>           <C>            <C>             <C>
BALANCE, OCTOBER 31, 2001             0       $    0      9,986,320    $   9,986     $ 9,891,221    $(13,845,685)   $ (3,944,478)

CONVERSION OF DEBENTURES FOR
   COMMON STOCK:
       PRINCIPAL                      0            0      6,077,099        6,077         336,199               0         342,276
       ACCRUED INTEREST               0            0        440,934          441          21,648               0          22,089

FEES AND COSTS FOR ISSUANCE OF
   COMMON STOCK                       0            0              0            0         (73,777)              0         (73,777)

ISSUANCE OF COMMON STOCK FOR:
       PAYMENT OF ACCOUNTS
          PAYABLE                     0            0      3,121,200        3,122         314,740               0         317,862
       PAYMENT OF SALARIES AND
          RETENTION BONUSES           0            0     18,778,104       18,778         228,287               0              24
       CONSULTING FEES                0            0      2,200,000        2,200          85,800               0          88,000
       LEGAL FEES                     0            0        825,000          825          99,675               0         100,500
       CASH                           0            0      3,000,000        3,000          76,500               0          79,500

DONATION OF STOCK BACK TO THE
   COMPANY FOR TREASURY STOCK         0            0       (928,560)        (929)       (131,355)              0        (132,284)
</TABLE>



                             See Accompanying Notes.

                                       F5
<PAGE>


                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
          CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT) (CONTINUED)
                  FOR THE YEARS ENDED OCTOBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                       Preferred Stock          Common Stock           Additional
                                     -------------------   ------------------------     Paid in       Accumulated
                                      Shares     Amount      Shares       Amount        Capital         Deficit           Total
                                     -------     -------   ------------   ---------   ------------    ------------    ------------
<S>                                        <C>     <C>       <C>          <C>         <C>             <C>             <C>
ISSUANCE OF COMMON STOCK TO THE
   PRESIDENT TO REIMBURSE HIM FOR
   SHARES GIVEN TO DEBENTURE
   HOLDERS FROM:
       TREASURY STOCK                      0     $     0        928,560   $     929   $    131,355    $          0    $    132,284
       NEW SHARES                          0           0        571,440         571         85,145               0          85,716

INTEREST EXPENSE - CONVERTIBLE
   DEBENTURES - BENEFICIAL
   CONVERSION FEATURE                      0           0              0           0      4,283,930               0       4,283,930

NET (LOSS) FOR THE YEAR
   ENDED OCTOBER 31, 2002                  0           0              0           0              0      (6,490,465)     (6,490,465)
                                     -------     -------   ------------   ---------   ------------    ------------    ------------

        BALANCE,  OCTOBER 31, 2002         0     $     0     45,000,097   $  45,000     15,349,368     (20,336,150)     (4,941,782)

CONVERSION OF DEBENTURES FOR
   COMMON STOCK:
        PRINCIPAL                          0           0    243,234,850     243,235        108,536               0         351,771
        INTEREST                           0           0     27,742,606      27,743         11,746               0          39,489

FEES AND COSTS FOR ISSUANCE OF
   COMMON STOCK                            0           0              0           0        (63,187)              0         (63,187)

ISSUANCE OF COMMON STOCK FOR:
   CONSULTING FEES                         0           0     21,161,764      21,162        110,088               0         131,250
   LEGAL FEES                              0           0     12,000,000      12,000         44,500               0          56,500
   EMPLOYEE RETENTION BONUSES              0           0    253,063,228     253,063        442,125               0         695,188
  ACCRUED EXPENSES AND PAYABLES            0           0     11,000,000      11,000         49,500               0          60,500
  CASH                                     0           0     36,691,176      36,691              0               0          36,691

INTEREST EXPENSE - CONVERTIBLE
   DEBENTURES - BENEFICIAL
   CONVERSION FEATURE                      0           0              0           0      1,379,077               0       1,379,077

NET (LOSS) FOR THE YEAR ENDED
   OCTOBER 31, 2003                        0           0              0           0              0      (4,462,182)     (4,462,182)
                                     -------     -------   ------------   ---------   ------------    ------------    ------------

BALANCE, OCTOBER 31, 2003                  0     $     0    649,893,721   $ 649,894   $ 17,431,753    $(24,798,332)   $ (6,716,685)
                                     =======     =======   ============   =========   ============    ============    ============
</TABLE>


                             See Accompanying Notes.

                                       F6

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                  FOR THE YEARS ENDED OCTOBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                   2003           2002
                                                                -----------    -----------

<S>                                                             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
       Net (loss) from continuing operations                    $(4,462,182)   $(6,010,911)
       Adjustments to reconcile net (loss) to
         net cash (used) in operating activities of
         continuing operations:
           Loss from discontinued operations                              0       (479,554)
           Write-off of intangible assets                           125,000              0
           Depreciation                                              21,875         24,504
           Amortization                                              39,000          3,333
         Interest expense - convertible debentures-beneficial
             conversion feature                                   1,379,077      4,283,930
           Common stock issued for expenses                         889,082        253,216
           Provision for uncollectible accounts                      35,948          8,109
           Provision for obsolete inventory                          10,000              0
       Changes in operating assets and liabilities:
           Accounts receivable                                     (147,832)        73,771
           Inventories                                               41,758         71,141
           Prepaid expenses                                          (6,057)        36,127
           Cash, pledged for letter of credit                       (10,000)             0
           Deposits                                                       0         13,512
           Accounts payable                                          91,401        509,519
           Accrued liabilities and taxes                          1,199,630        540,671
           Deferred income                                             (346)         1,421
                                                                -----------    -----------

              NET CASH (USED) IN OPERATING ACTIVITIES              (793,646)      (671,211)
                                                                -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchases of property and equipment                                0        (50,000)
       Purchase of Intellectual Property Rights                           0       (200,000)
       Proceeds from assets held for sale                                 0         48,635
                                                                -----------    -----------

              NET CASH (USED) IN INVESTING ACTIVITIES                     0       (201,365)
                                                                -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Net proceeds from issuance of common stock                    36,691         79,500
       Net proceeds from issuance of convertible
          debentures payable                                        686,813        848,723
       Net proceeds from loan payable                                90,000              0
       Repayments on note payable, factor                           (15,000)       (55,734)
       Repayment of not payable, other                               (3,666)        (5,946)
                                                                -----------    -----------
</TABLE>

                             See Accompanying Notes.

                                       F7

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                  FOR THE YEARS ENDED OCTOBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                  2003          2002
                                                              -----------   -----------
<S>                                                           <C>           <C>
NET CASH PROVIDED BY
   FINANCING ACTIVITIES                                       $   794,838   $   866,543
                                                              -----------   -----------

NET (DECREASE) IN CASH                                              1,192        (6,033)

CASH, AT
   BEGINNING OF YEAR                                                  948         6,981
                                                              -----------   -----------

CASH, AT
   END OF YEAR                                                $     2,140   $       948
                                                              ===========   ===========

SUPPLEMENTAL DISCLOSURE OF CASH
   FLOW INFORMATION

       Cash paid during year for:

          Interest                                            $     8,566   $    33,209
                                                              ===========   ===========

          Taxes                                               $        50   $        50
                                                              ===========   ===========

NON-CASH INVESTING AND FINANCING
   ACTIVITIES

       Issuance of common stock for convertible debentures    $   351,771   $   364,365
                                                              ===========   ===========

       Issuance of common stock for fees, services and
         expenses                                             $   889,082   $   274,216
                                                              ===========   ===========

       Issuance of common stock for accounts payable
          and accrued liabilities                             $    93,846   $   564,927
                                                              ===========   ===========

       Interest expense - convertible debentures-beneficial
          conversion feature                                  $ 1,379,077   $ 4,283,930
                                                              ===========   ===========
</TABLE>

                             See Accompanying Notes.

                                       F8

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                               NATURE OF BUSINESS

iBIZ Technology Corp. (hereinafter referred to as iBIZ or the Company) was
organized on April 6, 1994, under the laws of the State of Florida. The Company
operates as a holding company for subsidiary acquisitions.

iBIZ, Inc. designs, manufactures (through subcontractors), and distributes a
line of accessories for the PDA and handheld computer market which are
distributed through large retail chain stores and e-commerce sites.

Invnsys Technology Corporation (hereinafter referred to as Invnsys) is an
inactive entity.

Qhost, Inc. is an inactive entity.

                           PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of iBIZ Technology
Corp. and its wholly owned subsidiaries - iBIZ, Inc., Invnsys Technology
Corporation and Qhost, Inc.

All material inter-company accounts and transactions have been eliminated.

               REVERSE STOCK SPLIT AND RESTATEMENT OF COMMON STOCK

On September 6, 2002, the Company effected a one-for-ten reverse stock split of
the Company's common stock. The stock split has been retroactively recorded in
the financial statements as if it occurred at the date of inception.

                                CASH EQUIVALENTS

For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with an original maturity of three months or
less to be cash equivalents.

                        CASH PLEDGED FOR LETTER OF CREDIT

The Company has pledged $10,000 of its cash to secure a letter of credit for a
customer to guarantee payment of rebates. The letter of credit expires in June
2004.

                               ACCOUNTS RECEIVABLE

Accounts receivable are reported at the customers' outstanding balances less any
allowance for doubtful accounts and provision for returned merchandise. Interest
is not accrued on overdue accounts receivable.

     ALLOWANCE FOR DOUBTFUL ACCOUNTS AND PROVISION FOR RETURNED MERCHANDISE

The allowance for doubtful accounts on accounts receivables is charged to income
in amounts sufficient to maintain the allowance for uncollectible accounts at a
level management believes is adequate to cover any probable losses. Management
determines the adequacy of the allowance based on historical write-off
percentages and information collected from individual customers. Accounts
receivable are charged off against the allowance when collectibility is
determined to be permanently impaired (bankruptcy lack of contact, age of
account balance, etc.). A provision for returned merchandise is also recorded
based on our history of returns as a percentage of sales.

                                       F9

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                                   INVENTORIES

Inventories are stated at the lower of cost (determined principally by average
cost) or market. The inventories are comprised of finished products at October
31, 2003.

                                 PREPAID EXPENSE

The Company's prepaid expenses are being amortized over a one year period

                             PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Major renewals and improvements are
charged to the asset accounts while replacements, maintenance and repairs, which
do not improve or extend the lives of the respective assets, are expensed. At
the time property and equipment are retired or otherwise disposed of, the asset
and related accumulated depreciation accounts are relieved of the applicable
amounts. Gains or losses from retirements or sales are credited or charged to
income.

The Companies depreciate their property and equipment for financial reporting
purposes using the straight-line method based upon the following useful lives of
the assets:

               Tooling                                    3 Years
               Machinery and equipment                   10 Years
               Office furniture and equipment        5 - 10 Years
               Vehicles                                   5 Years
               Molds                                      5 Years

                                LONG-LIVED ASSETS

Statement of Financial Accounting Standards No. 144, "Accounting for the
Impairment and Disposal of Long-Lived Assets." requires that long-lived assets
be reviewed for impairment whenever events or changes in circumstances indicate
that the historical cost-carrying value of an asset may no longer be
appropriate. The Company assesses the recoverability of the carrying value of an
asset by estimating the future undiscounted net cash flows expected to result
from the asset, including eventual disposition. If the future net cash flows are
less than the carrying value of the asset, an impairment loss is recorded equal
to the difference between the asset's carrying value and fair value. Fair value
is determined based on discounted cash flows, appraised values or management's
estimates, depending on the nature of the assets.

                   ACCOUNTING FOR CONVERTIBLE DEBT SECURITIES

The Company has issued convertible debt securities with non-detachable
conversion features. The Company accounts for such securities in accordance with
Emerging Issues Task Force 98-5. The Company has recorded the fair value of the
beneficial conversion features as interest expense and an increase to Additional
Paid in Capital.

                                       F10

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

              DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company has financial instruments, none of which are held for trading
purposes. The Company estimates that the fair value of all financial instruments
at October 31, 2003, as defined in FASB 107, does not differ materially from the
aggregate carrying values of its financial instruments recorded in the
accompanying balance sheet. The estimated fair value amounts have been
determined by the Company using available market information and appropriate
valuation methodologies. Considerable judgment is required in interpreting
market data to develop the estimates of fair value, and accordingly, the
estimates are not necessarily indicative of the amounts that the Company could
realize in a current market exchange.

                  COMMON STOCK ISSUED FOR NON-CASH TRANSACTIONS

It is the Company's policy to value stock issued for non-cash transactions at
the stock closing price at the date the transaction is finalized or the value of
the services, whichever is more readily determinable..

                     AMENDMENT OF ARTICLES OF INCORPORATION

The Articles of Incorporation were amended in November 2002 to increase the
number of authorized shares of common stock from 450,000,000 to 5 billion and
authorized the creation of 50,000,000 shares of blank check preferred stock.

                               REVENUE RECOGNITION

The Company recognizes revenue when persuasive evidence of an arrangement
exists, title transfer has occurred, the price is fixed or readily determinable,
and collectibility is probable. Sales are recorded net of sales discounts. The
Company recognizes revenue in accordance with Staff Accounting Bulletin No. 101,
"Revenue Recognition in Financial Statements," (SAB 101). Our revenues are
recorded under two categories:

Product sales - When the goods are shipped and title passes to the customer. The
Company provides a reserve for sales returns based on its history of returns as
a percentage to sales.

During the year the Company provides rebates on selected products for a limited
sale period, normally 7 days. They contract with a company to process and track
the rebates. The Company provides a reserve for outstanding rebates based on its
history of rebates submitted as a percentage of applicable sales.

Maintenance agreements - Income from maintenance agreements is being recognized
on a straight-line basis over the life of the service contracts, which range
from 3 months to 1 year. The unearned portion is recorded as deferred income.
The unearned portion received is recorded as deferred income. The Company is not
actively pursuing this area of business and does not expect this to be
significant in subsequent periods.

                           SHIPPING AND HANDLING COSTS

The Company's policy is to classify shipping and handling costs as part of cost
of goods sold in the statement of operations.

                                   ADVERTISING

All direct advertising costs are expensed as incurred. The Company charged to
operations $45,028 and $23,167 in advertising costs for the years ended October
31, 2003 and 2002, respectively.

                                       F11

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                            RESEARCH AND DEVELOPMENT

The Company expenses research and development costs as incurred.

                                  INCOME TAXES

Provisions for income taxes are based on taxes payable or refundable for the
current year and deferred taxes on temporary differences between the amount of
taxable income and pretax financial income and between the tax bases of assets
and liabilities and their reported amounts in the financial statements. Deferred
tax assets and liabilities are included in the financial statements at currently
enacted income tax rates applicable to the period in which the deferred tax
assets and liabilities are expected to be realized or settled as prescribed in
FASB Statement No.109, Accounting for Income Taxes. As changes in tax laws or
rates are enacted, deferred tax assets and liabilities are adjusted through the
provision for income taxes.

                              NET (LOSS) PER SHARE

The Company adopted Statement of Financial Accounting Standards No. 128 that
requires the reporting of both basic and diluted (loss) per share. Basic (loss)
per share is computed by dividing net (loss) available to common stockholders by
the weighted average number of common shares outstanding for the period. Diluted
(loss) per share reflects the potential dilution that could occur if securities
or other contracts to issue common stock were exercised or converted into common
stock. In accordance with FASB 128, any anti-dilutive effects on net (loss) per
share are excluded.

During 2002, the Company enacted a 10 for 1 reverse stock split. Weighted
average shares outstanding and per share amounts have been retroactively
adjusted to reflect the stock split.

                              CONCENTRATION OF RISK

                                    INDUSTRY

The Company's products are intended for the computer and technology-related
industry. This industry experiences a high degree of obsolescence and changes in
buying patterns. The Company must expend funds for research and development and
identification of new products in order to stay competitive.

                              FINANCIAL INSTRUMENTS

Financial instruments which potentially subject the Company to concentrations of
credit risk consist principally of trade accounts receivable.

Concentrations of credit risk with respect to trade receivables are normally
limited due to the number of customers comprising the Company's customer base
and their dispersion across different geographic areas. The Company routinely
assesses the financial strength of its customers. The Company normally does not
require a deposit to support large customer orders.

                                    PURCHASES

The Company relies primarily on three suppliers for its products. The loss of a
supplier could have a material impact on the Company's operations. Purchases
from these suppliers for the year ended October 31, 2003 totaled 24%, 20% and
8%.

                                    REVENUES

For the year ended October 31, 2003, the Company had two customers whose sales
exceeded 48%, (35% and 13%), of total revenues.

                                       F12
<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                           PERVASIVENESS OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

                        RECENT ACCOUNTING PRONOUNCEMENTS

In April 2003, the FASB issued 145 "Rescission of FASB Statements No. 4, 44, and
64, Amendment of FASB Statement No. 13, and Technical Corrections." This
Statement rescinds SFAS 4, Reporting Gains and Losses from Extinguishment of
Debt and an amendment of that statement, SFAS 64, Extinguishments of Debt Made
to Satisfy Sinking-Fund Requirements. The rescission of these Statements alters
the financial reporting requirements from gains and losses resulting from the
extinguishments of debt. These gains or losses should now be reported before
extraordinary items, unless the two requirements for extraordinary items are
met. This statement also rescinds SFAS 44, Accounting for Intangible Assets of
Motor Carriers and amends SFAS 13, Accounting for Leases, to eliminate an
inconsistency between the required accounting for sale-leaseback transactions
and the required accounting for certain lease modifications that have economic
effects that are similar to sale-leaseback transactions. This statement also
amends other existing authoritative pronouncements to make various technical
corrections, clarify meanings, or describe their applicability under changed
conditions. The provisions of this statement related to the rescission of
Statement 4 shall be applied in fiscal years beginning after May 15, 2002. Any
gain or loss on extinguishments of debt that was classified as an extraordinary
item in prior periods presented that does not meet the criteria in Opinion 30
for classification as an extraordinary shall be reclassified. The provision of
this Statement related to Statement 13 shall be effective for transactions
occurring after May 15, 2002.

In June of 2002, the FASB issued SFAS 146, "Accounting for Costs Associated with
Exit or Disposal Activities," which nullifies EITF Issue 94-3. SFAS 146 is
effective for exit and disposal activities that are initiated after December 31,
2002 and requires that a liability for a cost associated with an exit or
disposal activity be recognized when the liability is incurred, in contrast to
the date of an entity's commitment to an exit plan, as required by EITF Issue
94-3. The Company adopted the provisions of SFAS 146 effective January 1, 2003.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure". This Statement amends SFAS No. 123,
"Stock-Based Compensation", to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, this Statement amends the disclosure
requirements of SFAS No. 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
alternative methods of transition of SFAS 148 are effective for fiscal year
ending after December 15, 2002. The Company follows APB 25 in accounting for its
employee stock options. The disclosure provision of SFAS 148 is effective for
years ending after December 15, 2002 and has been incorporated into these
consolidated financial statements and accompanying footnotes.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity". This Statement
establishes standards for how an issuer of debt classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify certain financial instruments as a liability
(or an asset in some circumstances) instead of equity. The Statement 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. The Company adopted this Statement on July 1,
2003.

The Company does not believe that any of these recent accounting pronouncements
will have a material impact on their financial position or results of
operations.

                                       F13

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 2 ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS AND PROVISION FOR
RETURNED MERCHANDISE

A summary of accounts receivable and allowance for doubtful accounts is as
follows:

Accounts receivable                     $          165,251

Allowance for doubtful accounts and
provision for returned merchandise                  41,500
                                        ------------------

       Net accounts receivable          $          123,751
                                        ==================
<TABLE>
<CAPTION>
                      Allowance for doubtful accounts and provision for returned merchandise
                             <S>                                                       <C>
                             Balance, at November 1, 2002
                                                                            $           58,109

                             Additions for the year
                                                                                        35,948

                             Write-off of uncollectible accounts
                                for the year
                                                                                      ( 52,557)

                                                                             ------------------

                             Balance, at October 31, 2003
                                                                             $           41,500

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

NOTE 3  PROPERTY AND EQUIPMENT

                Property and equipment and accumulated depreciation at October
                31, 2003 consists of:

                      Tooling                                                                        $           68,100
                      Machinery and equipment                                                                    37,641
                      Office furniture and equipment                                                             81,027
                      Vehicle                                                                                    39,141
                      Molds                                                                                      25,000
                                                                                                     ------------------
                                                                                                                250,909
                      Less accumulated depreciation                                                             187,580
                                                                                                     ------------------

                      Total property and equipment                                                   $           63,329
                                                                                                     ==================
</TABLE>

                                       F14


<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 4 INTELLECTUAL PROPERTY RIGHTS AND RELATED ROYALTY AGREEMENT

      On July 11, 2002, the Company purchased the Xela Case Keyboard and all
      related Intellectual Property and Resale Rights from ttools, LLC for
      $200,000. The Company is obligated to pay a royalty of $2.00 per unit sold
      on the first one million units. In accordance with FASB 142, the Company
      will amortize the Intellectual Property Rights over its estimated useful
      life of three years from the date the products are fully developed and
      ready for sale. As of October 31, 2003, the Company has written off 50% of
      the intellectual property rights due to impairment.

Estimated Amortization Expense:

For the year ended October 31, 2004                                      $22,182
For the year ended October 31, 2005                                       22,182
For the year ended October 31, 2006                                       16,636
                                                                         -------
            Total Estimated Amortization Expense                         $61,000
                                                                         =======

NOTE 5 NOTES RECEIVABLE, OFFICERS

                         INVNSYS TECHNOLOGY CORPORATION

A note due from the president of the Company, which is payable on demand and
accrues interest at 6%. Management believes the note is uncollectible since iBIZ
no longer has collateral for the note. The Company elected to write-off the loan
as uncollectible by establishing an allowance for doubtful collections for the
total amount due on the note.

Total amount of note                                                  $ 373,159
Less allowance for doubtful collection                                 (373,159)
                                                                      ---------
     Note Receivable, Net                                             $       0
                                                                      =========

NOTE 6 NOTE PAYABLE, GAMMAGE AND BURNHAM

      In July 2001, the Company issued a note to Gammage and Burnham, PLC for
      the payment of $80,000 of legal fees previously recorded in accounts
      payable. The note is secured by accounts receivable but the security is
      waived in favor of the note payable to Platinum Funding Corporation
      providing Gammage and Burnham PLC receives $2,500 each time that Invnsys
      draws against its factoring line. As of October 31, 2003, the Company is
      in default of their loan agreement. The note was paid in full November 4,
      2003, in exchange for 8,108,108 shares of common stock.

NOTE 7 LOAN PAYABLE, ENTERPRISE CAPITAL AG

      In September and October 2003, the Company received an advance of funds
      from Enterprise Capital AG totaling $90,000. The loan is unsecured, bears
      no interest and has no due date.


                                       F15

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 8 TAXES PAYABLE

Taxes payable consists of the following:

      Payroll taxes payable, current and deferred                       $197,912
      California income tax payable                                       19,028
                                                                        --------
                                                                        $216,940
                                                                        ========

NOTE 9 INCOME TAXES

Deferred Taxes

The components of deferred tax assets are as follows:

         Net operating loss carryforwards                     $2,900,500
         Accrued expenses and miscellaneous                        8,800
                                                              ----------
                                                               2,909,300
             Less valuation allowance                          2,909,300
                                                              ----------
      Net deferred tax asset                                  $        0
                                                              ==========

A reconciliation of the valuation allowance is as follows:

      Balance, at November, 2002                              $1,158,265
      Addition for the period                                  1,751,035
                                                              ----------

      Balance, at October 31, 2003                            $2,909,300
                                                              ==========


                                       F16

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

                                TAX CARRYFORWARDS

The Company has the following tax carryforwards at October 31,

          2003

                                                        Expiration
          Year                      Amount                 Date
---------------------------------------------------------------------------
  Net operating loss
  October 31, 1995              $       2,500        October 31, 2010
  October 31, 1997                    253,686        October 31, 2012
  October 31, 1998                     71,681        October 31, 2013
  October 31, 1999                    842,906        October 31, 2019
  October 31, 2000                  3,574,086        October 31, 2020
  October 31, 2001                  5,051,232        October 31, 2021
  October 31, 2002                  1,838,129        October 31, 2022
  October 31, 2003                  2,890,718        October 31, 2023
                                -------------

                                $  14,524,938
                                =============

NOTE 10 CONVERTIBLE DEBENTURES

Unsecured Convertible Debentures

<TABLE>
<CAPTION>
                                                                               Current
                                                                  Total        Portion
                                                                  -----        -------
<S>                                                             <C>           <C>
 Lites Trading Company - $1,600,000  Debenture                  $750,000      $     0
 ---------------------------------------------
</TABLE>

On March 27, 2000, the Company issued $1,600,000 of 7% convertible debentures
under the following terms and conditions:

1.    Due date - March 27, 2005.
2.    Interest only on May 1 and December 1 of each year commencing May 1, 2000.
3.    Default interest rate - 18%.
4.    Warrants to purchase 37,500 shares of common stock at $14.50 per share.
5.    Conversion terms - The debenture holder shall have the right to convert
      all or a portion of the outstanding principal amount of this debenture
      plus any accrued interest into such number of shares of common stock as
      shall equal the quotient obtained by dividing the principal amount of this
      debenture by the applicable conversion price.
6.    Conversion price - Lesser of (i) $14.50 (fixed price) or (ii) the product
      obtained by multiplying the average closing price by .80.
7.    Average closing price - The debenture holder shall have the election to
      choose any three trading days out of twenty trading days immediately
      preceding the date on which the holder gives the Company a written notice
      of the holder's election to convert outstanding principal of this
      debenture.
8.    Redemption by Company - If there is a change in control of the Company,
      the holder of the debenture can request that the debenture be redeemed at
      a price equal to 125% of the


                                       F17

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 9 CONVERTIBLE DEBENTURES (CONTINUED)

      aggregate principal and accrued interest outstanding under this debenture.

9.    The debentures are unsecured.

10.   Any further issuance of common stock or debentures must be approved by the
      debenture holders.

<TABLE>
<CAPTION>
                                                                                                  Current
                                                                                    Total         Portion
                                                                                    -----         -------
<S>                                                                               <C>           <C>
11.   Debenture holders have an eighteen month right of first refusal on future
      disposition of stock by the Company.

12.   Restriction on payment of dividends, retirement of stock or issuance of
      new securities.

13.   On January 29, 2001, the debenture was converted into common stock and
      paid-in-full.

$5,000,000 Convertible Debenture                                                  $1,668,702    $1,668,702
--------------------------------
</TABLE>

On October 31, 2001, the Company issued 8% convertible debentures as follows:

1.    Due date - October 31, 2003.

2.    Interest payable quarterly from January 1, 2001.

3.    Default interest rate - 20%.

4.    On the first $ 1,000,000 of financing, the Company issued warrants to
      purchase 50,000 shares of stock at $ 4.80 per share. The Company reserved
      an additional 124,000 shares for future borrowing on this debenture line.

5.    Put note purchase price - $4,000,000.

6.    Fees and costs - 7% - 10% of cash received for debentures and warrants
      plus legal fees.

7.    The Company must reserve a number of common shares equal to, but not less
      then, 200% of the amount of common shares necessary to allow the debenture
      and warrant holder to be able to convert all such outstanding notes and
      put notes to common stock.

8.    Conversion price for put notes. The initial 50% of the put notes shall be
      the lesser of: (i) 80% of the average of the three lowest closing bid
      prices for the stock for twenty two days or (ii) 80% of the average of the
      five lowest closing bid prices for the stock for sixty days. The conver-
      sion price of the balance of the put notes shall be 86% of the average of
      the three lowest closing bid prices for ten days.


                                       F18

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 10 CONVERTIBLE DEBENTURES (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                 Current
                                                                                   Total         Portion
                                                                                   -----         -------
<S>                                                                               <C>           <C>
9.    The debentures have penalty clauses if the common stock is not issued when
      required by the debenture holder.

10.   The debentures are unsecured.

11.   The Company's right to exercise the put commences on the actual effective
      date of the SEC Registration Statement and expires three years after the
      effective date.

12.   Right of first refusal - The debenture holders have the right to purchase
      a proportionate amount of new issued shares in order to maintain their
      ownership interest percentage.

13.   On January 12, 2004, the debenture was acquired by Enterprise Capital AG.

Laurus Master Fund, Ltd.                                                           $323,985      $323,985
------------------------
</TABLE>

In April and July 2001, the Company issued $500,000 and $150,000 of 8%
convertible debentures under the following terms and conditions:

1.  Due date - October 31, 2003.

2.  Interest on September 30, 2001 and quarterly thereafter.

3.  Default interest rate - 20%.

4.  On the first financing, the Company issued warrants to purchase 150,000
    shares of common stock at the lesser of $1.23 per share or an amount equal
    to the average of the three lowest closing prices for a ten day trading
    period. The Company may redeem the warrants for $6.67 per share. On the
    second financing, the Company issued warrants to purchase 150,000 shares of
    common stock at the lesser of $0.48 or an amount equal to 105% of the
    average of the three lowest closing bid prices for the common stock for the
    ten trading days prior to, but not including, the date the warrants are
    exercised.


                                       F19

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 10 CONVERTIBLE DEBENTURES (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                 Current
                                                                                   Total         Portion
                                                                                   -----         -------
<S>                                                                               <C>           <C>
5.    Conversion terms - The debenture holder shall have the right to convert
      all or a portion of the outstanding principal amount of this debenture
      plus any accrued interest into such number of shares of common stock as
      shall equal the quotient obtained by dividing the principal amount of this
      debenture by the applicable conversion price.

6.    Conversion price - Lower of eighty percent of the average of the three
      lowest closing bid prices for a specified three day or twenty-two day
      period.

7.    Prepayment - The debenture may not be paid prior to the maturity date
      without the consent of the holder.

8.    On January 12, 2004, the debenture was acquired by Enterprise Capital AG.

Alpha Capital                                                                    $240,000        $240,000
-------------

In January and April 2002, the Company issued an 8% convertible debenture as
follows:

1.    Due dates- January 30, 2004 and April 25, 2004.

2.    Interest payable quarterly from March 31, 2002.

3.    Default interest rate - 20%.

4.    Warrants to purchase 800,000 shares of common stock at $.60 per share.

5.    Fees and costs - 7% - 10% of cash received for debentures and warrants
      plus legal fees.

6.    Conversion price -

      (i)   80% of the average of the three lowest closing bid prices for the
            stock for twenty two days or

      (ii)  80% of the average of the three lowest closing bid prices for the
            stock for sixty days.

7.    The debentures are unsecured.

8.    In February 2004, the debenture was converted into common stock and
      paid-in-full.
                                                                                -----------     ----------
      Total unsecured convertible debenture                                     $ 2,982,687     $2,232,687
                                                                                -----------     ----------
</TABLE>


                                       F20

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 10 CONVERTIBLE DEBENTURES (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                 Current
                                                                                   Total         Portion
                                                                                   -----         -------
<S>                                                                               <C>           <C>
Secured convertible debentures                                                    1,033,150     1,033,150
------------------------------

AJW Entities

In August and October 2002, the Company issued 12% secured convertible
debentures as follows:

1.    Due dates - August 15, 2003 and October 9, 2003.

2.    Interest payable quarterly.

3.    Default interest rate - 15%.

4.    Warrants to purchase 180,000 shares of common Stock at $0.05 per share.

5.    Conversion Price

      (i)   50% of the average of the three lowest closing bid prices for the
            stock for twenty days or

      (ii)  Fixed conversion price of $0.05. 6. The convertible debentures are
            secured by all the assets of the Company.

7.    On January 28, 2004, the agreement was renegotiated and subsequently
      converted into common stock and paid-in-full.

    Total Secured Convertible Debentures                                        $ 1,033,150   $ 1,033,150
                                                                                ===========   ===========

    Total Debentures                                                            $ 4,015,837   $ 3,265,837
                                                                                ===========   ===========

Maturities of convertible debentures are as follows:

                                    2004                                                      $ 3,265,837
                                    2005                                                          750,000
                                                                                              -----------

                                            Total                                             $ 4,015,837
                                                                                              ===========
</TABLE>

See Note 22 for conversion of debentures subsequent to October 31, 2003.


                                       F21
<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

<TABLE>
<S>                                                                                          <C>
NOTE 11 NOTE PAYABLE, OTHER

Note payable to Community First National Bank is due in monthly payments of
principal and interest of $545 with interest at 7% until March 7, 2004. The note
is secured by an automobile which
costs $36,000 and has a book value of $0.                                                    $      4,920
                                                                                             ============

Maturities of long-term debt are as follows:

               2004                                                                          $      4,920
                                                                                             ============
</TABLE>

NOTE 12 DISCONTINUED OPERATIONS

The network integration services, digital subscriber line high speed internet
connection services, and Co-Location computer data and server facility were
discontinued on October 31, 2001.

The following information is presented for the discontinued operations:

A. Segments discontinued - as indicated above

B. Discontinued date - October 31, 2001

C. Manner of disposal - write-down of assets to fair market value and sale of
segments

NOTE 13 COMPUTATION OF EARNINGS PER SHARE

                                              2003             2002
                                          -------------    ------------
From continuing operations

  Net (loss) from continuing operations   $  (4,462,182)   $  (6,010,911)
                                          -------------    ------------
  Weighted average number of common
  shares outstanding                        231,553,359       26,404,820

  (Loss) per share                        $        (.02)   $      (0.23)


                                       F22

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 13 COMPUTATION OF EARNINGS PER SHARE (CONTINUED)

<TABLE>
<CAPTION>
                                                              2003                  2002
                                                        ---------------       --------------
<S>                                                     <C>                   <C>    <C>
From discontinued operations
  Net (loss) from discontinued operations               $             0       $    ( 479,554)
                                                        ---------------       --------------
  Weighted average number of common
  shares outstanding                                        231,553,359           26,404,820

  (Loss) per share                                      $          N/A        $        ( .02)
</TABLE>

The Company has outstanding warrants to purchase 5,187,116 shares of its common
stock which have not been included in the above computation, as they are
anti-dilutive.

NOTE 14 CANCELLATION OF DEBT

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

Settlement of prior year liabilities     $       85,733    $       44,754
                                         ==============    ==============

NOTE 15 COMMITMENTS AND CONTINGENCIES

                                 OPERATING LEASE

The Company leases its office and warehouse facilities in Phoenix, Arizona from
a third party under the following terms and conditions:

1.    Term - Three years from February 1, 2002 to January 31, 2005

2.    Size of facility - 4,343 square feet

3.    Base rent - Monthly rentals plus taxes and common area operating expenses

4.    Base rental schedule -

Months                     Rent
------                     ----

 1 - 12                 $  2,172
13 - 24                    3,692
25 - 36                    4,343


                                       F23

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 15 COMMITMENTS AND CONTINGENCIES (CONTINUED)

Future minimum lease payments excluding taxes and expenses, are as follows:

October 31, 2004       $              50,163
October 31, 2005                      13,029
                       ---------------------

                       $              63,192
                       =====================

Rent expense for the nine months ended October 31, 2003 and 2002 was $41,513 and
$44,644, respectively.

                                  PAYROLL TAXES

The Company is negotiating a settlement regarding delinquent payroll taxes of
approximately $65,000. Interest is being accrued on the outstanding balance. No
amounts have been accrued for any penalties.

                         WORKERS' COMPENSATION INSURANCE

Through November 2003, the Company did not carry general liability or workers'
compensation coverage, nor was it self-insured. The Company accrues liabilities
when it is probable that future costs will be incurred and such costs can be
reasonably estimated. As of November 30, 2003, there were no known liability
claims. No amounts have been accrued for any penalties which may be assessed by
the State of Arizona for non-compliance with the laws and regulations applicable
to workers' compensation insurance.

                                      LEGAL

The Company is the defendant in one lawsuit for unpaid wages. Management has
recorded a liability in the amount of $20,000.

The Company is also named as a counter defendant in a lawsuit with a former
associate. Although there is a possibility that the Company may be held liable,
an estimated range of potential loss cannot be determined at this time, but it
is not believed to have a material impact on the financial condition of the
Company.

                             OFFICERS' COMPENSATION

As of October 31, 2003, the Company has employment agreements with two of its
corporate officers. The contracts are for three years beginning July 2001 and
provide for the following:

1.    Salaries from $150,000 to $250,000 for each officer.

2.    Bonuses of 1% of total sales for each officer.

3.    Options for 120,000 shares of common stock which will vest and be
      exercisable for a period of ten years.


                                       F24

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 15 COMMITMENTS AND CONTINGENCIES (CONTINUED)

4.    Option price of $0.20 a share.

5.    Termination - Termination by the Company without cause - the employee
      shall receive six months salary. Change of control - in the event of
      change of control, the Company shall pay the employee a lump sum payment
      of three years annual salary.

                            UNPAID OFFICERS' SALARIES

On December 20, 2001, the Board of Directors authorized the issuance of
convertible debentures to the officers of the Company as consideration for their
unpaid wages. As of the date of this report, the debentures have not been
issued.

NOTE 16 COMMON STOCK

                                 STOCK ISSUANCES

1.    On November 26, 2002, the Company filed an S-B Registration Statement with
      the SEC and subsequently issued 9,000,000 shares of common stock to
      individuals for services rendered.

2.    On December 6, 2002, the Company issued 1,500,000 shares of restricted
      common stock in consideration of services rendered.

3.    On February 7, 2003, the Company issued 105,775,711 shares of restricted
      common stock to its current officers and employees as a retention bonus.

4.    On June 12, 2003, the Company issued 100,000,000 shares of restricted
      common stock to its current officers and employees as a retention bonus.

5.    On June 9, 2003, the Company filed an S-8 registration statement with the
      SEC and subsequently issued 64,640,458 shares of common stock to officers
      and employees for retention bonuses and individuals for services rendered.

6.    On August 14, 2003, the Company issued 16,308,823 shares of restricted
      common stock in consideration of services rendered.


                                       F25

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 16 COMMON STOCK (CONTINUED)

                             STOCK PURCHASE WARRANTS

As of October 31, 2003, the Company has issued the following common stock
purchase warrants:

                        Number                       Exercise
      Date            of Shares    Term               Price
      ----            ---------    ----               -----

December 28, 1999       20,000   5 years       $           9.40
January 10, 2000        28,125   5 years       $           9.90
March 27, 2000          61,500   5 years       $  14.50 - 20.50
May 17, 2000            12,500   3 years       $  10.20 - 50.00
August 30, 2000          3,413   5 years       $           9.37
August 30, 2000         25,000   3 years       $           5.00
August 30, 2000         25,000   3 years       $           7.50
August 30, 2000          3,636   3 years       $          10.00
September 3, 2000       10,900   3 years       $          10.00
September 27, 2000      27,875   3 years       $           9.00
October 31, 2000        50,000   2 years       $           4.76
December 20, 2000       40,000   5 years       $           2.28
December 20, 2000       15,000   5 years       $           2.28
April 26, 2001         150,000   5 years       $           1.23
June 22, 2001          150,000   5 years       $           0.42
June 27, 2001          150,000   5 years       $           0.21
August 21, 2001         52,500   5 years       $           0.39
October 9, 2001         35,000   5 years       $           0.26
January 15, 2002        16,667   5 years       $105% of Closing
January 15, 2002        50,000   5 years       $105% of Closing
January 30, 2002       500,000   5 years       $           0.06
April 23, 2002         300,000   5 years       $           0.06
August 15, 2002        105,000   5 years       $           0.05
October 9, 2002         75,000   5 years       $           0.05
November 5, 2002        30,000   5 years       $           0.05
January 31, 2003     1,500,000   5 years       $           0.01
March 20, 2003         500,000   7 years       $           0.01
May 9, 2003            500,000   7 years       $           0.01
June 12, 2003          750,000   7 years       $           0.01
                     ---------
                     5,187,116
                     =========

5,187,116 shares are exercisable at October 31, 2003.


                                       F26

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 17 EMPLOYEE STOCK OPTIONS

On October 31, 2002, the Company cancelled its employee stock option plan.

NOTE 18 PREFERRED STOCK

On December 20, 2001, the Board of Directors authorized the issuance of
3,500,000 shares of preferred stock to three officers and one director in lieu
of their annual bonus and retention incentives. The preferred stock will have a
10:1 conversion rate from common stock to preferred stock and will have a
"super" voting right of 100:1. As of the date of this report the preferred stock
had not been issued. The Company has not designated any other rights or dividend
policy in regard to the Preferred Stock.

NOTE 19 RELATED PARTY TRANSACTION

On February 1, 2002, the Company transferred $249,918 of net assets held for
sale in full payment of delinquent rent and property taxes in the amount of
$78,376 on property previously rented by the Company. Ken Schilling, the
President of the Company has an ownership interest in this property.

NOTE 20 CHANGE IN AUTHORIZED SHARES

On February 24, 2003, the Articles of Incorporation were amended to increase the
number of authorized shares of common stock from 450,000,000 shares to
5,000,000,000 shares.

NOTE 21 4TH QUARTER INTERIM RESULTS OF OPERATIONS (UNAUDITED)

Revenues                                             $   202,990
Costs and expenses                                     1,228,335
                                                     -----------

Loss from operations                                 $(1,025,345)
                                                     ===========


                                       F27
<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

NOTE 22 SUBSEQUENT EVENTS (UNAUDITED)

                                    SPIN-OFF

On July 20, 2003, the Board of Directors approved the spin-off of iBIZ, Inc., a
wholly owned subsidiary of the Company, into a separate company. Management
estimates that the transaction should be completed in the second quarter of
fiscal, 2004.

The Company proposes to issue without consideration non-restricted shares of
common stock in iBIZ, Inc. pro rata to all shareholders of the Company as of
September 25, 2003 at the ratio of one share of iBIZ, Inc. for each 500 shares
of the Company common stock.

The purpose of the spin-off of iBIZ, Inc. is that it will allow management of
each business to focus solely on that business. In addition, it should enhance
access to financing by allowing the financial community to focus separately on
each business.

iBIZ Technology Corp. will continue to distribute its product line in the United
States of America providing sub-licenses for all products to iBIZ, for worldwide
distribution. iBIZ, Inc. will sign distribution agreements with iBIZ Technology
Corp. for distribution of its products in the United States. iBIZ will support
iBIZ Technology Corp. in engineering, production, and business development,
through synergetic agreements using Enterprises Capital AG and its affiliates
infrastructure in Europe and Israel.

                                     OPTIONS

On November 1, 2003, the Company granted an individual the option to purchase
200,000,000 shares of common stock at the exercise price of the average closing
price for the three days prior to exercise less a 40% discount. The option is
exercisable commencing November 1, 2003 and expires after January 15, 2004.

On December 15, 2003, the Company granted an individual the option to purchase
50,000,000 shares of common stock at the exercise price of market value at the
date of exercise less a 15% discount. The options expire five years from date of
grant.

On January 28, 2004, the Company granted Pangea Investments GmbH the option to
purchase 100,000,000 shares of common stock at the exercise price of market
value at the date of exercise less a 50% discount. The option is exercisable
commencing January 28, 2004 and expires after January 29, 2014.

As of February 4, 2004, the Company has received approximately $1,098,000 cash
as a result of the Company's Optionholders exercising their options to purchase
chares of common stock.

                             CONVERTIBLE DEBENTURES

During the period from November 1, 2003 through January 15, 2004, the
convertible debenture holders converted $1,033,404 of principal and $80,104 of
accrued interest for 819,302,914 shares.

During January 2004, the Company's remaining principal balances of its
convertible debentures were acquired by Enterprise Capital AG.

                                 STOCK ISSUANCES

On October 31, 2003, the Company filed an S-8 Registration Statement with the
SEC and subsequently issued 21,108,108 shares of common stock to individuals for
services rendered, payment of accounts payable and payment of a note payable.

On December 5, 2003, the Company filed an Amendment to the S-8 Registration
Statement previously filed on October 31, 2003, and subsequently issued
81,000,000 shares of common stock to individuals for services rendered,
110,000,000 shares of common stock to individuals for options exercised and
204,482,761 shares of common stock to its current officers and employees as
bonuses for the fiscal year-end.


                                       F28

<PAGE>

                     iBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002

                           STOCK ISSUANCES (CONTINUED)

On January 7, 2004, the Company issued 194,137,931 shares of restricted common
stock to its current officers and employees as a retention bonus.

On January 29, 2004, the Company filed an Amendment to the S-8 Registration
Statement previously filed on October 31, 2003, to increase the number of shares
available for issuance by 450,000,000.

                         ACQUISITION OF SYNOSPHERE, LLC

On January 20, 2004, the Company acquired 5,000,000 Interests, representing all
of the Interest, of Synosphere, LLC, ("Synosphere"), in exchange for 30,000,000
shares of common stock. Synosphere is a Plano, Texas based corporation
specializing in the development of innovative handheld computer technologies.

                   ACQUISITION OF SYNOSPHERE, LLC (CONTINUED)

The Company entered into employment agreements with two of the current
directors/officers of Synosphere. The term of these employee agreements shall be
two years following the closing and transferable in the event of a sale of
Synosphere to another entity or if Synosphere is spun-off. The employees shall
receive annual base salaries of $112,000 and $102,000 per year with healthcare
benefits. In addition, each employee shall receive a sign-on bonus of 2,500,000
chares of common stock. Furthermore, the employees shall receive an Earn Out
bonus of common stock in eight payments, each made quarterly, in the amount of
$62,500. A "golden parachute" clause shall be put in place, such that if either
of the employee agreements are terminated by the Company or any successor they
are payable in full at the date of their termination. Finally, one of the
employees shall be appointed to the Company's Board of Directors.


                                       F29

<PAGE>

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

On October 11, 2002, iBIZ Technology Corp., (the "Company") was notified by
Moffitt & Company, P.C., ("Moffitt") that it resigned as the Company's
independent auditors effective October 11, 2002. On October 17, 2002, the
Company engaged Farber and Hass LLP, as independent auditors of the Company for
the fiscal year ending October 30, 2002. The action to engage Farber and Hass,
LLP was taken upon the unanimous approval of the Audit Committee of the Board of
Directors of the Company.

During the last two fiscal years ended October 30, 2000 and October 31, 2001 and
through October 11, 2002, there were no disagreements between the Company and
Moffitt on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure which, if not resolved to the
satisfaction of Moffitt would have caused Moffitt to make reference to the
matter in its reports on the Company's financial statements. During the last two
most recent fiscal years ended October 31, 2000 and October 30, 2001 and through
October 11, 2002, there were no reportable events as the term described in Item
304(a)(1)(iv) of Regulation S-B. Moffitt's opinion in its report on the
Company's financial statements for the year ended October 31, 2000 and 2001,
expressed substantial doubt with respect to the Company's ability to continue as
a going concern.

During the two most recent fiscal years and through October 11, 2002, the
Company has not consulted with Farber and Hass, LLP regarding either:

1. the application of accounting principles to any specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the Company's financial statements, and neither a written report was provided to
the Company nor oral advice was provided that Farber and Hass, LLP concluded was
an important factor considered by the Company in reaching a decision as to the
accounting, auditing or financial reporting issue; or

2. any matter that was either subject of disagreement or event, as defined in
Item 304(a)(1)(iv)(A) of Regulation S-B and the related instruction to Item 304
of Regulation S-B, or a reportable event, as that term is explained in Item
304(a)(1)(iv)(A) of Regulation S-B.

The Company requested that Moffitt furnish it with a letter addressed to the
Securities and Exchange Commission stating whether it agrees with the above
statements. A copy of such letter, dated October 17, 2002, was filed as Exhibit
16.1 to a Form 8-K filed with the Securities and Exchange Commission on October
18, 2002.

<PAGE>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.

NAME                    AGE     POSITION
----                    ---     --------
Kenneth W. Schilling    52      President, Chief Executive Officer, Acting
                                Principal Accounting Officer and Director
Mark Perkins            40      Executive Vice President and Director

Directors serve until the next annual meeting and until their successors are
elected and qualified. Officers are appointed to serve for one year until the
meeting of the board of directors following the annual meeting of stockholders
and until their successors have been elected and qualified. There are no family
relationships between any of our directors or officers.

Kenneth W. Schilling founded iBIZ'S predecessor, SouthWest Financial Systems, in
1979, and has been Chief Executive Officer, President and a Director since
iBIZ'S founding. Mr. Schilling studied for a B.S. in electrical engineering at
the University of Pittsburgh from 1970 to 1972 but left for military service
prior to receiving his degree. On February 28, 2001, the Securities and Exchange
Commission filed a federal court action in the District of Arizona against Mr.
Schilling. Mr. Schilling, however, has reached a settlement with the Commission
in which he neither admits nor denies the allegations made against him. Pursuant
to this settlement, Schilling will be permanently enjoined from violating
Section 10(b) of the Exchange Act or Rule 10b-5 thereunder. Mr. Schilling was
required to pay a $20,000 civil penalty.

Mark H. Perkins joined iBIZ in 1994 and currently serves as Executive Vice
President. Mr. Perkins was appointed to iBIZ's Board on March 5, 1999. Prior to
his joining iBIZ, Mr. Perkins was employed at American Express as a project
manager for major systems implementation, a position he held for eight years.
Mr. Perkins earned a degree in business management from California State
University-Sonoma.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Except as noted below, based solely upon a review of Forms 3, 4 and 5, and
amendments thereto, furnished to the Company during fiscal year 2003, the
Company is not aware of any director, officer or beneficial owner of more than
ten percent of the Company's Common Stock that, during fiscal year 2003, failed
to file on a timely basis reports required by Section 16(a) of the Securities
Exchange Act of 1934.

ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth certain compensation paid or accrued by us to
certain of our executive officers during fiscal years ended 2003, 2002 and 2001.
Summary Compensation Table

<TABLE>
<CAPTION>
                                                                          Other
                                                           Annual      Restricted     Options       LTIP
  Name & Principal                Salary       Bonus       Compen-        Stock         SARs       Payouts      All Other
      Position          Year        ($)         ($)      sation ($)     Awards ($)     (#)(1)        ($)      Compen-sation
--------------------- --------- ------------ ----------- ------------ -------------- ----------- ------------ --------------
<S>                     <C>     <C>            <C>             <C>     <C>             <C>              <C>           <C>
Kenneth W. Schilling,   2003    175,000.00        0            0       523,652.39(1)       0            0             0
President, CEO,         2002     68,750.00        0            0        57,691.82(1)       0            0             0
Acting Principal        2001    200,000.00     26,138          0             0         300,000          0             0
Accounting Officer,
and Director
--------------------- --------- ------------ ----------- ------------ -------------- ----------- ------------ --------------
Mark H. Perkins,        2003    150,000.00        0            0         521,634.65        0            0             0
Executive Vice          2002     69,791.69        0            0          57,021.48        0            0             0
President, Director     2001    150,000.00     26,138          0             0         300,000          0             0
--------------------- --------- ------------ ----------- ------------ -------------- ----------- ------------ --------------
</TABLE>

(1) Represents 57,691,823 restricted shares issued at the market price of $0.001
on August 22, 2002.

(2) Represents 57,021,476 restricted shares issued at the market price of $0.001
on August 22, 2002.

OPTIONS

No options were exercised or granted during the last fiscal year.

<PAGE>

There were no long-term incentive plans or rewards made in fiscal 2003.

Employment Agreements

Employment Agreement For Kenneth W. Schilling. Effective July 12, 2001, Kenneth
W. Schilling and iBIZ entered into an Employment Agreement (the "Agreement").
Under the Agreement, Mr. Schilling has been retained to act as President and
Chief Executive Officer of iBIZ. The Agreement is for a term of three years
ending July 12, 2004. Under the Agreement, Mr. Schilling shall receive an annual
base salary of $250,000. Mr. Schilling will also receive three hundred thousand
(300,000) options to purchase three hundred thousand (300,000) shares of common
stock of iBIZ at an exercise price to be determined by the Board based upon the
closing price of the Company's common stock. In addition, Mr. Schilling will
also receive a bonus equal to one percent 1% of the total sales of the Company
recorded in the preceding fiscal quarter.

Employment Agreement For Mark Perkins. Effective July 12, 2001, Mark Perkins and
iBIZ entered into an Employment Agreement (the "Agreement"). Under the
Agreement, Mr. Perkins has been retained to act as Executive Vice-President of
iBIZ. The Agreement is for a term of three years ending July 12, 2004. Under the
Agreement, Mr. Perkins shall receive an annual base salary of $150,000. Mr.
Perkins will also receive three hundred thousand (300,000) options to purchase
three hundred thousand (300,000) shares of common stock of iBIZ at an exercise
price to be determined by the Board based upon the closing price of the
Company's common stock. In addition, Mr. Perkins will also receive a bonus equal
to one percent 1% of the total sales of the Company recorded in the preceding
fiscal quarter.

In addition to the foregoing, each Agreement contains the following termination
provisions:

"(a) Termination By The Company For Cause: The Company shall have the right to
terminate this Agreement and to discharge Employee for cause (hereinafter
"Cause"), and all compensation to Employee shall cease to accrue upon discharge
of Employee for Cause. For the purposes of this Agreement, the term "Cause"
shall mean (i) Employee's conviction of a felony; (ii) the alcoholism or drug
addiction of Employee; (iii) gross negligence or willful misconduct of Employee
in connection with his duties hereunder; (iv) the determination by any
regulatory or judicial authority (including any securities self-regulatory
organization) that Employee directly violated, before or after the date hereof,
any federal or state securities law, any rule or regulation adopted thereunder;
or (v) the continued and willful failure by Employee to substantially and
materially perform his material duties hereunder.

(b) Termination By The Company Without Cause: In the event Employee's employment
hereunder shall be terminated by the Company for other than Cause: (1) the
Employee shall thereupon receive as severance in a lump sum payment from the
Company the amount of one (1) year of Salary in effect at the time of such
termination.

(c) Resignation: In the event Employee resigns without Reason, he shall receive
any unpaid fixed salary through such resignation date and such benefits to which
he is entitled by law, and shall also receive a lump sum payment from the
Company in the amount of six (6) months Salary in effect at the time of such
resignation.

(d) Change of Control: In the event of a Change in Control, as hereinafter
defined, the Company shall pay the Employee in a lump sum the amount of three
(3) years of annual Salary in effect at the time of such Change in Control. Such
payment and grant shall be made regardless of the continuation or termination of
Employee's employment with the Company after a Change of Control, and shall be
in addition to, and not in lieu of, any other payments or issuances due pursuant
to the terms of this agreement. For purposes hereof, a Change in Control shall
be deemed to have occurred (i) if there has occurred a "change in control" as
such term is used in Item 1 (a) of Form 8-K promulgated under the Securities
Exchange Act of 1934, as amended, at the date hereof ("Exchange Act") or (ii) if
there has occurred a change in control as the term "control" is defined in Rule
12b-2 promulgated under the Exchange Act."

<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT.

As of February 11, 2004, there were 2,132,956,988 shares of common stock, par
value $0.001 outstanding. The following table sets forth certain information
regarding the beneficial ownership of our common stock as of February 11, 2004:

- all directors

- each person who is known by us to be the beneficial owner of more than five
percent (5%) of the outstanding common stock

- each executive officer named in the Summary Compensation Table

- all directors and executive officers as a group

The number of shares beneficially owned by each director or executive officer is
determined under rules of the SEC, and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under the SEC rules,
beneficial ownership includes any shares as to which the individual has the sole
or shared voting power or investment power. In addition, beneficial ownership
includes any shares that the individual has the right to acquire within 60 days.
Unless otherwise indicated, each person listed below has sole investment and
voting power (or shares such powers with his or her spouse). In certain
instances, the number of shares listed includes (in addition to shares owned
directly), shares held by the spouse or children of the person, or by a trust or
estate of which the person is a trustee or an executor or in which the person
may have a beneficial interest.

                                                   Amount of
                  Name and Address                 Beneficial       Percent of
Title of Class    of Beneficial Owner              Ownership (1)    Class
--------------    ----------------------------     ---------------  -----------
Common Stock      Kenneth W. Schilling             257,737,722       12.08%
                  2238 West Lone Cactus Drive
                  Suite 200
                  Phoenix, Arizona 85021

Common Stock      Mark H. Perkins                  243,143,298       11.40%
                  2238 West Lone Cactus Drive
                  Suite 200
                  Phoenix, Arizona 85021

Common Stock      Shares of all directors and      500,881,020       23.48%
                  executive officers as a
                  group (2 persons)

iBIZ TECHNOLOGY CORP. STOCK OPTION PLAN

The iBIZ Technology Corp. Stock Option Plan provides for the grant of stock
options to purchase common stock to eligible directors, officers, key employees,
and service providers of iBIZ. The stock option plan covers an aggregate maximum
of ten million (10,000,000) shares of common stock and provides for the granting
of both incentive stock options (as defined in Section 422 of the Internal
Revenue Code of 1986, as amended) and non-qualified stock options (options which
do not meet the requirements of Section 422). Under the stock option plan, the
exercise price may not be less than the fair market value of the common stock on
the date of the grant of the option. As of October 31, 2001, 3,145,000 options
had been granted to 37 *persons (net of cancelled and exercised) under the plan
at exercise prices of between $0.53 and $5.00. As of February 11, 2003, the
market price of the stock was $0.04. The options have been granted for periods
ranging from one (1) to ten (10) years, subject to earlier cancellation upon
termination of employment, resignation, disability and death. The options vest
pursuant to the terms of each individual option, which to date have ranged from
immediate to a five (5) year period.

The stock option plan benefits currently have no value, as all of the
outstanding options were issued at exercise prices greater than the current
price of our common stock.

<PAGE>

The Board of Directors administers and interprets the stock option plan and is
authorized to grant options thereunder to all eligible persons. In the event the
Board has at least two (2) members who are not either employees or officers of
iBIZ or of any parent or subsidiary of iBIZ, the stock option plan will be
administered by a committee of not less than two (2) persons who are such
independent directors. The Board designates the optionees, the number of shares
subject to the options and the terms and conditions of each option. Certain
changes in control of iBIZ, as defined in the stock option plan, will cause the
options to vest immediately. Each option granted under the stock option plan
must be exercised, if at all, during a period established in the grant that may
not exceed ten (10) years from the date of grant. An optionee may not transfer
or assign any option granted and may not exercise any options after a specified
period subsequent to the termination of the optionee's employment with iBIZ. The
Board may make amendments to the stock option plan from time to time it deems
proper and in the best interests of iBIZ provided it may not take any action
which disqualifies any option granted under the stock option plan as an
incentive stock option or which adversely effects or impairs the rights of the
holder of any option under the stock option plan.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

While a private company, iBIZ (now iBIZ) made loans totaling $992,037 to Kenneth
Schilling. These loans are payable on demand and accrued interest at eight
percent (8%) during 1997 and six percent (6%) during 1998 and 1999. As of
January 31, 2001, the balance of the loans payable by Mr. Schilling to iBIZ
totaled approximately Three Hundred Eighty-Four Thousand Nine Hundred
Eighty-Eight Dollars and Ninety-Four Cents ($384,988.94). Mr. Schilling, as
trustee of the Moorea Trust, pledged 2,000,000 shares of iBIZ common stock to
secure this debt. As of October 31, 2001, this loan was considered uncollectible
because there is no longer collateral guaranteeing the loan.

In November 2001, the Board of Directors approved a resolution authorizing us to
accept 9,285,600 shares of our common stock from Mr. Ken Shilling, and that we
apply such shares to our authorized and un-issued capital stock so that it may
be used for future offerings. To compensate Mr. Schilling for his contribution
of the 9,285,600 shares, the Board of Directors agreed to issue 15,000,000
shares of our common stock to Mr. Schilling upon the increase of our authorized
common stock from 100,000,000 to 450,000,000.

<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

iBIZ did not file a Form 8-K for during the last quarter ending on December 31,
2003.

  Exhibit No.   DESCRIPTION
--------------------------------------------------------------------------------
 2.01(1)        Plan of Reorganization and Stock Exchange Agreement dated
                January 1, 1999

 3.01(1)        Articles of Incorporation, as amended

 3.02(1)        Bylaws

10.03(1)        iBIZ Technology Corp. Stock Option Plan dated January 31, 1999

  Exhibit No.   DESCRIPTION
--------------------------------------------------------------------------------

10.26(6)        Modification and Waiver by and among iBIZ Technology and
                Subscribers to 8% Convertible debentures Agreement, dated as of
                April 17, 2001

10.27(6)        Subscription Agreement for Debentures Convertible into Common
                Stock of iBIZ Technology Corp., dated as of April 26, 2001

10.28(6)        Form of 8% Convertible debentures Due April 26, 2003

10.29(6)        Form of Warrant dated April 26, 2001, 2000

10.30(6)        Form of Subscription Agreement for Debentures Convertible into
                Common Stock of iBIZ Technology Corp., dated as of October 9,
                2001

10.31(8)        Form of 8% Convertible debentures Due October 9, 2002

10.32(8)        Form of Warrant dated October 9, 2001 Form of Subscription
                Agreement for Debentures Convertible into Common Stock of iBIZ

10.33(10)       Technology Corp., dated as of August 21, 2001 between iBiz
                Technology and Laurus Master Fund, Ltd. and Keshet, L.P.

10.34(10)       Form of 8% Convertible Debenture Due October August 21, 2002
                between iBiz Technology and Laurus Master Fund, Ltd.

10.35(10)       Form of Warrant  dated  August 21, 2001 issued to Laurus  Master
                Fund, Ltd.

10.36(10)       Form of 8% Convertible Debenture Due October August 21, 2002
                between iBiz Technology and Keshet, L.P. Form of Subscription
                Agreement for Debentures Convertible into Common Stock of iBIZ

10.37(12)       Technology Corp., dated as of July 30, 2001 between iBiz
                Technology and Laurus Master Fund, Ltd., Esquire Trading &
                Finance, Inc. and Celeste Trust Reg.

10.38(12)       Form of 8% Convertible Debenture Due October July 30, 2002
                between iBiz Technology and Laurus Master Fund, Ltd.

10.39(12)       Form of Warrant  dated  July 30,  2001  issued to Laurus  Master
                Fund, Ltd.

10.40(12)       Form of 8% Convertible Debenture Due October July 30, 2002
                between iBiz Technology and Esquire Trading & Finance, Inc..

<PAGE>

10.41(12)       Form of Warrant dated July 30, 2001 issued to Esquire  Trading &
                Finance, Inc.

10.42(12)       Form of 8% Convertible Debenture Due October July 30, 2002
                between iBiz Technology and Celeste Trust Reg.

10.43(12)       Form of Warrant dated July 30, 2001 issued to Celeste Trust Reg.
                Form of Subscription Agreement for Debentures Convertible into
                Common Stock of iBIZ

10.44(12)       Technology  Corp.,  dated  as of  June  22,  2001  between  iBiz
                Technology and The Keshet Fund, L.P.

Exhibit No.     DESCRIPTION
--------------------------------------------------------------------------------

10.45(12)       Form of 8% Convertible Debenture Due October June 22, 2002
                between iBiz Technology and The Keshet Fund, L.P.

10.46(12)       Form of Warrant  dated July 30, 2001 issued to The Keshet  Fund,
                L.P.

31.1            Certification  by Chief  Executive  Officer and Chief  Financial
                Officer pursuant to Sarbanes -Oxley Section 302.

32.1            Certification by Chief Executive Officer and Chief Financial
                Officer pursuant to 18 U.S. C. Section 1350

(1) Incorporated by reference from iBIZ's Form 10-SB, File No. 000-27619, filed
with the SEC on October 13, 1999

(2) Incorporated by reference from iBIZ's Form 10-SB/A, File No. 000-27619,
filed with the SEC on November 30, 1999.

(3) Incorporated by reference from iBIZ's Form SB-2, File No. 333-94409, filed
with the SEC on January 11, 2000.

(4) Incorporated by reference from iBIZ's Form 10-KSB, File No. 000-027619,
filed with the SEC on January 7, 2000.

(5) Incorporated by reference from iBIZ's Form 10-QSB, File No. 000-027619,
filed with the SEC on March 16, 2000.

(6) Incorporated by reference from iBIZ's Form SB-2, File No. 333-34936, filed
with the SEC on April 17, 2000.

(7) Incorporated by reference from iBIZ's Form SB-2, File No. 333-42414, filed
with the SEC on July 28, 2000.

(8) Incorporated by reference from iBIZ's Form SB-2, File No. 333-50564, filed
with the SEC on November 22, 2000.

(9) Incorporated by reference from iBIZ's Form 8-K, File No. 000-027619, filed
with the SEC on January 19, 2001.

(10) Incorporated by reference from iBIZ's Form 10-KSB, File No. 000-027619,
filed with the SEC on January 29, 2001.

(11) Incorporated by reference from iBiz's Form SB-2, File No. 333-63808, filed
with the SEC on June 25, 2001.

(12) Incorporated by reference from iBiz's Form SB-2, File No. 333-74496, filed
with the SEC on December 4, 2001.

(13) Incorporated by reference from iBiz's Form SB-2, File No. 333-88274, filed
with the SEC on May 15, 2002.

(14) Incorporated by reference from iBiz's Form SB-2, File No. 333-100450, filed
with the SEC on October 9, 2002.

<PAGE>

ITEM 14. CONTROLS AND PROCEDURES

As of October 31, 2002, an evaluation was performed by our Chief Executive
Officer and Acting Chief Financial Officer, of the effectiveness of the design
and operation of our disclosure controls and procedures. Based on that
evaluation, Our Chief Executive Officer and Acting Chief Accounting Officer,
concluded that our disclosure controls and procedures were effective as of
October 31, 2002. There have been no significant changes in our internal
controls or in other factors that could significantly affect internal controls
subsequent to October 31, 2002.

                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                  iBIZ Technology Corp., a Florida Corporation


By: /s/ Kenneth W. Schilling
    -------------------------------------
    Kenneth W. Schilling, President,
    Director

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.


By: /s/ Kenneth W. Schilling
--------------------------------------------
Kenneth W. Schilling, President, Chief
Executive Officer, Acting Principal
Accounting Officer, and Director


By:/s/ Mark H. Perkins
--------------------------------------------
Mark H. Perkins, Vice President of
Operations, Director