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

                                  FORM 10-KSB/A2

              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 500,881,020  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.  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 proposes to issue  without  consideration  non-restricted  shares of common
stock in  IBIZ,  Inc.  pro rata to all  shareholders  of iBIZ  Technology  as of
September  25, 2003 at the ratio of one share of IBIZ,  Inc. for each 500 shares
of iBIZ Technology Corp. 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.

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  shareholders  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 all 5,000,000  Interests and iBIZ 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  large  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.  Through October 31, 2002, we
have  expanded  our  product mix to more than eighty  different  individual  PDA
products   manufactured   to   iBIZ's   specifications   by   various   overseas
manufacturers.

On July 11, 2002, iBIZ acquired the  intellectual  property and marketing rights
for the Xela Case Keyboard, which is currently scheduled for mass production and
shipping at the beginning of the second quarter of fiscal year 2003.

iBIZ's principal  offices are located at 2238 West Lone Cactus,  #200,  Phoenix,
Arizona 85021. iBIZ 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  and  web-hosting  services will generate any revenue.  Many products
discussed  in this  report  may  ultimately  not be sold or may  only be sold in
limited quantities. Marketing agreements and web-hosting services may not result
in anticipated revenue for the Company.  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. See Risk Factors, below.

                              PRODUCTS AND SERVICES

iBIZ Inc.  success is dependent  upon the  introduction  of new products and the
enhancement of existing  products.  iBIZ Inc. 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 Inc. also provides third-Party Hardware, Software, and Related Supplies. in
an effort to provide our customers a wider range of products.




<PAGE>

                        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.

                                        1

<PAGE>

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 entered into 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

Microsoft,  Inc. 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.



                                        2

<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.  For the year ended October 31, 2003, we had 2 customers that
accounted for 35% and 13% of our total revenues.

                                        3

<PAGE>

                        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.

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 stock 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 will
also be 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.

                                        4


<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.

                                        5
<PAGE>

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.

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 three month period 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. The Company does not normally
         require  collateral to support  receivables and interest is not accrued
         thereon.

(2)      ALLOWANCE FOR DOUBTFUL ACCOUNTS

         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, account balance over
         one year old, etc.).

(3)      INVENTORIES

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

(4)      ACCOUNTING FOR CONVERTIBLE DEBT SECURITIES

         The Company has 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

         Product  Sales - when the goods  are  shipped  and title  passes to the
         customer.

         Maintenance  Agreements - Income from  maintenance  agreements is being
         recognized  on a  straight-line  basis  over  the  life of the  service
         contracts. The unearned portion is recorded as deferred income.

         Service Income - When services are performed.

(6)      CONSULTING AGREEMENTS

         The Company 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, less an agreed upon discount,
         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

Sales from continuing  operations  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 mainly a result of the  addition of new  customers,  the
increase in volume sales to an existing  national  retailer and  introduction of
three new products.


Cost of Sales and Gross Loss

The cost of sales of $519,003 (107% of sales) in the year ended October 31, 2003
remained the same from  $379,440  (107% of sales) for the year ended October 31,
2002.  Cost of sales  consists  of  354,434  (73% of sales) of direct  material,
packaging  and freight and  $164,569  (34% of sales) of  salaries  and  employee
related  costs for the year ended  October 31, 2003.  Cost of sales  consists of
$274,556 (77% of sales) of direct  material,  packaging and freight and $104,884
(30% of sales) of salaries and employee related costs for the year ended October
31, 2002.

The gross loss of 33,621  ((7)> of sales) in the year  ended  October  31,  2003
decreased from $23,162 ((7)> of sales) for the year ended October 31, 2002.

Selling, General and Administrative Expenses
Selling,  general and  administrative  expenses  increased  approximately  1% to
$1,026,660 in the year ended October 31, 2003 from $1,516,776 in the year ended
October 31, 2002.


Officer Bonuses

Officer bonuses  increased 100% to $1,132,882 in the year ended October 31, 2003
from $0 in the year ended October 31, 2002.  The increase is due to the issuance
of stock based  bonuses to the officers  throughout  the year ended  October 31,
2003.


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 in interest is a
result of approximately $1,850,000 new convertible debentures issued at 12% from
August 2002 to June 2003.



<PAGE>

Interest Expense - Convertible Debentures-Beneficial Conversion Feature

The  Company  has  issued  convertible  debt  securities  with a  non-detachable
convertible  feature that were  "in-the-money"  at the date of  issuance.  . The
Company has  recorded  the fair value of the  beneficial  conversion  feature as
interest  expense and an increase in  paid-in-capital.  Interest  expense on the
convertible  debentures was $1,379,077 and $4,283,930 for the year ended October
31, 2003 and 2002, respectively.


Net Loss From Continuing Operations

Net loss from  continuing  operations  decreased 26% % to 4,462,182 for the year
ended October 31, 2003 from a net loss of $6,010,861  for the year ended October
31, 2002.  The decrease in net loss was  primarily the result of the decrease in
beneficial  conversion  interest of $2,904,853 offset by the increase of officer
bonuses in the amount of $1,132,882.


Discontinued Operations

Loss from  discontinued  operations was $479,554 for year ended October 31, 2002
as a result of management's election to discontinue  non-profitable  segments of
the Company's operations and to focus on profitable business units as of October
31,  2001.  The Company  completed  the  discontinuance  at October 31, 2002 and
incurred no further expenses from that date.



Liquidity

Net cash (used) by operating  activities for the year ended October 31, 2003 was
$793,646 compared to $671,211 (used) by operating  activities for the year ended
October  31,  2002.  The  $122,435  change,  net of  non-cash  transactions  was
primarily due to:

     a.  Accounts  receivable  increased $147,832 in the year ending October 31,
         2003 as compared  to a decrease  of $73,771 in the year ending  October
         31,  2002.  The net use of  operating  cash in 2003 is a result  of the
         Company's  major  customers  paying on  extended  terms  instead of the
         original agreed upon terms.

     b.  Inventories  decreased  41,758 in the year  ending  October 31, 2003 as
         compared to an decrease of $71,141 in the year ending October 31, 2002.
         The net  operating  cash  provided in 2003 is a result of the Company's
         fulfillment  of sales orders and the decision to purchase  inventory on
         an as needed basis due to cash flow restrictions.

     c.  Prepaid  expenses  increased $6,057 in the year ending October 31, 2003
         as compared  to a decrease  of $36,127 in the year  ending  October 31,
         2002.  The net use of  operating  cash in 2003 is a result of prepaying
         for  services in order to secure  their use in the year ending  October
         31, 2003.

     d.  Cash, pledged for letter of credit increased $10,000 in the year ending
         October 31, 2003.  The result of this use of  operating  cash is due to
         the Company's major customer requiring the establishment of a letter of
         credit in order to service rebates.

     e.  Accounts and notes payable  increased 91,401 in the year ending October
         31,  2003 as  compared  to a increase  of  $509,519  in the year ending
         October 31, 2002.  The increase in cash provided in 2003 is a result of
         the  Company's  need to  purchase  items on a cash basis and  therefore
         being unable to reduce  accounts and notes  payable by any  significant
         amount in the year ending October 31, 2003.


<PAGE>

     f.  Accrued  liabilities and taxes increased  $1,199,630 in the year ending
         October  31,  2003 as  compared  to an increase of $540,671 in the year
         ending  October 31, 2002.  The net increase in cash provided in 2003 is
         the result of the  Company's  increase of $735.000 of accrued wages and
         bonuses  and the  increase of $313,00 in  interest  due on  convertible
         debentures in the year ending October 31, 2003.

The Company plans to remedy the deficiency of operating cash flows by increasing
income from its new product line and obtaining additional equity investment.  As
of February 11, 2004, the Company has obtained  additional  equity investment of
$1.1 million.

Our  investing  activities  for the year ended October 31, 2003 used no cash, as
compared to $201,365,  which was used in the year ended  October 31,  2002.  The
primary change was that the Company received cash from the sale of assets in the
amount of  $48,635,  purchased a mold in the amount of $50,000 for a new product
line and purchased Intellectual Property Rights in the amount of $200,000 during
the year ended  October 31,  2002 and had no  investing  activities  in the year
ended October 31, 2003.

Our  financing  activities  for the year ended October 31, 2003 provided cash of
$794,838  compared to $866,543 for the year ended October 31, 2002.  The primary
change was that the Company obtained $686,813 of new debenture financing for the
year ended  October 31, 2003 compared to $848,723 for the year ended October 31,
2002.  Net  proceeds  from the issuance of common stock was $36,691 for the year
ended  October 31,  2003 as  compared to $79,500 for the year ended  October 31,
202. The Company also repaid  $55,734 on its note payable factor during the year
ended October 31, 2002 and $15,000 during the year ended October 31, 2003.

Capital Resources

Working capital is summarized and compared as follows:

                                     October 31,    October 31,
                                        2003           2002
                                     -----------    -----------
Current assets                       $   203,790     $   126,416
Current liabilities                    6,297,304       4,373,436
                                     -----------    -----------

Working capital (deficit)            $(6,093,514)   $(4,247,020)
                                     ===========    ===========


This  increase  in the  deficit  in working  capital  was  primarily  due to the
increase in the convertible debentures, current portion, the increase of accrued
interest and the increase of accrued wages and bonuses.

At October  31,  2003,  stockholders'  deficit  was  6,716,685  as compared to a
stockholders'  deficit of $4,941,782 at October 31, 2002. The $1,726,086  change
in stockholders' deficit was accounted for as follows:

Increase in Stockholders' Equity
     Issuance of common stock                                       $   980,129
     Conversion of convertible
       debentures, net of costs                                         328,073
     Interest expense - convertible
        debentures - beneficial
        conversion feature                                            1,379,077

Decreases in stockholders'equity
  net loss                                                           (4,462,182)
                                                                    -----------
                Net Change                                          $(1,774,903)
                                                                    ===========


<PAGE>

The Company currently has no material commitments for capital expenditures.

The Company has $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.

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. 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  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 February 3, 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 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


<PAGE>

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, 2004 and expires after January 15, 2004.

During  December 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 40% discount.

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.

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:



FASB 144 - Accounting for the  impairment or disposal of long-lived  assets
FASB 145 - Rescission of FASB statements 4, 44 and 64 and amendment of
           FASB 13
FASB 146 - Accounting for costs associated with exit or disposal
           activities
FASB 147 - Acquisitions of certain financial  institutions
FASB 148 - Accounting for  stock  based  compensation
FASB 150 - Accounting  for  Certain  Financial Instruments with
           Characteristics of both Liabilities and Equity


These FASB statements did not, or are not expected to, have a material impact on
the Company's financial position and results of operations.

                                        9

<PAGE>



ITEM 7. FINANCIAL STATEMENTS.

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                            OCTOBER 31, 2003 AND 2002






                                       10



<PAGE>


                                TABLE OF CONTENTS

                                                                        PAGE NO.
                                                                        --------

INDEPENDENT AUDITORS' REPORTS.....................................      12 - 13

FINANCIAL STATEMENTS

       Consolidated Balance Sheet.................................      14 - 15

       Consolidated Statements of Operations......................      16 - 17

       Consolidated Statement of Stockholders' (Deficit)..........      18 - 21

       Consolidated Statements of Cash Flows......................      22 - 23

       Notes to Consolidated Financial Statements.................      24 - 47



                                       11

<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To  The  Board  of  Directors  and   Stockholders   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



                                     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
                                                                        ========

<PAGE>

<TABLE>
<CAPTION>
                     LIABILITIES AND STOCKHOLDERS' (DEFICIT)


CURRENT LIABILITIES
<S>                                                                             <C>
      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.

                                        2
<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 SALES                                                         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.

                                        3

<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.

                                        4
<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
                                        ---------------              ------------
                                        Shares    Amount         Shares         Amount
                                        ------    ------         ------         ------

<S>                                        <C> <C>             <C>          <C>
BALANCE, OCTOBER 31, 2001                  0   $         0     9,986,320    $     9,986

CONVERSION OF DEBENTURES FOR
   COMMON STOCK:
       PRINCIPAL                           0             0     6,077,099          6,077
       ACCRUED INTEREST                    0             0       440,934            441

FEES AND COSTS FOR ISSUANCE OF
   COMMON STOCK                            0             0             0              0

ISSUANCE OF COMMON STOCK FOR:
       PAYMENT OF ACCOUNTS
          PAYABLE                          0             0     3,121,200          3,122
       PAYMENT OF SALARIES AND
          RETENTION BONUSES                0             0    18,778,104         18,778
       CONSULTING FEES                     0             0     2,200,000          2,200
       LEGAL FEES                          0             0       825,000            825
       CASH                                0             0     3,000,000          3,000

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


<PAGE>

                                 Additional
                                  Paid in      Accumulated
                                  Capital        Deficit          Total
                                  -------        -------          -----
                              $  9,891,221    $(13,845,685)   $ (3,944,478)



                                   336,199               0         342,276
                                    21,648               0          22,089


                                   (73,777)              0         (73,777)



                                   314,740               0         317,862

                                   228,287               0         247,065
                                    85,800               0          88,000
                                    99,675               0         100,500
                                    76,500               0          79,500


                                  (131,355)              0        (132,284)




                             See Accompanying Notes.

                                        5
<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
                                     -------------------------   -------------------------
                                        Shares        Amount       Shares        Amount
                                     -----------   -----------   -----------   -----------
<S>                                  <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
       NEW SHARES                              0             0       571,440           571

INTEREST EXPENSE - CONVERTIBLE
   DEBENTURES - BENEFICIAL
   CONVERSION FEATURE                          0             0             0             0

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

        BALANCE,  OCTOBER 31, 2002             0   $         0    45,000,097   $    45,000

CONVERSION OF DEBENTURES FOR
   COMMON STOCK:
        PRINCIPAL                              0             0   243,234,850       243,235
        INTEREST                               0             0    27,742,606        27,743

FEES AND COSTS FOR ISSUANCE OF
   COMMON STOCK                                0             0             0             0

ISSUANCE OF COMMON STOCK FOR:
   CONSULTING FEES                             0             0    21,161,764        21,162
   LEGAL FEES                                  0             0    12,000,000        12,000
   EMPLOYEE RETENTION BONUSES                  0             0   253,063,228       253,063
  ACCRUED EXPENSES AND PAYABLES                0             0    11,000,000        11,000
  CASH                                         0             0    36,691,176        36,691

INTEREST EXPENSE - CONVERTIBLE
   DEBENTURES - BENEFICIAL
   CONVERSION FEATURE                          0             0             0             0

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

BALANCE, OCTOBER 31, 2003                      0   $         0   649,893,721   $   649,894
                                     ===========   ===========   ===========   ===========
</TABLE>


<PAGE>

                   Additional
                     Paid in       Accumulated
                     Capital         Deficit           Total
                  ------------    ------------    ------------
                  $    131,355    $          0    $    132,284
                        85,145               0          85,716



                     4,283,930               0       4,283,930


                             0      (6,490,465)     (6,490,465)
                  ------------    ------------    ------------

                    15,349,368     (20,336,150)     (4,941,782)



                       108,536               0         351,771
                        11,746               0          39,489


                       (63,187)              0         (63,187)


                       110,088               0         131,250
                        44,500               0          56,500
                       442,125               0         695,188
                        49,500               0          60,500
                             0               0          36,691



                     1,379,077               0       1,379,077

                    (4,462,182)     (4,462,182)
                             0

                  $ 17,431,753    $(24,798,332)   $ (6,716,685)
                  ============    ============    ============

                             See Accompanying Notes.

                                        6
<PAGE>


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


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

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                             <C>            <C>
       Net (loss) from continuing operations                    $(4,462,182)   $(6,010,911)
       Adjustments to reconcile net (loss) to
         net cash (used) by 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 and notes 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.

                                        7

<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
                                                              -----------   -----------
NET CASH PROVIDED BY
<S>                                                           <C>           <C>
   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.

                                        8
<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 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.  IBIZ  Inc.  also  markets  LCD
                monitors,  OEM notebook  computers,  third party  software,  and
                general purpose financial application keyboards.

                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.


                                        9

<PAGE>

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



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                Accounts Receivable

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

                Allowance for Doubtful Accounts

                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.).

                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



                                       10

<PAGE>

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



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                Long-Lived Assets

                Statement of Financial Accounting Standards No. 121, "Accounting
                for the Impairment of Long-Lived Assets and for Long-Lived Asset
                to be Disposed of," requires that long-lived  assets by 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 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.

                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
                Topic  D-60.  The  Company  has  recorded  the fair value of the
                beneficial  conversion  features  as  interest  expense  and  an
                increase to Additional Paid in Capital.

                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.

                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
                100,000,000  to  450,000,000  and  authorized  the  creation  of
                50,000,000 shares of blank check preferred stock.




                                       11

<PAGE>


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


NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                Revenue Recognition

                Product  sales - When the goods are shipped and title  passes to
                the customer.

                Maintenance  agreements - Income from maintenance  agreements is
                being  recognized on a straight-line  basis over the life of the
                service contracts.  The unearned portion is recorded as deferred
                income.

                Service income - When services are performed.

                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.

                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.


                                       12
<PAGE>

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


NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                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%.


                                       13
<PAGE>

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


NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                Revenues

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

                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 will adopt the
                provisions of SFAS 146 effective January 1, 2003.


<PAGE>

                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 will
                adopt 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.

                                       14

<PAGE>


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



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                Recent Accounting Pronouncements (Continued)



NOTE 2  ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

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


                      Accounts receivable                     $          165,251

                      Allowance for doubtful accounts                     41,500
                                                              ------------------

                             Net accounts receivable          $          123,751
                                                              ==================


                                       15

<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 (CONTINUED)

<TABLE>
<CAPTION>
                      Allowance for doubtful accounts

<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
                                                                                                     ==================
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
                                                                                                     ==================
</TABLE>

                                       16

<PAGE>

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


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.

<TABLE>
<S>                                                                                                  <C>
                           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.

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
                                                                                                     ==================
</TABLE>

                                       17

<PAGE>


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


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
                                                              ==========

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

                                       18

<PAGE>


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


NOTE 10 CONVERTIBLE DEBENTURES

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

                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
                   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>

                                       19
<PAGE>

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


NOTE 9  CONVERTIBLE DEBENTURES (CONTINUED)

<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.


                                       20
<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>
                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
                ------------------------

                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.
</TABLE>

                                       21
<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>
                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>


                                       22
<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.

                                       23
<PAGE>


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

NOTE 11 NOTE PAYABLE, OTHER

<TABLE>
<S>                                                                                                   <C>
                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)



                                       24

<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
                                                                        ---------------       --------------

                From discontinued operations
<S>                                                                     <C>                   <C>    <C>
                  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 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


                                       25
<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.


                                       26
<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 offices 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.


                                       27

<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.

            See Accompanying Notes and Independent Auditors' Report.

                                       28


<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                                     1,179,518
                                                     -----------

Loss from operations                                 $  (976,528)
                                                     ===========

NOTE 22 SUBSEQUENT EVENTS (UNAUDITED)

                                       29

<PAGE>


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


NOTE 22 SUBSEQUENT EVENTS (UNAUDITED) (CONTINUED)

                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.

                During  December  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
                40% discount.

                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.



                                       30
<PAGE>


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



NOTE 22 SUBSEQUENT EVENTS (UNAUDITED) (CONTINUED)

                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.

                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 February 3, 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.





                                       31
<PAGE>


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



NOTE 22 SUBSEQUENT EVENTS (UNAUDITED) (CONTINUED)

                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.



                                       32

<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, CPA as independent  auditors of the Company for
the fiscal year ending  October 30, 2002.  The action to engage Farber and Hass,
CPA) 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, CPA 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, CPA 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.

                                       48

<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    51      President, Chief Executive Officer, Acting
                                Principal Accounting Officer and Director
Mark Perkins            39      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 will
also be 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.


                                       49

<PAGE>



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.

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

                                       50
<PAGE>

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."

                                       51

<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.

                                       52
<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.

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



<PAGE>

  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..

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.

<PAGE>



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.

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.

                                       55
<PAGE>

                                   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