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

                                   FORM 10-KSB

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

                     FOR FISCAL YEAR ENDED OCTOBER 31, 2004

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

                     For the Transition Period From __ to __

                                   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
                    (Address of principal executive offices)

                    Issuer's telephone number: (623) 492-9200

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].

State the registrant's revenues for its most recent fiscal year: $368,650 for
the year ended October 31, 2004.

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days: $7,077,806 as of March 9, 2005.

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. As of March 10, 2005, the registrant
had 3,725,160,822 shares of common stock, par value $.001 per share,
outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE.

Transitional Small Business Disclosure Format (check one): Yes [ ]   No [X]

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

                                     PART I
Item 1.   Description of Business. . . . . . . . . . . . . . . . . . . . . . 3

Item 2.   Description of Property. . . . . . . . . . . . . . . . . . . . . . 8

Item 3.   Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . 8

Item 4.   Submission of Matter to Vote of
          Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . 9

                                     PART II
Item 5.   Market for Common Equity and Related Stockholder
          Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Item 6.   Management's Discussion and Analysis
          or Plan of Operation . . . . . . . . . . . . . . . . . . . . . . . 9

Item 7.   Financial Statements . . . . . . . . . . . . . . . . . . . . . . .18

Item 8.   Changes in and Disagreements with Accountants on Accounting
          and Financial Disclosure . . . . . . . . . . . . . . . . . . . . .20

Item 8A.  Controls and Procedures  . . . . . . . . . . . . . . . . . . . . .20

Item 8B.  Other Information . . . . . . . . . . . . . . . . . . . . . . . . 20

                                    PART III
Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act  . . . . . . . .20

Item 10.  Executive Compensation . . . . . . . . . . . . . . . . . . . . . .21

Item 11.  Security Ownership of Certain Beneficial Owners and Management
          and Related Stockholder Matters . . . . . . . . . . . . . . . . . 22

Item 12.  Certain Relationships and Related Transactions . . . . . . . . . .22

Item 13.  Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . .22

Item 14.  Principal Accountant Fees and Services . . . . . . . . . . . . . .24

          Signatures and Certifications. . . . . . . . . . . . . . . . . . .25


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                                     PART I

Certain disclosures in this Annual Report on Form 10-KSB, including the
information incorporated by reference herein, include certain forward-looking
statements within the meaning of the safe harbor protections of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Statements that include words such as
"believe," "expect," "should," intend," "may," "anticipate," "likely,"
"contingent," "could," "may," or other future-oriented statements, are
forward-looking statements. Such forward-looking statements include, but are not
limited to, statements regarding our business plans, strategies and objectives,
and, in particular, statements referring to our expectations regarding our
ability to market and sell PDA accessories, generate increased market awareness
of, and demand for, our current products, realize profitability and positive
cash flow, and timely obtain required financing. These forward-looking
statements involve risks and uncertainties that could cause actual results to
differ from anticipated results. The forward-looking statements are based on our
current expectations and what we believe are reasonable assumptions given our
knowledge of the markets; however, our actual performance, results and
achievements could differ materially from those expressed in, or implied by,
these forward-looking statements. Factors, within and beyond our control, that
could cause or contribute to such differences include, among others, the
following: those associated with our marketing of a relatively new PDA
accessories for consumers in an evolving marketplace, consumer preferences,
perceptions and receptiveness with respect to our PDA accessories, our critical
capital raising efforts in an uncertain and volatile economical environment, our
ability to maintain existing relationships with critical customers and vendors,
including related licensing and marketing arrangements, our cash-preservation
and cost-containment efforts, our ability to retain key management personnel,
our relative inexperience with advertising, our competition and the potential
impact of technological advancements thereon, the impact of changing economic,
political, and geo-political environments on our business, as well as those
factors discussed in "Item 1 - Our Business," and "Item 6 - Our Management's
Discussion and Analysis," particularly the discussions under "Our Risks and
Uncertainties," and elsewhere in this Form 10-KSB. Readers are urged to
carefully review and consider the various disclosures made by us in this report
and those detailed from time to time in our reports and filings with the United
States Securities and Exchange Commission that attempt to advise interested
parties of the risks and factors that are likely to affect our business.

Our fiscal year ends on October 31. References to a fiscal year refer to the
calendar year in which such fiscal year ends.

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


ITEM 1. DESCRIPTION OF BUSINESS

                   GENERAL DESCRIPTION OF OUR CURRENT BUSINESS

Concurrent with the February 2, 2005 deployment of our new www.GoMoGear.com
e-commerce website, as more fully discussed below, we principally became an
Internet-based retailer of a broad and diversified offering of various consumer
electronics with an emphasis on products that are portable or mobile. Prior
thereto, and since 1998, we were a more narrowly-focused wholesaler and, to a
lesser extent, Internet-based retailer through our www.ibizpda.com e-commerce
website, of various accessories primarily intended for use with Personal Digital
Assistants ("PDAs"). We continue to conduct substantially all of our
non-research and development related activities through our wholly-owned
subsidiary, iBIZ, Inc. (hereinafter, "iBIZ, Inc.").

As a result of our January 20, 2004 acquisition of Synosphere, LLC (hereinafter,
"Synosphere"), as more fully discussed below, we subsequently have engaged in
significant activities directed at, among other efforts, further developing
certain of the acquired technologies. We currently conduct substantially all of
our product research and development activities through Synosphere, now as a
wholly-owned subsidiary of ours.

We were incorporated in the State of Florida in April 1994, although our
operations have been headquarted in the State of Arizona since November 1979.
Since February 2002, substantially all of our operations have been conducted
from leased facilities located at 2238 West Lone Cactus, #200, Phoenix, Arizona
85027.

Neither the content of our general corporate website at www.ibizcorp.com, nor of
our e-commerce websites at www.GoMoGear.com and www.ibizpda.com, are part of
this report.


                       OUR RECENT SIGNIFICANT DEVELOPMENTS

Business Evolution - On February 2, 2005, we deployed a second e-commerce
website at www.GoMoGear.com. This website currently features approximately 5,000
consumer electronics products available to us on a non-exclusive basis through a
significant new vendor relationship with DBL Distributing, Inc., a
privately-held, wholesale distributor of consumer electronics based in
Scottsdale, Arizona. This site additionally offers, as does our www.ibizpda.com
website, approximately one-hundred and thirty accessories for PDAs that we
procure on a non-exclusive basis from a number of other vendors. Our product
offerings on www.GoMoGear.com currently range in complexity and price from
disposable batteries with a suggested retail price of $0.99 at the low end to
sophisticated color printers with a suggested retail price of $4,999.95 at the
high-end. Our current product offering on www.GoMoGear.com emphasizes,
consistent with our prior emphasis of PDA accessories, consumer electronics
products and related accessories that are portable or mobile, such as MP3
players, DVD players, digital cameras and GPS devices.


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<PAGE>

Acquisition of Synosphere - On January 20, 2004, we acquired all of the
outstanding membership interests in Synosphere, a Texas-based limited liability
development-stage company, pursuing the development of certain handheld
computing technologies, in exchange for 30.0 million shares of our common stock.
As the technological feasibility of each of the acquired technologies had yet to
be fully established as of the acquisition date, the aggregate $1.2 million
purchase price, based on the then prevailing market price of our common stock,
was immediately reflected within our results of operations for our fiscal 2004
first quarter ended January 31, 2004. Subsequent to the acquisition, we have
engaged in significant activities directed at further developing certain of the
acquired technologies.


                          OUR CURRENT BUSINESS STRATEGY

For the immediate future, our principal business strategy will be to achieve
revenue growth sufficient to leverage our fixed and semi-fixed basic
infrastructure costs, thereby allowing us to realize positive operating results
and cash flows. It is our hope that our recent decision to significantly broaden
our product offerings, as described above, will facilitate the revenue growth we
desperately need and seek. Absent our obtaining of significant debt and/or
equity financing, our timely realization of the preceding strategy will be a
prerequisite to our ability to continue as a going concern. Over the longer
term, our principal business strategy will be to generate positive operating
cash flow from our retailing of consumer electronics sufficient to fund our
further development of certain technologies we are exploring, including those
that we acquired in our acquisition of Synosphere. Should we be initially
successful at establishing the technological and commercial feasibility of these
technologies and subsequently successful in releasing and marketing a line of
related devices to the general public at large, we believe that such could
provide us with extensive revenue generating opportunities. However, there can
be no assurance that we will ultimately be successful in achieving the preceding
business strategies or that any related successes will be sufficiently lucrative
or timely to ensure that we will be able to continue as a going concern. See
"Managements Discussion and Analysis of Financial Condition and Results of
Operations - Current Uncertainty Regarding Our Ability to Continue as a Going
Concern" for further details.


                        OUR HISTORICAL PRINCIPAL PRODUCTS

During our fiscal years ended October 31, 2004 and 2003, as reported upon in the
accompanying financial statements, our line of products principally consisted of
accessories for a wide array of PDAs. These accessories, which we continue to
market, range in complexity and price from simple connector cables with
suggested retail prices starting at $9.99 at the low end to our multi-faceted
Keysync Keyboard with a suggested retail price of $69.99 at the high end. We
currently expect that the following historical principal products, which
accounted for in descending order the substantial majority of the net product
sales for the fiscal years reported herein, will likely continue to constitute a
significant portion of our net product sales until, if and when, the other newly
added consumer electronics products offered on our new www.GoMoGear.com
e-commerce website begin to contribute significant product sales:

ENTERTAINMENT DEVICES:

o     Our pocketRADIO - We introduced our pocketRADIO to the consumer
      marketplace in October 2002. Our pocketRADIO is a FM Stereo card that
      allows a PDA user to listen to FM Stereo while simultaneously running
      other programs. It is available in CF (Compact Flash ) and SD (Secure
      Digital) formats for PDAs operating Windows or PALM (TM) operating
      systems, respectively. Our pocket RADIO has a AutoScan feature which
      allows a PDA user to quickly locate available FM stations within a
      particular geographic area and may be programmed to store up to eighteen
      FM Station locations for instant recall. Each pocketRADIO is accompanied
      by a pair of stereo headphones and is equipped with a jack allowing for
      its connection to external speakers. Its automatic power management
      feature provides for low power consumption while its "z" button feature
      enables a user to turn-off the PDA's screen and backlight so as to further
      conserve power. Our pocketRADIO have a suggested retail price of $49.99
      and a one-year parts and labor warranty, which includes unlimited
      technical support via our toll-free telephone number and www.ibizpda.com
      website.

POWER DEVICES:

o     Our Travel Kits - We introduced our first Travel Kit to the consumer
      marketplace in March 2002. We currently offer thirty-two variations of our
      Travel Kits to accommodate a wide array of PDAs. Each of our Travel Kits
      includes an AC charger, a 12-volt automobile adapter/charger, a USB
      charging cable, and a synchronization cable. Our Travel Kits have a
      suggested retail price of $39.99 and include a one-year parts and labor
      warranty, which includes unlimited technical support via our toll-free
      telephone number and www.ibizpda.com website.

DATA INPUT DEVICES:

o     Our Keysync Keyboard - We introduced our Keysync Keyboard to the consumer
      marketplace in November 1998 as a more practicable and user-friendly
      alternative to the traditional PDA stylus for inputting significant
      amounts of data. Our Keysync Keyboard's accompanying CD-ROM-based custom
      software drivers, which are loadable into a PDA via synchronization with a


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<PAGE>

      personal computer, make it compatible with a wide array of PDAs utilizing
      Windows or PALM (TM) operating systems. Our Keysync Keyboard resembles a
      smaller-scale version of a conventional computer keyboard and easily
      connects to a PDA either directly through a serial cable or indirectly
      through the PDA's synchronization cradle. Its durable, lightweight
      (approximately ten ounces) and compact design (approximately 10.5" long x
      4.5" wide x 1.25" high) and independent power source (i.e., three AAA
      batteries, which are included) make it suitable for use both in a
      stationary workstation setting and in a temporary mobile work setting. Our
      Keysync Keyboard has a suggested retail price of $69.00 and a one-year
      parts and labor warranty, which includes unlimited technical support via
      our toll-free telephone number and www.ibizpda.com website.


                        OUR HISTORICAL PRINCIPAL SERVICES

With the exception of the aforementioned warranty-related technical support
services, the only other services we performed during the fiscal years reported
herein were pursuant to maintenance agreements associated with our technical
servicing and support of computer terminals and printers for financial
institutions, which business we no longer actively market or pursue. Our
maintenance service revenues, which constituted 5.7% of our total consolidated
revenues for the fiscal year ended October 31, 2004, will likely continue to
decrease in future fiscal years.

                  OUR CURRENT PRODUCT PROCUREMENT AND LICENSES

We currently procure all of our consumer electronics products, with the
exception of our historical line of accessories for PDAs, on a non-exclusive,
just-in-time basis from DBL. We are, and expect to remain for the foreseeable
future, materially dependent upon DBL for providing us in a timely manner with
substantially all of the products that are available for purchase by customers
via our www.GoMoGear.com website. Any disruption in our business relationship
with DBL will likely have a material adverse impact upon our business, and, as a
result, on our financial condition, results of operations and cash flows, from
which may not be able to recover.

We continue to procure our historical line of accessories for PDAs on a
non-exclusive basis through various licensing and manufacturing arrangements
with entities located in Taiwan, the People's Republic of China, and the United
States. We are, and expect to remain for the foreseeable future, materially
dependent upon the vendors cited below for providing us on a timely basis with
our historical principal products:

o     Our pocketRADIOs - We procure our pocketRADIOs on an as needed, individual
      purchase order basis from Prolink Microsystems Corporation ("Prolink"), a
      full-service design, engineering and manufacturing entity which is located
      in Taiwan. Prolink developed and owns the software embedded on the related
      FM stereo card.

o     Our Travel Kits - We procure our Travel Kits, as well as certain other
      currently insignificant PDA cable and charging accessories, on an as
      needed, individual purchase order basis from Poto Technology, a
      full-service design, engineering and manufacturing entity which is located
      in the People's Republic of China.

o     Our Keysync Keyboard - We procure our Keysync Keyboard on an as needed,
      individual purchase order basis from Datacomp Electronics Corporation, a
      full-service design, engineering and manufacturing entity that specializes
      in keyboard and data input devices, which is located in Taiwan.

                 OUR CURRENT MARKETING, SELLING AND DISTRIBUTION

With the exception of our line of accessories for PDAs, all of our products are
marketed solely on our www.GoMoGear.com e-commerce website. We continue to
market our historical line of PDA accessories primarily through national and
regional retailers (e.g., CompUSA, Inc.), third-party e-commerce websites (e.g.,
www.mobileplanet.com, www.pdamart.com and www.outpost.com), and our own
proprietary e-commerce websites (www.ibizpda.com and www.GoMoGear.com). To date,
products sales to customers residing outside of North America have been nominal.
As in recent fiscal years, we continue to substantially outsource our field
sales functions to unrelated commissioned representatives.

For the fiscal year ended October 31, 2004, Comp USA accounted for $100,398
(27.2%) of our consolidated net revenues. For the fiscal year ended October 31,
2003, Comp USA and Synnex accounted for $168,000 (34.6%) and $61,000 (12.6%),
respectively, of our consolidated net revenue. Given our continuing modest and
declining revenue base, the loss of Comp USA as a customer, absent the obtaining
of one or more substantially offsetting new customers, would likely have
materially adverse consequences on our overall business, and, as a result, on
our consolidated financial condition, results of operations and cash flows, from
which we may not be able to recover.

Given our limited financial and other resources, our recent advertising
activities have been, and are anticipated to continue to be, primarily limited
to cooperative advertising with national and regional retailers via their weekly
sales flyers and newspaper inserts, periodic promotions by third-party
e-commerce retailers, periodic direct mail flyers and catalogs, and occasionally
advertisements placed in targeted monthly periodicals. Our continuing inability
to perform significant marketing and advertising activities limits our ability
to grow our product sales and makes us highly susceptible to competition.

We continue to receive fully assembled and packaged products from all of our
vendors at our Phoenix, Arizona facility, from which we, in turn, fulfill and
ship orders to our customers.


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<PAGE>

                             OUR CURRENT COMPETITION

The broader consumer electronics marketplace is, as is the more narrowly defined
PDA accessory marketplace, highly diverse and competitive. Through our
www.GoMoGear.com e-commerce website, we directly compete with numerous
multi-channel (i.e., bricks-and-mortar, catalog and/or e-commerce) specialty
retailers of consumer electronics, including, among others, Best Buy, Comp USA
and Circuit City. We also indirectly compete with numerous single or
multi-channel diversified retailers that offer consumer electronics including,
among others, WalMart, Target, Sears and Amazon.com. We believe that the primary
competitive factors in the consumer electronics marketplace would include, among
possible others, selection, price, service and support, and corporate
reputation.

With respect to our historical line of accessories for PDAs in particular, we
directly and indirectly compete through our www.ibizpda.com and www.GoMoGear.com
e-commerce websites with many of the same retailers referenced above as well as
with various designers, assemblers and manufacturers of PDA accessories
including, among others, Palm, Toshiba, Hewitt-Packard and Research In-Motion.
The PDA accessories marketplace is, as is the underlying PDA market itself,
characterized by rapid technological changes in hardware and software, evolving
consumer preferences and demands, and the frequent introduction of new and
innovative products. We believe that the primary competitive factors in the PDA
accessories marketplace would include, among possible others,
price-to-performance characteristics, technological capabilities and
ease-of-use, product quality and reliability, service and support, and corporate
reputation.

The vast majority of our competitors enjoy the advantages of far greater
financial, marketing and technological resources than we currently have or
anticipate having in the foreseeable future. Given our limited financial and
other resources, we currently are unable to perform any significant marketing
and advertising activities which, in turn, severely limits our ability to grow
our sales and makes us highly susceptible to competition.

With respect to the retailing of consumer electronics, we currently believe that
our primary competitive strength would be our commitment to providing excellent
customer service and support through our toll-free telephone numbers and
e-commerce websites. With respect to our marketing of PDA accessories in
particular, we believe that our primary competitive strength would be the unique
and space-saving characteristics of our products. However, as we procure the
vast majority of our PDA accessories on a non-exclusive basis from overseas
vendors, they are highly susceptible to being marketed by others and to
imitation or duplicative designs.

Given the aforementioned risks and uncertainties, there can be no assurance that
we will be able to effectively compete in the future.

                      OUR CURRENT RESEARCH AND DEVELOPMENT

Our continuing research and development efforts principal involve our pursuit of
two technology initiatives. The first initiative involves our continuing pursuit
of an infra-red virtual keyboard technology for utilization primarily with PDAs,
certain cellular phones and portable computing devices. The second initiative
involves our more recent pursuit of certain technologies directed at giving a
PDA or certain cellular phones, via a docking station, the functionality of a
desktop computer. There can no assurance that we either or both of these
technology initiatives will be successful. In the absence of significant
external debt and/or equity financing, we currently anticipate that our related
research and development efforts during the fiscal year ending October 31, 2005
will be sporadic and limited to those that can be conducted by our current, or
subsequently employed, salaried staff.

Our research and development activities during the fiscal year ended October 31,
2004 were substantially limited to those initiatives discussed above, for which
we incurred $597,121 in expenses. Our ongoing initiative involving certain
handheld technologies is a continuation of research and development that had
been previously conducted by Synosphere, which we acquired on January 20, 2004.
As the technological feasibility of Synosphere's research and development
efforts had yet to be established as of the acquisition date, we were required
by U.S. generally accepted accounting principles to recognize a $1.2 million
acquisition-related charge. We did not perform any research and development
activities during the preceding fiscal year ended October 31, 2003.

With respect to our line of accessories for PDAs, we continue to rely upon, as
we have in recent years, on acquiring or licensing technologies and products
from unrelated third-parties.

                       OUR CURRENT PATENTS AND TRADEMARKS

We are the exclusive holder of rights related to the below patent applications,
each being filed in the U.S. Patents and Trademarks Office. Each patent that is
eventually granted, if any, will expire on the twentieth anniversary from its
original filing date. We hold the rights to the following patent pending utility
applications before the U.S. Patents and Trademarks Office:

o     Intelligent docking station for a handheld personal computer (Application
      No. 10/053,433 - Feb 1, 2002)

o     Method For Integrating An Intelligent Docking Station With A Handheld
      Personal Computer (Application No. 10/061,997- Feb 1, 2002)

o     System for Intelligent Docking Station For A Handheld Personal Computer
      (Application No. 10/051,264- Feb 1, 2002)


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o     Method For Data Transmission By Using Communication Drivers In An
      Intelligent Docking Station/Handheld Personal Computer System (Application
      No. 10/093,779 - March 8, 2002)

o     Method For Data Transmission By Using Communication Drivers In An
      Intelligent Docking Station/Handheld Personal Computer System (PCT
      Application No. PCT/US03/6993 - March 7, 2003)

o     Systems, Devices, And Methods For Transferring Data Between An Intelligent
      Docking Station And A Handheld Personal Computer (Application No.
      10/093,921- March 8, 2002)

o     Method for video data transmission between an external video device and a
      handheld personal computer system (Application No. 10/288,845- Nov 6,
      2002)

o     Manipulating the position of a horizontal-vertical visual indicator on a
      PDA display via a one-hand manual screen horizontal-vertical visual
      indicator device (Application No. 10/288,846- Nov 6, 2002)

o     Performance Enhancement And Upgrade Attachment For A Handheld Computer
      (Application No. 10/291,068- Nov 6, 2002)

o     System, device, and method for receiving satellite radio on a handheld
      computing device (Application No. 10/801,973 - March 15, 2004)

o     Intelligent Docking Station For A Handheld Personal Computer (Application
      No. 10/801,974 - March 15, 2004)

o     Intelligent docking station integrated within a keyboard form factor for a
      handheld computer (Application No. 10/821,433 - April 9, 2004)

We hold the rights to the following provisional patent applications before the
U.S. Patents and Trademarks Office. A provisional application expires one year
from it original filing date, unless a patent application is submitted
containing its subject matter to the U.S. Patents and Trademarks Office.

o     Analog TV Tuner System & Apparatus For A Handheld Computer, Smart Phone,
      or Wireless Phone (Provisional Application No. 60/545,823- Feb 19, 2004)

o     Memory Card Light System (Provisional Application No. 60/553,375 - March
      15, 2004)

o     Memory Card System Having Visual Indicator (Provisional Application No.
      60/553,382 - March 15, 2004)

o     Memory Card Motor System (Provisional Application No. 60/555,171 - March
      22, 2004)

o     Satellite Radio (Provisional Application No. 60/576,846 - June 3, 2004)

o     In-Stadium Satellite Radio Architecture and Service (Provisional
      Application No. 60/627,007 - November 10, 2004)

We hold exclusive rights to the following trademarks registered with the U.S.
Patents and Trademarks Office that may be renewed on the tenth anniversary of
their respective registration dates:

o     Keysync (Registration No. 2,470,437 - July 17, 2001)

o     Blue Dock (US Serial No. 78,384,586 - March 15, 2004)

While we believe that the above patent applications and trademarks are
collectively important to our business, we currently do not believe that our
business is materially dependent upon any single patent or trademark.

                                  OUR EMPLOYEES

We currently employ eight individuals on a full-time basis in the following
positions: president and chief executive officer, executive vice president, vice
president, president- Synosphere, vice-president of Synosphere, product manager,
technical support specialist, and administrative assistant. Our currently
outsource substantially all of our accounting and financial functions to a local
accounting firm, our information technology support requirements on an as needed
basis to various local firms, and our field sales functions to independent
commissioned sales representatives.

To date, we have not experienced any employee-related work stoppages or
slowdowns. Currently, none of our employees are represented by a labor union or
are subject to a collective bargaining agreement. We currently believe that our
employee relations are satisfactory.


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ITEM 2. DESCRIPTION OF PROPERTY

On February 1, 2002, we began leasing a 4,343 square foot facility at 2238 West
Lone Cactus, #200, Phoenix, Arizona 85201, which facility continues to encompass
all of our corporate functions and activities, with the exception of the
research and development activities addressed below. On February 1, 2005, upon
the expiration of the original three-year lease, we entered into a new one year,
non-cancelable operating lease for the same premises at a monthly rental of
$2,823.

On January 20, 2004, we acquired all of the outstanding membership interests in
Synosphere, a Texas-based, development-stage limited liability company, pursuing
the development of certain handheld computing technologies. From January 20,
2004 through February 1, 2004, the acquired research and development activities
were conducted from an employee's residence at no cost to us. From February 2,
2004 through May 31, 2004, we leased on a month-to-month basis a 264 square foot
facility in Richardson, Texas at a monthly rental of $1,150 to house these
research and development activities. On June 1, 2004, we relocated these
research and development activities into a 537 square foot facility in Austin,
Texas which we leased on a month-to-month basis through July 31, 2004 at a
monthly rental of $3,481. On August 1, 2004, we began leasing a 1,627 square
foot facility in Austin, Texas to house these research and development
activities. This lease has a non-cancelable, two-year term with monthly rental
payments of $2,441 during the first year and $2,508 during the second year. In
an effort to reduce our prospective operating costs, we vacated this facility on
February 11, 2005, relocated the research and development activities into the
personal residences of certain of our Austin-based employees, and requested that
the lessor release us from this lease. The lessor has informed us that a new
tenant has leased this facility and will take physical possession on or about
April 1, 2005, at which time the lessor will agree to cancel our lease and
release us from any further rent obligations.

We believe that our current Phoenix facility, complemented by the uncompensated
use of employee residences for our current product research and development
activities, will be sufficient for the foreseeable future. We additionally
believe that suitable alternative facilities are readily available for lease in
and around Phoenix and Austin should such become necessary.

ITEM 3. LEGAL PROCEEDINGS.

In May 2004, Ttools, LLC (hereinafter, "Ttools"), our the supplier XELA keyboard
product, filed a lawsuit against us asserting breach of contract, conversion,
and unjust enrichment and $70,558 in damages, plus interest and legal fees. We
have counter-claimed asserting misrepresentations by Ttools. Our management
believes that their case is without merit and does not believe that the ultimate
outcome of this matter will have a material impact our consolidated financial
statements.

The United States Securities and Exchange Commission (hereinafter, "SEC")
currently is conducting a formal investigation into certain specific matters
that may constitute potential violations by us of the federal securities laws.
We believe that we have been fully cooperated with the SEC in its investigation
to date. We will publicly disclose the specific nature of any resulting SEC
allegations(s) if and when they become fully known, subject to any SEC mandated
confidentiality and as permitted by applicable federal securities laws.

With respect to the preceding SEC investigation, it should be noted that Kenneth
W. Schilling, the Company's Chairman, Chief Executive Officer and President,
remains the subject to a Cease and Desist Order from the SEC. The cease and
desist order constituted part of a negotiated settlement between Mr. Schilling
and the SEC that was formally entered into on February 28, 2001 pursuant to
which Mr. Schilling, without admitting or denying the SEC's allegations against
him, agreed to the entry of an Order enjoining him from violating Section 10(b)
of the Securities Exchange Act of 1934, as amended, and Rule 10-b5 thereunder,
and ordering him to pay a civil penalty of $20,000. In a related action, the
Company, without admitting or denying any of the SEC's findings, consented to a
cease-and-desist order enjoining it from committing or causing any violation or
any future violations of Section 10(b) of the Securities Exchange Act of 1934,
as amended, and Rule 10-b5 thereunder. The underlying SEC Complaint alleged that
Mr. Schilling provided false financial projections to a purported analyst for
research reports recommending the purchase of the Company's common stock. The
Complaint also stated that from February 1999 through June 1999, Mr. Schilling
placed seventeen press releases on the Company's corporate website which
contained direct hyperlinks to the analyst reports and, as late as February
2000, the Company maintained press releases on its corporate website which
referenced and contained hyperlinks to the analyst reports. The SEC further
alleged that in a February 19, 1999 press release, the Company characterized the
analyst as "independent" even though the Company, through its then investor
relations firm, had agreed to pay the analyst 200,000 shares of its common stock
for the report. The SEC found that Mr. Schilling had reviewed and approved the
press releases posted on the Company's corporate website. The SEC also alleged
that the false financial projections which appeared on the Internet fueled a
rise in both the price and the trading volume of the Company's common stock

Kenneth W. Schilling, our Chairman, Chief Executive Officer and President,
remains the subject to a Cease and Desist Order from the U.S. Securities and
Exchange Commission ("SEC"). The cease and desist order constituted part of a
negotiated settlement between Mr. Schilling and the SEC that was formally
entered into on February 28, 2001 pursuant to which Mr. Schilling, without
admitting or denying the SEC's allegations against him, agreed to the entry of
an Order enjoining him from violating Section 10(b) of the Securities Exchange
Act of 1934, as amended, and Rule 10-b5 thereunder, and ordering him to pay a
civil penalty of $20,000. In a related action, we, as a company, without
admitting or denying any of the SEC's findings, consented to a cease-and-desist


                                       8
<PAGE>

order enjoining us from committing or causing any violation or any future
violations of Section 10(b) of the Securities Exchange Act of 1934, as amended,
and Rule 10-b5 thereunder. The underlying SEC Complaint alleged that Mr.
Schilling provided false financial projections to a purported analyst for
research reports recommending the purchase of our stock. The Complaint also
stated that from February 1999 through June 1999, Mr. Schilling placed seventeen
press releases on our corporate website which contained direct hyperlinks to the
analyst reports and, as late as February 2000, we maintained press releases on
our corporate website which referenced and contained hyperlinks to the analyst
reports. The SEC further alleged that in a February 19, 1999 press release, we
characterized the analyst as "independent" even though we, through our then
investor relations firm, had agreed to pay the analyst 200,000 shares of our
common stock for the report. The SEC found that Mr. Schilling had reviewed and
approved the press releases posted on our corporate website. The SEC also
alleged that the false financial projections which appeared on the Internet
fueled a rise in both the price and the trading volume of our common stock

We remain liable to the U.S. Internal Revenue Service ("IRS") for approximately
$65,000 in unpaid payroll taxes, and subsequently assessed interest, for certain
periods through our fiscal 1999 first quarter. We continue to maintain an
accrual for this liability in our consolidated financial statements. It is our
intent to seek a reduced settlement of this liability with the IRS, if and when,
we have sufficient cash so as to enable us to honor any settlement. As of
October 31, 2004, the IRS had not yet assessed, nor have we accrued for, any
related penalties.

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

We did not submit any matters to a vote of our security holders during our
fiscal year ended October 31, 2004 or subsequent thereto.

                                     PART II

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

                          MARKET FOR OUR COMMON SHARES

Our common stock currently is traded on the Over-The-Counter Bulletin Board
("OTC-BB") under the symbol "IBZT." Prior to September 30, 2003, OTC-BB symbol
was "IBIZ." The following table sets forth the high and low sales prices, as
quoted by the OTC-BB, for our common stock for each quarter during our two most
recent fiscal years ended October 31, 2004 and subsequent thereto. These
quotations reflect inter-dealers prices, without retail mark-ups, mark-downs or
commissions, and may not represent actual transactions.

      Fiscal Quarter Ended         High         Low
--------------------------- --------------- ----------------
      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             0.0695       0.0555
        April 30, 2004             0.0366       0.0305
         July 31, 2004             0.0091       0.0085
      October 31, 2004             0.0033       0.0028
      January 31, 2005             0.0028       0.0026

On February 17, 2005, we received an "E Symbol" and our common stock may be
delisted from the OTC-BB if we do not file this annual report on Form 10-KSB for
the year ended October 31, 2004 on or prior to March 17, 2005.

We currently estimate that there are approximately 299 holders of record of our
common stock. Given our continuing need to retain any earnings to fund our
operations and desired growth, we have not declared or paid, nor do we currently
anticipate declaring or paying for the foreseeable future, any dividends on our
common stock.

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

                                  INTRODUCTION

Concurrent with the February 2, 2005 deployment of our new www.GoMoGear.com
e-commerce website, as more fully discussed below, we principally became an
Internet-based retailer of a broad and diversified offering of various consumer
electronics with an emphasis on products that are portable or mobile. Prior
thereto, and since 1998, we were a more narrowly-focused wholesaler and, to a
lesser extent, Internet-based retailer through our www.ibizpda.com e-commerce
website, of various accessories primarily intended for use with Personal Digital
Assistants ("PDAs"). We continue to conduct substantially all of our
non-research and development related activities through our wholly-owned
subsidiary, iBIZ, Inc. (hereinafter, "iBIZ, Inc.").

As a result of our January 20, 2004 acquisition of Synosphere, LLC (hereinafter,
"Synosphere"), as more fully discussed below, we subsequently have engaged in
significant activities directed at, among other efforts, further developing
certain of the acquired technologies. We currently conduct substantially all of


                                       9
<PAGE>

our product research and development activities through Synosphere, now as a
wholly-owned subsidiary of ours.

With the exception of the aforementioned warranty-related technical support
services, the only other services we performed during the fiscal years reported
herein were pursuant to maintenance agreements associated with our technical
servicing and support of computer terminals and printers for financial
institutions, which business we no longer actively market or pursue. Our
maintenance service revenues, which constituted 5.7% of our total consolidated
revenues for the fiscal year ended October 31, 2004, will likely continue to
decrease in future fiscal years.

                       OUR RECENT SIGNIFICANT DEVELOPMENTS

Business Evolution - On February 2, 2005, we deployed a second e-commerce
website at www.GoMoGear.com.. This website currently features approximately
5,000 consumer electronics products available to us on a non-exclusive basis
through a significant new vendor relationship with DBL Distributing, Inc., a
privately-held, wholesale distributor of consumer electronics based in
Scottsdale, Arizona. This site additionally offers, as does our www.ibizpda.com
website, approximately one-hundred and thirty accessories for PDAs that we
procure on a non-exclusive basis from a number of other vendors. Our product
offerings on www.GoMoGear.com currently range in complexity and price from
disposable batteries with a suggested retail price of $0.99 at the low end to
sophisticated color printers with a suggested retail price of $4,999.95 at the
high-end. Our current product offering on www.GoMoGear.com emphasizes,
consistent with our prior emphasis of PDA accessories, consumer electronics
products and related accessories that are portable or mobile, such as MP3
players, DVD players, digital cameras and GPS devices.

Acquisition of Synosphere - On January 20, 2004, we acquired all of the
outstanding membership interests in Synosphere, a Texas-based limited liability
development-stage company, pursuing the development of certain handheld
computing technologies, in exchange for 30.0 million shares of our common stock.
As the technological feasibility of each of the acquired technologies had yet to
be fully established as of the acquisition date, the aggregate $1.2 million
purchase price, based on the then prevailing market price of our common stock,
was immediately reflected within our results of operations for our fiscal 2004
first quarter ended January 31, 2004. Subsequent to the acquisition, we have
engaged in significant activities directed at further developing certain of the
acquired technologies.

                        OUR CRITICAL ACCOUNTING POLICIES

The following discussions of our consolidated results of operations and
financial condition, including our liquidity and capital resources, are based
upon our consolidated financial statements as included elsewhere in this filing.
The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires us to make certain estimates and assumptions that affect the reported
amounts and timing of revenue and expenses, the reported amounts and
classification of assets and liabilities, and disclosure of contingent assets
and liabilities. Our actual results have differed, and will likely continue to
differ, to some extent from our initial estimates and assumptions. We currently
believe that the following accounting policies entail making particularly
difficult, subjective or complex judgments of inherently uncertain matters that,
given any reasonably possible variance therein, would make such policies
particularly critical to a materially accurate portrayal of our historical or
reasonably foreseeable financial condition or results of operations:

o     Revenue Recognition for Product Sales and Related Allowances for Sales
      Returns and Rebates. In accordance with SEC Staff Accounting Bulletin No.
      101, "Revenue Recognition in Financial Statements," we recognize a product
      sale, including related shipping and handling income, and the cost of the
      sale, upon product shipment provided that all material risks and rewards
      of ownership are concurrently transferred from us to our customer,
      collection of the related receivable by us is reasonably assured, and we
      are able to reliably estimate appropriate allowances for probable sales
      returns and rebates based on our relevant historical experience and future
      expectations. We unconditionally accept product returns during the initial
      thirty days following the date of sale. We periodically offer promotional
      rebates of a limited duration, typically one week, on certain product
      sales, for which we outsource the processing and tracking of related
      customer submissions. The periodic provisions made by us to establish and
      maintain appropriate allowances for sales returns and rebates are charged
      to our results of operations via offsets to our gross product sales.
      Actual sales returns and rebates realized by us are charged against the
      related allowances with any favorable or unfavorable experience, as
      compared to our preceding estimates, having a corresponding impact on our
      results of operations.

o     Accounts Receivable and Related Allowance for Doubtful Accounts. In
      addition to corresponding reductions made for the allowances for sales
      returns and rebates, as discussed above, we further reduce our
      consolidated accounts receivable by an appropriate allowance for accounts
      where doubt exists in our opinion, based on known specifics or the passage
      of time, as to their ultimate


                                       10
<PAGE>

      collectability. We routinely offer our customers payment terms that range
      from 30 to 60 days. We do not access interest on, nor do we require any
      securing collateral of, past due customer balances. The periodic
      provisions made by us to establish and maintain an appropriate allowance
      for doubtful accounts are charged to our results of operations via
      increases to our selling, general and administrative expenses. Actual
      collection experience realized by us on previously designated doubtful
      accounts, including final determinations of uncollectability, is charged
      against the allowance for doubtful accounts with any favorable or
      unfavorable experience, as compared to our preceding estimates, having a
      corresponding impact on our results of operations.

o     Inventories. Our consolidated inventories, which consist solely of
      finished products available for sale, are stated at the lower of average
      cost or market, reduced by an appropriate allowance estimated by us for
      probable obsolescence. We record an allowance for obsolescence based on
      our historical experience and future expectations. The periodic provisions
      made by us to establish and maintain an appropriate allowance for
      obsolescence are charged to our results of operations via increases to our
      cost of goods sold. Actual disposition experience realized by us on
      previously designated obsolete inventory is charged against the allowance
      for obsolescence with any favorable or unfavorable experience, as compared
      to our preceding estimates, having a corresponding impact our its results
      of operations.

o     Impairment of Long-Lived Assets. We evaluate, on at least a quarterly
      basis, each of our long-lived assets for impairment by comparing our then
      estimate of its related future cash flows, on an undiscounted basis, to
      its net book value. If impairment is indicated, we reduce the net book
      value of the asset to an amount equal to our estimate of related future
      cash flows, on an appropriately discounted basis, with a corresponding
      impairment charge to our results of operations.

o     Convertible Debt Securities. We have periodically issued debentures that
      have non-detachable conversion features. In those instances where the
      stated conversion price reflects a discount from the then prevailing
      market price for our common stock, we make, at the date of the debenture
      issuance, an estimate as to the fair value of this beneficial conversion
      feature. The value assigned to the beneficial conversion feature is then
      immediately recognized in our results of operations via an
      interest/financing charge with a corresponding incremental credit to
      additional paid-in capital.

o     Non-Cash Equity Issuances. We periodically issue shares of our common
      stock in exchange for, or in settlement of, services. Our management
      values the shares issued in such transactions at either the then market
      price of our common stock, after taking into consideration factors such as
      the volume of shares issued or trading restrictions, or the value of the
      services received, whichever is more readily determinable. We also issue
      options, at a discount from market, for services. Our management values
      such options using Black Scholes.

                     OUR CONSOLIDATED RESULTS OF OPERATIONS

Our consolidated total revenues for the year ended October 31, 2004 ("fiscal
2004 year end") were $368,650, a decrease of $116,732, or 24%, as compared to
$485,382 for the year ended October 31, 2003 ("fiscal 2003 year end"). Our
product sales constituted 94% of our consolidated total revenues for the fiscal
year end as compared to 93% of our consolidated total revenues for the fiscal
year end, respectively. Our maintenance revenues, which constituted the balance
of our consolidated total revenues for each respective fiscal period, will
continue to decrease in future fiscal periods as we no longer actively market or
pursue maintenance services.

Our product sales were $347,544 for the fiscal 2004 year end, a decrease of
$106,253, or 23%, as compared to $453,797 in product sales for the fiscal 2003
year end. We substantially attribute the preceding decrease to sales of our
pocketRADIOs, which we began shipping to customers in late October 2003. The
pocketRADIOs accounted for approximately 38% of our product sales in fiscal 2004
year end and approximately 53% of our product sales in fiscal 2003 year end.
Sales of our Travel Kits represented 10% ($37,045) of our sales in the fiscal
2004 year end and 16%($78,019) of our sales in the fiscal 2003 year end.
Although to a significantly lesser extent, we also realized incremental decrease
in product sales from our XELA Keyboard, which we began shipping to customers in
March 2003. Sale of our XELA Keyboard accounted for approximately 6% and 8% of
our sales in fiscal 2004 and 2003 year end, respectively. Offsetting these
decreases was an increase in sales of our KeySync Keyboard. Sales from our
KeySync Keyboards accounted for approximately 9% ($32,942) during the fiscal
2004 year end while they only accounted for approximately 4% ($18,821) of our
sales during the fiscal 2003 year end. Variances in the average prices realized
by us on products in existence during both fiscal periods did not have a
significant impact, favorably or unfavorably, on the overall net increase in our
product sales for the fiscal years ended October 31, 2004 and 2003.

We incurred consolidated gross losses of $335,812 for the fiscal year end and
consolidated gross loss of $33,621 for the fiscal 2003 year end.. In turn, these
consolidated gross losses equated to negative gross margins of 91% for the
fiscal 2004 year end and a negative gross margin of 7% for the fiscal year end.
Our fiscal 2004 consolidated gross loss and negative gross margin were
attributable to gross losses of $324,925, and a resulting negative gross margin
of 93%, on our product sales during the fiscal 2004 year end. Our fiscal 2003
year end consolidated gross loss and negative gross margin was attributable to
gross loss of $43,478 and a resulting negative gross margin of 10%. We
principally attribute the preceding gross losses and negative gross margins on
our product sales to our inability, given our continuing reduction of product
sales, to leverage our allocable direct labor ($179,505 or 25% of Cost of
Revenues in the fiscal 2004 year end). In addition, during 2004 we experienced
an increase cost of revenues due to the write off of obsolete inventory
($139,214, or 20% of Costs of Revenues).

Our consolidated total operating expenses were $13,097,485 for the fiscal 2004
year end, an increase of $10,312,943, or 370%, from the $2,784,542 incurred
during the fiscal 2003 year end. As further detailed below, this overall
increase in our operating expenses primarily was attributable to non-cash
charges incurred for stock-based officer bonuses and the write-down of certain
intellectual property rights and molds.

Our consolidated SG&A expenses were $3,501,397 for the fiscal 2004 year, an
increase of $1,887,142, or 117%, from the $1,614,255 incurred during the fiscal
2003 year. We incurred a 85% increase in our payroll costs from the fiscal year
ended 2003 of $590,505 to $1,287,543. This is a direct result of the inclusion
of Synosphere's operations, including $672,500 (paid in stock) in sign-on and
contractual performance bonuses for the key officers of Synosphere. We also
experienced substantial increases in our consulting and legal fees ($1,192,226
and $281,183 for the fiscal years ended 2004 and 2003, respectively) as we
continue to pay consultants and attorneys with common stock in order to reduce
cash outlays. See discussion below where we have accounted for Consulting Fess
paid with stock options as a separate line item in our Consolidated Statement of
Losses included in this filing. The expenses for consultants and attorneys have
increased as a result of our efforts to expand our business and search for new
opportunities. Our accounting and auditing fees increased due to the additional
work to meet SEC filing requirements and respond to SEC comment letters on our
filings in 2004 ($251,538 and $179,390 for the fiscal years 2004 and 2003,
respectively). We have also accrued $100,000 as a potential penalty for our
failure to fulfill a sales contract in our fiscal quarter ended April 30, 2004.


                                       11
<PAGE>

Our consolidated selling, general and administrative ("SG&A") expenses were
$1,614,255 for fiscal 2003, an increase of $212,192, or 15.1%, from the
$1,402,063 incurred during fiscal 2002.Despite the relatively modest net change
in our SG&A expenses, their composition varied significantly. We incurred
substantial dollar and percentage increases in our accounting and auditing fees
during fiscal 2003 as a result of the proposed spin-off of our iBIZ, Inc.
subsidiary, as previously discussed, and, to a lesser extent, the increased
outsourcing of our accounting and financial functions and the required
implementation of certain provisions of the Sarbanes-Oxley Act of 2002. To a
significantly lesser dollar extent, we incurred a substantial percentage
increase in our depreciation and amortization expenses as a result of our fiscal
2002 purchases of intellectual property rights and property and equipment, in
our advertsing expenses as a result of marketing activities associated with the
introductions of our pocketRADIOs and XELA Keyboards, and in our sales expenses
as a result of our transitioning to incrementally more expensive, yet more
variable in nature, external commissioned field sales representatives.
Substantially offsetting the preceding were significant dollar and percentage
expense decreases realized primarily as a result of the non-recurrence of
significant fiscal 2002 charges associated with our then outsourcing of billing
and collection functions and various legal consultations made in connection with
certain business ventures then under consideration, certain proposals to settle
then outstanding debt obligations, and the contemplated changes in certain
businesses. As a result of ongoing working capital constraints, our two officers
continued to receive during fiscal 2003 only sporadic payments of salaries which
often were in amounts less that that stipulated for in their respective
employment contracts. Additionally, our other employees periodically experienced
delays in the payment of their salaries or wages due to cash shortfalls. In
recognition of the resulting personal hardships that were imposed and in an
effort to retain these remaining critical employees, particularly given of
minimal staffing, we deemed it critical to award retention bonuses during fiscal
2003. As the retention bonuses paid to our two officers principally took the
form of common stock issuances, $1,045,287, or 82.1%, of the overall $1,273,189
bonus compensation charge to our fiscal 2003 results of operations was non-cash
in nature. We similarly awarded $114,713 in stock-based retention bonuses to our
two officers during fiscal 2002. During our fiscal 2003 fourth quarter, we
recognized a $125,000 impairment charge related to the write-down of molds and
intellectual property rights underlying our XELA Keyboard which we acquired in
July 2002. This impairment was based on our then downwardly revised estimate of
the anticipated cash flows to be derived from future sales of our XELA Keyboard
as a result of lower than anticipated sales. We incurred no such impairment
charges during fiscal 2002.

Our consolidated research and development ("R&D") expenses were $597,121 for the
fiscal 2004 year. These research and development costs are directly related to
the acquisition of Synosphere and their continuing efforts to develop new
products for introduction in the PDA marketplace. As noted in Note 14 to the
October 31, 2004 Condensed Consolidated Financial Statements included in this
filing, we have expensed the cost of our acquisition of Synosphere, $1,200,000,
as Acquired Research and Development costs. In light of our continuing working
capital constraints, we currently do not anticipate performing any product
research and development activities during fiscal 2005. As such, we will remain
materially dependent upon procuring innovative and competitive products from
external vendors. We incurred no research and development expenses during fiscal
2003.

Our consolidated asset impairment expenses were $652,281 for the fiscal 2004
year, an increase of 422% or $527,281 from the $125,000 asset impairment
experienced in fiscal 2003. During fiscal 2004, we placed an initial purchase
order with Enterprise AG, ("Enterprise"), for a new virtual keyboard product and
remitted a required $400,000 deposit. When Enterprise subsequently failed to
deliver such keyboards, we filed a lawsuit in Israel against Enterprise for
breach of contract and demanding that the deposit be immediately returned.
However, we have uncertainties regarding our ability to recover this deposit and
deemed the asset as impaired and wrote-off the $400,000 balance in its entirety.
During fiscal 2004 we also entered into a three-year agreement with Virtual
Devices, Inc., ("VDI"), pursuant to which we would be licensed to use certain
patented technologies of VDI applicable to handheld computing devices. We
submitted $200,000 of the required $300,000 payment to VDI in July 2004. Due to
cash constraints we have been unable to fulfill the cash requirements of the
agreement and continue with this agreement. We deemed the licensed intellectual
property rights to be impaired and wrote-off the $200,000 unamortized balance in
its entirety. During fiscal 2004 Ttools, Inc., the licensor and vendor of our
XELA keyboard product filed a lawsuit against us for breach of contract. As a
result we deemed the underlying tooling and intellectual property rights as
impaired and wrote-off the then unamortized balance of $52,281 in its entirety.
Previously, during our fiscal 2003 year, we downwardly revised our estimated
cash flows from the XELA keyboard product and recognized a $125,000 impairment
charge to write-down the underlying tooling and intellectual property rights.

During fiscal 2004, we granted stock options to individuals in exchange for the
following consulting services. We valued the options granted using the
Black-Scholes stock option pricing model. The total fair value of the options
granted during fiscal 2004 was $6,969,186. Based on the uncertainty of any
future value of these agreements, we expensed the value of the options in fiscal
2004.

November 2003 - Options valued at $260,000 to purchase 200 million shares of
common stock (at a 40% discount from market, as defined) were issued to D. Scott
Elliott for general business and financial consulting services to assist us with
our expansion plans and entry into other markets.

December 2003 - Options valued at $60,000 to purchase 50 million shares of
common stock (at a 15% discount form market, as defined) were issued to Jeffrey
Firestone for providing legal counsel on International issues in mergers and
acquisitions.

January 2004 - Options valued at $4,450,000 to purchase 100 million shares of
common stock (at a 50% discount from market, as defined) were issued to Pangea
Investments GmbH for consulting and acquisition services in Europe and Israel.
Sam Elimalech, an officer of Enterprise Capital AG, is also a member of Pangea
Investments GmbH.


                                       12
<PAGE>

March 2004 - Options valued at $1,616,186 to purchase 151,045,455 shares of
common stock (at a 20% discount from market, as defined) to D. Scott Elliott for
general business and financial consulting services to assist us with our
expansion plans and entry into other markets.

May 2004 - Options valued at $492,000 to purchase 40,000,000 shares of common
stock (at a 7.5% discount from market, as defined) to Steven Green for financial
management, business management and business optimization through mergers and
acquisitions. These consulting services are offered for a term of three years.
Options to purchase 35,000,000 shares were exercised in May 2004 resulting in
the receipt of approximately $345,000. The remaining 5,000,000 shares were
deposited into an escrow account (see Common Stock Held in Escrow above).

May 2004 - Options valued at $91,000 to purchase 10,000,000 shares of common
stock (at a 15% discount from market, as defined) to Jeffrey Firestone for
providing legal counsel on International issues in mergers and acquisitions.
Options to purchase 10,000,000 shares were exercised in May 2004 resulting in
the receipt of approximately $128,000.

During fiscal 2004, we wrote-off $150,000 of a note receivable that we deemed
uncollectible. The original note arose when options to purchase 100 million
shares of common stock (at a 50% discount from market, as defined) were issued
to Pangea Investments GmbH (parent company of Enterprise Capital AG) on January
28, 2004 for consulting and acquisition services in Europe and Israel. Pursuant
to the option agreement, we transferred 100 million shares of our common stock
into an escrow account pending payment of the aggregate $1.5 million exercise
price and note receivable. Through June 4, 2004, 15 million shares were issued
upon receipt of $74,990 and the application of $175,000 to the Deposit for the
Virtual Keyboard product. Subsequently, on June 23, 2004, we cancelled the above
stock option in light of non-performance of the required consulting services and
requested that the escrow agent return the above common shares. We then recorded
a $150,000 expense based on our estimated probable loss relating to the share
recovery.

Our resulting losses from operations for the fiscal year ended 2004 was
$13,433,297. The preceding compares to losses from operations for the fiscal
year ended 2003 of $2,818,163, respectively.

Our non-operating other income primarily consist of gains on settlements of
debenture and vendor obligations and miscellaneous other income. During the
fiscal 2004 year we realized non-cash aggregate gains of $232,583 on settlements
of debenture obligations. The balance of our non-operating income and expenses
items, including interest income, were inconsequential to our consolidated
results of operations. Our non-operating expenses primarily consist of interest
expense, including non-cash charges attributable to the non-detachable
beneficial conversion feature of newly issued debentures. Our interest expense
was $211,328 for the fiscal 2004 year, a decrease of $1,521,265, or 88%, from
the $1,732,593 incurred during the fiscal 2003 year. This decrease is due to
$1,379,077 of beneficial conversion features of debentures issued during the
fiscal 2003 year. These charges were not repeated during fiscal 2004.

Primarily as a result of the foregoing, we incurred a net loss of $13,389,175
($0.01) per basic and diluted share) in fiscal 2004 as compared to a net loss of
$4,462,182 ($0.02 per basic and diluted share) in fiscal 2003.

Our future ability to achieve profitability in any given future fiscal period
remains highly contingent upon us realizing significantly increased product
sales sufficient to leverage our non-variable, likely to be recurring expenses.
For instance, our ability to achieve gross profits and positive gross margins in
any given future fiscal period remains highly contingent upon us being able to
leverage through significant incremental product sales the non-variable direct
labor and overhead components of our costs of goods sold. Similarly, our ability
to realize income from operations is further dependent upon our ability to
additionally leverage through significant incremental sales our SG&A expenses,
the majority of which currently are non-variable and recurring in nature. To the
extent that we incur other less frequent or non-recurring operating expenses, as
in fiscal 2003, we will require additional incremental product sales in order to
leverage them. Lastly, our ability to realize net income and net income per
common share remains highly contingent upon us being able to leverage through
incremental product sales any significant net non-operating expenses, such as
charges for the beneficial conversion features of any issued debentures and our
interest expense on any outstanding debt. Correspondingly, our ability to
realize significant incremental product sales in any given future fiscal period
remains highly contingent upon us obtaining significant equity infusions and/or
long-term debt financing sufficient to fund the increased and sustained campaign
of marketing and advertising activities we believe necessary to build broad
consumer awareness of, and demand for, our PDA accessories. Even if we were to
be successful in procuring such funding, there can be no assurance that we will
be successful in our marketing and advertising efforts, and that we will
subsequently realize the significant incremental product sales we require.

                OUR CONSOLIDATED LIQUIDITY AND CAPITAL RESOURCES

OUR OVERVIEW

During the course of transitioning our Company over the last several years from
our discontinued computer service businesses to our current business of
marketing and distributing various accessories primarily intended for use with
PDAs, we have incurred substantial operating and net losses, as well as negative
operating cash flows. As of our fiscal year ended October 31, 2004, our working
capital deficit was $3,423,584 and our stockholders' deficit was $3,373,445.
Such reflects a decrease from our preceding fiscal year ended October 31, 2003
when our working capital deficit was $6,093,514 and our stockholders' deficit
was $6,716,685. We had a nominal unrestricted cash balance of only $88 at
October 31, 2004, as compared to $2,140 at October 31, 2003.


                                       13
<PAGE>

We had outstanding convertible debentures with an aggregate principal face
amount of $863,675 at October 31, 2004, of which $863,675 is currently due and
payable. During December 2004, the remaining debentures balances and accrued
interest thereon were converted into common stock and, accordingly, are
considered paid in full.

OUR CONSOLIDATED CASH FLOWS

Our operating activities utilized $2,476,216 in cash during the fiscal 2004 year
end, an increase of $1,692,570, or 216%, from the $783,646 in cash utilized
during the fiscal 2003 year end. Our increased utilization substantially
reflects a $7,501,020, or 301%, net increase in our non-cash charges, net, being
substantially offset by the $8,926,993 increase in our net loss. The most
significant reductions in our non-cash charges were a $1,379,077 reduction in
the charges associated with the beneficial conversion features of issued
convertible debentures in 2003. This reduction is offset by increases of
$1,200,000, $1,464,268 and $6,969,186 in our non-cash acquisition of in-process
research and development and services rendered in exchange for common stock and
options, respectively. Partially offsetting these non-cash charge items were a
$34,905 decrease in accounts receivable, a $101,672 increase in inventories, a
$94,211 decrease in prepaid expenses and an $893,244 increase in accounts
payable. Based on the exercise of stock options in the 2004 period, we were able
to pay certain accounts payable and accrued liabilities in cash and settle
approximately $1 million through the issuance of common stock, but incurred a
significant increase in liabilities related to our operations of Synosphere and
ongoing administrative and professional fees associated with our recurring
operations in order to continue our operations. Cash flows from operations in
2003 reflect the increase in our accounts payable and accrued liabilities of
$1,363,989 due to our decreased cash flows experience continuing from late 2002
into 2003.

Our investing activities consumed $218,883 during fiscal 2004 to fund the
acquisition of Synoshere in the amount of $18,833 and the investment in a
License Agreement with Virtual Devices, $200,000. We had no investing activities
during the preceding fiscal 2003.

Our financing activities provided $2,692,997 and $784,838 in cash during fiscal
2004 and 2003, respectively. Fiscal 2003 reflects cash inflows primarily from
our issuances of common stock as options were exercised. We also experienced
cash inflows from a bank overdraft and the proceeds from the issuances of notes
payable and advances from our officers. These cash inflows in fiscal 2004 were
offset by the principal payments on notes payable. Fiscal 2003 reflects cash
inflows primarily from our issuances of convertible debentures, and, to a
significantly lesser extent, the incurring of a loan and the issuance of common
stock. The preceding cash inflows were slightly offset by the cash outflows
related to principal repayments made on outstanding notes payable and the
collateralization of a letter of credit.

As a result of the foregoing, our unrestricted cash decreased by $2,052 to $88
at October 31, 2004, as compared with $2,140 at October 31, 2003.

OUR OFF-BALANCE SHEET LIABILITIES AND COMMITMENTS

Our off-balance sheet liabilities principally consist of lease payment
obligations incurred under two operating leases, which are required to be
excluded from our consolidated balance sheet by accounting principles generally
accepted in the United States of America. By far, our most significant operating
leases pertains to our corporate facilities. Our other operating lease pertains
to office equipment. The three operating leases are noncancellable.. We incurred
aggregate rent expense under operating leases of $68,095 and $43,625 during
fiscal years 2004 and 2003, respectively.

The future aggregate minimum lease payments under operating lease agreements in
existence at October 31, 2004 are as follows:

                        FISCAL YEARS ENDING OCTOBER 31,

2005......................................   $   70,000
2006......................................       33,200
2007......................................          700
2008......................................           --
2009......................................           --
                                             ----------
Total minimum operating lease payments....   $  103,900
                                             ==========


We additionally have outstanding commitments related to employment agreements
with Kenneth Schilling and Mark Perkins which became effective July 1, 2001 and
remain in force through June 30, 2004. Mr. Schilling's contract provides for an
annual salary of $150,000, quarterly performance bonuses equal to one percent of
our total revenues, and the granting of an option allowing for his subsequent
purchase of 300,000 shares of our common stock at $0.20 per share. Mr. Perkin's
contract provides for an annual salary of $125,000, quarterly performance
bonuses equal to one percent of our total revenues, and the granting of an
option allowing for his subsequent purchase of 120,000 shares of our common
stock at $0.20 per share. Each stock option vested immediately and is
exercisable for a period of ten years. In the event of their voluntary
resignation, as defined, the officer shall be entitled to six month's salary. In
the event of their involuntary termination by us without cause, as defined, the
officer shall be entitled to one year's salary. In the event of a change in our
control, each officer shall be entitled to a lump sum payment equal to three
year's annual salary.


                                       14
<PAGE>

Furthermore, we recently assumed additional commitments in connection with our
January 20, 2004 acquisition of Synosphere as we concurrently entered into
two-year employment agreements with Bryan Scott and Ramon Pereles, its President
and Chief Marketing Officer, respectively. Pursuant to these agreements, Mssrs.
Scott and Pereles are to receive annual base salaries of $112,000 and $102,000,
respectively. Mssrs. Scott and Pereles are each to additionally receive
retention bonuses of 2,500,000 shares of our common stock. Mssrs. Scott and
Pereles are also each to receive $500,000 earn-out bonuses to be satisfied in
eight successive quarterly issuances of shares of our common stock equal to
$62,500 based upon the then market price of our common stock. A "golden
parachute" clause shall also be put in place such that if either of the employee
agreements are terminated by us or any successor that the above consideration is
payable in full as of the dates of their respective terminations.

OUR PLANNED CAPITAL EXPENDITURES

We had no significant planned capital expenditures, budgeted or otherwise, as of
October 31, 2004.

OUR SUBSEQUENT EVENTS

On December 7, 2004, we reached an agreement with the remaining debenture
holders and converted the outstanding principal balance of $863,675 and accrued
interest of $254,900 into 400,000,000 shares of our common stock. As a result of
this agreement, we will record a total of $390,086 benefit from the settlement
of the debt during the first quarter of fiscal 2005.

During December 2004, Pangea Investments GmbH returned 75 million shares to us
that were originally issued to an escrow account in connection with the original
option to purchase 100 million shares for services issued in January 2004 (see
Note 13).

On February 18, 2005, we closed a transaction pursuant to a Subscription
Agreement, dated as of February 18, 2005, with an accredited investor pursuant
to which the accredited investor lent an aggregate principal amount of $200,000
to us in exchange for (i) 8% promissory note in that aggregate principal amount,
and (ii) warrants to purchase shares of our common stock equal to one warrant
for each share of its common stock which would be issued on the closing date of
the loan assuming the complete conversion of the promissory note. An additional
$500,000 has been committed, subject to the filing of a registration statement.

Additional stock issuances after October 31, 2004:

o     2,566,667 shares of common stock where issued to an individual in exchange
      for $7,000 of accounts payable.
o     75,000,000 shares of common stock were issued to an individual under a
      private placement. We received approximately $90,000 in cash.
o     75,000,000 shares of common stock were issued to an individual under the
      exercise of an option. We received approximately $293,000 in cash.
o     2,806,400 shares of common stock were issued in exchange for $14,032 of
      accrued interest.
o     44,744,275 shares of common stock were issued to an individual for legal
      services rendered; value $25,372.
o     45,749,741 shares of common stock were issued to an individual for legal
      services rendered; value $110,600.
o     1,087,193 shares of common stock were issued to an individual for expenses
      incurred on behalf of the Company; value $2,500.
o     113,786,170 shares of common stock were issued to two officers of
      Synosphere for the quarterly bonuses called for in their employment
      contracts; value $250,000.

POTENTIAL SIGNIFICANT DILUTION TO OUR EXISTING OR PROSPECTIVE SHAREHOLDERS

It should be noted by our existing shareholders, as well as potential
prospective shareholders, that you may experience significant dilution in your
respective equity interest and related voting rights from any subsequent
conversions of our remaining outstanding debentures by their holders, any
subsequent exercises of our outstanding stock purchase warrants and options by
their holders, future issuances by us of additional convertible debentures or
common shares, or any future grants by us of additional stock purchase warrants
and/or options. Your exposure to such dilution will increase to the extent that
the market price of our common stock declines below the price at which you
purchased, or converted into, shares of our common stock and we issue or grant
equity or equity-related instruments at the then lower market prices. The
liklihood that the market price of our common stock will decline, and that such
a decline will be significant, will further increase to the extent that any of
our existing shareholders elect to sell large numbers of our shares into the
marketplace, particularly during a short period of time given the limited
trading in our common shares. Given that we remain in need of significant
additional debt and/or equity financing, as previously discussed, and the
historical volatility in the market price of our common stock, our existing and
potential investors must give due consideration to the potential of significant
dilution to their respective equity interest and related voting rights.

OUR OTHER MATTERS

Seasonal and Inflationary Influences

We expect, absent materially adverse economic or counter-acting events, that our
fiscal first quarter ending January 31 will continue to benefit from increased
orders for the holiday shopping season and that our fiscal fourth quarter ending
October 31 will continue to benefit from increased orders for the back-to-school


                                       15
<PAGE>

shopping season. Conversely, we expect that our fiscal second and third quarters
ending April 30 and July 31, respectively, will continue to comparatively
experience softer orders as retailers seek to sell-through any surplus stock
remaining from the aforementioned shopping seasons and return to more normal
inventory levels.

To date, we have not been materially impacted by inflationary influences.

Quantitative and Qualitative Disclosures About Market Risk

We currently are not materially exposed to financial market risks from changes
in short or long-term interest rates as substantially all of our financial
instruments, and most notably our remaining outstanding debentures, have fixed
rates of interest. However, should we be successful in procuring the significant
additional funding we currently seek and if such funding were to be
substantially in the form of debt with variable rates of interest, then our
exposure to these market risks would increase, possibly significantly.

We currently are not materially exposed to currency market risks as
substantially all of our business dealings, and most notably our purchases of
inventory from overseas vendors, are denominated in U.S. dollars. However,
should we in the future enter into significant contracts denominated in non-U.S.
dollar currencies, then our exposure to these currency market risks would
increase, possibly significantly.

We have not used, and currently do not contemplate using, any derivative
financial instruments.

Our Legal Contingencies

We as a company, including our subsidiary, are periodically involved in
litigation and administrative proceedings primarily arising in the normal course
of our business. In our opinion, our gross liability, if any, and without any
consideration given to the availability of indemnification or insurance
coverage, under any pending or existing incidental litigation or administrative
proceedings would not materially affect our financial position, results of
operations or cash flows over and beyond any acknowledged liability.

We remain liable to the U.S. Internal Revenue Service ("IRS") for approximately
$65,000 in unpaid payroll taxes, and subsequently assessed interest, for certain
periods through the first quarter of 1999. We have continued to accrue for this
liability in our consolidated financial statements. It is our intention to seek
a reduced settlement of this liability with the IRS if and when we have surplus
working capital allowing us to timely honor any such settlement.

In response to a personal lawsuit initiated by Kenneth W. Schilling, our
Chairman, Chief Executive Officer and President, against Douglas A. Dragoo and
Elizabeth W. Dragoo ("Dragoos") asserting breach of contract in connection with
a commercial office building jointly owned by Mr. Schilling and the Dragoos and
in which we were then tenants, the Dragoos counterclaimed on August 5, 2003 in
the Superior Court of the State of Arizona, County of Maricopa with a lawsuit
against Mr. Schilling and us alleging breach of contract, fraud, negligent
misrepresentation, and seeking compensatory and punitive damages as well as
legal fees. We intend to vigorously contest the counterclaim and do not believe
that we will incur any material liability in connection therewith.

Recently Issued Accounting Standards With Pending Adoptions

There currently are no recently issued accounting standards with pending
adoptions that have any applicability to us.

Our Risks and Uncertainties

We Have A History Of Losses And Anticipate Future Losses Which Will Compel Us To
Seek Additional Capital.

For the fiscal year ended October 31, 2004, we sustained a loss of approximately
$13.3 million; for our fiscal year ended October 31, 2003, we sustained a loss
of approximately $4.5 million and for the fiscal year ended October 31, 2002, we
sustained a loss of approximately $6.5 million. Future losses are anticipated to
occur. We continue to have insufficient cash flow to grow operations and we
cannot assure you that we will be successful in reaching or maintaining
profitable operations.

We Have A Limited Product Range Which Must Be Expanded In Order To Effectively
Compete.

To effectively compete in our industry, we need to continue to expand our
business and generate greater revenues so that we have the resources to timely
develop new products. We must continue to market our products and services
through our direct sales force and expand our e-commerce distribution channels.
At the present time, we have no other products in the development process. We
cannot assure you that we will be able to grow sufficiently to provide the range
and quality of products and services required to compete.

We Have Few Proprietary Rights, The Lack Of Which May Make It Easier For Our
Competitors To Compete Against Us.

Our products, principal and otherwise, are not covered by any exclusive
proprietary rights. While we have no current knowledge of any of our principal
products being marketed directly by our vendors or indirectly by others, there
can be no assurance as to the prospective absence of significant competition.

Our Continuing Inability To Perform Meaningful Research And Development


                                       16
<PAGE>

Activities Directed At Ultimately Marketing Our Own Patented Proprietary
Products Makes Us Highly Susceptible To Competition.

Given our currently limited financial and other resources, we currently perform
no research and development activities. Historically, we primarily have relied
upon acquiring or licensing technologies and products from unrelated
third-parties. While we have periodically performed limited in-house research
and development in the past, we incurred approximately 597,000 in research and
development from our Synosphere subsidiary. We did not perform any in-house
research and development during the fiscal years ended October 31, 2003 and
2002, as reported herein. Our continuing inability to perform meaningful
research and development activities directed at ultimately marketing our own
patented proprietary products makes us highly susceptible to competition.

This Report Contains Forward-Looking Statements Within the Meaning of Section
27A of the Securities Act and Section 21E of the Securities Exchange Act of
1934, as amended.

Any statements about our expectations, beliefs, plans, objectives, assumptions
or future events or performance are not historical facts and may be
forward-looking. These statements are often, but not always, made through the
use of words or phrases such as "anticipate," "estimate," "plans," "projects,"
"continuing," "ongoing," "expects," "management believes," "we believe," "we
intend" and similar words or phrases. Accordingly, these statements involve
estimates, assumptions and uncertainties, which could cause actual results to
differ materially from those expressed in them. Any forward-looking statements
are qualified in their entirety by reference to the "Risk Factors" contained on
pages 2 through 8 of this Report.

Because the factors discussed in this Report could cause actual results or
outcomes to differ materially from those expressed in any forward-looking
statements made by us or on behalf of our company, you should not place undue
reliance on any such forward-looking statements. Further, any forward-looking
statement speaks only as of the date on which it is made, and we undertake no
obligation to update any forward-looking statement or statements to reflect
events or circumstances after the date on which such statement is made or to
reflect the occurrence of unanticipated events. New factors emerge from time to
time, and it is not possible for us to predict which will arise. In addition, we
cannot assess the impact of each factor on our business or the extent to which
any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward- looking statements.


                                       17
<PAGE>

ITEM 7. FINANCIAL STATEMENTS

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                OCTOBER 31, 2004
                                OCTOBER 31, 2003



iBIZ Technology Corp. and Subsidiaries                                    Page
                                                                         ------

Report of Independent Certified Public Accountants....................      19
Consolidated Balance Sheet............................................   F - 1
Consolidated Statements of Loss.......................................   F - 2
Consolidated Statements of Changes in Stockholders' Deficit...........   F - 4
Consolidated Statements of Cash Flows.................................   F - 6
Notes to Consolidated Financial Statements............................   F - 8


                                       18
<PAGE>

INDEPENDENT REGISTERED AUDITORS' REPORT

To the Board of Directors and Stockholders
  of iBIZ Technology, Inc.:

We have audited the accompanying consolidated balance sheet of iBIZ Technology,
Inc. (the "Company") as of October 31, 2004 and the related consolidated
statements of operations, stockholders' deficit and cash flows for the two years
then ended. These consolidated financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amount s 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 presentation of the financial statements. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the accompanying consolidated financial statements present
fairly, in all material respects, the financial position of the Company at
October 31, 2004 and the results of its operations and its cash flows for the
two years then ended in conformity with accounting principles generally accepted
in the United States.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has incurred significant operating losses and
has negative working capital. These conditions raise substantial doubt about its
ability to continue as a going concern. Management's plans regarding these
matters are described in Notes 2 and 23. The consolidated financial statements
do not include any adjustments that might result from the outcome of these
uncertainties.

/s/ Farber & Hass LLP
January 21, 2005, except as to
Note 23 for which the date is
March 10, 2005
Camarillo, California


                                       19
<PAGE>


                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET

                                     ASSETS

<TABLE>
<CAPTION>
                                                               October 31,
                                                                  2004
                                                              ------------
<S>                                                           <C>
Current Assets:
   Cash                                                       $         88
   Inventories, net                                                 34,400
   Prepaid expenses                                                 86,206
                                                              ------------

Total Current Assets                                               120,694

Property and equipment, net                                         42,758
Deposits                                                             7,381
                                                              ------------

Total Assets                                                  $    170,833
                                                              ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
   Bank overdraft                                             $     10,420
   Accounts payable                                              1,095,956
   Accrued liabilities                                           1,401,227
   Notes payable                                                    50,000
   Advances from officers                                          123,000
   Current maturities of convertible debentures                    863,675
                                                              ------------

Total Current Liabilities                                        3,544,278
                                                              ------------

Commitments and Contingencies

Stockholders' Deficit:
   Preferred stock, $.001 par value; 50,000,000 shares
       authorized; none issued or outstanding                           --
   Common stock, $.001 par value; 5,000,000,000 shares
       authorized; issued and outstanding 3,030,370,376          3,030,370
   Common stock to be issued, 495,750 shares                        19,830
   Additional paid-in capital                                   32,888,872
   Less: note receivable                                        (1,125,010)
   Accumulated deficit                                         (38,187,507)
                                                              ------------

Total Stockholders' Deficit                                     (3,373,445)
                                                              ------------

Total Liabilities and Stockholders' Deficit                   $    170,833
                                                              ============
</TABLE>

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


                                      F-1
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF LOSS


<TABLE>
<CAPTION>
                                                              Fiscal Year    Fiscal Year
                                                                 Ended          Ended
                                                              October 31,    October 31,
                                                                 2004           2003
                                                             ------------    ------------
<S>                                                          <C>             <C>
Revenues:
    Net product sales                                        $    347,544    $    453,797
    Maintenance services                                           21,106          31,585
                                                             ------------    ------------

Total revenues                                                    368,650         485,382
                                                             ------------    ------------

Cost of revenues:
    Cost of product sales                                         672,469         497,275
    Cost of maintenance services                                   31,993          21,728
                                                             ------------    ------------

Total cost of revenues                                            704,462         519,003
                                                             ------------    ------------

Gross loss                                                       (335,812)        (33,621)
                                                             ------------    ------------

Operating expenses:
    Selling, general and administrative expenses,
          excluding those items separately disclosed below      3,401,397       1,614,255
    Research and development                                      597,121              --
    Acquired in process research and development                1,200,000              --
    Asset impairments                                             652,281         125,000
    Consulting fees paid in stock options                       6,969,186              --
    Loss on note receivable                                       150,000              --
    Dispute settlements                                           127,500              --
    Officer bonuses                                                    --       1,045,287
                                                             ------------    ------------

Total operating expenses                                       13,097,485       2,784,542
                                                             ------------    ------------

Loss from operations                                          (13,433,297)     (2,818,163)
                                                             ------------    ------------

Non-operating income (expenses):
    Interest and miscellaneous income                             255,500          88,624
    Interest and financing expenses                              (211,328)     (1,732,593)
                                                             ------------    ------------

Total non-operating income (expense), net                          44,172      (1,643,969)
                                                             ------------    ------------

Loss before provision from income taxes                       (13,389,125)     (4,462,132)
Provision for income taxes                                             50              50
                                                             ------------    ------------

Net loss                                                     $(13,389,175)   $ (4,462,182)
                                                             ============    ============
</TABLE>

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


                                      F-2
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF LOSS (continued)



<TABLE>
<CAPTION>
                                                  Fiscal Year        Fiscal Year
                                                    Ended               Ended
                                                  October 31,        October 31,
                                                     2004                2003
                                                ----------------   ----------------
<S>                                             <C>                <C>
Net loss per common share - basic and diluted   $          (0.01)  $          (0.02)
                                                ================   ================

Weighted average number of common shares
   outstanding - basic and diluted                 2,470,566,495        231,553,359
                                                ================   ================
</TABLE>

   Theaccompanying notes are an integral part of these consolidated financial
                                   statements.


                                      F-3
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT


<TABLE>
<CAPTION>
                                                                                          Common Stock
                                                        Common Stock                      To Be Issued
                                              -------------------------------   --------------------------------
                                                  Shares           Amount           Shares            Amount
                                              --------------   --------------   --------------    --------------
<S>                                           <C>              <C>              <C>               <C>
Balances as of October 31, 2002                   45,000,097   $       45,000               --    $           --
Common stock issued for cash                      36,691,176           36,691               --                --
Common stock issued for services
  received and in settlement of accounts
  payable                                         44,161,764           44,162               --                --
Common stock issued to officers and
  other employees as retention bonuses           253,063,228          253,063               --                --
Beneficial conversion feature of debentures
  issued                                                  --               --               --                --
Common stock issued upon conversion of
  debentures and accrued interest, net of
  related issuance costs                         270,977,456          270,978               --                --
Net loss                                                  --               --               --                --
                                              --------------   --------------   --------------    --------------

Balance, October 31, 2003                        649,893,721   $      649,894               --    $           --
Common stock issued upon
  exercise of options                            309,969,608          309,970               --                --
Common stock issued for services received
  and in settlement of liabilities               139,679,256          139,679               --                --
Common stock issued to officers and other
  employees as bonuses and wages                 418,576,051          418,577               --                --
Common stock issued upon conversion
  of debentures and accrued interest, net
  of related issuance costs                    1,479,530,624        1,479,530               --                --
Acquisition of Synosphere, LLC                    29,033,417           29,033          966,583            38,663
Cash payments to Synosphere, LLC
  members in lieu of stock                                --               --         (470,833)          (18,833)
Additional stock payments to
  Synosphere LLC members                           3,687,699            3,687               --                --
Value assigned to services received in
  exchange for options                                    --               --               --                --
     Net loss                                             --               --               --                --
                                              --------------   --------------   --------------    --------------

Balance, October 31, 2004                      3,030,370,376   $    3,030,370          495,750    $       19,830
                                              ==============   ==============   ==============    ==============
</TABLE>


                                      F-4
<PAGE>

<TABLE>
<CAPTION>
                                               Additional
                                                 Paid in         Note        Accumulated
                                                 Capital      Receivable       Deficit           Total
                                              ------------   ------------    ------------    ------------
<S>                                           <C>            <C>             <C>             <C>
Balances as of October 31, 2002               $ 15,349,368   $         --    $(20,336,150)   $ (4,941,782)
Common stock issued for cash                            --             --              --          36,691
Common stock issued for services
  received and in settlement of accounts
  payable                                          204,088             --              --         248,250
Common stock issued to officers and
  other employees as retention bonuses
Beneficial conversion feature of debentures        442,125             --              --         695,188
  issued
Common stock issued upon conversion of           1,379,077             --              --       1,379,077
  debentures and accrued interest, net of
  related issuance costs                            57,095             --              --         328,073
Net loss                                                --             --      (4,462,182)     (4,462,182)
                                              ------------   ------------    ------------    ------------

Balance, October 31, 2003                       17,431,753             --     (24,798,332)     (6,716,685)
Common stock issued upon
  exercise of options                            3,559,537     (1,125,010)             --       2,744,497
Common stock issued for services received
  and in settlement of liabilities               1,079,695             --              --       1,219,374
Common stock issued to officers and other
  employees as bonuses and wages                   621,503             --              --       1,040,080
Common stock issued upon conversion
  of debentures and accrued interest, net
  of related issuance costs                      2,085,241             --              --       3,564,771
Acquisition of Synosphere, LLC                   1,132,304             --              --       1,200,000
Cash payments to Synosphere, LLC
  members in lieu of stock                              --             --              --         (18,833)
Additional stock payments to
  Synosphere LLC members                             9,653             --              --          13,340
Value assigned to services received in
  exchange for options                           6,969,186             --              --       6,969,186
     Net loss                                           --             --     (13,389,175)    (13,389,175)
                                              ------------   ------------    ------------    ------------

Balance, October 31, 2004                     $ 32,888,872   $ (1,125,010)   $(38,187,507)   $ (3,373,445)
                                              ============   ============    ============    ============
</TABLE>


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


                                      F-5
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                               Fiscal Year    Fiscal Year
                                                                  Ended          Ended
                                                               October 31,    October 31,
                                                                  2004           2003
                                                              ------------    ------------
<S>                                                           <C>             <C>
Cash flows from operating activities:
    Net loss                                                  $(13,389,175)   $ (4,462,182)
    Adjustments to reconcile net loss to net cash
      used in operating activities:
          Depreciation of property and equipment and
            amortization of intellectual property rights            29,290          60,875
          Asset impairment                                         252,281         125,000
          Provision for sales returns, rebates and
             doubtful accounts                                      76,417          94,731
          Provision for inventory obsolescence                     111,114          33,100
          Acquired in process research and development           1,200,000              --
          Gains on settlements of obligations to vendors           (22,821)        (85,733)
          Common stock issued for services received              1,464,268         889,082
          Common stock options issued for services received      6,969,186              --
          Gains on settlements of debenture obligations           (232,583)             --
          Loss on note receivable                                  150,000              --
          Beneficial conversion feature of debentures                   --       1,379,077
Net changes in operating assets and liabilities:
    Accounts receivable                                             34,905        (194,186)
    Inventories                                                   (101,672)         18,658
    Prepaid expenses                                                94,211          (6,057)
    Accounts payable and accrued liabilities                       893,244       1,363,989
     Deposits                                                       (4,881)             --
                                                              ------------    ------------
Net cash used in operating activities                           (2,476,216)       (783,646)
                                                              ------------    ------------

Cash flows from investing activities:
    Acquisition of Synosphere, LLC                                 (18,833)             --
    Licensing fees to Virtual Devices, Inc.                       (200,000)             --
                                                              ------------    ------------
Net cash used in investing activities                             (218,833)             --
                                                              ------------    ------------

Cash flows from financing activities:
    Bank overdraft                                                  10,420              --
    Proceeds from issuances of note payable                         50,000          90,000
    Proceeds from advances from officers                           123,000              --
    Proceeds from issuances of convertible debentures, net              --         686,813
    Proceeds from issuances of common stock, net                 2,594,497          36,691
    Principal payments on notes payable                            (94,920)        (18,666)
    Restricted cash equivalent                                      10,000         (10,000)
                                                              ------------    ------------
</TABLE>


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


                                      F-6
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)


<TABLE>
<CAPTION>
                                                                        Fiscal Year     Fiscal Year
                                                                           Ended           Ended
                                                                        October 31,     October 31,
                                                                           2004            2003
                                                                        ------------    ------------
<S>                                                                     <C>             <C>
Net cash provided by financing activities                               $  2,692,997    $    784,838
                                                                        ------------    ------------

Net (decrease) increase in cash and cash equivalents                          (2,052)          1,192

Cash at beginning of year                                                      2,140             948
                                                                        ------------    ------------

Cash at end of year                                                     $         88    $      2,140
                                                                        ============    ============

Supplemental schedule of cash activities:
   Interest paid in cash                                                $      5,800    $      8,566
   Taxes paid in cash                                                             50              50

Supplemental schedule of non-cash investing and financing activities:

   Debenture principal and accrued interest thereon
      converted to common stock                                         $  3,564,771    $    328,073
   Issuance of common stock for officers and other
      employees bonuses and wages                                       $  1,040,080    $    695,188
Issuance of common stock for services received
      and in settlement of liabilities                                  $  1,219,374    $    248,250
   Consulting fees paid with common stock options                       $  6,969,186
Issuance of common stock for acquired research
     and development                                                    $  1,200,000
</TABLE>







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


                                      F-7
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    NATURE OF BUSINESS, ORGANIZATIONAL STRUCTURE AND PRINCIPLES OF
      CONSOLIDATION

      Concurrent with the February 2, 2005 deployment of its new
      www.GoMoGear.com e-commerce website, iBIZ Technology Corp. (hereinafter,
      "iBIZ") principally became an Internet-based retailer of a broad and
      diversified offering of various consumer electronics with an emphasis on
      products that are portable or mobile. Prior thereto, and since 1998, iBIZ
      was a more narrowly-focused wholesaler and, to a lesser extent,
      Internet-based retailer, through its www.ibizpda.com e-commerce website,
      of various accessories primarily intended for use with Personal Digital
      Assistants ("PDAs"). iBIZ continues to conduct substantially all of its
      non-research and development related activities through its wholly-owned
      subsidiary, iBIZ, Inc. (hereinafter, "iBIZ, Inc.").

      As a result of its January 20, 2004 acquisition of Synosphere, LLC
      (hereinafter, "Synosphere"), iBIZ subsequently has engaged in significant
      activities directed at, among other efforts, further developing certain of
      the acquired technologies. iBIZ currently conducts substantially all of
      its product research and development activities through Synosphere, as a
      wholly-owned subsidiary.

      iBIZ's other wholly-owned subsidiaries, Invnsys Technology Corporation and
      Qhost, Inc. have been inactive since their respective operations were
      discontinued effective October 31, 2001. iBIZ was incorporated in the
      State of Florida in April 1994, although its operations have been
      headquarted in the State of Arizona since November 1979.

      These consolidated financial statements include the operations of iBIZ and
      its wholly-owned subsidiaries (hereinafter collectively, the "Company").
      All material intercompany transactions and balances have been eliminated
      in consolidation.

2.    SIGNIFICANT UNCERTAINTY REGARDING THE COMPANY'S ABILITY TO CONTINUE AS A
      GOING CONCERN AND MANAGEMENT PLANS

      The accompanying consolidated financial statements have been prepared on a
      going concern basis, which contemplates the realization of assets and the
      satisfaction of liabilities in the normal course of business. The Company
      has incurred substantial operating and net losses, as well as negative
      operating cash flows, in recent fiscal years. As a result, the Company had
      significant working capital and stockholders' deficits at October 31,
      2004. Additionally, the Company has in recent years realized only limited
      sales from its PDA accessories which management primarily attributes to
      its continued inability to fund the marketing activities it believes are
      necessary to develop broad market awareness and acceptance of the
      Company's products. These factors, among others, indicate that there is
      substantial doubt that the Company will be able to continue as a going
      concern. The accompanying consolidated financial statements do not include
      any adjustments relating to the recoverability and classification of
      recorded asset amounts or the amounts and classification of liabilities
      that might be necessary should the Company be unable to continue as a
      going concern.

      The Company's continuation as a going concern currently is dependent upon
      it timely procuring significant external debt and/or equity financing to
      fund its immediate and nearer-term operations, and subsequently realizing
      operating cash flows from sales of its products sufficient to sustain its
      longer-term operations and growth initiatives, including its desired
      marketing and product research and development initiatives. Subsequent to
      October 31, 2004, management entered into a financing agreement to secure


                                      F-8
<PAGE>

      a maximum of $700,000 of equity investment (see Note 23). Should
      management be unable to procure sufficient additional external debt and/or
      equity in a timely manner, it could cease operations prior to October 31,
      2005.


                                      F-9
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

3.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Fiscal Year-End

      The Company's fiscal year-end is October 31st. References herein to a
      fiscal year refer to the calendar year in which such fiscal year ends.

      Use of Estimates

      The preparation of consolidated financial statements in conformity with
      accounting principles generally accepted in the United States of America
      requires management to make certain estimates and assumptions that affect
      the reported amounts and timing of revenue and expenses, the reported
      amounts and classification of assets and liabilities, and disclosures of
      contingent assets and liabilities. These estimates and assumptions are
      based on the Company's historical results as well as management's future
      expectations. The Company's actual results could vary materially from
      management's estimates and assumptions.

      Reclassifications

      Certain amounts in the consolidated financial statements for the prior
      fiscal year have been reclassified to be consistent with the current
      fiscal year's presentation.

      Cash and Cash Equivalents

      The Company maintains any cash and cash equivalent balances with high
      quality financial institutions thereby minimizing any associated credit
      risks. The Company considers all highly liquid debt instruments purchased
      with an original maturity of three months or less to be cash equivalents.
      The Company did not have any cash equivalents at October 31, 2004. The
      Company had a single restricted cash equivalent at October 31, 2003 that
      subsequently became unrestricted and was utilized during fiscal 2004.

      Accounts Receivable - Related Allowances for Sales Returns, Customer
      Rebates and Doubtful Accounts

      The Company's accounts receivable, if any, are reported net of related
      allowances for probable sales returns, customer rebates and doubtful
      accounts. Management believes that the only concentration of credit
      associated with the Company's accounts receivable portfolio is with large
      national retailers, the credit worthiness of such it regularly monitors.

      The Company unconditionally accepts product returns during the initial
      thirty days following the date of sale. Additionally, the Company
      periodically offers promotional rebates of a limited duration, typically
      one week, on certain product sales for which it outsources the processing
      and tracking of related customer submissions. The periodic provisions made
      by the Company to establish and maintain appropriate allowances for sales
      returns and customer rebates are charged to its results of operations via
      offsets to its gross product sales. Such provisions are based on
      management's


                                      F-10
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


3.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

      Accounts Receivable - Related Allowances for Sales Returns, Customer
      Rebates and Doubtful Accounts (continued)

      estimates of probable sales returns and customer rebates which, in turn,
      are based on its relevant historical experience and future expectations.
      Actual sales returns and customer rebates realized by the Company are
      charged against the related allowances with any favorable or unfavorable
      experience, as compared to management's preceding estimates, having a
      corresponding impact on its results of operations.

      The Company typically offer its customers payment terms that range from 30
      to 60 days. The Company does not assess interest on, nor does it require
      any securing collateral of, past due customer balances. The periodic
      provisions made by the Company to establish and maintain an appropriate
      allowance for doubtful accounts are charged to its results of operations
      via increases to its selling, general and administrative expenses. Such
      provisions are based on specifically identified accounts that management
      believes to be uncollectible based on facts then known to it and accounts
      that are past due beyond a certain date. Actual collection experience
      realized by the Company on previously designated doubtful accounts is
      charged against the allowance for doubtful accounts with any favorable or
      unfavorable experience, as compared to management's preceding estimates,
      having a corresponding impact on its results of operations.

      Inventories

      Inventories, which consist solely of finished goods available for sale,
      are stated at the lower of average cost or market, reduced by an
      appropriate allowance estimated by management for probable obsolescence.
      The Company records an allowance for obsolescence based on its historical
      experience and future expectations. The periodic provisions made by the
      Company to establish and maintain an appropriate allowance for
      obsolescence are charged to its results of operations via increases to its
      cost of product sales. Actual disposition experience realized by the
      Company on previously designated obsolete inventory is charged against the
      allowance for obsolescence with any favorable or unfavorable experience,
      as compared to management's preceding estimates, having a corresponding
      impact on its results of operations.

      Prepaid Expenses

      The Company amortizes its prepaid expenses on a straight-line basis over
      the period during which it receives the underlying services.

      Property and Equipment

      Property and equipment are recorded at cost. Cost includes expenditures
      for major additions and improvements. Maintenance and repairs which do not
      extend the useful life of the related property or equipment are charged to
      operations as incurred. The provision for related depreciation has been
      computed using the straight-line method over the following estimated
      useful lives: office furniture


                                      F-11
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


3.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

      Property and Equipment (continued)

      and equipment - five to ten; tooling - three years; machinery and
      equipment - ten years; and vehicle - five years. The net book value of
      property and equipment sold or retired is removed from the asset and
      related depreciation accounts with any resulting net gain or loss included
      in the determination of the Company's results of operations.

      Impairment of Long-Lived Assets

      Management, on at least a quarterly basis, evaluates each of the Company's
      long-lived assets for impairment by comparing the related estimated future
      cash flows, on an undiscounted basis, to its net book value. If impairment
      is indicated, the net book value is reduced to an amount equal to the
      estimated future cash flows, on an appropriately discounted basis.

      Deferred Financing Costs

      Direct costs incurred in connection with the issuance of debt instruments
      are initially deferred and subsequently amortized using the interest
      method over the term in which the related debt remains outstanding.
      However, in those cases where the fair value attributable to any
      beneficial conversion feature of the debt instrument indicates that,
      despite it legal form, the underlying substance is that of equity, the
      Company offsets the direct issuance costs incurred immediately against the
      fair value allocated to additional paid-in capital.

      Deferred Income Taxes

      Deferred income tax assets and liabilities are recognized for the expected
      future income tax benefits or consequences, based on enacted laws, of
      temporary differences between tax and financial statement reporting.
      Deferred tax assets are then reduced by a valuation allowance for the
      amount of any tax benefits that more likely than not, based on current
      circumstances, are not expected to be realized.

      Beneficial Conversion Rights

      The Company periodically issues debentures that have non-detachable
      conversion features. In those instances where the stated conversion price
      reflects a discount from the then prevailing market price of the Company's
      common stock, management makes, at the date of the issuance, an estimate
      as to the fair value of this beneficial conversion feature. The value
      assigned to the beneficial conversion feature is then immediately
      recognized in the Company's results of operations via an
      interest/financing charge with a corresponding credit to additional
      paid-in capital.


                                      F-12
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


3.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

      Non-Cash Equity Issuances

      The Company periodically issues shares of its common stock in exchange
      for, or in settlement of, services. The Company's management values the
      shares issued in such transactions at either the then market price of the
      Company's common stock, after taking into consideration factors such as
      the volume of shares issued or trading restrictions, or the value of the
      services received, whichever is more readily determinable. The Company
      also issues options, at a discount from market, for services. The
      Company's management values such options using Black Scholes.

      Fair Value of Financial Instruments

      Management believes that the carrying values reported for the Company's
      bank overdraft, accounts payable, accrued expenses, advances from
      officers, and notes payable materially approximated their respective fair
      values at the balance sheet date due to the immediate or short-term
      maturity of these financial instruments. Management also believes that the
      carrying values reported for the Company's outstanding debentures
      materially approximated their respective fair values at the balance sheet
      date as the stated rates of interest reflected then prevailing market
      rates of interest. The estimated fair value amounts have been determined
      by the Company's management 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.

      Revenue Recognition

      In accordance with SEC Staff Accounting Bulletin No. 101, "Revenue
      Recognition in Financial Statements," the Company recognizes a product
      sale, including related shipping and handling income, and the cost of the
      sale, upon product shipment provided that all material risks and rewards
      of ownership are concurrently transferred from the Company to its
      customer, collection of the related receivable is reasonably assured, and
      management is able to reliably estimate appropriate allowances for
      probable sales returns and customer rebates based on its relevant
      historical experience and future expectations. Cost of sales primarily
      consists of purchased product cost, direct labor, and overhead, including
      freight-in cost, warehousing costs, shipping and handling costs, and
      inventory valuation adjustments for obsolescence.

      The Company recognizes revenues from maintenance services on a
      straight-line basis over the terms of the respective underlying
      maintenance agreements, which range from three months to one year in
      duration. Any prepaid, yet unearned, portion of a maintenance agreement is
      recorded as deferred income. The Company is no longer actively marketing
      these computer-related maintenance services, which primarily remain with
      financial institutions, and, as a result, expects that the significance of
      the related revenues will continue to decline in future fiscal periods.


                                      F-13
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

3.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

      Major Customers

      One customer accounted for approximately 27% of the Company's consolidated
      net sales for fiscal 2004. Two different customers individually accounted
      for approximately 35% and 13% of the Company's consolidated net sales for
      fiscal 2003.

      Major Vendors

      Three vendors individually accounted for approximately 64%, 18% and 15% of
      the Company's inventory purchases during fiscal 2004. Two vendors
      individually accounted for approximately 24% and 20% of the Company's
      inventory purchases during fiscal 2003.

      Product Warranties

      The Company's PDA accessory products are accompanied by limited liability
      warranties of one year durations against defects in material or
      workmanship. At the time of each product's sale, management makes an
      estimate based on the Company's historical experience and future
      expectations of the probable future cost to be incurred in honoring the
      accompanying warranty and accrues a corresponding liability. To date, the
      Company's warranty liabilities, in the aggregate, have not been material.

      Advertising Costs

      The Company expenses all advertising costs as incurred. Consolidated
      selling, general and administrative expenses include advertising costs of
      $-0- and $45,028 for fiscal 2004 and 2003, respectively.

      Research and Development

      The Company expenses all research and development costs as incurred.

      Net Loss Per Share

      Basic and diluted net loss per share has been computed by dividing net
      loss by the weighted average number of common shares outstanding during
      the fiscal year. At October 31, 2004 and 2003, the Company had stock
      warrants outstanding that could potentially be exercised into 822,204
      additional common shares. The Company additionally had debentures
      outstanding at October 31, 2004 and 2003, the conversion price of which
      will be established as of the date of any subsequently elected conversion.
      Thus the number of potentially issuable common shares pursuant to the
      terms of these unexercised conversion rights will not be previously
      determinable. Such potentially issuable shares are excluded from the
      computation of net loss per share since the effect would be anti-dilutive.
      Should the Company report net income in a future period, diluted net
      income per share will be separately disclosed giving effect to the
      potential dilution that could occur if the then outstanding stock warrants
      were exercised into common shares.


                                      F-14
<PAGE>

                            IBIZ TECHNOLOGY CORP. AND
       SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

3.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

      Segment Reporting

      The Company's chief operating decision makers consist of members of senior
      management that work together to allocate resources to, and assess the
      performance of, the Company's business. Senior management currently
      manages the Company's business, assesses its performance, and allocates
      its resources as a single operating segment. To date, the Company's
      products and services have been principally marketed to customers residing
      within the United States of America. Net revenues realized from customers
      residing in other geographic markets were less than ten percent of
      consolidated net revenues in fiscal 2004 and 2003, respectively.

      Accounting Standards Adopted or Pending Adoption

      The Company's required fiscal 2004 adoptions of recently issued accounting
      standards did not have any material impacts upon its consolidated
      financial statements. Additionally, there are no recently issued
      accounting standards with pending adoptions that the Company's management
      currently anticipates will have any material impacts upon its consolidated
      financial statements.


4.    ACCOUNTS RECEIVABLE AND ALLOWANCES FOR SALES RETURNS, CUSTOMER REBATES AND
      DOUBTFUL ACCOUNTS

      The Company's accounts receivable, net, consists of:

<TABLE>
<CAPTION>
                                                                            October 31,
                                                                                2004
                                                                            ------------
<S>                                                                         <C>
      Accounts receivable, gross                                            $     51,273
      Allowance for sales returns, customer rebates and doubtful accounts        (51,273)
                                                                            ------------

      Accounts receivable, net                                              $         --
                                                                            ============
</TABLE>

      The following schedule sets forth the activity in the Company's allowance
for sales returns:

<TABLE>
<CAPTION>
                                    Fiscal Year     Fiscal Year
                                       Ended           Ended
                                    October 31,     October 31,
                                       2004            2003
                                   ------------    ------------
<S>                                <C>             <C>
      Balance, beginning of year   $     27,238    $      1,600
      Provisions                         47,171          46,354
      Returns                           (72,309)        (20,716)
                                   ------------    ------------

      Balance, end of year         $      2,100    $     27,238
                                   ============    ============
</TABLE>


                                      F-15
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


4.    ACCOUNTS RECEIVABLE AND ALLOWANCES FOR SALES RETURNS, CUSTOMER REBATES AND
      DOUBTFUL ACCOUNTS (continued)

      The following schedule set forth the activity in the Company's allowance
for customer rebates:

<TABLE>
<CAPTION>
                                       Fiscal Year    Fiscal Year
                                          Ended          Ended
                                       October 31,    October 31,
                                          2004           2003
                                      ------------    ------------
<S>                                   <C>             <C>
         Balance, beginning of year   $     12,429    $         --
         Provisions                             --          12,429
         Returns                           (12,429)             --
                                      ------------    ------------

      Balance, end of year            $         --    $     12,429
                                      ============    ============
</TABLE>


      The following schedule set forth the activity in the Company's allowance
for doubtful accounts:

<TABLE>
<CAPTION>
                                      Fiscal Year     Fiscal Year
                                         Ended           Ended
                                      October 31,     October 31,
                                         2004            2003
                                      ------------    ------------
<S>                                   <C>             <C>
         Balance, beginning of year   $     23,500    $     56,509
         Provisions                         29,246          35,948
         Returns                            (3,573)        (68,957)
                                      ------------    ------------

      Balance, end of year            $     49,173    $     23,500
                                      ============    ============
</TABLE>

5. INVENTORIES, NET

      Inventories, net, consists of the following:

<TABLE>
<CAPTION>
                                                   October 31,
                                                      2004
                                                  ------------

<S>                                               <C>
      Inventories, gross                          $     39,400
      Less allowance for inventory obsolescence         (5,000)
                                                  ------------

      Inventories, net                            $     34,400
                                                  ============
</TABLE>


                                      F-16
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


5.    INVENTORIES, NET (continued)

      The following schedule set forth the activity in the Company's allowance
for obsolescence:

<TABLE>
<CAPTION>
                                      Fiscal Year     Fiscal Year
                                         Ended           Ended
                                      October 31,     October 31,
                                         2004            2003
                                      ------------    ------------

<S>                                   <C>             <C>
      Balance, beginning of year      $     33,100    $         --
      Provisions                           111,114          33,100
      Write-offs, net of recoveries       (139,214)             --
                                      ------------    ------------

        Balance, end of year          $      5,000    $     33,100
                                      ============    ============
</TABLE>


6. PREPAID EXPENSES

      The Company's prepaid expenses consist of:

<TABLE>
<CAPTION>
                                                October 31,
                                                  2004
                                                ------------
<S>                                             <C>
      Consulting agreement                      $     66,666
      Service agreement                               16,250
      Membership dues and administration fees          3,290
                                                ------------

      Prepaid expenses                          $     86,206
                                                ============
</TABLE>

7. PROPERTY AND EQUIPMENT, NET

      Property and equipment, net, consists of the following:

<TABLE>
<CAPTION>
                                                             October 31,
                                                                2004
                                                             ------------
<S>                                                          <C>
      Office furniture and equipment                         $     81,027
      Tooling                                                      68,100
      Machinery and equipment                                      37,641
      Vehicle                                                       3,141
                                                             ------------

      Property and equipment, gross                               189,909
      Less accumulated depreciation, including write-downs       (147,151)
                                                             ------------

      Property and equipment, net                            $     42,758
                                                             ============
</TABLE>


                                      F-17
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


8.    DEFERRED TAX ASSETS

      Deferred tax assets, net, at October 31, 2004 consist of the following:

<TABLE>
<CAPTION>
                                           October 31,
                                              2004
                                           ------------
<S>                                        <C>
      Net operating loss carry-forwards    $  4,187,700
      Accrued expenses and miscellaneous          8,800
                                           ------------

      Deferred tax assets, gross              4,196,500
      Valuation allowance                    (4,196,500)
                                           ------------

      Deferred tax assets, net             $         --
                                           ============
</TABLE>

      The Company's net operating loss carry-forwards, which aggregated
      $20,884,400 at October 31, 2004, expire in varying amounts during calendar
      years 2010 through 2024.

      A reconciliation of the valuation allowance follows:

<TABLE>
<CAPTION>
                                   Fiscal Year
                                      Ended
                                   October 31,
                                      2004
                                   ------------
<S>                                <C>
      Balance, beginning of year   $  2,909,300
      Additions                       1,287,200
                                   ------------

      Balance, end of year         $  4,196,500
                                   ============
</TABLE>

9. ACCRUED LIABILITIES

      Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                                    Fiscal Year
                                       Ended
                                    October 31,
                                       2004
                                    ------------
<S>                                 <C>
      Accrued wages                 $    481,034
      Accrued interest                   283,548
      Accrued bonuses                    250,000
      Accrued payroll and  taxes         206,526
      Accrued dispute settlements        127,500
      Accrued sales commissions           49,966
      Accrued royalties                    2,653
                                    ------------

      Total accrued liabilities     $  1,401,227
                                    ============
</TABLE>


                                      F-18
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


10.   NOTES PAYABLE

      During its fiscal 2004 fourth quarter, the Company received an aggregate
      of $50,000 in cash via its issuance of two notes payable. These notes are
      unsecured, accrue interest at a stated rate of 4.5% per annum and become
      due and payable upon demand.


11.   ADVANCES FROM OFFICERS

      During its fiscal 2004 fourth quarter, the Company received an aggregate
      of $123,000 in cash advances from its officers. These advances are
      unsecured, accrue interest at a stated rate of 4.5% per annum and become
      due and payable upon demand.


12.   CONVERTIBLE DEBENTURES

      The Company's outstanding convertible debentures consist of the following:

<TABLE>
<CAPTION>
                                     October 31,
                                         2004
                                    ------------
<S>                                 <C>
      KCM, LLC                      $    700,817
      Laurus Master Fund, Ltd.           162,858
                                    ------------

      Total principal outstanding   $    863,675
      Less: current maturities          (863,675)
                                    ------------

      Non-current maturities        $         --
                                    ============
</TABLE>

      The Company's outstanding debentures to KCM, LLC ("KCM") were issued
      October 31, 2000 through January 15, 2002 in the original aggregate amount
      of $5,000,000, are unsecured, accrued interest at 8.0% per annum, with
      interest only payments due on the first day of each subsequent calendar
      quarter beginning January 1, 2001, and became due and payable on October
      31, 2003. KCM has the stated unilateral right to initially convert
      one-half of any outstanding principal and accrued interest thereon at any
      time into shares of the Company's common stock at the lesser of (1) 80% of
      the average of the three lowest closing bid prices over the preceding
      twenty-two consecutive trading days or (ii) 80% of the average of the five
      lowest closing bid prices over the preceding sixty consecutive trading
      days. KCM has the stated unilateral right to subsequently convert the
      remaining one-half of any outstanding principal and accrued interest
      thereon at any time into shares of the Company's common stock at 86% of
      the average of the three lowest closing bid prices over the preceding ten
      consecutive trading days. The Company is required to reserve twice the
      number of its common shares necessary to accommodate the conversion of any
      then unpaid principal and accrued interest thereon, plus the exercise of
      the warrants described in Note 13, and it will incur certain penalties if
      any conversion or exercise shares are not issued within the specified
      timeframe. KCM also received anti-dilution rights allowing it to


                                      F-19
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


12.   CONVERTIBLE DEBENTURES (continued)

      participate in any prospective issuances by the Company of shares of its
      common stock. As it was unable to redeem the $1,668,702 aggregate
      principal balance, and $367,568 aggregate accrued interest thereon, of
      these outstanding debentures when they became due and payable on October
      31, 2003, the Company became in default.

      The Company's outstanding debentures to Laurus Master Fund, Ltd.
      ("Laurus") were issued in April through October 2001 in the original
      aggregate amount of $709,723, are unsecured, accrued interest at 8.0% per
      annum, with interest only payments due on the last day of each subsequent
      calendar quarter beginning September 30, 2001, and became due and payable
      on October 31, 2003. Laurus has the stated unilateral right to convert all
      or a portion of any outstanding principal and accrued interest thereon at
      any time into shares of the Company's common stock at the lesser of (i)
      80% of the average closing bid price over any specified three successive
      trading days or (ii) 80% of the average closing bid price over any
      specified twenty-two successive trading days. As it was unable to redeem
      the $323,985 aggregate principal balance, and $60,121 aggregate accrued
      interest thereon, of these outstanding debentures when they became due and
      payable on October 31, 2003, the Company became in default.

      The outstanding debentures and accrued interest thereon were fully
      converted into common stock in December 2004 (see Note 23).

13.   STOCKHOLDERS' DEFICIT

      General

      On December 20, 2001, the Company's Board of Directors authorized the
      issuance of 3.5 million shares of the Company's preferred stock to one
      director and three officers in satisfaction of retention and performance
      bonuses. Although all of these preferred shares have been reserved for,
      their actual issuance was postponed due to the subsequent downturn in the
      Company's operations and departure of two of the officers. If and when
      ultimately issued, each preferred share will have a 10:1 conversion rate
      to common and super voting rights of 100:1. No other rights have yet been
      designated to these preferred shares, including, but not limited to,
      dividend and liquidation rights.

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

      On February 24, 2003, the Company's Board of Directors approved an
      amendment to the Company's Articles of Incorporation to increase its
      authorized common shares from 450 million to five billion.


                                      F-20
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


13.   STOCKHOLDERS' DEFICIT (continued)

      Common Stock Held in Escrow

      Options valued at $4,450,000 to purchase 100 million shares of common
      stock (at a 50% discount from market, as defined) were issued to Pangea
      Investments GmbH (parent company of Enterprise Capital AG) on January 28,
      2004 for consulting and acquisition services in Europe and Israel. Such
      services include, but are not limited to, development of a business plan
      for marketing existing products in Europe and Israel and identifying new
      products and technologies that could be added to the existing product
      line. In addition, Pangea would assist in the negotiation and financing of
      new products and technologies acquired. Pursuant to the option agreement,
      the Company transferred 100 million shares of its common stock into an
      escrow account pending payment of the aggregate $1.5 million exercise
      price. Through June 4, 2004, 15 million shares were issued upon receipt of
      $75,000 and the application of $175,000 to the Deposit for the Virtual
      Keyboard product. Subsequently, on June 23, 2004, the Company cancelled
      the above stock option in light of non-performance of the required
      consulting services and requested that the escrow agent return the above
      common shares. The Company also recorded a $150,000 loss from the note
      receivable associated with stock options issued to Pangea. The shares were
      returned to the Company in December 2004.

      In addition, options to purchase 5 million shares of common stock are
      being held in escrow pursuant to an option agreement with a consultant.

      The balance in the Note Receivable classified in the Stockholders' Equity
      represents the balance due on the options held in escrow.

      Common Stock Issued for Cash

      During fiscal 2003, the Company issued an aggregate of 36,691,176 shares
      of its common stock to one unrelated individual in exchange for $36,691 in
      cash.

      During fiscal 2004, the Company issued an aggregate of 224,969,608 shares
      of its common stock to five unrelated individuals in exchange for
      $2,594,507 in cash.

      Common Stock Issued for Services Received and in Settlement of Accounts
      Payable

      During fiscal 2003, the Company issued an aggregate of 44,161,764 shares
      of its common stock to various unrelated individuals in settlement of
      $248,250 in services received and accounts payable.

      Common Stock Issued for Services Received and In Settlement of Liabilities

      During the year ended October 31, 2004, the Company issued shares of its
      common stock for services received and in settlement of liabilities as
      follows:


                                      F-21
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


13.   STOCKHOLDERS' DEFICIT (continued)

      November 2003

      o     10 million shares valued at $37,000 for legal services provided by
            Greg Sichenzia.

      o     9.6 million shares valued at $35,425 to various creditors in
            satisfaction of their outstanding amounts due.

      o     0.5 million shares valued at $1,975 to a company that provided
            edgarizing and related services during the quarter ended January 31,
            2004.

      o     1.0 million shares valued at $3,700 to a company for marketing
            services during the quarter ended January 31, 2004.

      December 2003

      o     81.0 million shares valued at $332,300 in accordance with consulting
            contracts with four individuals for services.

      February 2004

      o     1.0 million shares valued at $40,000 for legal services provided by
            Greg Sichenzia.

      o     1,335,188 shares to individuals in satisfaction of their outstanding
            amounts due ($43,223).

      March 2004

      o     2.5 million shares valued at $75,000 for legal services provided by
            Greg Sichenzia.

      April 2004

      o     2.0 million shares valued at $80,000 for public relations services.

      o     8.0 million shares valued at $290,000 for consulting services
            provided by D. Scott Elliot and Steve Green for merger and
            acquisition services.

      May 2004 and June 2004

      o     The Company issued 1,428,571 shares of its common stock with an
            assigned aggregate fair market value of $50,000 to an unrelated
            attorney for legal services rendered.

      o     The Company issued 4,500,000 shares of its common stock with an
            assigned aggregate fair market value of $80,000 to an unrelated
            attorney for legal services rendered.


                                      F-22
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


13.   STOCKHOLDERS' DEFICIT (continued)

      o     The Company issued 1,661,266 shares of its common stock with an
            assigned aggregate fair market value of $54,140 to unrelated
            individuals for various services rendered.

      o     The Company issued 3,000,000 shares of its common stock with an
            assigned aggregate fair market value of $30,000 to two unrelated
            individuals in retention of SEC filing services over the subsequent
            twelve-month period.

      o     The Company issued 5,870,275 shares of its common stock with an
            assigned aggregate fair market value of $65,072 to an unrelated
            individual in retention of a 2 year facilities lease for the
            acquired Synosphere operations.

      August 2004 and September 2004

      o     The Company cancelled and received back 5,870,275 shares of its
            common stock with an assigned aggregate fair market value of $65,072
            from an unrelated individual. The shares were originally issued in
            retention of a two year facilities lease for the acquired Synosphere
            operations. The lease deposit and monthly payments were instead paid
            in cash.

      o     The Company issued 6,146,123 shares of its common stock with an
            assigned aggregate fair market value of $42,000 to Greg Sichenzia
            for legal services provided.

      Common stock Issued for Services Received and In Settlement of Liabilities
      (Continued)

      o     The Company issued 3,687,699 shares of its common stock with an
            assigned aggregate fair market value of $13,340 as additional
            payment to one member of Synosphere, LLC for purchase of their
            interests.

      o     The Company issued 6,000,000 shares of its common stock with an
            assigned aggregate fair market value of $24,600 to two unrelated
            individuals for marketing services provided.

      Common Stock Issued to Officers and Other Employees as Retention Bonuses

      During fiscal 2003, the Company issued an aggregate of 253,063,228 shares
      of its common stock to officers and other employees in settlement of
      $695,188 in retention bonuses.

      December 2003

      o     204,482,763 shares valued at $296,500 in partial settlement of
            accrued bonuses at October 31, 2003 to officers and employees.


                                      F-23
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


13.   STOCKHOLDERS' DEFICIT (continued)

      January 2004

      o     194,137,931 shares of our common stock in final settlement of
            $281,500 in accrued bonus at October 31, 2003.

      May 2004

      o     The Company issued 8,447,278 shares of its common stock with an
            assigned fair market value of $375,000 to officers of its
            wholly-owned subsidiary, Synosphere in accordance with their
            respective employment contracts.

      August 2004

      o     The Company issued 11,508,081 shares of its common stock with an
            assigned aggregate fair value of $87,079 to non-officer employees in
            payment of signing bonuses to new employees and performance bonuses
            to employees of Synosphere.

      Stock Options and Warrants

      During the six months ending April 30, 2004, the Company granted stock
      options to individuals in exchange for the following consulting services:

      November 2003

      o     Options valued at $260,000 to purchase 200 million shares of common
            stock (at a 40% discount from market, as defined) were issued to D.
            Scott Elliott for general business and financial consulting services
            to assist the Company with its expansion plans and entry into other
            markets.

      December 2003

      o     Options valued at $60,000 to purchase 50 million shares of common
            stock (at a 15% discount form market, as defined) were issued to
            Jeffrey Firestone for providing legal counsel on International
            issues in mergers and acquisitions.


                                      F-24
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


13.   STOCKHOLDERS' DEFICIT (continued)

      January 2004

      o     Options valued at $4,450,00 to purchase 100 million shares of common
            stock (at a 50% discount from market, as defined) were issued to
            Pangea Investments GmbH for consulting and acquisition services in
            Europe and Israel. Sam Elimalech, an officer of Enterprise Capital
            AG, is also a member of Pangea Investments GmbH.

      March 2004

      o     Options valued at $1,616,186 to purchase 151,045,455 shares of
            common stock (at a 20% discount from market, as defined) to D. Scott
            Elliott for general business and financial consulting services to
            assist the Company with its expansion plans and entry into other
            markets.

      May 2004

      o     Options valued at $492,000 to purchase 40,000,000 shares of common
            stock (at a 7.5% discount from market, as defined) to Steven Green
            for financial management, business management and business
            optimization through mergers and acquisitions. These consulting
            services are offered for a term of three years. Options to purchase
            35,000,000 shares were exercised in May 2004 resulting in the
            receipt of approximately $345,000. The remaining 5,000,000 shares
            were deposited into an escrow account (see Common Stock Held in
            Escrow above).

      o     Options valued at $91,000 to purchase 10,000,000 shares of common
            stock (at a 15% discount from market, as defined) to Jeffrey
            Firestone for providing legal counsel on International issues in
            mergers and acquisitions. Options to purchase 10,000,000 shares were
            exercised in May 2004 resulting in the receipt of approximately
            $128,000.

      The Company has valued the options granted using the Black-Scholes stock
      option pricing model. The total fair value of the options granted during
      fiscal 2004 was $6,969,187. Based on the uncertainty of any future value
      of these agreements, the Company expensed the value of the options in
      fiscal 2004.


                                      F-25
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


13.   STOCKHOLDERS' DEFICIT (continued)

      Beneficial Conversion Feature of Debentures Issued

      The Company recorded $-0- and $1,379,077 in additional paid-in capital
      during fiscal years 2004 and 2003, respectively, in recognition of the
      fair value attributable to the non-detachable conversion features of
      debentures issued whereby the stated conversion price reflected a discount
      from the then prevailing market price of the Company's common stock.

      Common Stock Issued Upon Conversion of Debentures and Accrued Interest
      Thereon

      The Company issued 1,479,530,624 and 270,977,456 common shares during
      fiscal years 2004 and 2003, respectively, to honor conversion elections by
      certain debenture holders of related principal and accrued interest
      thereon.

      Stock Options and Warrants

      In connection with its original issuance of debentures to KCM, the Company
      granted KCM detachable warrants entitling it to subsequently purchase over
      a five-year period 371,667 shares of the Company's common stock at
      exercise prices ranging from $0.21 to $0.42 per share. These warrants
      remained unexercised as of October 31, 2004.

      In connection with the April 2001 issuance of debentures to Laurus, the
      Company granted Laurus detachable warrants entitling it to subsequently
      purchase over a five year period 150,000 shares of the Company's common
      stock at an exercise price equal to the lesser of (i ) $1.23 per common
      shares or (ii) the average of the three lowest closing bid prices over any
      subsequent ten successive trading days. In connection with the July 2001
      issuance of debentures, the Company granted Laurus detachable warrants
      entitling it to subsequently purchase over a five year period 100,000
      shares of the Company's common stock at an exercise price equal to the
      lesser of (i) $0.48 per common shares or (ii) 105% of the average of the
      three lowest closing bid prices over any subsequent ten successive trading
      days. In connection with the August 2001 issuance of debentures, the
      Company granted Laurus detachable warrants entitling it to subsequently
      purchase over a five year period 52,500 shares of the Company's common
      stock at an exercise price equal to the lesser of (i) $0.39 per common
      shares or (ii) 105% of the average of the three lowest closing bid prices
      over any subsequent ten successive trading days. In connection with the
      October 2001 issuance of debentures, the Company granted Laurus detachable
      warrants entitling it to subsequently purchase over a five year period
      35,000 shares of the Company's common stock at an exercise price equal to
      the lesser of ( i ) $0.26 per common shares of ( ii ) 105% of the average
      of the three lowest closing bid prices over any subsequent ten successive
      trading days. These warrants remained unexercised as of October 31, 2004.


                                      F-26
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

14.   ACQUISITION OF SYNOSPHERE, LLC

      On January 20, 2004, the Company acquired all of the outstanding
      membership interest in Synosphere, a Texas-based limited liability
      development-stage company pursuing the development of certain hand-held
      computer technologies, in exchange for 30.0 million shares of its common
      stock with an aggregate value of $1,200,000 based on the immediately
      preceding closing bid price of its common stock. As the technological
      feasibility of each of the acquired technologies had yet to be fully
      established as of the acquisition date, the $1,200,000 purchase price was
      immediately reflected within the Company's results of operations for its
      fiscal 2004 first quarter ended January 31, 2004.

      A subsequent addendum to the acquisition agreement underlying the
      Company's acquisition of Synosphere permitted certain of Synosphere's
      former membership interest holders to elect to receive a cash payment
      instead of shares of the Company's common stock. Through October 31, 2004,
      the Company had paid $18,833 in cash and issued 29,033,417 shares of its
      common stock to former membership interest holders in Synosphere. At
      October 31, 2004, the Company had reserved 495,750 shares of its common
      stock for potential issuance to those former membership interest holders
      in Synosphere who had not yet made an election.


15.   ASSET IMPAIRMENTS

      Inventory Deposit

      During its fiscal 2004 second quarter ended April 30, 2004, the Company
      placed an initial purchase order with Enterprise Capital AG (hereinafter,
      "Enterprise") for a new virtual keyboard product and remitted a required
      $400,000 deposit. When Enterprise subsequently failed to deliver such
      keyboards, the Company filed a lawsuit in Israel on June 23, 2004 against
      Enterprise for breach of contract and demanding that the deposit be
      immediately returned. However, given significant uncertainties regarding
      the Company's ultimate ability to recover this deposit, management deemed
      this asset as impaired and wrote-off the $400,000 balance in its entirety
      during the Company's fiscal 2004 third quarter ended July 31, 2004.

      Tooling and Intellectual Property Rights

      During the Company's fiscal 2004 third quarter ended July 31, 2004,
      Ttools, Inc., the licensor and vendor of the Company's XELA keyboard
      product, filed a lawsuit against the Company asserting breach of contract.
      As a result of such lawsuit, the Company's management deemed the
      underlying tooling and intellectual property rights as impaired and
      wrote-off the then unamortized balance of $52,281 in its entirety during
      the Company's fiscal 2004 third quarter. Previously, during its fiscal
      2003 fourth quarter ended October 31, 2003, the Company's management had
      downwardly revised its estimate of the cash flows to be derived from
      future sales of the XELA Keyboard given lower than anticipated historical
      sales. As a result, the Company recognized a correspondingly $125,000
      impairment charge to write-down the underlying intellectual property
      rights and related tooling. The direct costs previously incurred by the
      Company in acquiring the intellectual property rights had been capitalized
      and were being subsequently amortized into operating results on a
      straight-line basis over an estimated useful life of three years.

                                      F-27
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


15.   ASSET IMPAIRMENTS (continued)

      Tooling and Intellectual Property Rights (continued)

      On July 20, 2004, the Company entered into a three-year agreement with
      Virtual Devices, Inc. ("VDI") pursuant to which the Company would be
      licensed to use certain patented technologies of VDI applicable to
      handheld computing devices. The agreement required the Company to make an
      initial $300,000 cash payment, of which the Company was only able to
      subsequently remit $200,000 given its cash constraints. The agreement
      further stipulated that, if and when, the Company and VDI mutually agreed
      upon certain performance criteria in a written addendum, the Company would
      then be required to (i) make two $250,000 installment payments and (ii) at
      its election, to provide VDI with either $200,000 in cash or equivalent
      services to support related engineering activities. In the absence of a
      written termination election by either party, the above licensing
      agreement will automatically renew annually. As of October 31, 2004, the
      Company remained unable to remit the $100,000 balance of required initial
      payment given its cash constraints and the Company and VDI had yet to
      reach mutually acceptable performance criteria. Given such, the Company's
      management deemed the licensed intellectual property rights to be impaired
      and wrote-off the $200,000 unamortized balance in its entirety during the
      Company's fiscal 2004 fourth quarter.


16.   DISPUTE SETTLEMENTS

      As a result of Enterprise's failure to deliver the new virtual keyboard
      product to the Company, as previously discussed in Note 13 above, the
      Company was correspondingly unable to fulfill a delivery obligation to a
      major retailer. As Mad Dog Multimedia, Inc. (hereinafter, "Mad Dog"), a
      sales intermediary, purportedly was assessed a $100,000 non-performance
      penalty by the retailer, the Company became obligated under an
      indemnification clause to reimburse Mad Dog for such penalty. In
      recognition of such, the Company recorded a related $100,000 settlement
      accrual during its fiscal 2004 third quarter ended July 31, 2004. As of
      October 31, 2004, the Company remained unable given its cash constraints
      to remit the $100,000 payment due to Mad Dog.

      In March 2004, Cable & Wireless, plc (hereinafter, "C&W") filed a lawsuit
      against the Company asserting breach of contract and damages aggregating
      $103,042 in connection with its providing of connectivity services for a
      previously discontinued line of business. In August 2004, the Company and
      C&W reached a settlement for $19,336 to be paid by the Company in three
      equal installments on September 15, October 15 and November 15, 2004,
      respectively. As the Company has been subsequently unable to make the
      required installment payments, the above matter is being renegotiated by
      the Company and C&W. As the Company's management believes that the above
      matter will ultimately be settled for a comparable amount, the Company
      maintains a related $20,000 settlement accrual at October 31, 2004.

      In March 2004, Synnex Corporation (hereinafter, "Synnex"), a wholesale
      distributor, advised the Company of its desire to return approximately
      $32,000 of merchandise that it had previously purchased during fiscal
      2003. When the Company and Synnex could not mutually agree to terms,


                                      F-28
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


16.   DISPUTE SETTLEMENTS (continued)

      including an appropriate restocking penalty, Synnex indicated its intent
      to exercise an arbitration provision within its purchase agreement with
      the Company. Prior to the commencement of the arbitration proceeding, the
      Company and Synnex reached a verbal settlement whereby Synnex agreed to
      retain the merchandise in exchange for a $7,500 payment by the Company.
      The Company correspondingly recorded a $7,500 settlement accrual during
      its fiscal 2004 fourth quarter ended October 31, 2004. The Company awaits
      the written agreement from Synnex's legal counsel formally documenting the
      agreed-upon settlement.


17.   LOSS CONTINGENCIES

      In May 2004, Ttools, LLC (hereinafter, "Ttools"), the supplier of the
      Company's XELA keyboard product, filed a lawsuit against the Company
      asserting breach of contract, conversion, and unjust enrichment and
      $70,558 in damages, plus interest and legal fees. The Company has
      counter-claimed asserting misrepresentations by Ttools. The Company's
      management believes that the case is without merit and does not believe
      that the ultimate outcome of this matter will have a material impact on
      the Company's consolidated financial statements.

      The Company remains liable to the U.S. Internal Revenue Service ("IRS")
      for approximately $65,000 in unpaid payroll taxes, and subsequently
      assessed interest, for certain periods through its fiscal 1999 first
      quarter. The Company continues to maintain an accrual for this liability
      in its consolidated financial statements. It is the Company's intent to
      seek a reduced settlement of this liability with the IRS, if and when, it
      has sufficient cash so as to enable it to honor any settlement. As of
      October 31, 2004, the IRS had not yet assessed, nor has the Company
      accrued for, any related penalties.

      The United States Securities and Exchange Commission (hereinafter, "SEC")
      currently is conducting a formal investigation into certain specific
      matters that may constitute potential violations by the Company, and/or
      its officers, directors, employees, and others, of the federal securities
      laws. The Company believes that it and its officers, directors and
      employees have fully cooperated with the SEC in its investigation to date.
      The Company will publicly disclose the specific nature of any resulting
      SEC allegations(s) if and when they become fully known, subject to any SEC
      mandated confidentiality and as permitted by applicable federal securities
      laws.

      With respect to the preceding SEC investigation, it should be noted that
      Kenneth W. Schilling, the Company's Chairman, Chief Executive Officer and
      President, remains the subject to a Cease and Desist Order from the SEC.
      The cease and desist order constituted part of a negotiated settlement
      between Mr. Schilling and the SEC that was formally entered into on
      February 28, 2001 pursuant to which Mr. Schilling, without admitting or
      denying the SEC's allegations against him, agreed to the entry of an Order
      enjoining him from violating Section 10(b) of the Securities Exchange Act
      of 1934, as amended, and Rule 10-b5 thereunder, and ordering him to pay a
      civil penalty of $20,000. In a related action, the Company, without
      admitting or denying any of the SEC's findings, consented to


                                      F-29
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


17.   LOSS CONTINGENCIES (continued)

      a cease-and-desist order enjoining it from committing or causing any
      violation or any future violations of Section 10(b) of the Securities
      Exchange Act of 1934, as amended, and Rule 10-b5 thereunder. The
      underlying SEC Complaint alleged that Mr. Schilling provided false
      financial projections to a purported analyst for research reports
      recommending the purchase of the Company's common stock. The Complaint
      also stated that from February 1999 through June 1999, Mr. Schilling
      placed seventeen press releases on the Company's corporate website which
      contained direct hyperlinks to the analyst reports and, as late as
      February 2000, the Company maintained press releases on its corporate
      website which referenced and contained hyperlinks to the analyst reports.
      The SEC further alleged that in a February 19, 1999 press release, the
      Company characterized the analyst as "independent" even though the
      Company, through its then investor relations firm, had agreed to pay the
      analyst 200,000 shares of its common stock for the report. The SEC found
      that Mr. Schilling had reviewed and approved the press releases posted on
      the Company's corporate website. The SEC also alleged that the false
      financial projections which appeared on the Internet fueled a rise in both
      the price and the trading volume of the Company's common stock

      The Company, including its subsidiaries, is periodically involved in
      litigation and administrative proceedings primarily arising in the normal
      course of its business. In the opinion of management, the Company's gross
      liability, if any, and without any consideration given to the availability
      of indemnification or insurance coverage, under any pending or existing
      litigation or administrative proceedings, other than those separately
      addressed above, would not have a material adverse impact upon the
      Company's financial statements.


18.   INTEREST AND MISCELLANEOUS INCOME

      Interest and miscellaneous income consist of the following:

<TABLE>
<CAPTION>
                                                 Fiscal Year    Fiscal Year
                                                    Ended          Ended
                                                 October 31,    October 31,
                                                    2004           2003
                                                ------------   ------------

<S>                                             <C>            <C>
      Interest income                           $         96   $         --
      Gains on settlements of
         obligations to vendors                       22,821         85,733
      Gains on settlements of
         debenture obligations                       232,583             --
      Other miscellaneous income                                      2,891
                                                ------------   ------------

      Total interest and miscellaneous income   $    255,500   $     88,624
                                                ============   ============
</TABLE>


                                      F-30
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


18.   INTEREST AND MISCELLANEOUS INCOME (continued)

      During fiscal 2004, statutes of limitations passed thereby prohibiting
      certain former vendors of the Company from further pursuing the collection
      of $22,821 in aggregate obligations. As a result, the Company recognized a
      corresponding gain.

      During fiscal 2004, certain debenture holders forgave $232,583 in
      principal and accrued interest in connection with conversions into shares
      of the Company's common stock. As a result, the Company recognized a
      corresponding gain.


19.   INTEREST AND FINANCING EXPENSES

<TABLE>
<CAPTION>
                                               Fiscal Year    Fiscal Year
                                                  Ended          Ended
                                               October 31,    October 31,
                                                  2004           2003
                                              ------------   ------------
<S>                                           <C>            <C>
      Interest expense                        $    211,328   $    353,516
      Beneficial conversion features
         of debentures issued                           --      1,379,077
                                              ------------   ------------

      Total interest and financing expenses   $    211,328   $  1,732,593
                                              ============   ============
</TABLE>


                                      F-31
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


20.   COMMITMENTS

      Operating Leases

      The Company leases its corporate facilities as well as a piece of office
      equipment under noncancellable operating leases with monthly payments of
      $2,823 and $716, respectively. The Company's wholly-owned subsidiary,
      Synosphere, leases its facility in Austin, Texas under a two year lease
      agreement beginning August 1, 2004 with monthly payments of approximately
      $2,500. The Company incurred aggregate rent expense under its operating
      leases of $68,095 and $43,625 during fiscal years 2004 and 2003,
      respectively.

      The future aggregate minimum lease payments under operating lease
      agreements in existence at October 31, 2004 are as follows:

<TABLE>
<CAPTION>
Fiscal years ending October 31,
-------------------------------
<S>                                            <C>
      2005                                     $     70,000
      2006                                           33,200
      2007                                              700
      2008                                               --
      2009                                               --
                                               ------------

      Total minimum operating lease payments   $    103,900
                                               ============
</TABLE>


      Officer's Compensation - iBIZ Technology Corp.

      As of October 31, 2004, 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 $125,000 for each officer.

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

      3.    Options for 120,000 shares of common stock at $0.20 per share which
            will vest and be exercisable for a period of ten years. None
            granted.

      4.    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.


                                      F-32
<PAGE>

                     IBIZ TECHNOLOGY CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

20.   COMMITMENTS (CONTINUED)

      Officers' Compensation - Synosphere, Inc.

      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. 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.

21.   CANCELLATION OF PREVIOUSLY PROPOSED SPIN-OFF OF IBIZ, INC.

      The Company continues to conduct substantially all of its operations
      through iBIZ, Inc., a wholly-owned subsidiary. On July 20, 2003, the
      Company's Board of Directors and a majority of its stockholders approved a
      proposed spin-off of iBIZ, Inc. as a stand-alone, separately-reporting
      public company. The proposed spin-off of iBIZ, Inc. was intended to
      facilitate a contemplated, although not legally consummated, transaction
      pursued with Enterprise Capital AG ("Enterprise"), an investment banking
      firm headquartered in Switzerland. Prior to any legal consummation of the
      contemplated transaction with Enterprise, all of the then assets and
      liabilities of iBIZ, Inc. would have reverted back to the Company. As a
      result, iBIZ, Inc. would, in effect, have become a legal public shell
      company. In September, the Company abandoned its efforts to spin-off iBIZ,
      Inc. due to problems encountered with Enterprise.

22.   FOURTH QUARTER ADJUSTMENTS

      The Company recorded certain adjustments in the fourth quarter that
      related to events or transactions in earlier fiscal quarters in 2004. The
      following schedule summarizes the adjustments and the revised results of
      operations in the applicable quarters:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                                          January 31, 2004     April 30, 2004    July 31, 2004
--------------------------------------------------------------------------------------------------------------
<S>                                                            <C>             <C>             <C>
      Net Loss, as previously reported                         $ (6,347,497)   $ (2,609,027)   $ (2,230,301)
      Fourth quarter adjustments:

         Correction of amortization of consulting fees              (62,015)       (119,301)        (25,910)
         Impairment of License Agreement                                                           (200,000)

         Dispute settlements                                        (20,000)         (7,500)

         Other adjustments                                          (55,596)        (30,850)        (17,150)
--------------------------------------------------------------------------------------------------------------
      Total fourth quarter adjustments                             (137,611)       (157,651)       (243,060)
--------------------------------------------------------------------------------------------------------------
      Net Loss, as adjusted                                    $ (6,485,108)   $ (2,766,678)   $ (2,473,361)
--------------------------------------------------------------------------------------------------------------

      Net Loss per share, as previously reported               $       0.00    $       0.00    $       0.00
      Effect of adjustments                                    $       0.00    $       0.00    $       0.00
--------------------------------------------------------------------------------------------------------------
      Net Loss per share, as adjusted                          $       0.00    $       0.00    $       0.00
--------------------------------------------------------------------------------------------------------------
</TABLE>


                                      F-33
<PAGE>

23.   SUBSEQUENT EVENTS (UNAUDITED)

      On December 7, 2004, the Company reached an agreement with the remaining
      debenture holders and converted the outstanding principal balance of
      $863,675 and accrued interest of $254,900 into 400,000,000 shares of the
      Company's common stock. As a result of this agreement, the Company will
      record a total of $390,086 benefit from the settlement of the debt during
      the first quarter of fiscal 2005.

      During December 2004, Pangea Investments GmbH returned 75 million shares
      to the Company that were originally issued to an escrow account in
      connection with the original option to purchase 100 million shares for
      services issued in January 2004 (see Note 13).

      On February 18, 2005, the Company closed a transaction pursuant to a
      Subscription Agreement, dated as of February 18, 2005, with an accredited
      investor pursuant to which the accredited investor lent an aggregate
      principal amount of $200,000 to the Company in exchange for (i) 8%
      promissory note in that aggregate principal amount, and (ii) warrants to
      purchase shares of the Company's common stock equal to one warrant for
      each share of its common stock which would be issued on the closing date
      of the loan assuming the complete conversion of the promissory note. An
      additional $500,000 has been committed, subject to the filing of a
      registration agreement.

      Additional stock issuances after October 31, 2004:

      o     2,566,667 shares of common stock where issued to an individual in
            exchange for $7,000 of accounts payable.
      o     75,000,000 shares of common stock were issued to an individual under
            a private placement. The Company received approximately $90,000 in
            cash.
      o     75,000,000 shares of common stock were issued to an individual under
            the exercise of an option. The Company received approximately
            $293,000 in cash.
      o     2,806,400 shares of common stock were issued in exchange for $14,032
            of accrued interest.
      o     44,744,275 shares of common stock were issued to an individual for
            legal services rendered; value $25,372.
      o     45,749,741 shares of common stock were issued to an individual for
            legal services rendered; value $110,600.
      o     1,087,193 shares of common stock were issued to an individual for
            expenses incurred on behalf of the Company; value $2,500.
      o     113,786,170 shares of common stock were issued to two officers of
            Synosphere for the quarterly bonuses called for in their employment
            contracts; value $250,000.


                                      F-34
<PAGE>

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

None

ITEM 8A. CONTROLS AND PROCEDURES

As of October 31, 2004, an evaluation was performed by Kenneth W. Schilling, our
President, Chief Executive Officer and Chairman of our Board of Directors, and
our current Acting Chief Financial and Accounting Officer, of the effectiveness
of the design and operation of our disclosure controls and procedures. Based on
that evaluation, Mr. Schilling concluded that our disclosure controls and
procedures were effective as of October 31, 2004. There have been no significant
changes in our internal controls or in other factors that could significantly
affect internal controls subsequent to October 31, 2004.

ITEM 8B.  OTHER INFORMATION

None.

                                    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    53      President, Chief Executive Officer, Acting
                                Principal Accounting and Financial Officer,
                                Chairman of Board of Directors

Mark Perkins            41      Executive Vice President and Director


Our directors serve until the next annual meeting and until their successors are
elected and qualified. Our 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 our predecessor, Southwest Financial Systems, in
1979, and has been our President, Chief Executive Officer, and Chairman of the
Board of Directors since our founding. Mr. Schilling studied electrical
engineering at the University of Pittsburgh and the Devry Institute of
Technology and served in the U.S. military. Mr. Schilling remains the subject to
a Cease and Desist Order from the U.S. Securities and Exchange Commission
("SEC"). The cease and desist order constituted part of a negotiated settlement
between Mr. Schilling and the SEC that was formally entered into on February 28,
2001 pursuant to which Mr. Schilling , without admitting or denying the SEC's
allegations against him, agreed to the entry of an Order enjoining him from
violating Section 10(b) of the Securities Exchange Act of 1934, as amended, and
Rule 10-b5 thereunder, and ordering him to pay a civil penalty of $20,000. In a
related action, we, as a company, without admitting or denying any of the SEC's
findings, consented to a cease-and-desist order enjoining us from committing or
causing any violation or any future violations of Section 10(b) of the
Securities Exchange Act of 1934, as amended, and Rule 10-b5 thereunder. The
underlying SEC Complaint alleged that Mr. Schilling provided false financial
projections to a purported analyst for research reports recommending the
purchase of our stock. The Complaint also stated that from February 1999 through
June 1999, Mr. Schilling placed 17 press releases on our corporate website which
contained direct hyperlinks to the analyst reports and, as late as February
2000, we maintained press releases on our corporate website which referenced and
contained hyperlinks to the analyst reports. The SEC further alleged that in a
February 19, 1999 press release, we characterized the analyst as "independent"
even though we, through our then investor relations firm, had agreed to pay the
analyst 200,000 shares of our common stock for the report. The SEC found that
Mr. Schilling had reviewed and approved the press releases posted on our
corporate website. The SEC also alleged that the false financial projections
which appeared on the Internet fueled a rise in both the price and the trading
volume of our common stock

Mark H. Perkins joined us in 1994 and currently serves as our Executive Vice
President. Mr. Perkins was subsequently appointed to our Board of Directors on
March 5, 1999. Prior to his joining us, 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 BA degree in business management from
California State University-Sonoma in 1987.

Code of Ethics

We have adopted a Code of Ethics that applies to all of our directors, officers
and employees, including our principal executive officer, principal financial


                                       20
<PAGE>

officer and principal accounting officer. We intend to satisfy the disclosure
requirement under Item 10 of Form 8-K regarding an amendment to, or waiver from,
a provision of our Code of Ethics by filing a Current Report on Form 8-K with
the SEC, disclosing such information.

Committees of the Board of Directors

As of October 31, 2004, we do not have any committees of our board of directors.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT, AS AMENDED.

Based solely upon our review of copies of Forms 3, 4 and 5, and any subsequent
amendments thereto, furnished to the Company by our directors, officers and
beneficial owners of more than ten percent of our common stock, we areaware of
the following Forms 3, 4 and/or 5 which certain of our directors, officers or
beneficial owners of more than ten percent of our common stock that, during our
fiscal year ended October 31, 2004, failed to file on a timely basis reports
required by Section 16(a) of the Securities Exchange Act of 1934:

      o     Forms 4 filed by Mark H. Perkins, the Company's Executive Vice
            President and director, on (i) January 8, 2004; (ii) January 20,
            2004; (iii) February 19, 2004; (iv) March 10, 2004; (v) April 1,
            2004; and (vi) August 3, 2004.

ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth certain compensation paid or accrued by us to
certain of our executive officers during our fiscal years ended October 31,
2004, 2003 and 2002.

                           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,   2004    150,000.00        0            0             0.00            0            0             0
President, CEO,         2003    175,000.00        0            0       523,652.39(1)         0            0             0
Acting Principal        2002     68,750.00        0            0        57,691.82(2)         0            0             0
Accounting Officer,
and Director
--------------------- --------- ------------ ----------- ------------ -------------- ----------- ------------ --------------
Mark H. Perkins,        2004    125,000.00        0            0             0.00            0            0             0
Executive Vice          2003    150,000.00        0            0       521,634.65(3)         0            0             0
President, Director     2002     69,791.69        0            0        57,021.48(4)         0            0             0
--------------------- --------- ------------ ----------- ------------ -------------- ----------- ------------ --------------
</TABLE>

(1)   Represents 272,083,624 shares issued at an average price of $0.002 during
      fiscal year 2003.

      t 0 6 (2) Represents 57,691,823 restricted shares issued at the market
price of $0.001 on August 22, 2002.

(3)   Represents 271,390,292 shares issued at an average price of $0.002 during
      fiscal year 2003.

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

OPTIONS/SAR GRANTS IN THE LAST FISCAL YEAR

No individual grants of stock options, whether or not in tandem with stock
appreciation rights ("SARs") and freestanding SARs have been made to any
executive officer or any director during our fiscal year ended October 31, 2004.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
OPTION/SAR VALUES

No individual exercises of stock options, whether or not in tandem with stock
appreciation rights ("SARs") and freestanding SARs have been made by executive
officer or any director during our fiscal year ended October 31, 2004.

LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR

We had no long-term incentive plans and made no stock awards during our fiscal
year ended October 31, 2004.

EMPLOYMENT AGREEMENTS

We have employment agreements with Kenneth Schilling and Mark Perkins which
became effective July 1, 2001 and expired as of June 30, 2004. We intend to


                                       21
<PAGE>

enter into new employment agreements with Messrs. Schilling and Perkins during
the 2005 fiscal year. Mr. Schilling's previous contract provided for an annual
salary of $150,000, quarterly performance bonuses equal to one percent of our
total revenues, and the granting of an option allowing for his subsequent
purchase of 300,000 shares of our common stock at $0.20 per share. Mr. Perkin's
previous contract provided for an annual salary of $125,000, quarterly
performance bonuses equal to one percent of our total revenues, and the granting
of an option allowing for his subsequent purchase of 120,000 shares of our
common stock at $0.20 per share. Each stock option vested immediately and is
exercisable for a period of ten years.

In addition to the foregoing, each of the above employment agreements contain
the following termination provisions:

(a)   Termination By Us For Cause: We 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 Us Without Cause: In the event Employee's employment
      hereunder shall be terminated by us for other than Cause: (1) the Employee
      shall thereupon receive as severance in a lump sum payment from us the
      amount of one 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 us in the amount of six 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, we shall pay the Employee in a lump sum the amount of three 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 us 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."

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

As of March 9, 2005, there were 3,725,160,822 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 March 7, 2005:

-     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       6.92%
                  2238 West Lone Cactus Drive
                  Suite 200
                  Phoenix, Arizona 85021

Common Stock      Mark H. Perkins                  235,831,298       6.33%
                  2238 West Lone Cactus Drive
                  Suite 200
                  Phoenix, Arizona 85021

Common Stock      Shares of all directors and      493,569,020       13.25%
                  executive officers as a
                  group (2 persons)


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Our privately-held predecessor (Southwest Financial) advanced monies to its sole
shareholder, Ken W. Schilling, our President, Chief Executive Officer and
Chairman of the Board of Directors. When we entered into a reverse merger in
January 1999, we executed a note receivable consolidating these past advances
which had a stated interest rate of 6.0% per annum, was collateralized by
personally owned shares of our common stock, and was payable upon demand. As the
collaterizing common stock was subsequently donated to us during fiscal 2001 in
order to facilitate its procurement of certain necessary corporate financing,
the aforementioned note receivable became unsecured. In the absence of any
collateral, given certain other concerns regarding its collectability, our Board
of Directors directed management during fiscal 2001 to establish a full
allowance against the note receivable, thus reducing its then net carrying value
to zero.

In November 2001, we had no additional common shares authorized for issuance. In
order to honor conversion elections by certain debenture holders, Mr. Schilling
donated 928,560 shares of our common stock owned by him to us. Upon obtaining
subsequent shareholder approval to increase our authorized common shares, our
Board of Directors approved the issuance of 1,500,000 restricted shares of our
common stock to Mr. Schilling as reimbursement and compensation for the
previously contributed common shares.

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

iBIZ did not file a Form 8-K for during its fiscal fourth quarter ended October
31, 2004.


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

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



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

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


                                       22
<PAGE>

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.



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.

10.47           Employment Agreement with Bryan Scott.

10.48           Employment Agreement with Ramon Perales.

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


                                       23
<PAGE>

(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. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

The aggregate fees billed for professional services rendered by our principal
accountants for the audit of our financial statements and for the reviews of the
financial statements included in our annual report on Form 10-KSB and 10-QSBs
respectively, and for other services normally provided in connection with
statutory filings were $68,794 and $42,639, respectively, for the years ended
October 31, 2004 and October 31, 2003.

Audit-Related Fees

We incurred fees of $67,788 and $4,950, respectively, for the years ended
October 31, 2004 and October 31, 2003 for professional services rendered by our
independent auditors that are reasonably related to the performance of the audit
or review of our financial statements and not included in "Audit Fees."

Tax Fees

The aggregate fees billed by our auditors for tax compliance matters were $0 for
the fiscal years ended October 31, 2004 and October 31, 2003.

All Other Fees

We did not incur any fees for other professional services rendered by our
independent auditors during the years ended October 31, 2004 and October 31,
2003.


                                       24
<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,
                    Chief Executive Officer, Chairman of
                    the Board of Directors, and Acting
                    Principal Financial and Accounting
                    Officer

                                          March 14, 2005

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, Chairman of
                    the Board of Directors, and Acting
                    Principal Financial and Accounting
                    Officer

                                          March 14, 2005

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

                                          March 14, 2005