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

                                   FORM 10-QSB

   (Mark One)
      [x]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
               For the three-month period ended September 30, 2005
                                       OR
                TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                        Commission file number 000-22515


                       SPEAKING ROSES INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

              Utah                                           20-0612376
  (State or other jurisdiction of                         (I.R.S. Employer
   incorporation or organization)                        Identification Number)

          545 West 500 South, Suite #170                       84010
                  Bountiful, Utah                            (Zip Code)
     (Address of principal executive offices)

       Registrant's telephone number, including area code: (801) 677-7673

          Securities registered pursuant to Section 12 (b) of the Act:

  Title of each class                Name of each exchange on which registered
  -------------------                -----------------------------------------
          None                                      None

           Securities registered pursuant to Section 12(g) of the Act:

                    Common Stock (par value, $.001 per share)
                                (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [x] No [ ]

As of November 7, 2005, there were 29,110,273 common shares outstanding.


<PAGE>

                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

PART I. FINANCIAL INFORMATION.


Item 1.  Financial Statements

The  accompanying  unaudited  condensed  consolidated  financial  statements  of
Speaking Roses  International,  Inc. and Subsidiary ("SRII" or the "Company") as
of September 30, 2005 and for the three and nine months ended September 30, 2005
and  2004,  have been  prepared  in  accordance  with  U.S.  generally  accepted
accounting  principles for interim financial reporting and pursuant to the rules
and  regulations  of the  Securities  and  Exchange  Commission.  The  unaudited
condensed financial  statements for the nine months ended September 30, 2004 are
combined  results  of  the  Company  and  Speaking  Roses,  LLC.  The  financial
statements do not include all of the information and footnotes  required by U.S.
generally  accepted  accounting  principles for complete  financial  statements.
These financial  statements should be read in conjunction with the notes hereto,
and the financial  statements and notes thereto included in our annual report on
Form 10-KSB for the year ended December 31, 2004.

All adjustments  (consisting only of normal recurring adjustments) necessary for
the fair  presentation  of our  financial  position as of September 30, 2005 and
December 31, 2004 and our results of operations,  financial position and changes
therein for the three and nine  months  ended  September  30, 2005 and 2004 have
been  included.  The results of  operations  for the three and nine months ended
September  30,  2005 may not be  indicative  of the  results for the year ending
December 31, 2005.

In Management's Discussion and Analysis or Plan of Operations in Item 2, we have
compared the operating results and financial  position of SRII for the three and
nine months ended  September 30, 2005 and of the Company and Speaking  Roses LLC
for the three and nine  months  ended  September  30,  2004.  We  believe  these
comparisons  may not be meaningful and caution should be exercised by readers in
utilizing these comparisons.



                                       2
<PAGE>
                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                                       September 30,          December 31,
                                                                                            2005                  2004
                                                                                      -------------------   -------------------
                                     ASSETS
                                     ------
<S>                                                                                  <C>                   <C>

CURRENT ASSETS
     Cash                                                                            $           94,400    $          523,072
     Accounts receivable, less allowance for doubtful accounts
         of $1,567 and $45,657, respectively                                                     49,981                62,785
     Inventories                                                                                 87,514                32,380
     Prepaid expenses                                                                            35,590                27,930
     Other current assets                                                                           709                     -
                                                                                     -------------------   -------------------

            TOTAL CURRENT ASSETS                                                                268,194               646,167
                                                                                     -------------------   -------------------

PROPERTY AND EQUIPMENT, at cost, net of
     accumulated depreciation and amortization
     of $117,280 and $57,843, respectively                                                      316,515               257,066
                                                                                     -------------------   -------------------

OTHER ASSETS
     Deposits                                                                                     9,267                 6,285
     Patents and trademarks, net of accumulated amortization
         of $26,542 and $13,971, respectively                                                   356,008               267,037
                                                                                     -------------------   -------------------

            TOTAL OTHER ASSETS                                                                  365,275               273,322
                                                                                     -------------------   -------------------


            TOTAL ASSETS                                                             $          949,984    $        1,176,555
                                                                                     ===================   ===================


                   LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                   ----------------------------------------------

CURRENT LIABILITIES
     Accounts payable, trade                                                         $          530,797    $          207,563
     Accrued expenses                                                                           116,428                56,737
     Area development rights deposits                                                           870,300                     -
     Accrued interest                                                                             8,067                     -
     Deferred revenue                                                                           100,038                96,173
     Note payable to shareholder                                                                250,000                     -
     Current portion of capital lease obligations                                                 3,299                32,702
                                                                                     -------------------   -------------------

            TOTAL CURRENT LIABILITIES                                                         1,878,929               393,175
                                                                                     -------------------   -------------------

DEFERRED REVENUE, less current portion                                                          170,008                     -
                                                                                     -------------------   -------------------
CAPITAL LEASE OBLIGATIONS, less current portion                                                  12,099                14,602
                                                                                     -------------------   -------------------
COMMITMENTS AND CONTINGENCIES (See note 13)

Preferred Stock, par value $.001; authorized 30,000,000 shares,
     no shares issued                                                                                 -                     -
Common Stock, par value $.001; authorized 70,000,000 shares,
     29,110,273 and 27,339,207 shares issued and outstanding, respectively                       29,110                27,339
     Additional paid-in capital                                                               6,443,626             4,903,427
     Accumulated deficit                                                                     (7,583,788)           (4,161,988)
                                                                                       -----------------     -----------------

            TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                             (1,111,052)              768,778
                                                                                        -----------------     -----------------

            TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                     $          949,984    $        1,176,555
                                                                                     ===================   ===================

</TABLE>



                                       3
<PAGE>

                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                     Three months ended                Nine months ended
                                                                       September 30,                     September 30,
                                                                 2005             2004             2005             2004
                                                             --------------   --------------   --------------   --------------
<S>                                                          <C>              <C>              <C>              <C>
SALES
     Product sales                                           $     202,201    $     177,684    $     896,667    $   1,271,288
     License fees and other revenue                                 50,017           53,787          142,105          177,179
     Royalties                                                      10,500           11,322           31,500           40,458
                                                             --------------   --------------   --------------   --------------
        TOTAL SALES                                                262,718          242,793        1,070,272        1,488,925

COST OF GOODS SOLD                                                 196,418          170,229          924,999        1,088,600
                                                             --------------   --------------   --------------   --------------

        GROSS PROFIT                                                66,300           72,564          145,273          400,325
                                                             --------------   --------------   --------------   --------------

OPERATING EXPENSES
     Sales and marketing                                           314,973          343,953        1,386,551        1,490,328
     General and administrative                                    450,349          381,046        1,248,392        1,013,320
     Research and development                                      413,716            6,628          461,151           17,712
                                                             --------------   --------------   --------------   --------------
        TOTAL OPERATING EXPENSES                                 1,179,038          731,627        3,096,094        2,521,360
                                                             --------------   --------------   --------------   --------------

        OPERATING LOSS                                          (1,112,738)        (659,063)      (2,950,821)      (2,121,035)
                                                             --------------   --------------   --------------   --------------

OTHER INCOME (EXPENSE)
     Other income                                                        -              558           14,203           15,069
     Interest income                                                   371            3,437              747           10,959
     Other expense                                                  (2,338)               -           (2,338)               -
     Interest expense                                               (9,474)          (2,149)        (481,863)          (8,470)
                                                             --------------   --------------   --------------   --------------

        TOTAL OTHER INCOME (EXPENSE)                               (11,441)           1,846         (469,251)          17,558
                                                             --------------   --------------   --------------   --------------

        LOSS BEFORE PROVISION FOR INCOME TAXES                  (1,124,179)        (657,217)      (3,420,072)      (2,103,477)

        Income tax expense                                            (930)            (800)          (1,730)            (900)
                                                             --------------   --------------   --------------   --------------

        NET LOSS                                             $  (1,125,109)   $    (658,017)   $  (3,421,802)   $  (2,104,377)
                                                             ==============   ==============   ==============   ==============

        NET LOSS PER COMMON SHARE,
           BASIC AND DILUTED                                 $       (0.04)   $       (0.02)   $       (0.12)   $       (0.08)
                                                             ==============   ==============   ==============   ==============

        WEIGHTED AVERAGE NUMBER OF COMMON
           SHARES OUTSTANDING,
               BASIC AND DILUTED                                29,026,112       26,439,207       28,066,176       25,562,548
                                                             ==============   ==============   ==============   ==============

</TABLE>

                                       4
<PAGE>

                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                           Nine months ended
                                                                                             September 30,
                                                                                       2005                2004
                                                                                 -----------------   -----------------
<S>                                                                              <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                                                    $     (3,421,802)   $     (2,104,377)
     Adjustments to reconcile net loss to net cash
         flows used in operating activities:
         Depreciation and amortization expense                                             74,531              48,350
         Common stock issued for interest expense                                         449,871                   -
         (Gain) / Loss on sale of assets                                                    2,338                 (53)
         Gain on forgiveness of liability                                                 (14,203)            (14,464)
     (Increase) decrease in operating assets:
         Accounts receivable                                                               12,804              45,885
         Inventories                                                                      (55,134)            (42,212)
         Prepaid expenses                                                                  (7,659)              7,527
         Other current assets                                                                (709)                  -
         Deposits                                                                          (2,982)             (1,500)
     Increase (decrease) in operating liabilities:
         Accounts payable, trade                                                          299,312            (197,165)
         Accrued expenses                                                                  59,691              21,168
         Area development rights deposits                                                 870,300                   -
         Accrued interest                                                                  24,196              14,464
         Deferred revenue                                                                 173,873             (98,734)
                                                                                 -----------------   -----------------

             NET CASH FLOWS USED IN OPERATING ACTIVITIES                               (1,535,573)         (2,321,111)
                                                                                 -----------------   -----------------

CASH FLOWS FROM INVESTING ACTIVITIES
     Purchase of property and equipment                                                   (90,036)           (133,144)
     Proceeds from sale of property and equipment                                           4,415                   -
     Increase in patents, trademarks and other intangibles                               (101,541)           (143,935)
                                                                                 -----------------   -----------------

             NET CASH FLOWS USED IN INVESTING ACTIVITIES                                 (187,162)           (277,079)
                                                                                 -----------------   -----------------

CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from notes payable to shareholders                                          750,000                   -
     Principal payments on notes payable                                                        -          (1,105,789)
     Principal payments on capital lease obligations                                      (31,907)                  -
     Proceeds from sale of common stock                                                   575,970           4,051,401
                                                                                 -----------------   -----------------

             NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES                            1,294,063           2,945,612
                                                                                 -----------------   -----------------

             INCREASE (DECREASE) IN CASH                                                 (428,672)            347,422

             CASH AT BEGINNING OF PERIOD                                                  523,072              41,723
                                                                                 -----------------   -----------------

             CASH AT END OF PERIOD                                               $         94,400    $        389,145
                                                                                 =================   =================

CASH PAID DURING THE PERIOD FOR
     Interest                                                                    $         15,863    $          8,470
     Income taxes                                                                $          1,730    $            900

</TABLE>
                                    Continued

                                       5
<PAGE>



                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

                                    Continued




Supplemental  schedule of non-cash investing and financing activities during the
nine months ended September 30, 2005:

In connection with the repayment of notes payable to  shareholders,  the Company
issued 1,000,000  shares of its common stock valued at $966,000,  to settle loan
balances totaling $500,000 plus $16,129 in accrued interest. As a result of this
transaction,  the  Company  recorded  additional  non-cash  interest  expense of
$449,871  representing the difference between the fair market value of the stock
on the settlement date and the loan balances.

The Company acquired  equipment  totaling $38,125 for which payment had not been
made as of September 30, 2005 and which is included in accounts payable.

                                       6
<PAGE>

                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(1)      Summary of significant accounting policies
         ------------------------------------------

         Nature  of  operations  -  Speaking  Roses   International,   Inc.  and
         Subsidiary   (the   "Company"  or  "SRII")  owns   patented  and  other
         proprietary  technology used to emboss flowers and other products.  The
         technology allows end users to request personalized floral arrangements
         using standardized or unique messages, logos, trademarks, and pictures.
         In  addition to its own  production,  the  Company  has  licensed  that
         technology  to large  wholesale  flower  concerns and other  parties to
         perform the actual  embossing  of flowers.  In the United  States,  the
         Company sells embossed flowers and bouquets containing embossed flowers
         directly to individuals,  businesses,  florists,  chain stores, funeral
         homes and large wedding and corporate  event  planners with  production
         and  fulfillment  primarily  provided  by the  Company  and by licensed
         wholesale flower providers. The Company has recently developed a retail
         distribution  model  and  has  begun  to  offer  area  development  and
         franchise rights in those jurisdictions which do not require regulatory
         approval. The Company formed a wholly owned subsidiary,  Speaking Roses
         Development  Corporation ("SRDC"),  during August 2005 through which to
         conduct its  franchise  activities.  SRII's  financial  statements  now
         include  the  accounts  of SRDC.  The  Company  has also  licensed  the
         technology  and  equipment  to  exclusive  licensees  in  international
         markets and is beginning to offer area development and franchise rights
         internationally.

         Acquisition - On February 6, 2004, Millennium Electronics,  Inc. issued
         20,551,264  shares to Speaking  Roses,  LLC ("SR") in exchange for SR's
         operating assets and liabilities. These newly issued shares represented
         approximately  80% of the Company's then outstanding  common shares. In
         connection with this transaction, the Company changed its domicile from
         the State of Nevada to the State of Utah. In addition, the then current
         officers and  directors of the Company  resigned and  affiliates  of SR
         were appointed and elected as the Company's officers and directors. The
         acquisition was treated, for accounting purposes, as a recapitalization
         in a reverse merger.  Therefore, the financial statements as of and for
         the year ended December 31, 2004 included in the Company's Form 10-KSB,
         included  historical  results  of SR through  February  6, 2004 and the
         combined  results  of the  Company  and SR  subsequent  to the  reverse
         merger.  The Company paid all legal and  accounting  expenses and other
         direct  costs  totaling   approximately  $71,000  associated  with  the
         acquisition.

         Basis  of   presentation  -  The   accompanying   unaudited   condensed
         consolidated financial statements have been prepared in accordance with
         the  instructions  to  Form  10-QSB  but  do  not  include  all  of the
         information and notes required by U.S.  generally  accepted  accounting
         principles  and  should,  therefore,  be read in  conjunction  with our
         annual report on Form 10-KSB.  These condensed  consolidated  financial
         statements  include only normal recurring  adjustments  necessary for a
         fair  presentation of the financial  statements.  The interim operating
         results are not necessarily indicative of the results for a full year.

         The unaudited condensed  consolidated  financial statements include the
         accounts of the  Company and its wholly  owned  subsidiary,  SRDC.  All
         material intercompany balances and transactions have been eliminated in
         consolidation.  Certain  amounts in prior  years are  reclassified  for
         comparability    to   the   current    year's    presentation.    These
         reclassifications have no effect on net income or loss.

                                       7
<PAGE>

                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(1)      Summary of significant accounting policies (continued)
         ------------------------------------------------------

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

         Inventories  -  Inventories  consist  primarily of product for both the
         wholesale and retail  channels  including silk roses,  franchise  store
         supplies,  inks and other printing  supplies,  and shipping  materials.
         Inventories  are  stated  at the  lower of cost or  market,  with  cost
         determined on the first-in, first-out basis and market determined using
         realizable value.

         Patents and trademarks - Certain costs related to obtaining patents and
         trademarks of the Company have been capitalized. Patents and trademarks
         are  amortized  over  their  legal  lives of 20 years  from the date of
         filing.

         Property  and  equipment - Property and  equipment  are stated at cost.
         Major  additions  and  improvements   are   capitalized.   Repairs  and
         maintenance costs are expensed when incurred.

         Property held under capital leases is amortized over the shorter of the
         terms of the  respective  leases or the  estimated  useful lives of the
         assets.   Depreciation   and   amortization   are  computed  using  the
         straight-line method over the following estimated useful lives:

            Assets                                          Useful Lives
            ------                                          ------------

         Machinery and equipment                              3 - 7 years
         Furniture and fixtures                               3 - 7 years
         Computer equipment and software                      3 - 5 years
         Leasehold improvements                                   5 years

         Upon  retirement or other  disposition of property and  equipment,  the
         cost and accumulated  depreciation or amortization are removed from the
         accounts   and  the   resulting   gain  or  loss  is  included  in  the
         determination of net income or loss.


                                       8
<PAGE>

                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(1)      Summary of significant accounting policies (continued)
         ------------------------------------------------------

         Long-lived assets - The Company assesses its property and equipment and
         other  long-lived  assets in  accordance  with  Statement  of Financial
         Accounting  Standards ("SFAS") No. 144,  "Accounting for the Impairment
         or Disposal of Long-Lived Assets." The Company periodically reviews its
         property and equipment and other definite-lived tangible and intangible
         assets for  impairment in  accordance  with SFAS No. 144 when events or
         circumstances  indicate  the  existence  of a possible  impairment.  In
         determining  whether  an asset  is  impaired,  the  Company  must  make
         assumptions  regarding  recoverability  of costs,  estimated future net
         cash flows from the asset,  intended use of the asset and other related
         factors.  If these estimates or their related  assumptions  change, the
         Company may be required to record impairment  charges for these assets.
         As of December  31,  2004,  the Company  determined  that it had excess
         floral  embossing  equipment and the carrying  value of this  equipment
         exceeded the estimated net future cash flows.  An impairment  charge of
         $52,582 was recorded in the fourth quarter of 2004. The Company did not
         record  any  impairment  charges  for the three and nine  months  ended
         September 30, 2005 and 2004.

         Advertising  costs - Advertising  costs are charged to operations  when
         incurred.  Advertising  expense  was  $10,885  and $7,628 for the three
         months ended September 30, 2005 and 2004, respectively, and $51,154 and
         $326,796  for the nine  months  ended  September  30,  2005  and  2004,
         respectively.

         Income  Taxes - Income  taxes  are  accounted  for  using the asset and
         liability  method.  Deferred  income  tax assets  and  liabilities  are
         recognized for the future tax consequences  attributable to differences
         between the financial statement carrying amounts of the existing assets
         and liabilities and their  respective tax bases using enacted tax rates
         in effect for the year in which the  differences are expected to affect
         taxable income. The Company provides a valuation allowance for deferred
         tax assets  when it does not  believe  that it is more  likely than not
         that the deferred tax assets will be realized. As of September 30, 2005
         and  December  31,  2004,  the  Company has  recorded a 100%  valuation
         allowance on its deferred income tax assets.

         Net loss per common share - The Company applies  Statement of Financial
         Accounting  Standards  No. 128  "Earnings  Per Share,"  (SFAS No. 128),
         which requires the calculation of basic and diluted net loss per common
         share. Basic net loss per common share is computed by dividing net loss
         by the weighted average number of common shares  outstanding during the
         period.  Diluted  net loss per common  share is  computed  taking  into
         account  dilutive common stock  equivalents  using the "treasury stock"
         method.  Common stock  equivalents  for the three and nine months ended
         September  30, 2005 and 2004 were not  included in the  computation  of
         diluted  net loss per common  share  because  they were  anti-dilutive,
         thereby decreasing the net loss per common share.

                                       9
<PAGE>

                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(1)      Summary of significant accounting policies (continued)
         ------------------------------------------------------

         Revenue  recognition - Revenue from direct  product sales is recognized
         when the following four revenue  criteria (as defined by the Securities
         and  Exchange  Commission's  Staff  Accounting  Bulletin  No. 104 ("SAB
         104")) are met: (1) persuasive  evidence of an arrangement  exists; (2)
         products are shipped and the customer  takes  ownership and assumes the
         risk of loss; (3) the selling price is fixed or  determinable;  and (4)
         collectibility is reasonably assured.  The Company uses domestic floral
         wholesalers  to emboss,  fulfill and  distribute  their direct  product
         sales.  The  wholesalers  emboss and fulfill orders using the Company's
         proprietary   technology   and  equipment.   Under  these   fulfillment
         arrangements,  the Company is the primary  obligor,  assumes  inventory
         risk  upon  customer  return,  establishes  price,  provides  embossing
         specifications and techniques and assumes credit risk. As a result, and
         in  accordance  with  Emerging  Issues Task Force No. 99-19  "Reporting
         Revenue Gross as a Principal versus Net as an Agent" (EITF 99-19),  the
         Company  recognizes  revenue on a gross basis for direct product sales.
         Gross sales are reduced by returns, chargebacks and other discounts.

         Revenue from licensing  agreements  with  international  wholesalers is
         recognized on a monthly basis over the lives of the agreement beginning
         on the commencement dates of the license agreements. Under the terms of
         these  non-cancelable  license  agreements,  fees are generally paid in
         advance  by the  wholesaler  for the  exclusive  rights  to  distribute
         imprinted  floral  products  within  a  geographical  region.  Fees are
         recorded  initially as deferred  revenue and  amortized as revenue on a
         straight-line  basis  over the  lives of the  agreements.  The terms of
         these non-cancelable license agreements are generally 2 to 4 years. The
         Company also receives a royalty on sales of all  imprinted  flowers and
         monthly rental fees for use of the proprietary equipment. Royalties are
         recognized as earned in accordance with SAB 104 and EITF 99-19.

         Revenue from  wholesale  originated  sales is  recognized as commission
         revenue when the revenue recognition criteria as defined in SAB 104 are
         met. Under these arrangements,  the wholesalers initiate sales to their
         customers,  are  responsible for collections and have a risk of loss of
         inventory.  The Company  recognizes only its commission  portion of the
         price paid by the customers to the  wholesalers  for the products since
         the  Company  is  acting as an agent in such  transactions.  Commission
         revenues  are  reduced   accordingly   for  returns,   chargebacks  and
         discounts.

         The Company  recognizes  franchise  fee revenue and revenue  associated
         with sales of area  development  rights when earned in accordance  with
         SFAS No. 45,  "Accounting  for Franchise  Fee  Revenue."  Franchise fee
         revenue is recognized when all material services or conditions relating
         to the  sale  of a  franchise  have  been  substantially  performed  or
         satisfied by the Company,  which generally occurs upon the commencement
         of franchise  operations.  Revenues  from the sale of area  development
         rights are recognized proportionately as the franchised stores, subject
         to the area  development  agreements,  commence  operations.  Franchise
         royalties, which are based on a percentage of franchised stores' sales,
         are recognized as earned. As of September 30, 2005, the Company had not
         yet  recognized  any  revenue  associated  with  franchise  fees,  area
         development rights or franchise royalties.



                                       10
<PAGE>

                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



(1)      Summary of significant accounting policies (continued)
         ------------------------------------------------------

         The Company  records  provisions  against revenue for sales returns and
         allowances in the same period as the related  revenue is recorded.  The
         Company also records  estimates  for bad debt  expense  resulting  from
         customers'  inability to pay for the products or services  received due
         to such factors as bankruptcy.  These estimates are based on historical
         sales returns and bad debt expenses,  analysis of credit memo data, and
         other known factors.  If the historical  data we use to calculate these
         estimates  does not  properly  reflect  future  returns  or bad  debts,
         revenue or net loss will be overstated or understated.

         Accounting  for stock  based  compensation  - The  Company  adopted the
         disclosure  requirements of Statement of Financial Accounting Standards
         ("SFAS")  No.  123,  "Accounting  for  Stock-Based  Compensation."  The
         Company  will  continue  to  measure   compensation   expense  for  its
         stock-based  employee  compensation  plans  using the  intrinsic  value
         method  prescribed by APB Opinion No. 25,  "Accounting for stock Issued
         to Employees," and related  interpretations in accounting for its plans
         and  does  not  recognize  compensation  expense  for  its  stock-based
         compensation plans other than for options granted to non-employees.  If
         the Company had elected to recognize  compensation  expense  based upon
         the fair  value at the grant  date for  awards  under  its  stock-based
         compensation  plans consistent with the methodology  prescribed by SFAS
         No. 123, the  Company's net loss and net loss per common share would be
         increased to the following pro forma amounts:
<TABLE>
<CAPTION>

                                        Three Months Ended         Nine Months Ended
                                           September 30,              September 30,
                                        2005           2004          2005        2004                                     2004
                                    ------------   ----------   ------------   ------------
<S>                                 <C>            <C>          <C>            <C>
Net loss as reported                $ (1,125,109)  $ (658,017)  $ (3,421,802)  $ (2,104,377)
Add (Deduct): Change in stock-
   based employee compensation
   included in reported net loss,
   net of $0 related tax effects               -            -              -           -
Add: Total stock-based employee
   compensation expense determined
   under fair value based method
   for all awards, net of $0
   related tax effects                   (65,843)           -       (135,355)      (501,455)
                                    ------------   ----------   ------------   ------------

Pro forma net loss                  $ (1,190,952)  $ (658,017)  $ (3,557,157   $ (2,605,832)
                                    ============   ==========   ============   ============

Net loss per common share (basic and diluted):
As reported                         $      (0.04)  $    (0.02)  $      (0.12)  $      (0.08)
                                    ============   ==========   ============   ============
Pro forma                           $      (0.04)  $    (0.02)  $      (0.13)  $      (0.10)
                                    ============   ==========   ============   ============
</TABLE>

                                       11
<PAGE>
                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



(1)      Summary of significant accounting policies (continued)
         ------------------------------------------------------

         In calculating pro forma compensation  related to employee stock option
         grants, the fair value of each stock option is estimated on the date of
         grant using the  Black-Scholes  option-pricing  model and the following
         weighted average assumptions:

                                     Three months ended      Nine months ended
                                       September 30,            September 30,
                                      2005        2004       2005        2004
                                    --------   --------   --------    --------
Dividend yield                      None        N/A        None          N/A
Expected volatility                 144.68%     N/A        145.03%       N/A
Risk-free interest rate             4.34%       N/A        4.23%         N/A
Expected life of options (years)    10.0        N/A        10.0          N/A


         Receivables - The Company  records an allowance  for doubtful  accounts
         receivable based on the collection  history from the specific customer.
         The allowance for doubtful  accounts at September 30, 2005 and December
         31, 2004 was $1,567 and $45,657, respectively.

         Concentrations of credit risk - Financial instruments which potentially
         subject the Company to  concentrations  of credit risk  consist of cash
         and accounts  receivable.  The Company  places its cash with  federally
         insured  financial  institutions.  At September 30, 2005, the Company's
         cash in banks did not exceed the federally insured limits.

         Recent   Pronouncements   -  The  Company   accounts  for   stock-based
         compensation  awards  issued to  employees  using the  intrinsic  value
         measurement   provisions  of  APB  Opinion  No.  25.  Accordingly,   no
         compensation  expense has been  recorded for stock  options  granted to
         employees with exercise  prices greater than or equal to the fair value
         of the  underlying  common stock at the option grant date.  On December
         16, 2004, the FASB issued Statement of Financial  Accounting  Standards
         No. 123 (revised 2004) ("SFAS No. 123R"),  Share-Based  Payment,  which
         eliminates the alternative of applying the intrinsic value  measurement
         provisions of APB Opinion No. 25 to stock compensation awards issued to
         employees. The new standard requires enterprises to measure the cost of
         employee   services  received  in  exchange  for  an  award  of  equity
         instruments  based on the grant-date fair value of the award. That cost
         will be recognized over the period during which an employee is required
         to provide  services in exchange for the award,  known as the requisite
         service period (usually the vesting period).

         The Company has not yet  quantified the effects of the adoption of SFAS
         No.  123R,  but it is  expected  that the new  standard  will result in
         significant stock-based  compensation expense. The pro forma effects on
         net loss and net loss per common  share if the  Company had applied the
         fair value  recognition  provisions  of original  SFAS No. 123 on stock
         compensation   awards   (rather  than  applying  the  intrinsic   value
         measurement  provisions of APB Opinion No. 25) are  disclosed  above in
         Stock-Based  Compensation.  Although the pro forma  effects of applying
         the original  SFAS No. 123 may be indicative of the effects of adopting
         SFAS No. 123R, the  provisions of these two  statements  differ in some
         important  respects.  The actual effects of adopting SFAS No. 123R will
         be dependent  on numerous  factors  including,  but not limited to, the
         valuation model chosen by the Company to value stock-based  awards, the
         assumed  award  forfeiture   rate,  the  accounting   policies  adopted
         concerning the method of recognizing  the fair value of awards over the
         requisite  service  period,  and the  transition  method (as  described
         below) chosen for adopting SFAS No. 123R.

                                       12
<PAGE>
                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



(1)      Summary of significant accounting policies (continued)
         ------------------------------------------------------

         SFAS No. 123R will be effective  for the Company  beginning  January 1,
         2006,  and  requires  the  use  of  either  the  Modified   Prospective
         Application  Method or the  Modified  Retrospective  Method.  Under the
         Modified Prospective Method, SFAS No. 123R is applied to new awards and
         to awards modified, repurchased, or cancelled after the effective date.
         Additionally, compensation cost for the portion of awards for which the
         requisite service has not been rendered (such as unvested options) that
         are  outstanding  as of the date of adoption shall be recognized as the
         remaining  requisite  services  are  rendered.  The  compensation  cost
         relating to unvested  awards at the date of adoption  shall be based on
         the  grant-date  fair value of those awards as calculated for pro forma
         disclosures under the original SFAS No. 123.  Alternatively,  companies
         may use the Modified Retrospective  Application Method. This method may
         be applied to all prior years for which the  original  SFAS No. 123 was
         effective  or only to prior  interim  periods  in the  year of  initial
         adoption. If the Modified Retrospective  Application Method is applied,
         financial statements for prior periods shall be adjusted to give effect
         to the fair-value-based method of accounting for awards on a consistent
         basis with the pro forma  disclosures  required for those periods under
         the original SFAS No. 123.

         On April 15,  2005,  the  Securities  and  Exchange  Commission  issued
         release  No.  33-8568,  Amendment  to Rule  4-01(a) of  Regulation  S-X
         Regarding  the  Compliance  Date for SFAS No.  123R.  The amended  rule
         permits  calendar year  registrants  subject to oversight by the SEC to
         implement  SFAS No. 123R at the beginning of its next fiscal year.  The
         Company  will  implement  SFAS No.  123R at the  beginning  of its next
         fiscal year (January 1, 2006).

         In  December  2004,  the FASB  issued  Staff  Position  No.  FAS 109-1,
         Application of FASB No. 109,  Accounting  for Income Taxes,  to the Tax
         Deduction on Qualified  Production  Activities Provided by the American
         Jobs  Creation  Act of 2004  (AJCA).  The AJCA was  signed  into law in
         October  2004 and  includes a tax  deduction  of up to 9 percent  (when
         fully phased in) of the lesser of a) "qualified  production  activities
         income"  as  defined  in the  Act,  or b)  taxable  income  (after  the
         deduction for the utilization of any net operating loss carryforwards).
         The FASB  concluded  that the tax relief  (special  tax  deduction  for
         domestic  manufacturing)  from this legislation should be accounted for
         as a "special  deduction" instead of a tax rate deduction.  The Company
         is  expecting  to start  claiming  this  benefit in 2005.  The  Company
         expects the  adoption of Staff  Position  No. FAS 109-1 will not have a
         material  impact on the  Company's  financial  position  or  results of
         operations.

         In November  2004, the FASB issued SFAS No. 151,  Inventory  Costs - An
         Amendment  of ARB No.  43,  Chapter  4.  SFAS No.  151  clarifies  that
         abnormal amounts of idle facility expense,  freight, handling costs and
         spoilage  should be expensed as incurred  and not included in overhead.
         The  provisions  in SFAS No.  151 are  effective  for  inventory  costs
         incurred  during  fiscal  years  beginning  after  June  15,  2005  and
         companies must apply the standard  prospectively.  The Company  expects
         the  adoption  of SFAS No. 151 will not have a  material  impact on the
         Company's financial position or results of operations.


                                       13
<PAGE>
                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(2)      Going concern
         -------------

         The accompanying  financial  statements have been prepared assuming the
         Company  will  continue  as a going  concern,  which  contemplates  the
         realization of assets and the satisfaction of liabilities in the normal
         course of business.  The Company has incurred  cumulative net losses of
         $7,583,788  as of  September  30,  2005 and  losses of  $1,125,109  and
         $658,017  for the  three  months  ended  September  30,  2005 and 2004,
         respectively,  and  $3,421,802 and $2,104,377 for the nine months ended
         September 30, 2005 and 2004,  respectively.  At September 30, 2005, the
         Company had total cash available of $94,400.

         The above factors raise substantial doubt that the Company will be able
         to continue as a going  concern  unless the Company is able to generate
         sufficient  cash  flows  from  its  operating  activities  to meet  its
         obligations  as they  come  due or  obtain  additional  debt or  equity
         financing.

         The  Company is  attempting  to raise  additional  funds;  however,  no
         assurance  can be given that the  Company  will be able to obtain  such
         financing  on terms  favorable  to the  Company or at all.  Any sale of
         additional  equity  or  debt  securities  would  result  in  additional
         dilution to the Company's shareholders.

         Management's plans to improve the Company's  liquidity position include
         raising additional capital through the sale of common stock or issuance
         of debt.  During the nine months ended  September 30, 2005, the Company
         issued  1,771,066  shares of its common stock and received net proceeds
         of $575,970.  The Company also received  $750,000 in exchange for notes
         payable to shareholders and received $870,300 in cash from deposits for
         area development rights for territories to be determined.

         The financial statements do not include any adjustments relating to the
         recoverability  and  classification  of asset  carrying  amounts or the
         amount and classification of liabilities that might be necessary should
         the Company be unable to continue as a going concern.

(3)      Inventories
         -----------

         As of September 30, 2005, total inventories consist of the following:

                                       September 30,         December 31,
                                     ---------------   ------------------
                                            2005                 2004
                                     ---------------   ------------------

Floral products                      $        31,756    $           7,078
Non-floral products                           27,504                3,434
Printing supplies                             18,357               17,062
Shipping materials                             9,897                4,806
                                     ----------------   ------------------
     Total inventories               $        87,514    $          32,380
                                     ================   ==================


                                       14
<PAGE>

                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




(4)      Property and equipment
         ----------------------

                                                 September 30,     December 31,
                                                     2005             2004
                                                ------------------------------

Machinery and equipment                         $      205,789   $    171,392
Furniture and fixtures                                 106,984         46,850
Computer equipment and software                        113,433         96,667
Leasehold improvements                                   7,589              -
                                                ---------------  -------------
                                                       433,795        314,909
Accumulated depreciation and amortization             (117,280)       (57,843)
                                                ---------------  -------------

         Net property and equipment             $      316,515   $    257,066
                                                ===============  =============

        Property and equipment held under capital lease are as follows:

                                                 September 30,    December 31,
                                                      2005            2004
                                                ---------------  -------------

Machinery and equipment                         $       23,368   $     84,195
Furniture and fixtures                                       -         14,174
                                                ---------------  -------------
                                                        23,368         98,369
Accumulated amortization                                (5,169)       (36,143)
                                                ---------------  --------------
         Net property and equipment held under
             capital leases                     $       18,199   $     62,226
                                                ================  =============

         Total depreciation and amortization expense was $22,888 and $16,522 for
         the three months ended September 30, 2005 and 2004,  respectively,  and
         $61,775 and $43,426 for the nine months  ended  September  30, 2005 and
         2004, respectively.

(5)      Intangible assets
         -----------------

         Amortization  expense was $4,623 and $1,613 for the three  months ended
         September 30, 2005 and 2004,  respectively,  and $12,570 and $4,924 for
         the nine months ended September 30, 2005 and 2004, respectively.

                                            September 30,         December 31,
                                                2005                  2004
                                        ------------------     -----------------
Definite-lived intangible assets:
     Patents                            $       201,605        $      151,495
     Trademarks                                 180,945               129,513
                                        ------------------     -----------------

         Total                                  382,550               281,008

         Accumulated amortization                26,542                13,971
                                        ------------------     -----------------

         Net intangible assets          $       356,008        $      267,037
                                         ==================     ================


                                       15
<PAGE>


                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



(6)      Accounts payable, trade
         -----------------------

         As of September  30,  2005,  the  Company's  accounts  payable  balance
         included two amounts owed to vendors that  exceeded 5% of total current
         liabilities.  The amounts,  $153,114 and $114,930,  were payable to the
         Company's patent law firm and corporate law firm, respectively.

(7)      Area development rights deposits
         --------------------------------

         During the nine months ended  September 30, 2005,  the Company  entered
         into  three  agreements  for the sale of area  development  rights  and
         received deposits  totaling  $870,300.  These deposits  represent funds
         collected from potential area developers of retail distribution outlets
         in  territories  yet  to be  determined.  One  of  the  potential  area
         developers,  who owns more than 5% of the Company's common stock,  paid
         $750,000 for the right to,  within sixty days of being  provided with a
         form of area  development  agreement,  choose to either  enter into the
         area  development  agreement or be issued a convertible note payable by
         the Company.  The convertible note would have a six-month term,  accrue
         interest at 12% per annum, and be convertible into common stock at $.50
         per  share.  The area  developers  have a right to  receive a refund of
         their deposits,  plus interest,  if the Company does not timely provide
         them with forms of area development agreements.

(8)      Deferred revenue
         ----------------

         As of September 30, 2005, the Company has deferred  revenue of $270,046
         which  consists of $195,960 of deferred  revenue  associated  with area
         development rights and $74,086 associated with international  licensing
         agreements.

         The Company has entered into non-cancelable  licensing  agreements with
         international  wholesalers  with  terms  of 2 to 4 years.  Under  these
         contracts  the  wholesalers  acquire  exclusive  rights  to  distribute
         imprinted  floral  products  within a geographic  region.  License fees
         under these  agreements  are paid to the Company at  inception  and are
         recognized  over the lives of the  contracts  using  the  straight-line
         method.

         The  Company  has not  recognized  any  revenue  associated  with  area
         development  rights as of September  30, 2005.  The Company  recognized
         sales of  international  license fee revenue of $38,375 and $37,334 for
         the three months ended September 30, 2005 and 2004,  respectively,  and
         $102,087 and $108,839 for the nine months ended  September 30, 2005 and
         2004, respectively.

(9)      Notes payable to shareholder
         ----------------------------

         In May 2005, a shareholder  loaned  $250,000 to the Company as a 90 day
         short-term loan with interest  accruing at an annual rate of 8%. At the
         end of the 90 day term,  the loan was  extended  for an  additional  30
         days. At the end of the extension  period,  the loan was converted to a
         demand note and no request for payment has been received.

                                       16
<PAGE>

                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



(10)     Capital leases
         --------------

         The  Company  has  capitalized  lease  obligations  for  $15,397  as of
         September  30,  2005.  The  current  portion of the  capitalized  lease
         obligations  is $3,298.  Future  minimum lease  payments  under capital
         leases  together  with  the  present  value  of the net  minimum  lease
         payments  are  as  follows:

         Years Ending December 31,
          -------------------------
                2005                                         $        1,155
                2006                                                  4,620
                2007                                                  4,620
                2008                                                  4,620
                2009                                                  3,820
                                                             --------------
         Total minimum lease payments                                18,835

         Less amount representing interest                           (3,438)
                                                             --------------

         Present value of net minimum lease payments         $       15,397
                                                             ==============

(11)     Stockholders equity
         -------------------

         During the nine months ended  September  30, 2005,  the Company  issued
         1,771,066  shares of its $.001 par value common stock to six  unrelated
         accredited investors. The total net proceeds were $575,970.

(12)     Stock option plan
         -----------------

         During  the year  ended  December  31,  2004,  the  Company's  Board of
         Directors  adopted the "2004 Speaking Roses Equity Incentive Plan." The
         stock option plan  provides that options will be granted at an exercise
         price equal to or greater than the fair market value,  have an exercise
         period of not more than ten years, and vest on a schedule determined by
         the Compensation  Committee of the Board of Directors.  The Company has
         reserved  5,000,000  shares of its common stock to administer  the plan
         through  awards to qualifying  employees,  directors  and  non-employee
         consultants.


                                       17
<PAGE>

                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



(12)     Stock option plan (continued)
         -----------------------------

         On November 22, 2004,  300,000  options under the "2004  Speaking Roses
         Equity  Incentive  Plan"  were  granted  and  vested to  members of the
         Company's  Board of  Directors.  The stock  options  were granted at an
         exercise price equal to the fair market value on the date of the grant,
         which was $1.60 per share.
                                                Exercise
                                    Options       Price      Exercisable
                                    ---------   --------   -------------
Outstanding, December 31, 2003              -  $      -                -

     Granted, October 21, 2004        590,000      1.70                -
     Granted, November 22, 2004       300,000      1.60          300,000
     Exercised                              -         -                -
     Canceled                               -         -                -
                                    ---------             --------------

Outstanding, December 31, 2004        890,000                    300,000

     Granted, April 21, 2005          300,000     0.71                 -
     Granted, June 1, 2005            200,000     1.00                 -
     Granted, August 5, 2005          420,000     1.50                 -
     Exercised                              -        -                 -
     Canceled                        (330,000)    1.70                 -

                                    ---------             --------------
Outstanding, September 30, 2005     1,480,000                    300,000
                                    =========             ==============

(13)     Operating leases
         ----------------

         The Company leases multiple facilities for its general, administrative,
         selling and  production  activities.  Rent expense for the three months
         ended   September   30,  2005  and  2004  was   $44,748  and   $13,341,
         respectively,  and  $106,625  and  $41,580  for the nine  months  ended
         September 30, 2005 and 2004, respectively.

(14)     Income taxes
         ------------

         The Company has net operating loss  carryforwards  and other  temporary
         differences  which  give  rise  to a  deferred  income  asset.  Because
         management has not determined  that it is more likely than not that the
         deferred income tax asset will be realized,  a valuation  allowance has
         been provided equal to the amount of the net deferred income tax asset.
         Income tax expense for the three and nine months  ended  September  30,
         2005 and 2004  consists of minimum  state  income  taxes  during  those
         periods.


                                       18
<PAGE>
                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(15)     Related party transactions
         --------------------------

         For the three months  ended  September  30, 2005 and 2004,  the Company
         paid management and consulting fees and other expenses totaling $13,953
         and $973,  respectively,  and  $82,237  and $30,235 for the nine months
         ended  September  30,  2005  and  2004,   respectively,   to  companies
         controlled  by  affiliates  of certain  principal  shareholders  of the
         Company.  As of September 30, 2005, the Company had amounts  payable to
         those companies  totaling $13,604;  $7,237 of the total was recorded in
         accrued expenses and $6,367 was recorded in accounts payable, trade. As
         of  December  31,  2004,  the  Company  had  amounts  payable  to those
         companies  totaling  $2,225;  $1,821 in  accrued  expenses  and $405 in
         accounts  payable,  trade. The Company had no accounts  receivable from
         related parties as of September 30, 2005 nor as of December 31, 2004.

         In May 2005, a shareholder, who is also a member of the Company's Board
         of  Directors,  loaned  $250,000 to the Company as a 90 day  short-term
         loan with interest  accruing at an annual rate of 8%. At the end of the
         90 day term,  the loan was extended for an  additional  30 days. At the
         end of the  extension  period,  the loan was converted to a demand note
         and no request for payment has been received.

(16)     Subsequent events
         -----------------

         During the three months ended September 30, 2005, a member of the Board
         of Directors  loaned  $65,000 to the Company and received a demand note
         with an annual  interest  rate of 8%. In addition,  a member of another
         Director's  family  loaned  $100,000  to the  Company  and  received  a
         short-term  note  with an annul  interest  rate of 8% which  was due on
         November  15,  2005.  The note holder has agreed to extend the due date
         until November 25, 2005.

         On September  7, 2005,  the Company  entered  into an Area  Development
         Agreement with Business  Retail Group,  LLC owned by Mike Glauser,  the
         Company's  Vice  President  of Retail  Operations,  and his  wife.  The
         Agreement permits the area developer to refer potential  franchisees to
         the Company and to share in any franchise  fees paid by  franchisees in
         Utah and Clark County,  Nevada.  The Company  granted  Business  Retail
         Group,  LLC these  rights in  exchange  for  research  and  development
         services provided to the Company for its retail  expansion.  A non-cash
         charge of $195,960 was recorded in the three months ended September 30,
         2005 which  represented  the  estimated  fair value of the  rights.  On
         October  28,  2005,  the  Company  entered  into  its  first  franchise
         agreement  with the same entity.  The  franchise  agreement  allows the
         franchisee  to open  stores  under the  Speaking  Roses  name using the
         Company's  technology.  The Company will receive  continuing  royalties
         from the  store  and will act as the  wholesaler  of  floral  and other
         products to the store. The first store opened on November 1, 2005.


                                       19
<PAGE>
                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY


Item 2.  Management's Discussion and Analysis or Plan of Operations

This Management's  Discussion and Analysis or Plan of Operations ("MD&A") should
be read in conjunction with our interim  consolidated  financial  statements and
notes  thereto  which  appear  elsewhere in this  Quarterly  Report and the MD&A
contained  in our Annual  Report on Form 10-KSB  filed with the  Securities  and
Exchange  Commission  (the  "SEC") on April 7, 2005.  The  following  discussion
contains forward-looking  statements and should also be read in conjunction with
"Forward-looking  statements"  below.  All  amounts  presented  in the  MD&A are
rounded to the nearest thousand dollars.

Overview

We own  patented and other  proprietary  technology  used to emboss  flowers and
other products.  The technology allows end users to request  personalized floral
arrangements  using  standardized or unique  messages,  logos,  trademarks,  and
pictures. In addition to our own production, we have licensed that technology to
large  wholesale  flower  concerns  and other  parties  to  perform  the  actual
embossing  of  flowers.  In the United  States,  we sell  embossed  flowers  and
bouquets  containing  embossed  flowers  directly  to  individuals,  businesses,
florists,  chain stores,  funeral  homes and large  wedding and corporate  event
planners  with  production  and  fulfillment  primarily  provided  by us  and by
licensed  wholesale  flower  providers.  We have  recently  developed  a  retail
distribution model and have begun to offer area development and franchise rights
for sale in those  jurisdictions  which do not require regulatory  approval.  We
have also  licensed the  technology  and  equipment  to  exclusive  licensees in
international  markets  and we are  beginning  to  offer  area  development  and
franchise rights for sale internationally.

On February 6, 2004,  we issued  20,551,264  shares of common  stock to Speaking
Roses, LLC ("SR") in exchange for SR's operating  assets and liabilities.  These
newly issued shares  represented  approximately  80% of our  outstanding  common
shares.  In connection with this  transaction,  we changed our domicile from the
State of Nevada to the State of Utah. In addition, the then current officers and
directors  resigned  and  nominees  of SR were  appointed  as our  officers  and
directors.   The  acquisition  was  treated,  for  accounting  purposes,   as  a
recapitalization  in a reverse merger. We paid all legal and accounting expenses
and other direct costs associated with the acquisition of approximately $71,000.

Set forth below are comparisons of financial statement information for the three
and  nine-month  periods ended  September  30, 2005 and September 30, 2004.  The
unaudited financial  statements for the nine months ended September 30, 2004 are
combined results of the Company and SR.

We believe the comparison of financial  statement  information for the three and
nine months ended  September 30, 2005 with financial  statement  information for
the  comparable  period  during the  previous  year may not  provide  meaningful
information  regarding our financial  position or the results of our operations.
Persons who review the  following  information  should  carefully  consider  the
following:

         o    Under  applicable  accounting  regulations,   our  operations  are
              treated as  continuations  of the  operations  of SR,  rather than
              Millennium Electronics, Inc.
         o    SR was a  non-corporate  entity  for  tax  purposes  and  the  tax
              benefits and burdens of its operations  were generally  attributed
              to its members.  As a result,  SR may have treated certain aspects
              of its operations in a manner differently than it would have if it
              had been a taxable  corporate  entity. We have made no adjustments
              in the comparative information provided below with respect to SR's
              operations to account for any such potential differences, nor have
              we  highlighted  those areas  where the results of SR's  financial
              operations  may have been  different it if had been  operated in a
              taxable corporate form.

                                       20
<PAGE>
                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY


Interim results are not necessarily indicative of results for future quarters or
the full fiscal year.

Results of Operations

Sales
-----

Sales for the three and nine months ended  September  30, 2005 were $263,000 and
$1,070,000  compared to sales of $243,000 and $1,489,000 for the same periods in
the prior  year.  Our net loss for the first  three and nine  months of 2005 was
$(1,125,000) or $(.04) per common share and  $(3,422,000),  or $(.12) per common
share, compared to $(658,000),  or $(.02) per common share and $(2,104,000),  or
$(.08) per common share for the same three and nine months ended  September  30,
2004.  The  decrease in sales for the  nine-month  period was due  primarily  to
slower sales to mass marketers  resulting  from  competitive  pressure.  We also
decreased  our  sales  efforts  in that  channel  because  we are  changing  our
strategic direction toward retail, rather than wholesale distribution.

The large increase in net loss of $467,000 for the three months ended  September
30, 2005 over the same period in the prior year is due primarily to research and
development expense recorded in connection with services provided to the Company
to begin its retail operations in the amount of $196,000, and increased research
and  development  costs of  $211,000  over the same  period  in the  prior  year
associated with the Company's increasing focus on its retailing strategy.

Product  (flower)  revenues  were  $202,000  and $897,000 for the three and nine
months ended September 30, 2005 compared to $178,000 and $1,271,000 for the same
periods in 2004.  The decrease for the  nine-month  period was due  primarily to
slower  sales to mass  marketers  as we  decreased  our  sales  efforts  in that
channel.

Licensing  fees  and  royalty  revenues  for the  three  and nine  months  ended
September  30,  2005  were  $61,000  and  $174,000,  respectively,  compared  to
licensing fees and royalty revenues of $65,000 and $218,000,  respectively,  for
the same three and nine month periods in the prior year.


                                       21
<PAGE>
                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY


Cost of goods sold
------------------

Cost of goods sold for the three and nine months ended  September  30, 2005 were
$196,000 and $925,000, respectively, compared to $170,000 and $1,089,000 for the
same three and nine month  periods,  respectively,  in 2004.  Cost of goods sold
consisted  primarily of purchases of roses and the labor and supplies  necessary
to emboss and ship them.  The  increase  in cost of goods sold for the three and
nine months ended  September 30, 2005 in relation to sales is a direct result of
higher  product  costs,  labor and costs of the  Company's  expanded  production
facilities compared with the three and nine months ended September 30, 2004.

For the nine months  ended  September  30, 2005,  cost of goods sold  included a
seasonal charge of $75,000 for flower commitment and shipping.

Selling and marketing
---------------------

Selling and marketing  expenses were $315,000 and  $1,387,000  for the three and
nine months ended September 30, 2005, respectively,  and $344,000 and $1,490,000
for the three and nine months ended September 30, 2004, respectively. The slight
decrease in selling and marketing  costs for the nine months ended September 30,
2005  compared  to the same  period  in 2004 is  primarily  due to  discontinued
marketing  expenses  which  were not  expected  to  benefit  the  Company in its
execution of the retailing strategy.

General and administrative
--------------------------

General and  administrative  expenses were $450,000 and $1,248,000 for the three
and nine months ended September 30, 2005, respectively, compared to $381,000 and
$1,013,000  for the same  three  and  nine  months  ended  September  30,  2004,
respectively.  The increase in general and administrative  expenses for the nine
months  ended  September  30,  2005  compared  to the same period in 2004 is due
primarily to an increase in legal and accounting expenses in 2005. Additionally,
general and  administrative  costs have  increased  for the three  months  ended
September  30,  2005  compared to the same  period in 2004 due  primarily  to an
increase in salaries and wages and office facility expense.  In the three months
ended  September 30, 2005,  the Company  completed a reduction in force which is
expected  to  result  in  reduced  payroll  expenses  in both  the  general  and
administrative expense category and the selling and marketing expense category.

Research and development
------------------------

Research and  development  expenses were $414,000 and $461,000 for the three and
nine months ended September 30, 2005,  respectively,  and $7,000 and $18,000 for
the same three and nine months  ended  September  30,  2004,  respectively.  The
increase in research and development expenses for the two comparative periods is
due to  the  Company's  increasing  focus  on its  retailing  strategy  and  the
associated  development  expenses,  including  a  non-cash  charge  of  $196,000
associated with the granting of the Company's first area  development  rights in
exchange for research and development  services  provided to the Company for its
retail expansion.


                                       22
<PAGE>
                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY


During the three months ended September 30, 2005, our newly formed, wholly owned
subsidiary  entered into an Area Development  Agreement (the  "Agreement")  with
Business Retail Group, LLC owned by our Vice President of Retail  Operations and
his  wife.  The  Agreement  permits  Business  Retail  Group to refer  potential
franchisees to us, to open up to ten stores with  franchise fees waived,  and to
share in any  franchise  fees  paid by  franchisees  in Utah and  Clark  County,
Nevada.  The estimated value of the Area Development  Rights associated with the
aforementioned  geographic area is $196,000,  which was recorded as research and
development expense. The offsetting credit was recorded as deferred revenue.

Interest expense
----------------

Interest  expense was $9,000 and  $482,000  for the three and nine months  ended
September 30, 2005,  respectively,  and $2,000 and $8,000 for the same three and
nine months ended September 30, 2004, respectively. The large increase from 2004
was  interest  expense  incurred in  connection  with the  repayment of notes to
shareholders with shares of common stock. During the nine months ended September
30, 2005, we issued 1,000,000 shares of our common stock valued at $966,000,  to
pay in full the loan balances of $500,000 plus $16,000 in accrued interest.  The
difference of $450,000  between the value of the stock and the loan balances was
recorded as interest expense.

Income taxes
------------

Management  has  determined  that our net deferred  income tax asset more likely
than not will not be realized and therefore, a 100% valuation allowance has been
provided.

Income tax expense for the three and nine months  ended  September  30, 2005 and
2004 consists of minimum state income taxes during those periods.

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

Cash
----

We had cash of $94,000 at  September  30, 2005,  which is currently  invested in
demand  deposits  and secure  investment  grade money market  accounts  with the
over-riding objective of safety of principal.

Cash Flows
----------

Cash flows used in operating  activities were  $(1,536,000) and $(2,321,000) for
the nine months ended  September  30, 2005 and 2004,  respectively.  Because our
operating cash flows are currently insufficient to fund our operations, SRII has
relied on funding from outside  sources.  During the nine months ended September
30, 2005, we received $575,970, net of offering expenses, from the sale of stock
in private placements and $750,000 in loans from three shareholders.


                                       23
<PAGE>
                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY


Capital expenditures
--------------------

Capital  expenditures  totaled  $182,000  and $277,000 for the nine months ended
September 30, 2005 and 2004,  respectively.  Expenditures in 2005 were primarily
for leasehold improvements,  office equipment,  software, machinery and printing
equipment, and patent and trademark applications.

Financing
---------

During the three months ended  September 30, 2005, we issued  114,666  shares of
our  common  stock to three  nonaffiliated  accredited  investors  yielding  net
proceeds of $110,000.  Also during the three months ended September 30, 2005, we
collected  deposits  of  $770,000  from  three  parties  for  rights  to be area
developers of retail  distribution  outlets in territories yet to be determined.
One of the potential area  developers,  who also owns more than 5% of our common
stock,  paid $750,000 for the right to, within sixty days of being provided with
a form of area  development  agreement,  choose  to either  enter  into the area
development  agreement or be issued a convertible  note.  The  convertible  note
would  have  a  six-month  term,  accrue  interest  at  12%  per  annum,  and be
convertible  into common  stock at $.50 per share.  The area  developers  have a
right to receive a refund of their deposits,  plus interest, if we do not timely
provide them with forms of area development agreements.

We have not achieved  quarterly or annual  profitability  as either SR (prior to
the SR acquisition) or as SRII. Accordingly, until we prove to be profitable, we
can give no assurances that we have sufficient capital resources or liquidity to
satisfy  working  capital and  operating  requirements  beyond our current  cash
balances. The Company's ability to continue as a going concern is dependent upon
its ability to generate  future  profits and to generate  sufficient  capital to
meet its  obligations  as they come due.  The  Company  is  attempting  to raise
additional  funds.  No  assurance  can be given that the Company will be able to
obtain such  financing on terms  favorable to the Company or at all.  During the
three and nine months ended September 30, 2005,  expenses  exceeded our revenues
by approximately $1,125,000 and $3,422,000, respectively. Net cash flows used in
operating  activities  during the nine months ended  September 30, 2005 and 2004
were $1,536,000 and $2,321,000, respectively.

We had  approximately  $94,000 in available  cash at September  30, 2005 to fund
future operations and capital expenditures.  Based on our current business plan,
our management  believes we can sufficiently  increase  revenues,  generate cash
flow and  obtain  additional  capital  to ensure the  ongoing  viability  of the
enterprise.  If we need additional  financing,  and acquire that funding through
the issuance of equity securities,  our shareholders may experience  dilution in
the  value per share of their  equity  securities.  If we  acquire  the  funding
through the  issuance of debt,  that  financing  could  result in a  substantial
portion of our cash flows  from  operating  activities  being  dedicated  to the
payment of principal and interest on that indebtedness, and could render us more
vulnerable  to  competitive  pressures  and economic  downturns.  We can give no
assurances that we will be able to obtain additional  financing,  either through
debt or equity, on terms that are acceptable to us, or at all.

Estimated  capital  expenditures  for the next three months  (through the end of
fiscal 2005) are approximately  $75,000.  We believe we will have the ability to
plan and execute our capital spending and expenses in the future as we implement
our  business  plan by varying the extent of our  licensing  activities,  hiring
practices and promotional  activities.  If we elect to slow the speed, or narrow
the  focus,  of our  business  plan,  we may  be  able  to  reduce  our  capital
expenditures  and losses.  Our actual  ability to execute our proposed  business
plan will depend on a number of factors including:

                                       24
<PAGE>
                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY


         o    the acceptance of our floral embossing process in the market place
              at profitable prices;
         o    the success of our retail business strategy;
         o    our ability to protect our intellectual property;
         o    our ability to continue to raise capital; and
         o    factors  over  which  we  have  little  or  no  control,  such  as
              regulatory  changes,  changes  in  technology,  failures  by third
              parties  to meet  their  contractual  obligations  or  significant
              changes in the competitive environment in which we operate.

In  addition,  our actual  costs and  revenues can vary from the amounts that we
expect or budget in our business plan, possibly materially, and those variations
are likely to affect our ability to generate a profit or our need for additional
financing. Accordingly, we can give no assurance that our actual financial needs
will not exceed the anticipated amounts that are available to us, including from
new third parties.

The unaudited condensed  consolidated  financial statements included herein have
been prepared assuming we will continue as a going concern,  which  contemplates
the  realization  of assets and the  satisfaction  of  liabilities in the normal
course of business. We have incurred cumulative net losses of $7,584,000 and net
losses of $1,125,000 and $658,000 for the three months ended  September 30, 2005
and 2004, respectively,  and $3,422,000 and $2,104,000 for the nine months ended
September 30, 2005 and 2004, respectively.

The above factors raise  substantial doubt that we will be able to continue as a
going  concern  unless  we are  able to  generate  sufficient  cash  flows  from
operating  activities  to meet  our  obligations  as  they  come  due or  obtain
additional debt or equity financing.

The  financial  statements  do  not  include  any  adjustments  relating  to the
recoverability  and  classification  of asset carrying amounts or the amount and
classification  of  liabilities  that might be necessary  should we be unable to
continue as a going concern.

Forward-looking statements

This report includes  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 (the "34 Act"). Although we believe our expectations  regarding
future  events  are based on  reasonable  assumptions  within  the bounds of our
knowledge,   these   forward-looking   statements   are  subject  to  risks  and
uncertainties  that  could  prevent  our goals from  being  achieved.  Important
factors that could cause actual results to differ  materially  from those in the
forward-looking  statements include the effects of competition,  legislative and
regulatory  developments,  conditions of the capital  markets and equity markets
and, in general,  our ability to achieve the goals  described  in this report as
well as other factors contained in other cautionary  statements included in this
report.

Certain  statements  contained in this  report,  including  without  limitation,
statements  containing  the words  "will,"  "anticipate,"  "believe,"  "intend,"
"estimate,"  "expect,"  "project"  and  words  of  similar  import,   constitute
forward-looking statements,  although not all forward-looking statements contain
such identifying  words.  Forward-looking  statements  involve known and unknown

                                       25
<PAGE>

risks,  uncertainties  and other  factors  that may cause  our  actual  results,
performance or achievements to be materially  different from any future results,
performance  or  achievements   expressed  or  implied  by  the  forward-looking
statements.  Those risks, uncertainties and other factors include, among others,
the following:

         o    our  ability  to develop a  presence  in the  market  and  sustain
              profitable operations;

         o    the acceptance by the public of our product and retail concept;

         o    the availability  and terms of the additional  capital required to
              fund our operations as needed;

         o    performance by third parties of their  contractual  obligations to
              us;

         o    our ability to manage growth and retail operations;

         o    technological changes; and

         o    competitive factors.

All  forward-looking  statements speak only as of the date of this report. We do
not undertake any  obligation to update or revise  publicly any  forward-looking
statements, whether as a result of new information,  future events or otherwise.
Although we believe that the plans,  intentions and expectations reflected in or
suggested by the forward-looking  statements made in this report are reasonable,
we can give no assurance  that such plans,  intentions or  expectations  will be
achieved. Given these uncertainties,  prospective investors are cautioned not to
place undue reliance on such forward-looking statements.

                                       26
<PAGE>
                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY


Item 3. Controls and Procedures

In accordance  with the rules  promulgated  under the 34 Act, our management has
evaluated,  with the  participation of our president and chief executive officer
and our chief financial  officer,  the effectiveness of the design and operation
of our disclosure  controls and  procedures (as defined in Rule 13a-15(e)  under
the 34 Act) as of the end of the fiscal quarter ended September 30, 2005.  Based
upon its  evaluation  of these  disclosure  controls,  management  identified  a
deficiency that existed in the design or operation of our internal controls over
financial  reporting  that it considers to be a "material  weakness." The Public
Company  Accounting  Oversight  Board  has  defined  a  material  weakness  as a
"significant deficiency or combination of significant  deficiencies that results
in more than a remote  likelihood that a material  misstatement of the annual or
interim financial statements will not be prevented or detected."

The  deficiency in our internal  controls  resulted in a non-cash  adjustment to
interest expense in the quarter ended June 30, 2005 and more detailed disclosure
regarding  stock options and related party  transactions  for such quarter.  The
need for an adjustment to record  additional  interest  expense was detected and
the adjustment was  appropriately  recorded.  We have filed an amended quarterly
report for the three months ended June 30, 2005 on Form 10-QSB/A  reflecting the
more  detailed  disclosures.  We are in the process of  improving  our  internal
controls over financial reporting in an effort to remediate this deficiency.

There  was no change in our  internal  control  over  financial  reporting  that
occurred  during  our third  fiscal  quarter  ended  September  30,  2005,  that
materially affected,  or is reasonably likely to materially affect, our internal
controls over financial reporting.

Our management,  including our chief  executive  officer and our chief financial
officer,  does not expect that our  disclosure  controls and  procedures  or our
internal  controls will prevent all error and all fraud.  A control  system,  no
matter how well  conceived and operated,  can provide only  reasonable,  but not
absolute,  assurance that the objectives of the control system are met. Further,
the design of a control  system must  reflect  the fact that there are  resource
constraints,  and the benefits of controls must be considered  relative to their
cause. Because of the inherent limitations in all control systems, no evaluation
of  controls  can  provide  absolute  assurance  that  all  control  issues  and
incidences of fraud, if any, within a company have been detected. These inherent
limitations  reflect the fact that judgments and  decision-making  can be faulty
and that breakdowns can occur because of simple error or mistake.  Additionally,
controls  can be  circumvented  by the  individual  acts  of  some  persons,  by
collusion of two or more people, or by management override of the controls.  The
design  of any  system  of  controls  also  is  based,  in  part,  upon  certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving  its stated goals under all  potential
future conditions.  Over time, controls may become inadequate because of changes
and conditions,  or the degree of compliance with the policies or procedures may
deteriorate.  Because of the inherent  limitations in a cost  effective  control
system, errors and fraud may occur and still not be detected.

PART II  OTHER INFORMATION

Item 2.   Changes in Securities

During the three months ended  September 30, 2005, we issued  110,400  shares of
our $.001 par value common stock to three nonaffiliated  accredited investors at

                                       27
<PAGE>
                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY


prices  ranging  from $1.05 to $.90 per share.  We believe the issuance of these
securities was exempt from the  registration  requirements of the Securities Act
of 1933,  as  amended  (the "33  Act"),  pursuant  to  Sections  4(2) and  other
provisions  of the 33 Act. The investors  were all  "accredited  investors"  and
represented  that they were  acquiring  the  common  shares for  investment  and
without  a view to their  distribution  in  violation  of the  federal  or state
securities laws, and that they understood that the common shares were being sold
in  reliance  upon  exemptions  from  registration  under the  federal and state
securities laws and that they were, therefore,  "restricted  securities" subject
to  significant  restrictions  on  transfer.  The  certificates  evidencing  the
securities bear a standard restrictive legend.


                                       28
<PAGE>
                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY


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

None

Item 6.  Exhibits and Reports on Form 8-K

 (A) EXHIBITS

The  exhibits  listed below are hereby  filed with the  Securities  and Exchange
Commission  as part of this  Quarterly  Report on Form  10-QSB.  Certain  of the
following  exhibits have been previously  filed with the Commission  pursuant to
the  requirements  of the 33 Act or the 34 Act. Those exhibits are identified by
the parenthetical  references following the listing of each such exhibit and are
incorporated  herein by  reference.  We will  furnish a copy of any exhibit upon
request, but a reasonable fee will be charged to cover our expense in furnishing
such exhibit.

        Exhibit             Description
        -------             -----------

         2.1         Agreement   and   Plan   of   Merger   between   Millennium
                     Electronics, Inc. and Speaking Roses International, Inc.(1)

         3.1         Articles of Incorporation of Speaking Roses  International,
                     Inc (1)

         3.2         Bylaws of Speaking Roses International, Inc. (1)

         10.1        Contribution  Agreement  between  Speaking  Roses,  LLC and
                     Millennium Electronics, Inc. (2)

         10.2        Form  of  Speaking  Roses   Development   Corporation  Area
                     Development Agreement

         10.3        Form of Speaking Roses  Development  Corporation  Franchise
                     Agreement

         14          Codes of Ethics (3)

         31          Certifications required by Rule 13a-15(e) and 15d-15(e).

         32          Section 1350 Certifications

________________

(1)  Incorporated  by reference from our  information  statement on Schedule 14C
filed December 23, 2003.

(2) Incorporated by reference from our current report on Form 8-K filed February
5, 2004.

(3)  Incorporated by reference from our annual report on Form 10-KSB filed April
13, 2004.


                                       29
<PAGE>
                SPEAKING ROSES INTERNATIONAL, INC. AND SUBSIDIARY


(B) REPORTS ON FORM 8-K

The  following  reports on Form 8-K were filed  during  the three  months  ended
September 30, 2005:

         Report Filing Date                  Item Reported
         ------------------                  -------------

(a)  Current Report on Form 8-K       Trading of common stock on OTC Bulletin
     filed July 13, 2005              Board and interview on ceocast.com
(b)  Current Report on Form 8-K       Appointment of new Chief Financial Officer
     filed August 8, 2005
(c)  Current Report on Form 8-K       Signing of first Area Development
     filed September 13, 2005         Agreement
(d)  Current Report on Form 8-K       Signing of Sales Agreement with RE/MAX
     filed September 19, 2005         Realtors

SIGNATURES

In accordance with the requirements Exchange Act, the Registrant has duly caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


SPEAKING ROSES INTERNATIONAL, INC.

By:       /s/ John W. Winterholler
          John W. Winterholler
          President and Chief Executive Officer
Date:     November 21, 2005

By:       /s/ Bradley E. Wittwer
          Bradley E. Wittwer
          Chief Financial Officer
Date:     November 21, 2005


                                       30