ITEM 2. OUR MANAGEMENT'S DISCUSSION AND ANALYSIS

The following discussion includes certain forward-looking statements within the meaning of the safe harbor protections of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that include words such as "believe," "expect," "should," intend," "may," "anticipate," "likely," "contingent," "could," "may," or other future-oriented statements, are forward-looking statements. Such forward-looking statements include, but are not limited to, statements regarding our business plans, strategies and objectives, and, in particular, statements referring to our expectations regarding our ability to continue as a going concern, generate increased market awareness of, and demand for, our current products, realize profitability and positive cash flow, and timely obtain required financing. These forward-looking statements involve risks and uncertainties that could cause actual results to differ from anticipated results. The forward-looking statements are based on our current expectations and what we believe are reasonable assumptions given our knowledge of the markets; however, our actual performance, results and achievements could differ materially from those expressed in, or implied by, these forward-looking statements. Factors, within and beyond our control, that could cause or contribute to such differences include, among others, the following: those associated with our marketing of a relatively new PDA accessories for consumers in an evolving marketplace, consumer preferences, perceptions and receptiveness with respect to our PDA accessories, our critical capital raising efforts in an uncertain and volatile economical environment, our ability to maintain an existing relationships with critical customers and vendors, including related licensing and marketing arrangements, our cash-preservation and cost-containment efforts, our ability to retain key management personnel, our relative inexperience with advertising, our competition and the potential impact of technological advancements thereon, the impact of changing economic, political, and geo-political environments on our business, as well as those factors discussed elsewhere in this Form 10-QSB and in "Item 1 - Our Business," "Item 6 - Our Management's Discussion and Analysis," particularly the discussion under "Risk Factors - Substantial Doubt as to our Ability to Continue as a Going Concern" and elsewhere in our most recent Form 10-KSB for our fiscal year ended October 31, 2004, as amended, filed with the United States Securities and Exchange Commission. Readers are urged to carefully review and consider the various disclosures made by us in this report, in the aforementioned Form 10-KSB, as amended, and those detailed from time to time in our reports and filings with the United States Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that are likely to affect our business.

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

INTRODUCTION

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

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

With the exception of the aforementioned warranty-related technical support services, the only other services we performed during the periods reported herein were pursuant to maintenance agreements associated with our technical servicing and support of computer terminals and printers for financial institutions, which business we no longer actively market or pursue.

OUR RECENT SIGNIFICANT DEVELOPMENTS

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

Acquisition of Synosphere - On January 20, 2004, we acquired all of the outstanding membership interests in Synosphere, a Texas-based limited liability company, pursuing the development of certain handheld computing technologies, in exchange for 30.0 million shares of our common stock. As the technological feasibility of each of the acquired technologies had yet to be fully established as of the acquisition date, the aggregate $1.2 million purchase price, based on the then prevailing market price of our common stock, was immediately reflected within our results of operations for our fiscal 2004 first quarter ended January 31, 2004. Subsequent to the acquisition, we engaged in significant activities directed at further developing certain of the acquired technologies. Due to recent cash flow constraints, we were forced to vacate our Synosphere facility in February 2005 and we ceased further research and development activities.

SIGNIFICANT UNCERTAINTY REGARDING THE COMPANY'S ABILITY TO CONTINUE AS A GOING CONCERN

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred substantial operating and net losses, as well as negative operating cash flows, in recent fiscal years. As a result, the Company had significant working capital and stockholders' deficits at January 31, 2005. Additionally, the Company has in recent years realized only limited sales from its PDA accessories which management primarily attributes to its continued inability to fund the marketing activities it believes are necessary to develop broad market awareness and acceptance of the Company's products. These factors, among others, indicate that the Company may be unable to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company's continuation as a going concern currently is dependent upon it timely procuring significant external debt and/or equity financing to fund its immediate and nearer-term operations, and subsequently realizing operating cash flows from sales of its products sufficient to sustain its longer-term operations and growth initiatives, including its desired marketing and product research and development initiatives.

OUR CRITICAL ACCOUNTING POLICIES

o Revenue Recognition for Product Sales and Related Allowances for Sales Returns and Rebates. In accordance with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements," we recognize a product sale, including related shipping and handling income, and the cost of the sale, upon product shipment provided that all material risks and rewards of ownership are concurrently transferred from us to our customer, collection of the related receivable by us is reasonably assured, and we are able to reliably estimate appropriate allowances for probable sales returns and rebates based on our relevant historical experience and future expectations. We unconditionally accept product returns during the initial thirty days following the date of sale. We periodically offer promotional rebates of a limited duration, typically one week, on certain product sales, for which we outsource the processing and tracking of related customer submissions. The periodic provisions made by us to establish and maintain appropriate allowances for sales returns and rebates are charged to our results of operations via offsets to our gross product sales. Actual sales returns and rebates realized by us are charged against the related allowances with any favorable or unfavorable experience, as compared to our preceding estimates, having a corresponding impact on our results of operations. Gomogear.com - The Company acts as an agent or broker for the sales made through their website www.gomogear.com It does not take title to the products and has no risks or rewards of ownership from these products. Accordingly, the Company will report all sales on a net basis.

o Accounts Receivable and Related Allowance for Doubtful Accounts. In addition to corresponding reductions made for the allowances for sales returns and rebates, as discussed above, we further reduce our consolidated accounts receivable by an appropriate allowance for accounts where doubt exists in our opinion, based on known specifics or the passage of time, as to their ultimate collectability. We routinely offer our customers payment terms that range from 30 to 60 days. We do not access interest on, nor do we require any securing collateral of, past due customer balances. The periodic provisions made by us to establish and maintain an appropriate allowance for doubtful accounts are charged to our results of operations via increases to our selling, general and administrative expenses. Actual collection experience realized by us on previously designated doubtful accounts, including final determinations of uncollectability, is charged against the allowance for doubtful accounts with any favorable or unfavorable experience, as compared to our preceding estimates, having a corresponding impact on our results of operations.

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

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

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

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

Accounting Standards Adopted or Pending Adoption

The Company's required fiscal 2005 adoptions of recently issued accounting standards did not have any material impact upon its consolidated financial statements. Additionally, there are no recently issued accounting standards with pending adoptions that the Company's management currently anticipates will have any material impacts upon its consolidated financial statements.

OUR CONDENSED CONSOLIDATED STATEMENTS OF LOSS

Our consolidated total revenues for the three months ended January 31, 2005 were $37,597, a decrease of $124,352 or 77% as compared to the $161,949 experienced in the three months ended January 31, 2004. Our product sales constituted 100% of total revenues in the three months ended January 31, 2005 as compared to 94% of total revenues in the three months ended January 31, 2004. Our maintenance services, which constituted the balance of total revenues in the three months ended January 31, 2004 is a line of service we are no longer actively pursuing.

Our product sales for the three months ended January 31, 2005 were $37,597 as compared to $152,216 for the three months ended January 31, 2004. This decrease of $114,619 is the result of fewer sales to our customers plus lower sales prices on the units sold. In the three months ended January 31, 2005 we sold approximately 75% fewer Travel Kits at an average price that was approximately 15% less than what we sold in the three months ended January 31, 2004. Similarly, in the three months ended January 31, 2005 we sold approximately 80% and 90% fewer XELA Keyboards and KeySync Keyboards, respectively, at average prices that were approximately 45% and 25% less than what we sold in the three months ended January 31, 2004, respectively.

During the three months ended January 31, 2005 cost of product sales decreased $64,580 or 57% to $48,458 as compared to $113,038 during the three months ended January 31, 2004. Cost of product sales as a percentage of net product sales increased 55 percentage points from 74% in the three months ended January 31, 2004 to 129% in the three months ended January 31, 2005. This increase of cost of product sales as a percentage of net product sales is the result of our decision to sell certain Travel Kits to a major retailer at below cost in order to bolster relations and generate future sales. We also sold certain Pocket Radios to our online customers at reduced gross profits or below cost in order to reduce our inventory carrying levels. Cost of maintenance services, which constituted the balance of the cost of revenues in the three months ended January 31, 2004 is a line of service we are no longer actively pursuing.

Our consolidated total operating expenses decreased $5,684,405 or 88% to $665,744 in the three months ended January 31, 2005 as compared to $6,350,149 in the three months ended January 31, 2004.

Due to recent cash flow constraints, we were unable to fund our research and development activities at Synosphere during the quarter ended January 31, 2005. Subsequently, we vacated our Synosphere facility in February 2005 and we have ceased further research and development activities until adequate funding is obtained. We incurred no research and development activity in the quarter ended January 31, 2004 since the acquisition of Synosphere took place at the end of the quarter.

Our selling, general and administrative expenses increased $285,595 or 75% to $665,744 in the three months ended January 31, 2005 as compared to $380,149 in the three months ended January 31, 2004. This increase is mainly the result of an increase of $210,839 in employee salaries, taxes and benefits from $94,060 in the three months ended January 31, 2004 to $304,889 in the three months ended January 31, 2005 due to the quarterly contractual bonus to Bryan Scott and Ramon Perales of the Synosphere subsidiary in the aggregate of $125,000 and the consolidation of the Synosphere subsidiary employees in the three months ended January 31, 2005 that were not present in the three months ended January 31, 2004. We also experienced an increase of $89,228 of legal fees from $42,122 in the three months ended January 31, 2004 to $131,350 in the three months ended January 31, 2005 as the result of additional fees associated with lawsuit settlements and securities issues. Offsetting these increases were decreases of $25,900 and $28,465 in advertising and travel expenses, respectively, to $9,639 and $5,124 in the three months ended January 31, 2005. These decreases are the result of our lack of cash flows to fund activities outside the normal course of operations.

During the three months ended January 31, 2004 we acquired all of the outstanding membership interests in Synosphere, LLC in exchange for 30.0 million shares of our common stock. As the technological feasibility of each of the acquired technologies had yet to be fully established as of the acquisition date, the aggregate $1.2 million purchase price, based on the then prevailing market price of our common stock, was immediately expensed.

During the three months ended January 31, 2004 we granted options to individuals in exchange for consulting services. We valued the options granted using the Black-Scholes stock option pricing model and recorded an aggregate of $4,770,000 associated expense.

Our consolidated loss from operations decreased $5,633,340 or 89% to $676,605 during the three months ended January 31, 2005 as compared to $6,309,945 in the three months ended January 31, 2004. This is the result of the $1,200,000 acquired in process research and development and the $4,770,000 consulting fees paid with stock options expenses in the three months ended January 31, 2004 that were not repeated in the three months ended January 31, 2005.

Our consolidated miscellaneous income increased $330,178 or 510% to $394,906 in the three months ended January 31, 2005 as compared to $64,728 in the three months ended January 31, 2004. During both periods certain debenture holders forgave interest and principal in connection with conversions into shares of our common stock in order to settle and pay the debt in full.

Our consolidated interest and miscellaneous expense increased $156,956 or 153% to $259,236 in the three months ended January 31, 2005 as compared to $102,280 in the three months ended January 31, 2004. During the three months ended January 31, 2005 we paid certain services and liabilities through the issuance of our common stock. The fair market value of the common stock issued was $246,665 greater than the amount of the services and liabilities paid. As a result, we recorded a corresponding loss. Offsetting the 100% increase in this loss on debt settlements is the decrease of $89,709 or 88% of interest expense to $12,571 in the three months ended January 31, 2005 as compared to $102,280 in the three months ended January 31, 2004. During December 2004, we paid the remaining debenture balances of $863,675 in full through the issuance of our common stock and therefore our recognition of interest expense stopped at that point. At January 31, 2004 we had an aggregate of $2,619,297 of outstanding debenture balances that called for interest expense at 8% to 12%.

Primarily as a result of the foregoing, we incurred a net loss of $540,935 ($0.00 per basic and diluted share) in the three months ended January 31, 2005 as compared to a net loss of $6,347,497 ($0.00 per basic and diluted share) in the three months ended January 31, 2004.

Our future ability to achieve profitability in any given future fiscal period remains highly contingent upon us realizing significantly increased product sales sufficient to leverage our non-variable, likely to be recurring expenses. For instance, our ability to achieve gross profits and positive gross margins in any given future fiscal period remains highly contingent upon us being able to leverage through significant incremental product sales the non-variable direct labor and overhead components of our costs of goods sold. Similarly, our ability to realize income from operations is further dependent upon our ability to additionally leverage through significant incremental sales our SG&A expenses, the majority of which currently are non-variable and recurring in nature. To the extent that we incur other less frequent or non-recurring operating expenses, as in fiscal 2004, we will require additional incremental product sales in order to leverage them. Lastly, our ability to realize net income and net income per common share remains highly contingent upon us being able to leverage through incremental product sales any significant net non-operating expenses, such as charges for the beneficial conversion features of any issued debentures and our interest expense on any outstanding debt. Correspondingly, our ability to realize significant incremental product sales in any given future fiscal period remains highly contingent upon us obtaining significant equity infusions and/or long-term debt financing sufficient to fund the increased and sustained campaign of marketing and advertising activities we believe necessary to build broad consumer awareness of, and demand for, our PDA accessories. Even if we were to be successful in procuring such funding, there can be no assurance that we will be successful in our marketing and advertising efforts, and that we will subsequently realize the significant incremental product sales we require.

OUR CONSOLIDATED LIQUIDITY AND CAPITAL RESOURCES

Overview

During the course of transitioning our Company over the last several years from our discontinued computer service businesses to our current business of marketing and distributing various accessories primarily intended for use with PDAs, we have incurred substantial operating and net losses, as well as negative operating cash flows. As of January 31, 2005, our working capital deficit was $2,232,575 and our stockholders' deficit was $2,191,927. Such reflects a decrease from January 31, 2004 when our working capital deficit was $3,795,901 and our stockholders' deficit was $4,091,965. We had a nominal unrestricted cash balance of only $6,954 at January 31, 2005, as compared to $262,649 at January 31, 2004.

Our Consolidated Cash Flows

Our operating activities utilized $332,884 in cash during the three months ended January 31, 2005, a decrease of $148,100, or 31%, from the $480,984 in cash utilized during the three months ended January 31, 2004. Our decreased utilization substantially reflects a $6,040,282, or 101%, net decrease in our non-cash charges, net, being substantially offset by the $5,806,562 decrease in our net loss. The most significant reductions in our non-cash charges were the $1,200,000 and $4,770,000 in our non-cash acquisition of in-process research and development and services rendered in exchange for common stock and options, respectively. During the three months ended January 31, 2005 cash was used by a $20,577 decrease in accounts receivable and provided by a $19,692 increase in inventories, a $60,790 decrease in prepaid expenses and an $202,450 increase in accounts payable.

Our investing activities consumed $19,830 during the three months ended January 31, 2005 to fund the acquisition of Synoshere. We received an aggregate of $2,000 from the sale of fixed assets in the three months ended January 31, 2004.

Our financing activities provided $359,580 and $739,493 in cash during the three months ended January 31, 2005 and 2004, respectively. During the three months ended January 31, 2005 we paid a aggregate of $10,420 to cover a bank overdraft at October 31, 2004 and we received $2,000 in advances from our officers, $75,000 resulting from the sale of common stock through a private offering and $293,000 from the exercise of stock options. During the three months ended January 31, 2004 we received an aggregate of $9,990 from the issuance of a note payable, $734,423 from the exercise of stock options and paid $4,920 principal on notes payable.

As a result of the foregoing, our unrestricted cash increased by $6,866 to $6,954 at January 31, 2005, as compared to $262,649 at January 31, 2004.

Our Planned Capital Expenditures

We had no significant planned capital expenditures, budgeted or otherwise, as of January 31, 2005.