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

INTRODUCTION

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

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

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

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

OUR RECENT SIGNIFICANT DEVELOPMENTS

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

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

OUR CRITICAL ACCOUNTING POLICIES

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

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

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

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

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

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

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

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

OUR CONSOLIDATED RESULTS OF OPERATIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

OUR CONSOLIDATED LIQUIDITY AND CAPITAL RESOURCES

OUR OVERVIEW

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

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

OUR CONSOLIDATED CASH FLOWS

Our operating activities utilized $2,476,216 in cash during the fiscal 2004 year end, an increase of $1,692,570, or 216%, from the $783,646 in cash utilized . . .