8-K/A 1 v02509_8k.txt ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A Amendment No. 1 to CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): January 20, 2004 COMMISSION FILE NUMBER 0-27619 IBIZ TECHNOLOGY CORP. (Exact name of Registrant as specified in its charter) FLORIDA 86-0933890 ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 2238 WEST LONE CACTUS, SUITE 200, PHOENIX, ARIZONA 85027 -------------------------------------------------------- (Address of principal executive offices) (623) 492-9200 --------------------------------------------------- (Registrant's telephone number including area code) N/A ------------------------------------------------------------- (Former name or former address, if changed since last report) ================================================================================ This Current Report on Form 8-K/A amends Item 7 of the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 4, 2004. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Synosphere LLC Financial Statements Report of Farber & Hass LLP, Independent Auditors Balance Sheet as of December 31, 2003 Statements of Operations for the Years Ended December 31, 2003 and 2002 and for the period May 2, 2001 (Date of Inception) to December 31, 2003 Statements of Members' Deficit for the Years Ended December 31, 2003 and 2002 and for the period May 2, 2001 (Date of Inception) to December 31, 2003 Statements of Cash Flows for the Years Ended December 31, 2003 and 2002 and for the period May 2, 2001 (Date of Inception) to December 31, 2003 Notes to Financial Statements (b) Pro Forma Financial Information Unaudited Pro Forma Condensed Consolidated Balance Sheet as of January 31, 2004 Unaudited Pro Forma Condensed Consolidated Statements of Operations for the Three Months Ended January 31, 2004 Unaudited Pro Forma Condensed Consolidated Statements of Operations for the Year Ended October 31, 2003 Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements (c) Exhibits 23.1 Consent of Farber & Hass LLP, Independent Auditors. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: April 5, 2004 iBIZ Technolgy Corp. ---------------------------------------- (Registrant) /s/ Ken W. Schilling ---------------------------------------- Ken W. Schilling President 3 SYNOSPHERE, LLC (A DEVELOPMENT STAGE COMPANY) FINANCIAL STATEMENTS DECEMBER 31, 2003 AND 2002 SYNOSPHERE, LLC (A DEVELOPMENT STAGE COMPANY) FINANCIAL STATEMENTS DECEMBER 31, 2003 AND 2002 TABLE OF CONTENTS PAGE NO. INDEPENDENT AUDITORS' REPORT ........................................... 2 FINANCIAL STATEMENTS Balance Sheet........................................................... 3 Statements of Operations................................................ 4 Statements of Members' Deficit.......................................... 5 Statements of Cash Flows................................................ 6-7 Notes to Financial Statements........................................... 8 - 11 1 INDEPENDENT AUDITORS' REPORT To The Board of Directors and Stockholders of Synosphere, LLC We have audited the accompanying balance sheet at December 31, 2003 and the related statements of operations, members' (deficit) and cash flows of Synosphere, LLC (a development stage company) for the years ended December 31, 2003 and 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respect, the financial position of the Company at December 31, 2003 and the results of its operations and its cash flows for the years ended December 31, 2003 and 2002, in conformity with accounting principles generally accepted in the United States of America. /s/ Farber & Hass LLP March 31, 2004 Camarillo, California 2 SYNOSPHERE, LLC (A DEVELOPMENT STAGE COMPANY) BALANCE SHEET DECEMBER 31, 2003 ASSETS OTHER ASSETS - Patents under development $ 63,130 ========= LIABILITIES AND MEMBERS' (DEFICIT) CURRENT LIABILITIES: Bank overdraft $ 21 Accrued expenses 77,991 --------- Total current liabilities 78,012 --------- MEMBERS' DEFICIT: Contributions 103,807 Deficit accumulated during the development stage (118,689) --------- Total members' deficit (14,882) --------- TOTAL LIABILITIES AND MEMBERS' DEFICIT $ 63,130 ========= See accompanying notes. -------------------------------------------------------------------------------- 3 SYNOSPHERE, LLC (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002 AND FOR THE PERIOD FROM MAY 2, 2001 (DATE OF INCEPTION) TO DECEMBER 31, 2003
May 2, 2001 Years Ended (Date of December 31, Inception) to ----------------------- December 31, 2003 2002 2003 --------- --------- --------- REVENUE $ 0 $ 0 $ 0 --------- --------- --------- EXPENSES: Research and development costs 20,586 21,139 79,541 General and administrative 26,477 10,891 39,148 --------- --------- --------- TOTAL EXPENSES 47,063 32,030 118,689 --------- --------- --------- NET LOSS FROM DEVELOPMENT STAGE OPERATIONS $ (47,063) $ (32,030) $(118,689) ========= ========= =========
See accompanying notes. -------------------------------------------------------------------------------- 4 SYNOSPHERE, LLC (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF MEMBERS' (DEFICIT) FOR THE PERIOD FROM MAY 2, 2001 (DATE OF INCEPTION) TO DECEMBER 31, 2003 MAY 2, 2001, (Date of Inception) $ 0 MEMBERS' CONTRIBUTIONS - Cash 39,689 NET LOSS (39,596) -------- BALANCE, DECEMBER 31, 2001 93 MEMBERS' CONTRIBUTIONS: Cash 41,909 Services 800 Patents under development 10,000 NET LOSS (32,030) -------- BALANCE, DECEMBER 31, 2002 20,772 MEMBERS' CONTRIBUTIONS-Cash 11,409 NET LOSS (47,063) -------- BALANCE, DECEMBER 31, 2003 $(14,882) ======== See accompanying notes. -------------------------------------------------------------------------------- 5 SYNOSPHERE, LLC (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002 AND FOR THE PERIOD FROM MAY 2, 2001 (DATE OF INCEPTION) TO DECEMBER 31, 2003
May 2, 2001 Years Ended (Date of December 31, Inception) to ---------------------- December 31, 2003 2002 2003 --------- --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (47,063) $ (32,030) $(118,689) Interests given for services 800 800 Changes in operating assets and liabilities: Accrued expenses 67,598 10,393 77,991 --------- --------- --------- Net cash provided (used) by operating activities 20,535 (20,837) (39,898) --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES - Patents under development (32,379) (20,751) (53,130) --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Bank overdraft 21 0 21 Proceeds from members' contributions 11,409 41,909 93,007 --------- --------- --------- Net cash provided by financing activities 11,430 41,909 93,028 --------- --------- --------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (414) 321 0 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 414 93 0 --------- --------- --------- CAH AND CASH EQUIVALENTS END OF PERIOD $ 0 $ 414 $ 0 ========= ========= =========
(CONTINUED) 6 SYNOSPHERE, LLC (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002 AND FOR THE PERIOD FROM MAY 2, 2001 (DATE OF INCEPTION) TO DECEMBER 31, 2003 May 2, 2001 Years Ended (Date of December 31, Inception) to --------------- December 31, 2003 2002 2003 ---- ---- ---- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest $0 $0 $0 Cash paid for taxes $0 $0 $0 SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION: During 2002, membership interests were issued in exchange for services valued at $800 and patent development valued at $10,000. See accompanying notes. -------------------------------------------------------------------------------- 7 SYNOSPHERE, LLC (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003 AND 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF BUSINESS AND HISTORY OF COMPANY - Synosphere, LLC was organized on May 2, 2001 under the laws of the state of Texas. The Company is based in Plano, Texas and specializes in the development of innovative handheld computer technologies that expand and enhance the mobile computing experience. CASH AND CASH EQUIVALENTS - For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. PATENTS UNDER DEVELOPMENT - Patents under development represents the costs of developing patents that are pending approval by the U.S. government. The Company will amortize the asset over the estimated useful life of the patents once the patents are approved and the products are developed and ready for sale. ACCOUNTING ESTIMATES - Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used. INCOME TAXES - The Company has elected to be classified as an association taxable as a corporation. Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled as prescribed in FASB Statement No. 109, "Accounting for Income Taxes". As changes in tax laws or rate are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. 8 DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS - The Company estimates that the fair value of all financial instruments at December 31, 2003, as defined in FASB 107, does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying balance sheet. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value, and accordingly, the estimates are not necessarily indicative of the amounts that the Company could realize in a current market exchange. RECENT ACCOUNTING PRONOUNCEMENTS - In April 2002, the FASB issued 145 "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." This Statement rescinds SFAS 4, "Reporting Gains and Losses from Extinguishment of Debt" and an amendment of that Statement, SFAS 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements". The rescission of these Statements alters the financial reporting requirements from gains and losses resulting from the extinguishments of debt. These gains or losses should now be reported before extraordinary items, unless the two requirements for extraordinary items are met. This Statement also rescinds SFAS 44, "Accounting for Intangible Assets of Motor Carriers" and amends SFAS 13, "Accounting for Leases", to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. This Statement also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. The provisions of this Statement related to the rescission of Statement 4 shall be applied in fiscal years beginning after May 15, 2002. Any gain or loss on extinguishments of debt that was classified as an extraordinary item in prior periods presented that does not meet the criteria in Opinion 30 for classification as an extraordinary shall be reclassified. The provision of this Statement related to Statement 13 shall be effective for transactions occurring after May 15, 2002. In June of 2002, the FASB issued SFAS 146, "Accounting for Costs Associated with Exit or Disposal Activities," which nullifies EITF Issue 94-3. SFAS 146 is effective for exit and disposal activities that are initiated after December 31, 2002 and requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred, in contrast to the date of an entity's commitment to an exit plan, as required by EITF Issue 94-3. The Company adopted the provisions of SFAS 146 effective January 1, 2003. 9 In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure". This Statement amends SFAS No. 123, "Stock-Based Compensation", to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The alternative methods of transition of SFAS 148 are effective for fiscal years ending after December 15, 2002. The Company follows APB 25 in accounting for its employee stock options. The disclosure provision of SFAS 148 is effective for years ending after December 15, 2002 and has been incorporated into these financial statements and accompanying footnotes. In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity". This Statement establishes standards for how an issuer of debt classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify certain financial instruments as a liability (or an asset in some circumstances) instead of equity. The Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The Company adopted this Statement on July 1, 2003. The Company does not believe that any of these recent accounting pronouncements will have a material impact on their financial position or results of operations. 2. DEVELOPMENT STAGE OPERATIONS As of December 31, 2003, the Company was in the development stage of operations. According to Statement of Financial Accounting Standard No. 7, a development stage company is defined as a company that devotes most of its activities to establishing a new business activity. In addition, planned principal activities have not commenced, or have commenced and have not yet produced significant revenue. 10 3. INCOME TAXES Significant components of the Company's deferred tax asset are as follows:
December 31, -------------------- 2003 2002 -------- -------- DEFERRED TAX ASSET: Net operating loss carryforward $ 23,500 $ 14,200 Less valuation allowance (23,500) (14,200) -------- -------- Net deferred tax asset $ 0 $ 0 ======== ======== A reconciliation of the valuation allowance is as follows: Balance, beginning of year $ 14,200 $ 7,900 Addition for the year 9,300 6,300 -------- -------- Balance, end of year $ 23,500 $ 14,200 ======== ========
4. NET OPERATING LOSS CARRYFORWARDS The Company has the following net operating loss carryforwards: Tax Year Amount Expiration Date -------- ------ --------------- December 31, 2001 $ 39,596 2021 December 31, 2002 31,230 2022 December 31, 2003 47,063 2023 -------- $117,889 Future changes in ownership may limit the ability of the Company to utilize these net operating loss carryforwards prior to their expiration. 5. SUBSEQUENT EVENTS Acquisition by iBIZ Technology Corp.: On January 20, 2004, iBIZ Technology Corp. acquired 100% of the member interests of the Company, in exchange for 30,000,000 shares of common stock. iBIZ Technology Corp. is a leading manufacturer and distributor of accessories for personal digital assistant (PDA) and hand-held devices. -------------------------------------------------------------------------------- 11 IBIZ TECHNOLOGIES CORP. & SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) JANUARY 31, 2004
iBIZ Technology Corp. and Synosphere, Subsidiaries LLC Adjustments Proforma ------------ --- ----------- -------- ASSETS CURRENT ASSETS: Cash $ 242,670 $ 20,000 $ 262,670 Cash, pledged for letter of credit 10,000 10,000 Accounts receivable, net 48,995 48,995 Inventories 62,228 62,228 Prepaid expenses 129,128 129,128 Advances, Synosphere, LLC 20,000 $ (20,000)(1) 0 Investment in Synosphere, LLC 1,200,000 (1,200,000)(1) 0 ----------- ---------- ----------- Total current assets 1,713,021 20,000 513,021 ----------- ---------- ----------- PROPERTY, PLANT AND EQUIPMENT, Net of accumulated depreciation 59,851 59,851 ----------- ---------- ----------- OTHER ASSETS: Patents under development 63,130 63,130 Technology and patents 1,200,000(1) 1,200,000 Intellectual property rights, net 55,455 55,455 Note receivable, officer 373,159 373,159 Less allowance for doubtful collection (373,159) (373,159) Deposits 2,500 2,500 ----------- ---------- ----------- Total other assets 57,955 63,130 1,321,085 ----------- ---------- ----------- TOTAL ASSETS $ 1,830,827 $ 83,130 $ 1,893,957 =========== ========== ===========
(Continued) 12 IBIZ TECHNOLOGIES CORP. & SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) (CONTINUED) JANUARY 31, 2004
iBIZ Technology Corp. and Synosphere, Subsidiaries LLC Adjustments Proforma ------------ --- ----------- -------- LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Bank overdraft $ 21 $ 21 Accounts payable and accrued expenses $ 668,052 77,991 746,043 Advances due to iBIZ Technology Corp. 20,000 $(20,000)(1) 0 Loan payable, Enterprise Capital AG 99,990 99,990 Accrued wages 403,363 403,363 Accrued interest 685,195 685,195 Taxes payable 218,900 218,900 Deferred income 3,113 3,113 Convertible debentures, current portion 2,152,297 2,152,297 --------- -------- ---------- Total current liabilities 4,230,910 98,012 4,308,922 --------- -------- ---------- LONG-TERM LIABILITIES - Convertible debentures payable, net of current portion 467,000 467,000 --------- -------- ----------
(Continued) 13 IBIZ TECHNOLOGIES CORP. & SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) (CONTINUED) JANUARY 31, 2004
iBIZ Technology Corp. and Synosphere, Subsidiaries LLC Adjustments Proforma --------------- --------------- ----------- --------------- STOCKHOLDERS' DEFICIT: Preferred stock - authorized, 50,000,000 shares, par value $.001 per share; issued and outstanding -0- 0 0 Common stock - authorized 5,000,000,000 shares, par value $.001 per share; issued and outstanding 2,273,572,909 shares; reserved for issuance of options, 23,050,000 shares 2,273,573 2,273,573 Common stock to be issued for Synosphere, LLC, 30,000,000 shares 1,200,000 1,200,000 Additional paid-in capital 23,580,291 23,580,291 Accumulated deficit (29,920,947) (29,920,947) Members' deficit (14,882) (14,882) --------------- --------------- --------------- Total stockholders' deficit (2,867,083) (14,882) (2,881,965) --------------- --------------- --------------- TOTAL LIABILITIES AND STOCKHOLERS' DEFICIT $ 1,830,827 $ 83,130 $ 1,893,957 =============== =============== ===============
See notes to proforma consolidated financial statements (unaudited). ----------------------------------------------------------------------- 14 IBIZ TECHNOLOGIES CORP. & SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) FOR THE YEAR ENDED OCTOBER 31, 2003
iBIZ Technology Corp. and Synosphere, Subsidiaries LLC Adjustments Proforma --------------- --------------- ----------- --------------- REVENUES: Product sales $ 453,797 $ 453,797 Maintenance agreements 31,585 31,585 ----------- -------- ----------- Total revenues 485,382 485,382 ----------- -------- ----------- COST OF REVENUES: Product sales 497,275 497,275 Maintenance agreements 21,728 21,728 ----------- -------- ----------- Total cost of revenues 519,003 519,003 ----------- -------- ----------- GROSS LOSS (33,621) (33,621) ----------- -------- ----------- EXPENSES: Research, development costs and consulting fees $ 4,591 $257,000(2) 261,591 Selling, general and administrative 2,784,542 18,065 500,000(3) 3,302,607 ----------- -------- ----------- Total expenses 2,784,542 22,656 3,564,198 ----------- -------- ----------- OPERATING LOSS (2,818,163) (22,656) (3,597,819) ----------- -------- -----------
(Continued) 15 IBIZ TECHNOLOGIES CORP. & SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) (CONTINUED) FOR THE YEAR ENDED OCTOBER 31, 2003
iBIZ Technology Corp. and Synosphere, Subsidiaries LLC Adjustments Proforma ------------- ------------- -------------- ------------- OTHER INCOME (EXPENSE): Cancellation of debt 85,733 85,733 Interest expense (353,516) (353,516) Interest expense - convertible debentures - beneficial conversion feature (1,379,077) (1,379,077) Other income 2,891 2,891 ------------- ------------- ------------- Other expense, net (1,643,969) (1,643,969) ------------- ------------- ------------- LOSS BEFORE INCOME TAXES (4,462,132) (22,656) (5,241,788) INCOME TAXES 50 0 50 ------------- ------------- ------------- NET LOSS $ (4,462,182) $ (22,656) $ (5,241,838) ============= ============= ============= NET LOSS PER COMMON SHARE $ (0.02) $ (0.02) ============= ============= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 231,553,359 93,457,408(4) 325,010,767 ============= =============
See notes to proforma consolidated financial statements (unaudited). ----------------------------------------------------------------------- 16 IBIZ TECHNOLOGIES CORP. & SUBSIDIARIES NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) On January 20, 2004, iBIZ Technology Corp., (the "Company"), acquired Synosphere, LLC, ("Synosphere") in exchange for 30,000,000 shares of common stock. The issuance of 30,000,000 shares of common stock was based on the aggregate purchase price of $1,200,000 and the market value of the stock at the date of acquisition ($0.04). The purchase price was allocated to technology and patents as Synosphere did not own any tangible assets and its only intangible assets were pending patents and technology. The acquisition will be accounted for as a purchase, with the assets acquired and liabilities assumed recorded at fair values, and the results of Synosphere's operations included in the Company's consolidated financial statements from the date of acquisition. The unaudited pro forma condensed consolidated balance sheet gives effect to the financial position at January 31, 2004 as if the acquisition occurred at January 31, 2004. Such consolidated financial position of the Company is not necessarily indicative of the consolidated financial position as it may be in the future, or as it might have been had these events been effective at January 31, 2004. The unaudited pro forma condensed consolidated statement of operations for the year ended October 31, 2003 gives effect to the consolidated results of operations as if the acquisition occurred at November 1, 2002. The unaudited pro forma condensed consolidated statement of operations for the three months ended January 31, 2004 gives effect to the consolidated results of operations as if the merger occurred at November 1, 2003. These results are not necessarily indicative of the consolidated results of operations of the Company as they may be in the future, or as they might have been had these events been effective at November 1, 2002 and 2003, respectively. The unaudited pro forma condensed consolidated financial information should be read in conjunction with the historical financial statements of the Company and Synosphere, LLC and the related notes thereto. PRO FORMA ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AT JANUARY 31, 2004: (1) Reflects preliminary purchase price allocation for the acquisition of Synosphere, LLC consisting of intangible assets and liabilities in exchange for 30 million shares of iBIZ Technology Corp. common stock and elimination of inter-company advances. 17 PRO FORMA ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 2003 AND THE THREE MONTHS ENDED JANUARY 31, 2004: (2) Gives effect to the contracted salaries and benefits as if the merger had occurred at November 1 for each of the periods presented. (3) Gives effect to contracted bonuses of $125,000 per quarter payable in common stock. (4) Reflects issuance of common stock for the acquisition of Synosphere, LLC and the contractual issuance of common stock for bonuses. The number of shares to be issued for the acquisition was based on the closing price on November 1 for each period. The number of shares to be issued for the quarterly bonuses was based on the average price for the quarter in each period. NOTE: The Company is still in the process of evaluating the fair value of the assets acquired and the liabilities assumed in order to make a final determination of the excess purchase price, including allocation to the intangibles other than goodwill. Accordingly, the purchase accounting information is preliminary and has been made solely for the purpose of developing such pro forma condensed consolidated financial information. Based on current information, the preliminary determination of the cost in excess of the net assets acquired and the allocation to intangible assets should not materially differ from the final determination. 18 INDEX TO EXHIBITS Exhibit Number Description of Document 23.1 Consent of Farber & Hass LLP, Independent Auditors 19