United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                  Form 10-QSB

            [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2003

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                                  EXCHANGE ACT

        For the transition period from ______________ to ________________

                        Commission File Number: 0-30611

                                ITS NETWORKS INC.
                    (Exact name of small business issuer as
                            specified in its charter)

           Florida                                       52-2137517
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization


    Edif. Marina Marbella, Severo Ochoa, 28, Planta 9, 29600 Marbella, Spain
                    (Address of principal executive offices)


                               011-34-95-276-8600
                               ------------------
                          (Issuer's telephone number)

                                 Not Applicable
   --------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                    report)


                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

     Check whether the registrant filed all documents and reports required to be
filed  by  Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities  under  a  plan  confirmed  by  a  court.  Yes        No

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State  the  number of shares outstanding of each of the issuer's classes of
common  equity,  as  of the latest practicable date: 40,474,580 shares as of May
19, 2003.

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


<PAGE>
                                ITS NETWORKS INC.
                                      INDEX


PART  I.  FINANCIAL  INFORMATION

Item  1.  Consolidated  Financial  Statements:

Consolidated  Balance  Sheet  as  of  March  31,  2003                         2

Consolidated  Statements  of  Operations  for  the  three
months  and  six  months  ended  March  31,  2003,  and  2002                  3

Consolidated  Statements  of  Cash  Flows  for  the  six
months  ended  March  31,  2003,  and  2002                                    4

Notes  to  the  Consolidated  Financial  Statements                            5

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

Item  3.  Controls  and  Procedures

PART  II.  OTHER  INFORMATION

Item  1.  Legal  Proceedings

Item  2.  Changes  in  Securities

Item  3.  Defaults  on  Senior  Securities

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

Item  5.  Other  Information

Item  6.  Exhibits  and  Reports  on  Form  8-K

Signatures







<PAGE>

                          PART I. FINANCIAL INFORMATION

Item  1.  Financial  Statements

                                ITS NETWORKS INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2003
                                  (Unaudited)

                                     ASSETS

<TABLE>
<CAPTION>
CURRENT  ASSETS:
<S>                                                               <C>
  Cash  and cash equivalents                                      $     420,000
   Accounts  receivable,  net  of  allowance
     for  doubtful  accounts  of  $1,085,000                          1,278,000
  Inventory                                                             105,000
  Prepaid  expenses                                                      48,000
                                                                  -------------
      Total  current assets                                           1,851,000
                                                                  -------------

PROPERTY  AND  EQUIPMENT,  NET                                        1,435,000
                                                                  -------------

OTHER  ASSETS:
  Vendor  deposits                                                      406,000
  Goodwill                                                            1,085,000
                                                                  -------------

                                                                      1,491,000
                                                                  -------------

                                                                  $   4,777,000
                                                                  =============

                    LIABILITIES AND STOCKHOLDERS' (DEFICIT)

CURRENT  LIABILITIES:
  Accounts  payable  and accrued expenses                         $   4,562,000
  Other  current  liabilities                                           893,000
  Loans  from  related  parties                                       1,113,000
  Deferred  income                                                    1,448,000
                                                                  -------------
      Total  current  liabilities                                     8,016,000
                                                                  -------------

LONG  TERM  DEBT
  Loans  from  related  parties                                         981,000
                                                                  -------------

      Total  long-term  debt                                            981,000
                                                                  -------------

STOCKHOLDERS'  DEFICIT:
  Preferred stock; par value of $0.001, 5,000,000 shares
    authorized,  no  shares  outstanding                                      -
  Common  stock;  par  value  of  $0.001,  50,000,000  shares
    authorized,  40,474,580  shares  outstanding                         41,000
  Additional  paid-in capital                                         6,863,000
  Less:  Prepaid  syndication  fees                                    (418,000)
  Less:  Stock  held  in  escrow                                       (913,000)
  Accumulated  (deficit)                                             (8,639,000)
  Effect  of  cumulative  translation  adjustment                    (1,154,000)
                                                                  -------------

      Total  stockholders'  (deficit)                                (4,220,000)
                                                                  -------------

                                                                  $   4,777,000
                                                                  =============
</TABLE>

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



<PAGE>
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                      For three months ended    For six months ended
                                                           March 31,                  March 31,
                                                       2003         2002          2003          2002
                                                   ----------   ----------    ----------    ----------
<S>                                                <C>          <C>           <C>           <C>
SALES                                              $1,885,000   $  504,000    $2,812,000    $1,254,000

COST OF GOODS SOLD (exclusive of Depreciation
  shown  separately  below)                         1,210,000      341,000     1,877,000       912,000
                                                   ----------   ----------    ----------    ----------

GROSS  PROFIT                                         675,000      163,000       935,000       342,000

OPERATING  EXPENSES:
  Selling, general and administrative expenses      1,302,000      179,000     2,035,000       366,000
  Depreciation                                        113,000       10,000       165,000        15,000
  Bad  debt  expense                                    5,000       11,000        18,000        20,000
  Impairment  on goodwill                                   -            -     3,254,000             -
                                                   ----------   ----------    ----------    ----------

      Total  operating  expenses                    1,420,000      200,000     5,472,000       401,000
                                                   ----------   ----------    ----------    ----------

(LOSS)  FROM  OPERATIONS                             (745,000)     (37,000)   (4,537,000)      (59,000)
                                                   ----------   ----------    ----------    ----------

OTHER  INCOME  (EXPENSES):
  Interest  expense                                   (33,000)      (1,000)      (39,000)       (1,000)
  Non  operating  profit                                    -       19,000             -        19,000
                                                   ----------   ----------    ----------    ----------

                                                      (33,000)      18,000       (39,000)       18,000
                                                   ----------   ----------    ----------    ----------

(LOSS)  BEFORE  INCOME  TAXES                      $ (778,000)  $  (19,000)  $(4,576,000)   $  (41,000)
                                                   ==========   ==========   ===========    ==========

PROVISION  FOR  INCOME  TAXES                               -            -             -             -
                                                   ==========   ==========   ===========    ==========

NET  (LOSS)                                        $ (778,000)  $  (19,000)  $(4,576,000)   $  (41,000)
                                                   ==========   ==========   ===========    ==========

BASIC  EARNINGS  (LOSS)  PER  SHARE                $    (0.02)  $        -   $     (0.15)   $        -
                                                   ==========   ==========   ===========    ==========

AVERAGE  COMMON  AND  COMMON
  EQUIVALENT  SHARES  OUTSTANDING                  33,737,479   22,301,167    30,829,223    21,815,667
                                                   ==========   ==========   ===========    ==========

THE  COMPONENTS  OF  COMPREHENSIVE  LOSS:
  Net  (loss)                                     $  (778,000)  $  (19,000)  $(4,576,000)   $  (41,000)
  Foreign  currency  translation  adjustment         (335,000)           -    (1,154,000)      (40,000)
                                                  -----------   ----------   -----------    ----------

COMPREHENSIVE  (LOSS)                             $(1,113,000)  $  (19,000)  $(5,730,000)   $  (81,000)
                                                   ==========   ==========   ===========    ==========
</TABLE>


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

<PAGE>

                                ITS NETWORKS INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                          For six months ended
                                                               March  31,
                                                            2003         2002
                                                        ------------  ----------
CASH  FLOWS  FROM  OPERATING  ACTIVITIES:
<S>                                                     <C>           <C>
  Net  (loss)                                           $(4,576,000)  $ (41,000)
  Adjustments  to  reconcile  net  (loss)  to
    net  cash  used  in  operating  activities:
    Depreciation                                            165,000      15,000
    Bad  debt  expense                                       18,000      20,000
    Loss  on  impairment  on  goodwill                    3,254,000           -
    Decrease  (increase)  in  operating  assets:
      Accounts  receivable                                 (988,000)   (164,000)
      Inventory                                            (105,000)          -
      Prepaid  expenses                                     (32,000)     (1,000)
      Vendor  and  other  deposits                         (312,000)      6,000
      Increase (decrease) in operating liabilities:
        Accounts payable and accrued liabilities          4,706,000    (148,000)
        Deferred  revenue  and deposits received          1,440,000      77,000
                                                        ------------  ----------

        Net  cash  (used  in)  operating  activities      3,570,000    (236,000)
                                                        ------------  ----------

CASH  FLOWS  FROM  INVESTING  ACTIVITIES:
  Purchased  goodwill                                    (4,339,000)
  Purchase  of  property  and  equipment                 (1,381,000)     (1,000)
                                                        ------------  ----------

        Net cash (used in) investing activities          (5,720,000)     (1,000)
                                                        ------------  ----------

CASH  FLOWS  FROM  FINANCING  ACTIVITIES:
  Loan  proceeds  from  related  parties                  3,554,000     231,000
  Loan  principal  payments  to  related  parties                 -     (24,000)
                                                        ------------  ----------

        Net cash provided by financing activities         3,554,000     207,000
                                                        ------------  ----------

EFFECT  OF EXCHANGE RATE                                 (1,032,000)     40,000
                                                        ------------  ----------

NET  INCREASE  (DECREASE)  IN  CASH  AND
  CASH  EQUIVALENTS                                         372,000      10,000

CASH  AND  CASH  EQUIVALENTS,
  BEGINNING  OF YEAR                                         48,000      12,000
                                                        ------------  ----------

CASH  AND  CASH  EQUIVALENTS,
  END  OF  YEAR                                         $   420,000   $  22,000
                                                        ============  ==========

SUPPLEMENTAL  DISCLOSURES  OF  CASH  FLOW  INFORMATION:
  Cash  paid  during  the  year  for:
    Interest                                            $    33,000   $       -
                                                        ============  ==========

SUPPLEMENTAL  DISCLOSURE  OF  NONCASH  TRANSACTIONS:
  Long-term  debt  converted  to  common  stock         $ 3,848,937   $ 720,000
                                                        ============  ==========
</TABLE>















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

<PAGE>
                       ITS NETWORKS INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2002
                                  (Unaudited)


1.   THE  COMPANY

     ITS Networks Inc. (the  "Company") was incorporated in the State of Florida
on  November  23,  1998.  On  December  22,  2000, the Company issued 16,886,667
shares  of  common stock in exchange for 100% of the outstanding common stock of
ITS  Europe,  S.L.  ("ITS  Europe"),  a Spanish telecommunications company.  For
accounting  purposes, the acquisition has been recorded as a recapitalization of
ITS Europe, with ITS Europe as the acquirer.  The 16,866,677 shares  issued  are
treated  as  issued  by  ITS  Europe  for  cash.

     In  December  2002  the  Company  acquired Teleconnect Comunicaciones, S.A.
("Teleconnect")  for  for 1,986,525 shares of the Common Stock of the Company
valued  at  912,808  Euro  and the assumption of approximately 2,200,000 Euro of
net  debt.  The  stock  issuance  is  subject  to guarantees made by Teleconnect
shareholders  that  Teleconnect  liabilities  will  not  exceed  2,200,000 Euro.
Management has not yet determined the amount, if any, of these shares which will
ultimately  be  released.

     Upon  completion of the acquisition, management determined that Teleconnect
assets  had  been  less  and  its  liabilities  more  than believed based on due
diligence.  This  resulted  in the creation of $4,339,000 in goodwill associated
with  this  acquisition.  There is substantial doubt about the Company's ability
to  realize  all  of the goodwill associated with this acquisition.  The Company
does  attribute  substantial value to the Teleconnect branding and distributions
systems. Therefore management elected to reserve $3,254,000 of this goodwill for
financial  reporting  purposes  as  of  December  31,  2002.

     Results  for  the  six  months  ended  March  31, 2003, are not necessarily
indicative of the results that may be expected for the year ending September 30,
2003.  For  further  information,  refer to the Company's consolidated financial
statements  and  footnotes  thereto included in its annual report on Form 10-KSB
for  its  fiscal  year  ended  September  30,  2002.

     The  Company  is  a  provider  of  pre-paid  telephone  cards  and  other
telecommunication  services  and  products  primarily  within Spain. Significant
inter-company  balances  and transactions have been eliminated in consolidation.

2.   GOING  CONCERN

     The  accompanying financial statements have been prepared assuming that the
Company  will  continue  as  a  going  concern.

     As  shown  in  the  financial  statements,  the  Company incurred losses of
$(4,576,000)  and  $(41,000)  for  the six months ended March 31, 2003 and 2002,
respectively.  In  addition,  the  Company has incurred substantial losses since

<PAGE>

its  inception.  As of March 31, 2003, current liabilities exceed current assets
by  $6,165,000  and  total liabilities exceed total assets by $4,220,000.  These
factors  raise  substantial  doubts about the Company's ability to continue as a
going  concern.

     These  financial  statements do not include any adjustments relating to the
recoverability  and  classification  of  recorded  assets,  or  the  amounts and
classification  of  liabilities that might be necessary in the event the Company
cannot  continue  as  a  going  concern.

     Management  anticipates that it will be able to convert certain outstanding
debt  into  equity  and that it will be able to raise additional working capital
through  the issuance of stock and through additional loans from investors.  The
current  shareholders  have shown their commitment to the Company by financially
supporting  the  operations.  During  the  six  months  ended  March  31,  2002,
$2,470,000  of debt was converted to equity. Furthermore, it anticipates that it
will  be able to achieve a profitable level of operations since it has completed
the  consolidation  of  its  ITS  Europe  and  Teleconnect  operations.

     The ability of the Company to continue as a going concern is dependent upon
the Company's ability to attain a satisfactory level of profitability and obtain
suitable  and  adequate  financing.  There can be no assurance that management's
plan  will  be  successful.

3.   SIGNIFICANT  ACCOUNTING  POLICIES

     Cash  and  cash  equivalents.  The  Company  considers  all  highly  liquid
investments  with  maturities  of three months or less when purchased to be cash
equivalents.  There  are  no  cash  equivalents  at  March  31,  2003.

     Property  and  equipment.  Property  and  equipment  are  stated  at  cost.
Depreciation  is  provided  primarily  by  the  straight-line  method  over  the
estimated  useful  lives  of  the  assets.

     Impairment  of  long-lived  assets.  The  Company  evaluates its long-lived
assets  to  determine  whether  later  events  and circumstances warrant revised
estimates  of  useful  lives  or  reduction in carrying value due to impairment.

     Income  taxes.  The  Company  accounts  for income taxes in accordance with
Statement  of  Financial  Accounting  Standards  No. 109, "Accounting for Income
Taxes", which requires an asset and liability approach to determine deferred tax
assets  and  liabilities.  Deferred  tax  assets  and liabilities are determined
based  upon  the differences between financial reporting and tax basis of assets
and  liabilities  and are measured using the enacted tax rates and laws that are
expected  to  be  in  effect  when  the  differences  are  assumed  to  reverse.

     Revenue  recognition.  Revenue  from  the  sale of prepaid calling cards is
recognized as the cards are used.  Deferred revenues are recorded to reflect the
unused  portion  of  calling  cards  that  have  been  issued  to  customers.


<PAGE>

     Loss  per  share.  Loss  per common and common equivalent share is computed
based  on  the  weighted  average  number of shares of Common Stock outstanding.

     Use  of  estimates.  The  preparation of financial statements in conformity
with  accounting  principles  generally accepted in the United States of America
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 the financial statements and the reported amounts of
revenues  and expenses during the reporting period.  Actual results could differ
from  those  estimates.

     Foreign  Currency Translation/Transactions.  The current assets and current
liabilities of ITS Europe, S.L. and Teleconnect, whose functional currencies are
the  Euro  (formerly  the Peseta), are generally translated into U.S. dollars at
the  March  31,  2003  exchange  rate.  Long-term  assets  are translated at the
exchange  rate  in effect on the date of acquisition.  The revenues and expenses
are  translated at average exchange rates for the period.  Resulting translation
adjustments  are  accumulated  and  reflected  as  a  separate  component  of
stockholders'  equity.

4.   INCOME  TAXES

     The  Company's  wholly-owned subsidiaries, ITS Europe, S.L. and Teleconnect
file  their  income taxes on a calendar year basis.  Statutory tax laws of Spain
allow  net  losses  from  operations  to  be carried forward for a period of ten
years.  For the year ended September 30, 2002, the available tax loss ITS Europe
has  accumulated  is  $2,744,000,  which  may  be  used to offset future taxable
income.  Teleconnect,  which  was  acquired  in December 2002, has available tax
losses of approximately $10,000,000 as of December 31, 2002.  The utilization of
the  loss expires in years from 2005 to 2012.  The Company cannot use any of the
tax  losses  of  ITS  Europe  or  Teleconnect  to offset any future U.S. taxable
income.  The  U.S. parent Company has net operating loss carry forwards totaling
approximately  $176,000,  which is available to offset any future parent Company
taxable  income  in  the  United  States  in  years  2021  to  2022.

     The  Company has a deferred tax asset principally due to net operating loss
carry  forwards.  This deferred tax asset has been offset in full by a valuation
allowance,  as  the  Company  can  not  be assured at this time that it will  be
able  to  utilize  these  loss  carryforwards.

5.   LITIGATION

     In the normal course of its operations, the Company has, from time to time,
been  named  in  legal  actions  seeking monetary damages.  While the outcome of
these  matters  cannot  be estimated with certainty, management does not expect,
based  upon  consultation  with  legal  counsel,  that they will have a material
effect  on  the  Company's  business  or  financial  condition  or  results  of
operations,  except  that  as of March 31, 2003, the Company has accrued 224,000
Euro  for  the  settlement  of  pending  litigation.

<PAGE>

6.   LOANS  PAYABLE

     At  March  31,  2003,  the  Company  has  loans  payable to related parties
totaling  $2,094,000,  of  which  $1,113,000 have no maturity dates or repayment
terms  and  are  interest free. The remaining $981,000 is due November 25, 2004.
Interest is to be computed and paid monthly at an interest rate of 9% per annum.

7.   ACQUISITION  OF  TELECONNECT

     Effective December 5, 2002, the Company acquired Teleconnect, a Spain-based
telecom operator marketing prepaid telephone card services, to allow the Company
to become more competitive in the Spain market by increasing sales, implementing
new  cost  control  procedures  and  minimizing  redundancies.  The  acquisition
involved  an  exchange  for  1,986,525  shares  of  Common  Stock of the Company
and  the assumption of approximately 2,200,000 Euros of Teleconnect net debt for
substantially  all  of  the outstanding stock of Teleconnect. In accordance with
the  terms  of  this agreement, the former Teleconnect shareholders made certain
warranties  about  Teleconnect's  net  debt level at the date of acquisition. If
Teleconnect  had  specified debts in excess of 2,200,000 Euro on the acquisition
date,  the  former  shareholders have agreed to reduce the number of shares they
are  entitled  to receive by an amount that the specified debt exceeds 2,200,000
Euro. The shares will be valued at approximately .46 Euro per share for purposes
of  this reduction in shares to be issued. The 1,986,525 shares of the Company's
Common  Stock issued to the former stockholders of Teleconnect are to be held in
escrow  until  November  14, 2003 at which time a final accounting will be made.

     For  financial reporting purposes, the 1,986,525 shares of Common Stock has
been  valued  at 913,000 Euro based on the stock price on November 11, 2002, the
date  of  the  agreement,  and  is  shown as issued with an offset in the equity
section  to  reflect  the  stock  held  in  escrow  since management has not yet
determined the amount, if any, of these shares which will ultimately be released
from  escrow.

     Liabilities  assumed  exceeded assets by $4,339,000.  The summarized assets
and  liabilities  of  Teleconnect  on  the  acquisition  date  were  as follows:

<TABLE>
<CAPTION>
<S>                                                  <C>
     Cash                                            $  210,000
     Accounts  receivable                               984,000
     Inventory                                          120,000
     Property  and  equipment,  net                   1,247,000
     Prepaid  assets                                     22,000
     Other  assets                                      288,000
                                                     ----------
                                                     $2,871,000
                                                     ==========

     Accounts  payable  and  accrued  expenses       $2,952,000
     Other  current  liabilities                      2,851,000
     Loans  from  related  parties                      233,000
     Deferred  income                                 1,174,000
                                                     ----------
                                                     $7,210,000
                                                     ==========
</TABLE>

<PAGE>

Since  the  liabilities assumed exceeded those previously estimated, it resulted
in  more  goodwill  than  anticipated.  There  is  substantial  doubt  about the
Company's  ability  to  realize  all  of  the  goodwill  associated  with  the
acquisition.  An  impairment test was performed based on the discounted value of
anticipated  future  cash flows and $3,254,000 of the goodwill was determined to
be  impaired.

The  result  of  operations  of  Teleconnect  is  included  in  the accompanying
financial  statements  since  date of acquisition.  The following summarized pro
forma  (unaudited)  information for the six months ended assumes the acquisition
occurred  on  10/01/01:

<TABLE>
<CAPTION>
                                          March  31,  2003     March  31,  2002
                                          ----------------     ----------------
<S>                                          <C>                  <C>
Net  sales                                   $3,669,000           $5,886,000
Cost  of  goods  sold                         2,332,000            4,496,000
                                             ----------           ----------

Gross  Profit                                 1,337,000            1,390,000
                                             ----------           ----------

Selling,  general  &  administrative          2,614,000            4,254,000
Depreciation                                    230,000              162,000
Bad  debt  expense                               18,000               61,000
Impairment  of  goodwill                      3,254,000                    -
                                             ----------           ----------

Total  operating  expense                     6,116,000            4,477,000
                                             ----------           ----------

Loss  from  operations                        4,779,000            3,087,000

Other  income  and  expenses                    (45,000)             (26,000)
                                             ----------           ----------

Net  loss                                    $4,824,000           $3,113,000
                                             ==========           ==========

Loss  per  share                             $    (0.15)          $    (0.13)
                                             ==========           ==========
</TABLE>


<PAGE>


                                        8

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

RESULTS  OF  OPERATIONS

     ITS  Networks  Inc.  (the "Company") was incorporated under the laws of the
State  of  Florida  on  November  23,  1998.  However,  it  did  not conduct any
significant operations until December 2000 when there was a change in control of
the  Company.  The  new controlling stockholders changed its corporate name from
Technology  Systems  International,  Inc. to ITS Networks Inc. and increased the
authorized  number  of  shares  of  common  stock  from 25,000,000 to 50,000,000
shares.  In  connection  with  the  change of control of the Company in December
2000,  the  Company  acquired all of the issued and outstanding capital stock of
ITS  Europe,  S.L.,  a  Spanish telecommunications company that was organized in
1995.  As  a  result,  ITS  Europe,  S.L.  ("ITS  Europe") became a wholly owned
subsidiary  of  the  Company.  In  December  2002,  ITS  Networks formalized the
purchase  of  Teleconnect Comunicaciones S.A., ("Teleconnect") a company focused
on  prepaid  long  distance  services.  For information concerning the Company's
prior  full  fiscal  year,  the  Company  refers  the  reader  to  the financial
statements  provided  in  the  previous  Annual  Report on Form 10-KSB filed its
fiscal  year ended  September  30,  2002.

     This acquisition of  Teleconnect  has  significantly  expanded our pre-paid
calling card  business,  and  has  also  significantly increased our outstanding
debt.  As  a  result  of  the  Teleconnect  acquisition,  ITS  Europe's business
activities  have  been  absorbed  by Teleconnect. As such, the postpaid business
will  be  maintained  since  it  represents approximately 25% of total revenues,
however all marketing efforts will be focused on the prepaid business. Wi Fi and
other  internet  related  activities  will  be  sold  off  or  terminated.

COMPARISION  OF  THE THREE MONTHS ENDED MARCH 31, 2003 TO THE THREE MONTHS ENDED
MARCH  31,  2002

REVENUES

     Sales  for  the  three  months  ended  March  31,  2003  increased  274% to
$1,885,000  from  $504,000 for the quarter ended March 31, 2002. These increases
were  due  primarily  to  the  growth  in  customer  base and increased sales of
telecommunications  services  arising from  the  purchase  of  Teleconnect.  The
Teleconnect  addition  accounted  for  substantially  all  of  this  increase.

COST  OF  GOODS  SOLD/GROSS  MARGIN

     Cost  of  goods  sold  increased  to $1,210,000, or 64% of revenues for the
three  months  ended  March  31,  2003,  from $341,000 or 68% of revenues in the
quarter ended March 31, 2002. This increase of $869,000 was primarily due to the
expansion  of  business.  The  improvement in gross margin is the result of  the
better  margins  of  the  Teleconnect  residential account business and improved
buying  processes.

<PAGE>

SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES

     Selling,  general  and administrative expenses have increased by $1,123,000
or 627% from $179,000 for the quarter ended March 31, 2002 to $1,302,000 for the
quarter  ended  March 31, 2003.  This increased is due primarily to the addition
of  the  Teleconnect business and the additional costs associated with acquiring
Teleconnect and consolidating its operations with those of ITS Europe as well as
restructuring  costs.

DEPRECIATION

     Depreciation expense increased by $103,000 from $10,000 in 2002 to $113,000
in  2003.  This  increase  is  due  to  inclusion  in  deprecations  in  2003 of
Teleconnects  depreciable assets which include a substantial amount of telephone
switching  equipment  and  call  tracking  software.

BAD  DEBTS  EXPENSE

     Bad  debts expense decreased by 55% from $11,000 to $5,000 during the three
months period ended March 2002 and 2003, respectively. This decrease is a result
of  the  Company's  efforts  to  tighten  its  credit  policies.

OTHER  INCOME  AND  EXPENSES

     Interest  expense  increased from $1,000 during the quarter ended March 31,
2002 to $33,000 for the quarter ended March 31, 2003.  This increase is a result
of  borrowings incurred  in  connection  with  the  Teleconnect acquisition.  In
addition  during  2002, the  Company  enjoyed  $19,000  in  other  income.


NET  LOSS

     Loss  from  operations  for the quarter ended March 31, 2003, increased  to
$(778,000)  from  $(19,000) for the quarter ended March 31, 2002.  This increase
was  primarily  due  to the additional selling, general and administrative costs
associated  with  the  acquisition  of  Teleconnect.


<PAGE>
COMPARISION OF THE SIX MONTHS ENDED MARCH 31, 2003 TO THE SIX MONTHS ENDED MARCH
31,  2002


REVENUES

     Sales  for the six months ended March 31, 2003 increased 124% to $2,812,000
from  $1,254,000  for  the six months ended March 31, 2002. These increases were
due  primarily  to  the  growth  in  customer  base  and  increased  sales  of

<PAGE>

telecommunications  services  as well as the purchase of Teleconnect in December
of  2002.  The  Teleconnect  addition  accounted  for  substantially all of this
increase.

COST  OF  GOODS  SOLD/GROSS  MARGIN

     Cost  of goods sold increased to $1,877,000, or 67% of revenues for the six
months  ended March 31, 2003, from $912,000 or 73% of revenues in the six months
ended  March  31,  2002.  This  increase  of  $965,000  was primarily due to the
expansion  of  business.  The  improvement  in gross margin is the result of the
better  margins  of  the  Teleconnect  residential account business and improved
buying  processes.

SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES

     Selling,  general  and administrative expenses have increased by $1,669,000
or  456% from $366,000 for the six months ended March 31, 2002 to $2,035,000 for
the  six  months  ended  March 31, 2003.  This increased is due primarily to the
addition  of  the  Teleconnect business and the additional costs associated with
acquiring Teleconnect and consolidating its operations with those of ITS Europe.

DEPRECIATION

     Depreciation  expense increased by $150,000 from $15,000 to $165,000 during
the  six  months  periods  ended  March  31,  2002  and 2003, respectively. This
increase  is  due  to  inclusion  in  deprecations  in  2003  of  Teleconnect's
depreciable  assets  which  include  a substantial amount of telephone switching
equipment  and  call  tracking  software.

IMPAIRMENT  OF  GOOWILL

     During  December  of  2002,  the  Company  wrote  down goodwill acquired in
connection  with  acquisition  of  Teleconnect  by  $3,254,000.

BAD  DEBTS  EXPENSE

     Bad  debts  expense decreased by 10% from $20,000 to $18,000 during the six
months  periods  ended March 31, 2002 and 2003, respectively. This decrease is a
result  of  the  Company's  efforts  to  tighten  its  credit  policies.

OTHER  INCOME  AND  EXPENSES

     Interest  expense  increased  from $1,000 during the six months ended March
31,  2002  to  $39,000 for the quarter ended March 31, 2003.  This increase is a
result of borrowing incurred in connection with the Teleconnect acquisition.  In
addition  during  2002  the  Company  enjoyed  $19,000  in  other  income.

<PAGE>

NET  LOSS

     Loss from operations for the six months ended March 31, 2003, increased  to
$(4,576,000)  from  $(41,000)  for  the  six  months ended March 31, 2002.  This
increase  was primarily due to the impairment of goodwill of $3,254,000 incurred
in  connection  with  the Teleconnect acquisition along with additional selling,
general and administrative costs associated with the acquisition of Teleconnect.


PLAN  OF  OPERATIONS  FOR  THE  COMPANY

One  of the Company's main objectives for the current fiscal year is to complete
the  integration of ITS Europe S.L. and Teleconnect Comunicaciones S.A. E and in
this  way  take  maximum  advantage  of  the  synergies  of  both  local Spanish
companies.  As  of March 11, 2003, Mr. Nicholas Bruemmer assumed the position of
managing  director at Teleconnect and ITS Europe S.L. in this way freeing up Mr.
Gomez  to  dedicate himself as president of the parent company, ITS Networks, to
the  search  of new acquisitions, new investors or other new sources of capital.
As  of  March  31,  2003,  all  clients  of ITS Europe have been integrated with
Teleconnect's client base, ITS Europe's assets have either been absorbed or sold
off,  and  any  outstanding  creditors  have either been liquidated or a payment
arrangement has been agreed whereby Teleconnect ultimately assumes the debt left
by  ITS  Europe  S.L.

     In  addition, another objective is to regain prepaid card market share that
Teleconnect lost last year and in so doing aim to be increase prepaid card sales
to  over  1,000,000  euro  monthly  during the next six months. The Company will
also  eliminate  all  lines  of  business  that  are not profitable or that take
up  too  much  resources  and  in so doing, the Company will be able to focus on
prepaid  telephone  card  services.  Hence, as of March 31, 2003, the company no
longer offers in Spain, 906 (intelligent number service), internet access or web
design  and  hosting,  nor  does  it  offer  Wireless Fidelity ("WiFi")  access.

     Cost  reduction  is  a  major  objective  for  the company during this last
quarter  and  it has further reduced staff another 25% by reducing 11 people and
remaining with 34. In addition, the Company has set up international connections
outside  of  Spain  which  allow it to send international traffic (long distance
phone  calls) at a significant reduction from previous costs using locally-based
carriers.

     It  is  the  Company's  goal  to  acquire  other similar telecommunications
companies,  primarily  in  Spain  with  the  objective  of adding more volume of
business onto the existing infrastructure and improving positive Earnings Before
Interest,  Income  Taxes,  Depreciation  and  Amortization ("EBITDA") faster. No
other  specific  acquisitions are presently planned though initial conversations
with  other  parties  are  underway.

You  should  read  the following discussion and analysis in conjunction with our
consolidated  financial  statements  and  related  notes  included  elsewhere
herein.

<PAGE>

Forward  Looking  Statements
----------------------------

     When  used  in  the  annual  report on Form 10-KSB and in our other filings
with  the  SEC,  in  our  press  releases  and  in oral statements made with the
approval of one of our authorized executive officers, the words or phrases "will
likely  result",  "plans",   "will  continue",  "is  anticipated",  "estimated",
"expect", "project" or "outlook" or similar expressions (including confirmations
by  one  of  our authorized executive officers of any such expressions made by a
third  party  with  respect  to  us)  are  intended to identify "forward-looking
statements"  within  the meaning of the Private Securities Litigation Reform Act
of  1995. We caution readers not to place undue reliance on any such statements,
each  of  which  speaks only as of the date made. Such statements are subject to
certain  risks  and  uncertainties,  including but not limited to our history of
losses,  our limited operating history, our need for additional financing, rapid
technological  change,  and an uncertain market, that could cause actual results
to differ materially from historical earnings and those presently anticipated or
projected. Factors that may cause actual results to differ materially from those
contemplated  by  such  forward-looking  statements  include,  among others, the
factors  described  below  and  in  the  Description of Business section of this
annual  report. We undertake no obligation to release publicly revisions we made
to  any  forward-looking statements to reflect events or circumstances occurring
after  the  date  of  such  statements.  All  written  and  oral forward-looking
statements  made  after the date of this annual report and/or attributable to us
or  persons  acting  on  our behalf are expressly qualified in their entirety by
this  discussion.

Significant  Accounting  Estimates  and  Policies
-------------------------------------------------

     The  discussion  and  analysis  of  our  financial condition and results of
operations  is  based upon our consolidated financial statements which have been
prepared  in  accordance  with  accounting  principles generally accepted in the
United  States.  The  preparation  of  these financial statements requires us to
make  estimates  and  judgments  that  affect  the  reported  amounts of assets,
liabilities,  revenue  and expenses, and related disclosure of contingent assets
and liabilities.   On an on-going basis, we evaluate our estimates including the
allowance  for  doubtful  accounts,  the  saleability,  and  recoverability  of
inventory,  income  taxes and contingencies. We base our estimates on historical
experience  and  on  various  other assumptions that we believe to be reasonable
under  the  circumstances,  the  results  of  which  form  our  basis for making
judgments  about  the  carrying  values  of  assets and liabilities that are not
readily  apparent  from  other  sources.  Actual  results  may differ from these
estimates  under  different  assumptions  or  conditions.

     We  must  make  estimates of the collectability of accounts receivable.  We
analyze  historical  write-offs,  changes  in  our  internal credit policies and
customer  concentrations  when  evaluating  the  adequacy  of  our allowance for
doubtful  accounts.  Differences may result in the amount and timing of expenses
for  any  period  if  we  make  different judgments or use difference estimates.

     As  part of the process of preparing our consolidated financial statements,

<PAGE>

we  are required to estimate our income taxes.  This process involves estimating
our current tax exposure together with assessing temporary differences resulting
from  differing  treatment  of  items  for  tax  and accounting purposes.  These
differences  result in deferred tax assets and liabilities.  We must then assess
the  likelihood  that  our  deferred  tax  assets  will be recovered from future
taxable  income,  and,  to the extent we believe that recovery is not likely, we
must  establish  a  valuation  allowance.  To  the  extent  that  we establish a
valuation  allowance  or  increase this allowance in a period, we must include a
tax provision or reduce our tax benefit in the statements of operations.  We use
our  judgment  to  determine our provision or benefit for income taxes, deferred
tax  assets and liabilities and any valuation allowance recorded against our net
deferred  tax  assets.  We  believe,  based  on  a  number  of factors including
historical  operating  losses, that we will not realize the future benefits of a
significant  portion  of  our  net  deferred  tax assets and we have accordingly
provided  a  full valuation allowance against our deferred tax assets.  However,
various  factors  may  cause  those  assumptions  to  change  in  the near term.

     We  cannot  predict  what  future laws and regulations might be passed that
could have a material effect on our results of operations.  We assess the impact
of significant changes in laws and regulations on a regular basis and update the
assumptions  and estimates used to prepare our financial statements when we deem
it  necessary.

     We  have  determined  the  significant principles by considering accounting
policies  that  involve the most complex or subjective decisions or assessments.
Our  most  significant  accounting  policies  are  those  related  to  revenue
recognition  and  accounting  for  stock-based  compensation.

     Revenue  Recognition.  Our  revenue  recognition  policies are based on the
requirements  of  SEC  Staff Accounting Bulletin No. 101, Revenue Recognition in
Financial  Statements.

     Revenue  from  sales of telecommunication services is recognized during the
period  when  the  services  are  rendered.

     Accounting  for  Stock-Based  Compensation.  We  have  elected to apply the
disclosure-only   provisions  of  SFAS  No.  123,   Accounting  for  Stock-Based
Compensation.  In  accordance  with  the  provisions   of  SFAS  123,  we  apply
Accounting  Principles  Board  Opinion  No.  25,  Accounting for Stock Issued to
Employees,  and  will use related interpretations in accounting for stock option
plans.  We  account  for  stock  issued  to non-employees in accordance with the
provisions of SFAS 123 and the Emerging Issues Task Force consensus in Issue No.
96-18, Accounting for Equity Instruments That are Issued to Other Than Employees
for  Acquiring  or  in  Conjunction with Selling, Goods or Services.  Generally,
under  APB  25, if the option exercise price for a fixed award to an employee is
equal  to  the  fair  value  of the common stock at the date of the grant of the
stock  option,  no  compensation  expense  is recorded.  Under SFAS 123 and EITF
96-18, the amount of compensation expense that is recorded is based on an option
pricing  model  which  incorporates  such  factors as the expected volatility of
future movements in the price of the underlying stock, risk-free interest rates,
the  term  of  the  options and any dividends expected to be paid.  As a result,
under  SFAS  123  and  EITF 96-18, we would generally expect to record a greater

<PAGE>

amount  of  compensation  expense  than  under  APB  25.

     Segment  Reporting.  We  have  adopted  SFAS  No.  131, "Disclosures  About
Segments of an Enterprise and Related Information".  SFAS 131 requires companies
to  disclose  certain  information  about  reportable  segments.  Based  on  the
criteria  within  SFAS  131,  we have determined that we currently have only one
reportable  segment,  telecommunications  systems  and  related  services.

Overview
--------

     We  derive  our  revenues  primarily  from  the  sale  of our long-distance
pre-paid  telephone  cards.  Our  revenues  and operating results have depended,
and will continue to depend, upon the continued adoption and use of our products
and  services  by  consumers  and  small  businesses.  The  rate  of adoption is
influenced  significantly  over the longer term by government laws and mandates,
performance  and  pricing  of  our  products/services,  relationships  with  the
public  and  other  factors.

     Our  quarterly revenues also may be impacted by other factors including the
length  of  our  sales  cycle,  the timing of sales orders, budget cycles of our
customers,  competition,  the  timing  and  introduction  of new versions of our
products,  the  loss  of,  or  difficulties  affecting,  key  personnel  and
distributors, changes in market dynamics or the timing of product development or
market  introductions.  These  factors have impacted our historical results to a
greater  extent  than  has  seasonality.  Combinations  of  these  factors  have
historically  influenced  our growth rate and profitability significantly in one
period  compared  to  another,  and are expected to continue to influence future
periods,  which  may  compromise  our  ability  to  make  accurate  forecasts.

     No  single  customer  accounted for more than 10% of our revenues during of
the  six months ended March 31, 2003. Domestic sales in Spain accounted for 100%
of  our  revenues  in  each  of  the  last  two  fiscal  years.

     Cost of goods sold consists primarily of the costs associated with carriers
which  supply  the telecom services for the Company to resell.  We rely on third
parties  to  offer  the  majority  of  the  services  we  have in our portfolio.
Accordingly,  a  significant  portion  of  our  cost  of  goods sold consists of
payments  to  these  carriers.  Cost  of  goods  sold  revenues also consists of
customer  support  costs, training and professional services expenses, parts and
marketing  compensation.

Our  gross  profit  has  been  and  will continue to be affected by a variety of
factors,  including competition, the mix and average selling prices of products,
maintenance  and  services,  new  versions  of  products, the cost of equipment,
component  shortages,  and  the  mix  of distribution channels through which our
products  are  sold.  Our  gross  profit  will  be  adversely  affected by price
declines  if  we are unable to reduce costs on existing products or to introduce
new  versions  of  products  with  higher  margins.

<PAGE>

     Selling,  general and administrative expenses consist primarily of salaries
and  related  expenses  for  executive,  finance,  accounting,  legal  and human
resources  personnel,  professional  fees  and  corporate  expenses.  We  expect
general and administrative expenses to increase in absolute dollars as we employ
additional  personnel  and  incur  additional costs related to the growth of our
business  and  our  operation  as  a  public  company.  We  present  stock-based
compensation  as  a  part  of  general  and  administrative  expenses.

     Stock-based compensation charges are recorded when the exercise price of an
option  or  the  sales  price  of  stock  is  less  than  the  fair value of the
underlying  Common  Stock  for  awards to employees.  We also record stock-based
compensation  charges  when  options are granted to non-employees.  Compensation
charges  for  non-employees  are based on estimates of the underlying stock fair
values.  As  of  March  31,  2003,  the  Company  has  not  granted  any  stock
options,  but  the  Company  has  issued  Common  Stock  to  consultants  and
professionals  in  exchange  for  services  to  the  Company.

LIQUIDITY  AND  CAPITAL  RESOURCES

     The  Company  has no commitments for additional financing, and there can be
no  assurances that any such additional financing would be available in a timely
manner  or,  if  available,  would  be  on  terms  acceptable  to  the  Company.
Furthermore, any additional equity financing or convertible debt financing could
be  dilutive  to  our  then-existing  shareholders  and any debt financing could
involve restrictive covenants with respect to future capital raising activities,
dividends,  and  other  financial  and  operational  matters.

     At  March  31,  2003,  the  Company  had  negative  working  capital  of
approximately  $(6,165,000),  compared to negative working capital of $(251,000)
at  March  31,  2002.

     The  ability  of  the Company to satisfy its obligations and to finance its
business  plans  will depend in part upon its ability to raise funds through the
sale  of  additional  shares  of its Common Stock, increasing borrowings, and in
part upon its ability to reach a profitable level of operations. ITS anticipates
that  approximately  2,500,000 euro will be needed for funding its operations in
terms  of  paying  the  negotiated  and  agreed  debt  payment plans. Management
anticipates that this amount will be raised through various fund raising methods
such  as  new  investors,  loans,  leasing  arrangements,  sale  of nonessential
equipment, etc. This amount does not include any funds with acquisition to other
companies.

     Management  expects  to  incur  a  net  loss  from  operations  during  its
fiscal  year  ending  September  30,  2003.  However,  we  anticipate  that  the
Company  will not be operating at a loss after the nine month period ending June
30,  2003.  We  anticipate that ITS will be operating at a profit for its fiscal
year  ending  September  30,  2004.

     The  Company's capital resources have been previously provided primarily by
capital  contributions  from  stockholders,  stockholders loans, the exchange of
outstanding  debt  into  Common  Stock  of the Company, and services rendered in
exchange  for  Common  Stock.

     The  Company entered into an Equity Line of Credit Agreement dated June 18,
2002  (the  "Agreement")  with  Cornell  Capital  Partners, LP ("Cornell").  The

<PAGE>

Agreement  provides  for  Cornell  to  commit  to purchase up to an aggregate of
$10,000,000 (U.S.) of the Common Stock of the Company, not to exceed 9.9% of the
then  total  issued  and  outstanding  shares of Common Stock of the Company, as
requested  from  time  to  time by the Company as its equity capital needs arise
during  the term of the Agreement. Upon written notice from the Company, Cornell
is  committed  to purchase Common Stock of the Company at a purchase price equal
to  95%  of the then current market closing bid prices.  Market price is defined
to  mean  the  lowest  bid  price for the Common Stock during the five preceding
trading  days  during  a  pricing period (the date following the notice from the
Company)  to Cornell. On September 27, 2002, the Company issued 1,026,316 shares
of  Common  Stock  for  syndication  fees  for  this  equity  line of credit. In
addition,  in  connection  with  the  Equity Line of Credit Agreement, we issued
26,316  shares  of our Common Stock to Westrock Advisors, Inc. ("Westrock") as a
placement  agent fee. For financial reporting purposes, these shares were valued
at  $418,000, which were treated as additional paid in capital with an offset to
a contra additional paid in capital account. No capital was raised in the fiscal
year  ended September 30, 2002. As of March 31'st, 2003, this line of credit has
not become available as the shares covered under this equity line of credit have
not  been  registered  with  the Security and Exchange Commission. The shares of
Common  Stock  and  warrants  of  the  Company  to  be  issued  to  Cornell  and
underwriters  are  covered  by  a  Registration  Rights  Agreement requiring the
Company  to  file a registration statement with the U.S. Securities and Exchange
Commission  to  register  such securities under the Securities Act of 1933 (File
No.  333-100549).  The  company has withdrawn its SB2 registration statement due
to  poor  market  conditions.

     With  respect  to  the Equity Line of Credit, the Company cannot predict at
this time whether it will draw down or not during 2003.  This depends greatly on
the  evolution  of the current market conditions as well as the Company's return
to  breakeven.

     On December 5, 2002, the Company acquired Teleconnect Comunicaciones, S.A.,
("Teleconnect")  a  company  formed  under  the  laws  of Spain which operates a
pre-paid  telephone  card  business  in Spain. The Company agreed to issue up to
3,000,000  shares  of  its  restricted  common  stock  to  the  shareholders  of
Teleconnect  in reliance upon Regulation S under the Securities Act of 1933. The
Company  also agreed to inject into Teleconnect 2,200,000 euro which was used to
cancel  approximately  5,500,000  euro  of  existing  debt. In order to pay this
approximately  2,200,000 euro, the Company sold its common stock and/or borrowed
additional  funds  from  investors to procure up to $3 million to pay such debts
and  for  working  capital.

As  of  the  date  of  this  filing,  3,200,000 euro have been injected into the
Company for the procurement of Teleconnect and for current operating losses. The
funds  have been received from private investors. Of this amount, 1,700,000 euro
has  been  capitalized  and the balance 1.500,000 euro is still being treated as
loans.


<PAGE>

                          PART II - OTHER INFORMATION

Item  1.  Legal  Proceedings

     The  Company  is  engaged  in  various legal proceedings which arise in the
ordinary  course  of  its  business. In the opinion of management, the amount of
ultimate liability with respect to those proceedings, if any, is not expected to
be  material  to  the  Company's  financial  position  or results of operations.

Item  2.  Changes  in  Securities

     During  February  2003, the following stockholders of the Company converted
loans  they  had made to the Company of approximately $2,470,000 into 13,474,185
shares  of  restricted  Common  Stock  in  reliance  upon Regulation S under the
Securities  Act  of  1933,  as  amended,  which  were  issued  to Geeris Holding
Nederland  B.U.  (5,000,000  shares), WKC Greenwoud (6,272,000 shares), Smithoak
Properties  (12,735  shares),  and  Talgon  Corporation  (2,168,750  shares).

     During March 2003, the Company issued 1,986,525 shares of restricted common
stock  to  the  approximately  64  exchanging  stockholders  and debt holders of
Teleconnect  Communicaciones,  S.A.  (("Teleconnect") acquired by the Company in
December  2002,  in reliance upon Regulation S under the Securities Act of 1933,
as  amended. The Common Stock issued regarding the acquisition of Teleconnect is
being  held  in  escrow subject to the terms of the Private Stock Swap Agreement
dated  November  11,  2002  regarding  the  acquisition  of  Teleconnect.

Item  3.  Defaults  Upon  Senior  Securities

     None

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

     No  matter  was  submitted to a vote of the security holders of the Company
during  the  three  month  period  ended  March  31,  2003.

Item  5.  Other  Information

     As  of  March 31, 2003 sales fell short of the established objective and no
bonus  was  paid  out to Mr. Nicholas Bruemmer in accordance with his consulting
agreement.

Item  6.  Exhibits  and  Reports  on  Form  8-K

     (a)  EXHIBITS

     None.

     (b)  REPORTS  ON  FORM  8-K

     During  the  fiscal quarter ended March 31, 2003 a Form 8-K dated March 11,
2003  was  filed  to announce the fact that Mr. Bruemmer took over the legal and
operational    responsibilities    of    ITS  Europe  S.L.    and    Teleconnect
Communicaciones,S.A.  in  Spain;  in this way substituting Mr. Gomez leaving him
additional  time  to  pursue more "corporate" related activities as President of
ITS  Networks.  This  Form  8-K  also announced that Mr. Martin Becerra had been
terminated  as  the principal financial and accounting officer of the Registrate
and  its subsidiaries of the Registrant, but may continue to provide services to
the  Registrant  as  a  consultant.


                                   SIGNATURES

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

                                   ITS  NETWORKS  INC.

Date:  May  20,  2003              By:  /s/  Gustavo  Gomez
                                   ---------------------------------------------
                                   Gustavo  Gomez,
                                   President,  Principal  Financial  Officer,
                                   and  Principal  Accounting  Officer