##### Table of Contents



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

FORM 10-QSB

|    |  |                                                                                            
|--- |  | -------------------------------------------------------------------------------------------
|(X) |  | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2003

OR

|     |  |                                                                                             
|---- |  | --------------------------------------------------------------------------------------------
|(  ) |  | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
|    
|    
|    
|    
|     |  | For the transition period from
 to                                                          

Commission File Number 1-9043

B.H.I.T. INC.

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(Exact name of Registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 36-3361229                          
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               |  |                                     
|                                                              
|                                                              
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|6950 South Edgerton Road, Brecksville, Ohio                    |  | 44141                               
|                                                               |  |                                     
|(Address of principal executive offices)                       |  | (Zip Code)                          
|                                                              
|                                                              
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|                                                               |  |                                     
|                                                              
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|(440) 838-4700                                                 |  |                                     
|                                                               |  |                                     
|Registrants telephone number, including area code             |  |                                     

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.

Yes (X)    NO (  ).


Shares of Common Stock Outstanding as of November 4, 2003: 14,988,051

Transitional Small Business Disclosure Format

Yes (  )
    NO (X).






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TABLE OF CONTENTS



|                                   |                                                                                                  |                                                                                |  |  |  |  |  | 
|---------------------------------- | ------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------ |  |  |  |  |  | 
|                                   | Item 1. Financial Statements                                                                    
|Part I  FINANCIAL INFORMATION    
|                                   | Item 1. Financial Statements                                                                    
|                                   | Balance Sheets                                                                                  
|                                   |                                                                                                  | Statements of Operations                                                      
|                                   |                                                                                                  | Statements of Operations For the Nine Months Ended September 30, 2003 and 2002
|                                   |                                                                                                  | Statement of Stockholders Equity                                             
|                                   |                                                                                                  | Statements of Cash Flows                                                      
|                                   |                                                                                                  | NOTES TO FINANCIAL STATEMENTS                                                 
|                                   | ITEM 2.   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
|PART II  OTHER INFORMATION       
|                                   | ITEM 1. LEGAL PROCEEDINGS                                                                       
|                                   | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                        
|SIGNATURES                        
|EX-31.1  302 CERTIFICATION FOR CEO
|EX-31.2  302 CERTIFICATION FOR CFO
|EX-32  906 CERTIFICATION          



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##### Table of Contents



B.H.I.T. INC.

QUARTERLY REPORT ON FORM 10-QSB
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003

TABLE OF CONTENTS

|      |  |     
|----- |  | ----
|INDEX |  | PAGE

|                                                                                              |                              |  |      |  | 
|--------------------------------------------------------------------------------------------- | ---------------------------- |  | ---- |  | 
|                                                                                              | PART I FINANCIAL INFORMATION |  |      |  | 
|                                                                                             
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|                                                                                             
|ITEM 1. Financial Statements                                                                  |                              |  |      | 
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|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                              |  |      | 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Balance Sheets as of September 30, 2003 (unaudited)
and December 31, 2002                     |                              |  | 3    | 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                              |  |      | 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Statements of Operations for the
three months ended September 30, 2003 and 2002 (unaudited)   |                              |  | 4    | 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                              |  |      | 
|                                                                                             
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|                                                                                             
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|Statements of Operations for the
nine months ended September 30, 2003 and 2002 (unaudited)    |                              |  | 5    | 
|                                                                                             
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|                                                                                             
|                                                                                             
|                                                                                              |                              |  |      | 
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|                                                                                             
|Statement of Stockholders Equity for the
nine months ended September 30, 2003 (unaudited)    |                              |  | 6    | 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                              |  |      | 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Statements of Cash Flows for the
nine months ended September 30, 2003 and 2002 (unaudited)    |                              |  | 7    | 
|                                                                                             
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|                                                                                             
|                                                                                             
|                                                                                              |                              |  |      | 
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|                                                                                             
|Notes to Financial Statements (unaudited)                                                     |                              |  | 8    | 
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|                                                                                             
|                                                                                             
|                                                                                              |                              |  |      | 
|                                                                                             
|                                                                                             
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|                                                                                             
|ITEM 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations |                              |  | 9-10 | 
|                                                                                             
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|                                                                                             
|                                                                                             
|                                                                                              |                              |  |      | 
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|                                                                                              | PART II OTHER INFORMATION    |  |      |  | 
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|ITEM 1. Legal Proceedings                                                                     |                              |  | 11   | 
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|ITEM 6. Exhibits and Reports on Form 8-K                                                      |                              |  | 11   | 
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|SIGNATURES                                                                                    |                              |  | 12   | 

2



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##### Table of Contents



| |  |  |  |  | 
| |  |  |  |  | 

B.H.I.T. INC.







Part I  FINANCIAL INFORMATION







Balance Sheets

ASSETS

|                                           |                                                                                                                                              |                                                |           |                    |   |                   |           |             |   | 
|------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | --------- | ------------------ | - | ----------------- | --------- | ----------- | - | 
|                                           |                                                                                                                                              |                                                |           | September 30, 2003 |   | December 31, 2002
|                                           |                                                                                                                                              |                                                |           |                    |   |                  
|                                           |                                                                                                                                              |                                                |           | (Unaudited)        |   |                   |           |            
|CURRENT ASSETS                             |                                                                                                                                              |                                                |           |                    |   |                   |           |            
|                                          
|                                          
|                                          
|                                          
|                                           | Cash and cash equivalents                                                                                                                    |                                                | $         | 1,648,850          |   |                   | $         | 1,712,815   |  
|                                          
|                                          
|                                          
|                                          
|                                           | Interest receivable                                                                                                                          |                                                |           | 1,501              |   |                   |           | 2,142       |  
|                                          
|                                          
|                                          
|                                          
|                                           | Prepaid insurance                                                                                                                            |                                                |           |                   |   |                   |           | 9,000       |  
|                                           |                                                                                                                                              |                                                |           |                    |   |                   |           |            
|Total Current Assets                       |                                                                                                                                              | $                                              | 1,650,351 |                    |   | $                 | 1,723,957 |            
|                                           |                                                                                                                                              |                                                |           |                    |   |                   |           |            
|                                           |                                                                                                                                              | LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
|                                          
|                                          
|                                          
|                                          
|CURRENT LIABILITIES                        |                                                                                                                                              |                                                |           |                    |   |                   |           |            
|                                          
|                                          
|                                          
|                                          
|                                           | Accounts payable and other accrued expenses                                                                                                  |                                                | $         | 36,438             |   |                   | $         | 37,003      |  
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                                                                              |                                                |           |                    |   |                   |           |            
|                                          
|                                          
|                                          
|                                          
|STOCKHOLDERS EQUITY (DEFICIT)             |                                                                                                                                              |                                                |           |                    |   |                   |           |            
|                                          
|                                          
|                                          
|                                          
|                                           | Shares of Common Stock, $0.01 par value, 
20,000,000 shares authorized, 15,020,808 shares
issued at September 30, 2003
and December 31, 2002 |                                                |           | 88,060,847         |   |                   |           | 88,060,847  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Accumulated deficit                                                                                                                          |                                                |           | (86,438,745        | ) |                   |           | (86,365,704 | )
|                                          
|                                          
|                                          
|                                          
|                                           | Treasury stock, at cost, for 32,757 shares
of Common Stock                                                                                   |                                                |           | (8,189             | ) |                   |           | (8,189      | )
|                                           |                                                                                                                                              |                                                |           |                    |   |                   |           |            
|Total Stockholders Equity                 |                                                                                                                                              |                                                | 1,613,913 |                    |   |                   | 1,686,954 |            
|                                           |                                                                                                                                              |                                                |           |                    |   |                   |           |            
|Total Liabilities and Stockholders Equity |                                                                                                                                              | $                                              | 1,650,351 |                    |   | $                 | 1,723,957 |            
|                                           |                                                                                                                                              |                                                |           |                    |   |                   |           |            

See accompanying notes to the Financial Statements.

3



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##### Table of Contents



B.H.I.T. INC.




Statements of Operations

For the Three Months Ended
September 30, 2003 and 2002
(Unaudited)


|                                                                                                                                             |                                              |               |        |        |         |      |       |        |        |  
|-------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ------------- | ------ | ------ | ------- | ---- | ----- | ------ | ------ | -
|                                                                                                                                             |                                              |               |        | 2003   |         | 2002
|                                                                                                                                             |                                              |               |        |        |         |     
|REVENUE                                                                                                                                      |                                              |               |        |        |         |      |       |       
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                             | Interest earned on cash and cash equivalents |               | $      | 4,897  |         |      | $     | 7,163  |       
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                             | Interest earned on mortgage receivable       |               |        |       |         |      |       | 8,250  |       
|                                                                                                                                             |                                              |               |        |        |         |      |       |       
|                                                                                                                                             |                                              | Total revenue |        |        | 4,897   |      |       |        | 15,413 |  
|                                                                                                                                             |                                              |               |        |        |         |      |       |       
|                                                                                                                                             |                                              |               |        |        |         |      |       |       
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|EXPENSES                                                                                                                                     |                                              |               |        |        |         |      |       |       
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                             | General and administrative                   |               |        | 27,376 |         |      |       | 22,337 |       
|                                                                                                                                             |                                              |               |        |        |         |      |       |       
|                                                                                                                                             |                                              | NET LOSS      |        | $      | (22,479 | )    |       | $      | (6,924 | )
|                                                                                                                                             |                                              |               |        |        |         |      |       |       
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|Basic and diluted net loss per share of Common
Stock (based on weighted average number of
shares outstanding of 14,988,051 in 2003 and 2002) |                                              | $             | (0.001 | )      |         | $    | 0.000 |       
|                                                                                                                                             |                                              |               |        |        |         |      |       |       

See accompanying notes to the Financial Statements.

4



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##### Table of Contents



B.H.I.T. INC.




Statements of Operations

For the Nine Months Ended September 30, 2003 and 2002


(Unaudited)


|                                                                                                                                             |                                              |               |        |        |         |      |        |        |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ------------- | ------ | ------ | ------- | ---- | ------ | ------ | ------- | -
|                                                                                                                                             |                                              |               |        | 2003   |         | 2002
|                                                                                                                                             |                                              |               |        |        |         |     
|REVENUE                                                                                                                                      |                                              |               |        |        |         |      |        |       
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                             | Interest earned on cash and cash equivalents |               | $      | 16,043 |         |      | $      | 22,393 |        
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                             | Interest earned on mortgage receivable       |               |        |       |         |      |        | 24,750 |        
|                                                                                                                                             |                                              |               |        |        |         |      |        |       
|                                                                                                                                             |                                              | Total revenue |        |        | 16,043  |      |        |        | 47,143  |  
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                             |                                              |               |       |        |         |      |       |       
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|EXPENSES                                                                                                                                     |                                              |               |        |        |         |      |        |       
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                             | General and administrative                   |               |        | 89,084 |         |      |        | 67,832 |        
|                                                                                                                                             |                                              |               |        |        |         |      |        |       
|                                                                                                                                             |                                              | NET LOSS      |        | $      | (73,041 | )    |        | $      | (20,689 | )
|                                                                                                                                             |                                              |               |        |        |         |      |        |       
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|                                                                                                                                            
|Basic and diluted net loss per share of Common
Stock (based on weighted average number of
shares outstanding of 14,988,051 in 2003 and 2002) |                                              | $             | (0.005 | )      |         | $    | (0.001 | )     
|                                                                                                                                             |                                              |               |        |        |         |      |        |       

See accompanying notes to the Financial Statements.

5



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B.H.I.T. INC.




Statement of Stockholders Equity

For the Nine Months Ended September 30, 2003


(Unaudited)


|                                                      |  |              |            |        |  |         |            |                |  |        |             |       |  |  |        |  |  |   |        |   |  |   |           |  
|----------------------------------------------------- |  | ------------ | ---------- | ------ |  | ------- | ---------- | -------------- |  | ------ | ----------- | ----- |  |  | ------ |  |  | - | ------ | - |  | - | --------- | -
|                                                      |  | Common Stock |            |        |  |         |            |                |  |        |             |       |  |  |        |  |  |  
|                                                      |  |              |            |        |  |         |            | Treasury Stock |  |        |             |      
|                                                      |  | Shares       |            |        |  |         |            | Accumulated    |  |        |             |       |  | 
|                                                      |  | Issued       |            | Amount |  | Deficit |            | Shares         |  | Amount |             | Total
|                                                      |  |              |            |        |  |         |            |                |  |        |             |      
|Stockholders equity (deficit)
December 31, 2002      |  |              | 15,020,808 |        |  | $       | 88,060,847 |                |  | $      | (86,365,704 | )     |  |  | 32,757 |  |  | $ | (8,189 | ) |  | $ | 1,686,954 |  
|                                                     
|                                                     
|                                                     
|                                                     
|Net loss for the nine months ended
September 30, 2003 |  |              |           |        |  |         |           |                |  |        | (73,041     | )     |  |  |       |  |  |   |       |   |  |   | (73,041   | )
|                                                      |  |              |            |        |  |         |            |                |  |        |             |       |  |  |        |  |  |   |        |   |  |   |           |  
|Stockholders equity (deficit)
September 30, 2003     |  |              | 15,020,808 |        |  | $       | 88,060,847 |                |  | $      | (86,438,745 | )     |  |  | 32,757 |  |  | $ | (8,189 | ) |  | $ | 1,613,913 |  
|                                                      |  |              |            |        |  |         |            |                |  |        |             |       |  |  |        |  |  |   |        |   |  |   |           |  

See accompanying notes to the Financial Statements.

6



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##### Table of Contents



B.H.I.T. INC.




Statements of Cash Flows

For the Nine Months Ended
September 30, 2003 and 2002
(Unaudited)


|                                                 |                                                                             |                                       |           |                                       |         |      |           |      |          |   |         |  
|------------------------------------------------ | --------------------------------------------------------------------------- | ------------------------------------- | --------- | ------------------------------------- | ------- | ---- | --------- | ---- | -------- | - | ------- | -
|                                                 |                                                                             |                                       |           |                                       |         | 2003 |           | 2002
|                                                 |                                                                             |                                       |           |                                       |         |      |           |     
|Operating Activities:                            |                                                                             |                                       |           |                                       |         |      |           |     
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Net Loss                              |           | $                                     | (73,041 | )    |           |      | ($20,689 | )
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                 | Adjustments to reconcile net loss to net cash
used in operating activities: |                                       |           |                                       |         |      |           |      |         
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Changes in assets and liabilities:    |           |                                       |         |      |           |      |          |   |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             |                                       |           | Interest receivable                   |         |      | 641       |      |          |   | 3,434   |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             |                                       |           | Prepaid insurance                     |         |      | 9,000     |      |          |   | (12,000 | )
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             |                                       |           | Accounts payable and accrued expenses |         |      | (565      | )    |          |   | (5,118  | )
|                                                 |                                                                             |                                       |           |                                       |         |      |           |     
|                                                 |                                                                             | Net cash used in operating activities |           |                                       | (63,965 | )    |           |      | (34,373  | ) |        
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|Cash and cash equivalents at beginning of period |                                                                             |                                       | 1,712,815 |                                       |         |      | 1,471,139 |     
|                                                 |                                                                             |                                       |           |                                       |         |      |           |     
|Cash and cash equivalents at end of period       |                                                                             | $                                     | 1,648,850 |                                       |         | $    | 1,436,766 |     
|                                                 |                                                                             |                                       |           |                                       |         |      |           |     

See accompanying notes to the Financial Statements.

7



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##### Table of Contents



B.H.I.T. INC.




NOTES TO FINANCIAL STATEMENTS

(Unaudited)

NOTE 1.   BASIS OF PRESENTATION

B.H.I.T. Inc. (the Company) was organized under the laws of the State of
Massachusetts pursuant to a Declaration of Trust filed March 19, 1985 for the
purpose of investing in mortgage loans. The Company was subsequently
reorganized as a Delaware corporation on March 13, 1987.

The accompanying financial statements have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of management, these financial statements give
effect to all normal recurring adjustments necessary to present fairly the
financial position of the Company as of September 30, 2003 and December 31,
2002, and the results of its operations for the three months and nine months
ended September 30, 2003 and 2002; and cash flows for the nine months ended
September 30, 2003 and 2002.

The financial information included herein for the three months and nine
months ended September 30, 2003 and September 30, 2002 is unaudited.

Although the Company believes that the disclosures included herein are
adequate to make the information not misleading, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted.
Accordingly, the accompanying financial statements should be read in
conjunction with the Companys latest annual report on Form 10-KSB for the
year ended December 31, 2002.

The results of operations for the nine months ended September 30, 2003
presented are not necessarily indicative of the results to be expected for
the full 2003 year.

NOTE 2.   MORTGAGE LOANS

During 1997, the Company invested $1,000,000 in a loan secured by a mortgage
on a related commercial property located in Dallas, Texas. Principal
payments were made in April 1998 and June 2000, totaling $725,000. On
September 30, 2002, the principal balance due was $275,000, with a due date
of April 1, 2003, with a yield of 12% per annum and requiring monthly
interest payments. On December 18, 2002, the Company received repayment of
the outstanding principal balance of $275,000 plus accrued interest.

8



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##### Table of Contents



B.H.I.T. INC.




ITEM 2.   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

GENERAL

B.H.I.T. Inc. (the Company) was originally organized as a Massachusetts
business trust pursuant to a Declaration of Trust filed March 19, 1985 under
the name VMS Hotel Investment Trust, for the purpose of investing in mortgage
loans. The Company was subsequently reorganized as a Delaware corporation on
March 13, 1987. The Company changed its name from Banyan Hotel Investment
Fund to B.H.I.T. Inc. in 1998.

Certain statements in this quarterly report, included within this
Managements Discussion and Analysis of Financial Conditions and Results of
Operations, which are not historical in nature, are intended to be, and
hereby identified as forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The Company cautions
readers that forward-looking statements, including without limitation, those
relating to the Companys future business prospects, revenues, working
capital, liquidity, capital needs, interest costs and income, are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those indicated in such forward-looking statements due to
several important factors hereafter identified, among others, as well as
other risks and uncertainties identified from time-to-time in the Companys
reports filed with the United States Securities and Exchange Commission.
Readers of this report are cautioned not to place undue reliance upon these
forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to publicly release any revisions to these
forward-looking statements or reflect events or circumstances after the date
hereof.

BUSINESS OPERATIONS AND HISTORY

The Companys current operations relate primarily to servicing its cash
investment portfolio and seeking profitable investments including mortgage
loans for its available funds.

The business of the Company is not seasonal and the Company has no foreign or
export business. The Company does not segregate revenue or assets by
geographical region because such presentation would not be material to an
understanding of the Companys business.

The Company was originally established to invest in mortgage loans
principally to entities affiliated with VMS Realty Partners. These loans were
collateralized by hotel and resort properties.

As the result of a public offering that concluded January 13, 1986, the
Company received gross proceeds of $98,482,751. During the years 1989
through 1992 the Company experienced severe losses due primarily to a decline
in real estate property values and the resulting default on mortgage loans
held by the Company. The Company has recorded losses every year since 1989
resulting in the accumulated deficit totaling $86,438,745 on September 30,
2003.

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##### Table of Contents



B.H.I.T. INC.

BUSINESS OPERATIONS AND HISTORY (Continued)

In September 2000, Arrowhead Holdings Corporation (Arrowhead) purchased
5,870,563 shares of the Company stock, or 39.2% of the outstanding shares.
Subsequent purchases of the Companys shares have resulted in Arrowhead
owning a total of 6,243,563 shares, or 41.7% of the outstanding shares on
September 30, 2003.

RESULTS OF OPERATIONS

Total revenue for the three months and nine months ended September 30, 2003,
compared to the same periods in 2002, decreased by $10,516 and $31,100,
respectively, due primarily to reduced interest earned resulting from lower
interest rates. The lower interest rate resulted primarily from the repayment
of a high yield mortgage note, referred to in Note 2.

Total expenses for the three months and nine months ended September 30, 2003,
compared to the same periods in 2002, increased by $5,039 and $21,252,
respectively, due primarily to increases in various expenses including
insurance, state tax, and professional service fees, such as outside audit
fees and stock transfer agency fees.

The net loss for the three months and nine months ended September 30, 2003,
compared to the same periods in 2002, increased by $15,555 and $52,352,
respectively. The increase in net loss results primarily from a decrease in
mortgage interest revenue and increases in various general and administrative
expenses for the three months and nine months ended September 30, 2003.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents consist of cash and short-term investments. The
Companys cash and cash equivalents balance at September 30, 2003 and
December 31, 2002 was $1,648,850 and $1,712,815, respectively. Cash and cash
equivalents decreased in the first nine months of 2003 by $63,965 primarily
as the result of the Companys net loss of $73,041.

At this time, there are no material commitments for capital expenditures. The
Companys cash is sufficient to meet its needs for anticipated operating
expenses. The Company deems its liquidity to be adequate.

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##### Table of Contents



B.H.I.T. INC.




PART II  OTHER INFORMATION




ITEM 1.             LEGAL PROCEEDINGS

The Registrant is not aware of any material legal proceedings to which the
Company is a party or to which any of its property is subject.




|        |  |                                  |  |                                                                                                                                  
|------- |  | -------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------
|ITEM 6. |  | EXHIBITS AND
REPORTS ON
FORM 8-K |  |                                                                                                                                  
|       
|       
|       
|       
|        |  |                                  |  |                                                                                                                                  
|       
|       
|       
|       
|(a)     |  | EXHIBITS                         |  |                                                                                                                                  
|       
|       
|       
|       
|        |  |                                  |  |                                                                                                                                  
|       
|       
|       
|       
|        |  |                                  |  | EXHIBIT 31.1 Certification of the Chief Executive Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002              
|       
|       
|       
|       
|        |  |                                  |  |                                                                                                                                  
|       
|       
|       
|       
|        |  |                                  |  | EXHIBIT 31.2 Certification of the Chief Financial Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002              
|       
|       
|       
|       
|        |  |                                  |  |                                                                                                                                  
|       
|       
|       
|       
|        |  |                                  |  | EXHIBIT 32 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|       
|       
|       
|       
|        |  |                                  |  |                                                                                                                                  
|       
|       
|       
|       
|(b)     |  | REPORTS ON
FORM 8-K              |  |                                                                                                                                  
|       
|       
|       
|       
|        |  |                                  |  |                                                                                                                                  
|       
|       
|       
|       
|        |  |                                  |  | NONE                                                                                                                             

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SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) 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.

|                                                                                                                           |  |                 
|-------------------------------------------------------------------------------------------------------------------------- |  | ----------------
|B.H.I.T. Inc.                                                                                                              |  |                 
|                                                                                                                          
|                                                                                                                           |  |                 
|                                                                                                                          
|By:  /s/ John V. CurciJohn V. Curci Date:
Vice-President, Treasurer & Chief
Financial Officer
Principal Accounting Officer |  | November 7, 2003

12