UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                ----------------


                                   FORM 10-QSB

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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000

     [ ]    TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF EXCHANGE ACT
            For the transition period from ________ to _________

                         COMMISSION FILE NUMBER 0-13741

                            ITC LEARNING CORPORATION
                            ------------------------
           (Name of small business issuer as specified in its charter)

             MARYLAND                                     52-1078263
             --------                                     ----------
  (State or other jurisdiction of                        (IRS Employer
  incorporation or organization)                      Identification No.)


                          13515 DULLES TECHNOLOGY DRIVE
                             HERNDON, VIRGINIA 20171
                             -----------------------
                    (Address of principal executive offices)

                                 (703) 713-3335
                                  -------------
                           (Issuer's telephone number)

                    ----------------------------------------


Check whether  the issuer (1) filed all  reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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. |X| Yes |_| No

  As of September 30, 2000, 3,964,078 shares of Common Stock were outstanding.

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


<PAGE>


                            ITC LEARNING CORPORATION

                                   FORM 10-QSB

                                      INDEX

                       PART I - FINANCIAL INFORMATION                       PAGE
                                                                            ----

Item 1.     Financial Statements (Unaudited)

            Condensed Consolidated Statements of Operations for the
            Three Months and Nine Months Ended September 30, 2000 and 1999.....1

            Condensed Consolidated Balance Sheets as of
            September 30, 2000 and December 31, 1999.........................2-3

            Condensed Consolidated Statements of Cash Flows for the
            Nine Months Ended September 30, 2000 and 1999......................4

            Notes to Condensed Consolidated Financial Statements...............5

Item 2.     Management's Discussion and Analysis of Financial Condition
            and Results of Operations.........................................12




                           PART II - OTHER INFORMATION

Item 1.     Legal Proceedings.................................................17

Item 2.     Changes in Securities and Use of Proceeds.........................17

Item 3.     Defaults Upon Senior Securities...................................17

Item 4.     Submission of Matters to a Vote of Security Holders...............17

Item 5.     Other Information.................................................17

Item 6.     Exhibits and Reports on Form 8-K..................................18




<PAGE>



                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                            ITC LEARNING CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)


                              For the 3 Months Ended     For the 9 Months Ended
                                  September 30,              September 30,
                               2000         1999          2000         1999
                               ----         ----          ----         ----

Net revenues..............  $  823,436   $ 3,102,150   $ 4,153,439  $14,273,729
Cost of sales.............     835,748     2,220,530     3,162,458    6,733,204
                             ---------   -----------   ----------- ------------
Gross margin..............     (12,312)      881,620       990,981    7,540,525


Sales and marketing expense    538,265     1,582,673     1,838,123    4,777,734
General and administrative
   expense................   1,456,792     1,545,022     4,546,239    4,356,325
Equity in earnings of
   affiliates.............     (20,882)      (37,101)     (107,547)    (149,408)

Loss before interest
   and income taxes.......  (1,986,487)   (2,208,974)   (5,285,834)  (1,444,126)

Interest income...........       6,580        21,003        14,730       67,969
Interest expense..........    (228,647)      (79,053)     (631,573)    (239,959)
Gain on sale of product
   line                        250,000            --       250,000           --
                             ---------   -----------   -----------  -----------

Loss before income taxes..  (1,958,554)   (2,267,024)   (5,652,677)  (1,616,116)

Income tax expense
   (benefit)                        --            --            --           --
                             ---------   -----------   -----------  -----------

Net loss.................. $(1,958,554)  $(2,267,024)  $(5,652,677) $(1,616,116)
                           -----------   -----------   -----------  -----------

Net loss per common share:
    Basic and diluted..... $     (0.50)  $     (0.58)  $     (1.44) $     (0.42)
                           ===========   ===========   ===========  ===========









     See accompanying notes to condensed consolidated financial statements.


<PAGE>


                            ITC LEARNING CORPORATION

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                   (UNAUDITED)

                                                   September 30,    December 31,
                                                       2000            1999
                                                       ----            ----


Current assets:
   Cash and cash equivalents...................   $   246,819      $   535,178
   Accounts receivable, net (note 2)...........       940,129        4,482,511
   Due from affiliates.........................       112,269          175,533
   Inventories, net of reserve of $22,500 at
      September 30, 2000 and December 31, 1999         90,864          338,900
   Prepaid expenses (note 8)...................       951,986          153,724
   Income taxes receivable.....................        68,192           70,258
   Deferred financing costs, net...............        38,409           65,000
                                                  -----------      -----------
      Total current assets.....................     2,448,668        5,821,104

Note receivable (note 3).......................       344,828          537,628

Property and equipment:
   Video and computer equipment................     2,510,955        2,666,316
   Furniture and fixtures......................       191,309          210,994
   Leasehold improvements......................        59,336           61,340
                                                  -----------      -----------
                                                    2,761,600        2,938,650
   Less accumulated depreciation and amortization  (2,314,795)      (2,020,237)
      Net property and equipment...............       446,805          918,413

Capitalized program development costs, net
   of accumulated amortization of $8,050,019 and
   $6,282,102 at September 30, 2000 and
   December 31, 1999, respectively.............     2,634,429        5,097,679
Intangible assets, net of accumulated amortization of
   $1,547,535 and $1,617,499 at September 30, 2000
   and December 31, 1999, respectively.........     1,779,245        3,504,645
Prepaid royalties and other....................     1,602,534           10,927
                                                  -----------      -----------

   Total assets................................   $ 9,256,509      $15,890,396
                                                  ===========      ===========







     See accompanying notes to condensed consolidated financial statements.


                                       2


<PAGE>


                            ITC LEARNING CORPORATION

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                   (UNAUDITED)

                                                   September 30,    December 31,
                                                       2000             1999
                                                       ----             ----


Current liabilities:
   Line of credit (note 4).....................      $       --    $   663,838
   Current installments of long-term debt (note 5)    2,362,578        277,160
   Accounts payable............................       2,078,997      2,193,676
   Due to affiliates...........................          52,525        187,070
   Accrued compensation and benefits...........         233,801        167,218
   Deferred revenues...........................         300,204        373,144
   Other accrued expenses......................       1,058,262      2,260,240
   Income taxes payable .......................          42,750          6,128
                                                     ----------    -----------
      Total current liabilities................       6,129,117      6,128,474



Deferred lease obligations.....................          17,837         12,119
Long-term debt (note 5)........................       1,074,068      2,313,604
                                                     ----------    -----------
      Total liabilities........................       7,221,022      8,454,197



Stockholders' equity:
   Common stock, $0.10 par value, 12,000,000
     shares  authorized;  3,964,078 and
     3,964,078 shares issued and outstanding
     at September 30, 2000 and
     December 31, 1999........................          396,408        396,408
   Additional capital..........................      17,083,716     16,975,959
   Note receivable from ESOP...................        (290,002)      (359,377)
   Retained deficit............................     (15,216,386)    (9,563,709)
   Accumulated other comprehensive gain
     (loss) (note 7)                                     61,751        (13,082)
                                                     ----------    -----------
      Total stockholders' equity...............       2,035,487      7,436,199
                                                     ----------    -----------




Total liabilities and stockholders' equity.....      $9,256,509    $15,890,396
                                                     ==========    ===========








     See accompanying notes to condensed consolidated financial statements.



                                       3
<PAGE>


                            ITC LEARNING CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)

                                                         For the Nine Months
                                                         Ended September 30,
                                                       2000              1999
                                                       ----              ----

Cash flows from operating activities:
Net loss.......................................   $ (5,652,677)   $ (1,616,116)
Reconciling items:
   Provision for doubtful accounts.............        180,000         150,000
   Depreciation and amortization...............      5,325,639       2,830,776
   Foreign currency translation adjustment.....         74,833          (9,095)
   Changes in operating assets and liabilities:
      Decrease in accounts receivable..........      3,362,382         397,777
      Decrease in inventories..................        248,036         140,246
      Increase in prepaid expenses and other...     (2,390,444)        (76,055)
      Decrease in income taxes receivable......          2,066         209,567
      Decrease in long term receivable.........        192,800           3,832
      Decrease in accounts payable.............       (114,678)       (361,223)
      Decrease in due to affiliates, net.......        (71,281)       (166,664)
      Increase in accrued compensation and
        benefits                                        66,583         175,189
      Decrease in accrued expenses.............     (1,179,533)       (729,355)
      Decrease in deferred revenues............        (72,940)        (55,196)
      Increase (decrease) in deferred
        lease obligations                                5,718         (17,087)
      Increase (decrease) in income tax payable         36,622          (9,415)
                                                  ------------    ------------
Net cash provided by operating activities......         13,126         867,181

Cash flows from investing activities:
   Capitalized program development costs.......       (358,513)     (1,886,112)
   Capital expenditures........................             --        (402,106)
                                                  ------------    ------------
Net cash used for investing activities.........       (358,513)     (2,288,218)

Cash flows from financing activities:
   Borrowings under line of credit.............             --       9,736,729
   Repayments under line of credit.............       (663,838)     (7,834,000)
   Principal payments on long-term debt........       (311,221)       (567,439)
   Proceeds from issuance of long-term debt....        962,712              --
   Issuance of common stock....................             --          45,805
   Employee stock ownership plan note collections       69,375          69,375
                                                  ------------    ------------
Net cash provided by financing activities......         57,028       1,450,470
                                                  ------------    ------------

Net increase (decrease) in cash................       (288,359)         29,433

Cash and cash equivalents, beginning of period.        535,178         267,045
                                                  ------------    ------------
Cash and cash equivalents, end of period.......   $    246,819    $    296,478
                                                  ============    ============






     See accompanying notes to condensed consolidated financial statements.


                                       4


<PAGE>


                            ITC LEARNING CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2000

                                   (UNAUDITED)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

   The consolidated  financial  statements of ITC Learning Corporation ("ITC" or
the  "Company")  include the  accounts of its wholly  owned  subsidiaries  Activ
Training, Ltd. ("Activ"), ITC Australasia Pty. Ltd. ("ITCA"),  Turn-Key Training
Technologies,  Inc.  ("Turn-Key"),  ITC Canada  Limited,  and ComSkill  Learning
Centers, Inc. ("ComSkill").

   ITC  is  a  worldwide   provider  of  education  and  training   software  to
professionals in business, education and government organizations.  Incorporated
under the laws of the state of Maryland in 1977 the  Company  develops,  markets
and  delivers  specific  libraries  of  interactive  multimedia   computer-based
training ("CBT") courseware designed for CD-ROM, intranet and Internet delivery,
thus enabling  organizations to effectively and efficiently  deliver training to
improve individual and organizational performance.  The Company operates in four
reportable segments: U.S., Canada, Australia and the United Kingdom.

   Significant  intercompany  accounts and transactions  have been eliminated in
consolidation. In the opinion of the Company's management, the interim condensed
consolidated  financial  statements include all adjustments,  consisting of only
normal recurring  adjustments,  necessary for a fair presentation of the results
for the interim periods.  Certain information and footnote  disclosures normally
included in financial  statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. Certain prior year amounts
have been reclassified to improve  comparability to current year  presentations.
The  interim  condensed  consolidated  financial  statements  should  be read in
conjunction with the Company's  December 31, 1999 audited  financial  statements
included with the Company's filing on Form 10-KSB. The interim operating results
are not  necessarily  indicative  of the  operating  results for the full fiscal
year.

The Company's financial statements have been presented on a going concern basis,
which  contemplates  the realization of assets and settlement of liabilities and
commitments in the normal course of business. The Company experienced a net loss
in the nine months ended  September 30, 2000, and the years ended 1999 and 1998.
Although  the Company  expects  operating  results to  improve,  there can be no
assurances that the Company will not experience  adverse results of operation in
the future. The Company believes that its existing cash,  anticipated cash flows
from 2000 operations, proceeds from sale of non-core Company assets, and planned
capital fund raising activities should provide sufficient  resources to fund its
activities  for the  remainder of 2000.  However,  the timing of  aforementioned
capital  infusion is critical,  as the Company is currently  receiving  pressure
from some of its larger  suppliers.  Anticipated cash flows from 2000 operations
are largely  dependent upon the Company's ability to achieve its sales and gross
profit  objectives  for its currently  existing  products and new products to be
launched in 2000.  Achievement  of these  objectives  is subject to various risk
factors  related to,  among  other  things:  incremental  sales  resulting  from
expansion of  distribution  capabilities;  the  Company's  ability to deploy its
courseware over the Internet and corporate  intranets;  the Company's ability to
control costs in relation to future  revenues,  the  acceptance of the Company's
new CBT courseware management system and the Company's ability to raise capital.
If the Company is unable to meet these objectives, it will consider expansion of
existing  or  development  of  alternative   sources  of  bank  financing;   the
curtailment of certain capital expenditures and discretionary expenditures (such
as travel,  consulting  and  salaries);  and  various  other  courses of action,
including  the  possible  sale  of  the  Company.   These  are   forward-looking
statements.   SEE  FORWARD-LOOKING  STATEMENTS  AND  RISK  FACTORS  FOR  FURTHER
DISCUSSION.


                                       5
<PAGE>


                            ITC LEARNING CORPORATION

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

                                   (UNAUDITED)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REVENUES AND COSTS

   Revenues include both  off-the-shelf and custom courseware sales,  courseware
licenses,  consulting  service  revenues  and  hardware  revenues.  The  Company
recognizes  revenues from off-the-shelf  product and hardware sales as units are
shipped.  The Company  permits the customer  the right to return the  courseware
within 30 days of purchase. Revenues from sales of custom training programs that
are developed and produced under specific  contracts with  customers,  including
contracts  with  affiliated  joint  ventures  and  limited   partnerships,   are
recognized  on a percentage  of  completion  basis as related costs are incurred
during the  production  period.  Gross  revenues from sales of affiliated  joint
venture and  limited  partnership  copyrighted  courseware  are  included in the
Company's  financial  statements,   as  are  related  production,   selling  and
distribution    costs.    Amounts   due   to   co-owners   of   the   affiliated
venture/partnerships related to such courseware sales are reflected as royalties
and  included  in cost of  sales  in the  financial  statements.  Revenues  from
courseware licenses are recognized upon the delivery of the initial copy of each
product licensed,  and related duplication costs are accrued based on estimates.
Revenues from consulting services are recognized as services are performed.

NET INCOME (LOSS) PER COMMON SHARE

   Basic  earnings  per common share is computed  based on the weighted  average
number of common shares outstanding during the year. Diluted earnings per common
share  is  computed  based on the  weighted  average  number  of  common  shares
outstanding  plus the effect of stock  options  and other  potentially  dilutive
common  stock  equivalents.  The  dilutive  effect  of stock  options  and other
potentially  dilutive common stock  equivalents is determined using the treasury
stock method based on the Company's average stock price.

   The  details of the  earnings  per share  calculation  for the three and nine
months ended September 30, 2000 and 1999 follow:

<TABLE>
<CAPTION>

                                                        Income                            Per Share
                                                        (LOSS)          SHARES              AMOUNT
                                                        ------          ------              ------
<S>                                                  <C>                <C>               <C>

THREE MONTHS ENDED SEPTEMBER 30, 2000
   Loss per share of common stock - basic........  $(1,958,554)         3,905,755         $   (0.50)
   Dilutive securities:
      Stock options..............................        --                 --                 --
                                                   -----------          ---------         ----------
   Loss per share of common stock - diluted......  $(1,958,554)         3,905,755         $   (0.50)
                                                   -----------          ---------         ----------


THREE MONTHS ENDED SEPTEMBER 30, 1999
   Earnings per share of common stock - basic      $(2,267,024)         3,881,382         $   (0.58)
   Dilutive securities:                                  --                 --                 --
      Stock options...................             -----------          ---------         ----------
   Earnings per share of common stock - diluted    $(2,267,024)         3,881,382         $   (0.58)
                                                   ------------         ---------         ----------
</TABLE>


                                       6
<PAGE>


                            ITC LEARNING CORPORATION

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

                                   (UNAUDITED)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
<TABLE>
<CAPTION>

                                                        Income                            Per Share
                                                        (Loss)          Shares             Amount
                                                        -------         ------            ---------
<S>                                                <C>                  <C>               <C>

NINE MONTHS ENDED SEPTEMBER 30, 2000
   Loss per share of common stock - basic          $(5,652,677)         3,915,755         $     (1.44)
   Dilutive securities:
      Stock options...................                   --                 --                   --
                                                   -----------          ---------         ------------
   Loss per share of common stock - diluted        $(5,652,677)         3,915,755         $     (1.44)
                                                   ------------         ------------      ------------

NINE MONTHS ENDED SEPTEMBER 30, 1999
   Earnings per share of common stock - basic      $(1,616,116)         3,890,415         $     (0.42)
   Dilutive securities:
      Stock options...................                   --                 --                   --
                                                   -----------          ---------         ------------
   Earnings per share of common stock - diluted    $(1,616,116)         3,890,415         $     (0.42)
                                                   ------------         ----------        ------------
</TABLE>


NOTE 2 - ACCOUNTS RECEIVABLE

   Accounts receivable include the following:

                                                   September 30,  December 31,
                                                       2000           1999
                                                       ----           ----

   Trade accounts receivable.................       $1,435,330     $4,717,097
   Unbilled contract receivables.............           17,940        200,000
   Less allowance for doubtful accounts......         (681,369)      (502,644)
                                                    ----------     ----------
       Trade accounts receivable, net........          771,901      4,414,453
   Other receivables.........................          168,228         68,058
                                                    ----------     ----------
                                                    $  940,129     $4,482,511
                                                    ==========     ==========
NOTE 3 - NOTE RECEIVABLE

   On November 20, 1997,  the Company  entered into a stock  purchase  agreement
with Anderson  Holdings  Inc., to sell all of the Company's  stock in its wholly
owned subsidiary Anderson Soft-Teach ("AST").  Pursuant to the transaction,  ITC
accepted an 8% promissory note in the amount of $950,000. Under the terms of the
note, interest payments are due quarterly,  with the remaining principal balance
due in 2001.

   Under the terms of the stock purchase  agreement,  ITC and AST entered into a
reciprocal agreement to sell each other's products.  Royalties earned by AST for
sales of their  products  under this  agreement will be applied to the principal
value of the note.

NOTE 4 - LINE OF CREDIT

   On January 21, 2000,  the Company  satisfied its  outstanding  debt,  and all
associated fees and expenses under its line of credit agreement.  The Company is
currently operating without a short-term credit facility.

                                       7
<PAGE>

                            ITC LEARNING CORPORATION

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

                                   (UNAUDITED)

NOTE 5 - LONG-TERM DEBT

Long-term  debt at  September  30, 2000 and  December  31, 1999  consists of the
following:

                                                 September 30,     December 31,
                                                     2000              1999
                                                     ----              ----
NON-RELATED PARTY DEBT:
8.0% senior note due 2003......................    $  866,709     $  1,177,930
5.5% note due 2001, net of unamortized
 discount of $120,644                                 879,356          795,834
9.5% note due 2001, net of unamortized
  discount of $334,818                                865,182          617,000
                                                   ----------     ------------
Subtotal - non-related party debt..............     2,611,247        2,590,764

RELATED PARTY DEBT:
7.0% notes due 2002, net of unamortized
  discount of $55,024                                 407,369               --
8.0% notes due 2000, net of unamortized
  discount of $7,288                                  418,030               --
                                                   ----------     ------------
Subtotal - related party debt..................       825,399               --
                                                   ----------     ------------

Total debt.....................................     3,436,646        2,590,764
Less current maturities........................    (2,362,578)        (277,160)
                                                   ----------     ------------
Long-term debt, net............................    $1,074,068     $  2,313,604
                                                   ==========     ============


   The 8.0% note payable is due in monthly  interest  installments and quarterly
principal  installments,  and matures in June 2003.  The note has a subordinated
interest  position to the Company's  principal  lender,  in the  receivables and
inventory  of ITC  Canada  Limited.  Additionally,  the note  carries a security
interest in the fixed assets and  intellectual  property of ITC Canada  Limited,
which ranks pari passu with the Company's principal lender.

   The 5.5% convertible  subordinated  note payable is due on April 2, 2001. The
note is secured by the assets of the Company and is subordinated to existing and
future  indebtedness  of the Company.  Interest and principal are due in full at
maturity. The note is convertible into shares of common stock of the Company, up
to the maturity  date,  at a price of $2.00 per share.  The note was issued with
warrants  which  grant the holders  the right to acquire  291,500  shares of the
Company's  common stock at a per share price of $2.00.  The  warrants  expire on
April 2, 2001. The warrants were  determined to have a value of $245,000,  which
was  recorded  as  additional  capital.  The  resulting  debt  discount is being
amortized over the holding period of the note.

   The 9.5% convertible  subordinated  note payable is due on April 2, 2001. The
note is secured by the assets of the Company and is subordinated to existing and
future  indebtedness  of the Company.  Interest and principal are due in full at
maturity.  The note may be converted  into shares of common stock of the Company
at any time up to  maturity  date,  at a price of $1.75 per share.  The note was
issued with  warrants,  which  grant the  holders  the right to acquire  349,800
shares of the Company's common stock at a price of $1.75 per share. The warrants
expire  on  April 1,  2002.  The  warrants  were  determined  to have a value of
$508,000,  which was recorded as additional capital. The resulting debt discount
is being amortized over the holding period of the note.



                                       8
<PAGE>

                            ITC LEARNING CORPORATION

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

                                   (UNAUDITED)

NOTE 5 - LONG-TERM DEBT (CONTINUED)

   During  the first  quarter  of 2000,  the  Company  issued  7.0%  convertible
subordinated notes payable to certain Officers and Directors of the Company, and
various other related parties, in the amount of $462,392,  due on June 30, 2002.
Interest is payable semi-annually and principal is due in full at maturity.  The
notes may be converted into shares of common stock of the Company at any time up
to  maturity  date,  at a price of $2.75 per share.  The notes were  issued with
warrants  that  grant the  holders  the right to  acquire  46,239  shares of the
Company's  common stock,  at a price of $2.75 per share.  The warrants expire on
June 30, 2001.  The warrants were  determined to have a value of $78,607,  which
was  recorded  as  additional  capital.  The  resulting  debt  discount is being
amortized over the holding period of the notes.

   On January 20, 2000 the Company issued 8.0% notes payable to certain Officers
and Directors of the Company,  and various other related parties,  in the amount
of  $325,318,  due  upon  the  Company  closing  a line of  credit  of at  least
$1,000,000.  As of June 30, 2000,  the Company has not secured a line of credit,
and has extended the due date of the notes until the repayment of the notes will
not materially and adversely affect the Company's business operations.  Interest
and principal  are due in full at maturity.  The notes were issued with warrants
that grant the  holders  the right to  acquire  15,900  shares of the  Company's
common stock,  at a price of $2.63 per share.  The warrants  expire  January 31,
2002.  The  warrants  were  determined  to have a value of  $29,150,  which  was
recorded as additional  capital.  The resulting debt discount is being amortized
over the holding period of the notes.

NOTE 6 - SEGMENT INFORMATION

   The  following  tables  identify  revenues  and profit or loss by  reportable
segment for the three and nine months ended September 30, 2000 and 1999 (amounts
in thousands):

THREE MONTHS ENDED SEPTEMBER 30, 2000

--------------------------------------------------------------------------------
                                   United            United
                                   States   Canada   Kingdom   Australia  Total
--------------------------------------------------------------------------------

Revenues from external customers     $534     $94     $145       $50       $823
Intersegment revenues...........      140       2       --        --        142
Segment income (loss) before taxes (1,161)   (519)    (106)     (173)    (1,959)

--------------------------------------------------------------------------------

THREE MONTHS ENDED SEPTEMBER 30, 1999

--------------------------------------------------------------------------------
                                   United            United
                                   States   Canada   Kingdom   Australia  Total
--------------------------------------------------------------------------------

Revenues from external customers   $2,214    $264     $476       $148    $3,102
Intersegment revenues...........      316      42       --         --       358
Segment loss before taxes.......   (1,484)   (440)     (81)      (262)   (2,267)

--------------------------------------------------------------------------------


NOTE 6 - SEGMENT INFORMATION (CONTINUED)


                                       9
<PAGE>

                            ITC LEARNING CORPORATION

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

                                   (UNAUDITED)

NINE MONTHS ENDED SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
                                   United            United
                                   States   Canada   Kingdom   Australia  Total
--------------------------------------------------------------------------------

Revenues from external customers    $1,993     $240   $1,371     $549    $4,153
Intersegment revenues...........     1,022       40      --       --      1,062
Segment income (loss) before taxes  (3,555)  (1,677)    (256)    (165)   (5,653)

--------------------------------------------------------------------------------

NINE MONTHS ENDED SEPTEMBER 30, 1999

--------------------------------------------------------------------------------
                                   United            United
                                   States   Canada   Kingdom   Australia  Total
--------------------------------------------------------------------------------

Revenues from external customers   $10,416   $1,447   $1,729     $682   $14,274
Intersegment revenues...........     1,523      291      --       --      1,814
Segment loss before taxes.......      (351)    (848)    (179)    (238)   (1,616)

--------------------------------------------------------------------------------



NOTE 7 - COMPREHENSIVE INCOME (LOSS)

   The components of  comprehensive  income (loss),  net of related tax, for the
nine months ended September 30, 2000 and 1999 are as follows:

                                                September 30,    September 30,
                                                    2000             1999
                                                    ----             ----

   Net loss..................................    $(5,652,677)    $ (1,616,116)
   Foreign currency translation adjustment...         74,833           (9,095)
                                                 -----------     -------------
   Comprehensive income (loss)                   $(5,577,844)    $ (1,625,211)
                                                 ============    =============

   The components  of  accumulated other  comprehensive  income,  net of related
tax,  at September 30, 2000 and December 31, 1999 are as follows:

                                                September 30,    December 31,
                                                    2000             1999
                                                    ----             ----

   Cumulative foreign currency translation
    adjustment                                   $    61,751     $    (13,082)
                                                 ===========     =============



                                       10
<PAGE>

                            ITC LEARNING CORPORATION

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

                                   (UNAUDITED)

NOTE 8 - SALE OF PRODUCT LINE

   Effective July 31, 2000, the Company  completed the sale of its AdminSTAR(TM)
enterprise  learning  management  system  product line, to  Learnframe,  Inc., a
provider of e-Learning  technologies and services.  The  transaction,  valued at
$4,000,000,  consists of a cash  payment of  $250,000,  paid in 5 equal  monthly
installments  beginning on the closing date, and $3,750,000 of prepaid royalties
on the sale of Learnframe  products over the next four years.  This sale follows
the execution of an Original  Equipment  Manufacturer  ("OEM") and  distribution
agreement  between ITC and Learnframe,  dated May 22, 2000, giving ITC the right
to private label and distribute  Learnframe's  proprietary  learning  management
system - PINNACLE LEARNING MANAGER.

   As a  result  of  the  transaction,  the  Company  recorded  assets  totaling
$2,542,182,  a gain on the sale totaling $250,000, while eliminating $986,578 in
net  capitalized  product  development  costs and $1,392,158 in net  capitalized
intangible assets.

NOTE 9 - SUBSEQUENT EVENT

   In October of 2000, the Company  entered into an agreement with two investors
to provide the Company with $500,000 of convertible  debt  financing.  Under the
terms of the agreement, the debt may be converted into shares of common stock of
the Company at $1.00 per share.  The maturity of the debt  financing is December
31, 2001, bears a 10% annual interest rate and has 500,000  warrants  associated
with the financing.



















                                       11
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS


OVERVIEW OF BUSINESS

   ITC Learning  Corporation  is a worldwide  provider of education and training
software to professionals in business,  education and government  organizations.
Incorporated  under  the laws of the  state  of  Maryland  in 1977  the  Company
develops,  markets and delivers specific libraries of interactive multimedia CBT
training  courseware designed for CD-ROM,  intranet and Internet delivery,  thus
enabling  organizations  to  effectively  and  efficiently  deliver  training to
improve individual and organizational performance.

FORWARD-LOOKING STATEMENTS AND RISK FACTORS

FORWARD-LOOKING STATEMENTS

   Certain  statements made by the Company's  management may be considered to be
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation Act of 1995.  Forward-looking statements are based on various factors
and  assumptions  that include  known and unknown risks and  uncertainties.  The
words "believe,"  "expect,"  "anticipate" and "project," and similar expressions
identify  forward-looking  statements,  which  speak  only  as of the  date  the
statement  was  made.  Such  statements  may  include,  but not be  limited  to,
projections  of revenues,  income or loss,  expenses,  availability  of capital,
plans,  as  well  as  assumptions  relating  to the  foregoing.  Forward-looking
statements  are  inherently  subject to risks and  uncertainties,  some of which
cannot be predicted or quantified.  Future results could differ  materially from
those described in forward-looking statements as a result of the risks set forth
in the following discussion, among others.

RISK FACTORS

   The Company's  financial  statements  have been  presented on a going concern
basis,   which   contemplates  the  realization  of  assets  and  settlement  of
liabilities  and  commitments  in the normal  course of  business.  The  Company
experienced  a net loss in the nine months ended  September  30,  2000,  and the
years ended 1999 and 1998.  Although the Company  expects  operating  results to
improve, there can be no assurances that the Company will not experience adverse
results of operation in the future. The Company believes that its existing cash,
anticipated  cash flows from 2000  operations,  proceeds  from sale of  non-core
Company  assets,  and planned  capital fund raising  activities  should  provide
sufficient  resources to fund its activities for the remainder of 2000. However,
the timing of  aforementioned  capital  infusion is critical,  as the Company is
currently receiving pressure from some of its larger suppliers. Anticipated cash
flows from 2000 operations are largely  dependent upon the Company's  ability to
achieve  its  sales and  gross  profit  objectives  for its  currently  existing
products  and  new  products  to be  launched  in  2000.  Achievement  of  these
objectives  is subject to various risk factors  related to, among other  things:
incremental  sales  resulting from expansion of distribution  capabilities;  the
Company's  ability to deploy its  courseware  over the  Internet  and  corporate
intranets;  the  Company's  ability  to  control  costs in  relation  to  future
revenues,  the acceptance of the Company's new CBT courseware  management system
and the  Company's  ability to raise  capital.  If the Company is unable to meet
these  objectives,  it will  consider  expansion of existing or  development  of
alternative  sources of bank  financing;  the  curtailment  of  certain  capital
expenditures  and  discretionary  expenditures  (such as travel,  consulting and
salaries);  and various other courses of action,  including the possible sale of
the Company.

   A number of factors could also  contribute  to  significant  fluctuations  in
operating results,  which may result in volatility in the price of the Company's
common  stock.  These  include,  but are not  limited to, the size and timing of
orders  and  shipments,  the  mix of  ITC-developed  products  and  third  party
products,  the mix of sales from the Company's direct and indirect  distribution
channels,  the  introduction  and acceptance of new products,  and the degree to
which the market  understands  and accepts the  Company's  role as a provider of
training solutions.


                                       12
<PAGE>


   In addition,  the Company faces certain general  business risks,  which could
materially and adversely impact future operating results. These include, but are
not  limited  to,  changes  in  economic  conditions,  the cost of labor and raw
materials, changes in technology and general competitive factors.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2000 ("THIRD  QUARTER OF 2000") COMPARED TO THE
THREE MONTHS ENDED SEPTEMBER 30, 1999 ("THIRD QUARTER OF 1999")

REVENUES

   Total revenues for the third quarter of 2000 totaled $823,000, as compared to
$3,102,000 for the third quarter of 1999,  representing a decrease of $2,279,000
or 73%. Courseware revenues,  which include sales of off-the-shelf CBT products,
custom CBT products,  learning  management  system sales,  consulting  services,
fees,  royalties and videotape  training  products,  totaled $771,000 during the
third quarter of 2000, as compared to $2,504,000  for the third quarter of 1999.
The decrease in total revenues was primarily attributable to lower product sales
within the North  American  markets as well as the United Kingdom and Australia.
As compared to the third quarter of 1999, the Company's North American sales and
marketing  efforts have been  substantially  impacted by the  Company's  working
capital  constraints,  which  hindered  the  Company's  ability to  aggressively
recruit,  train and  support  both  direct  and  indirect  sales  and  marketing
resources.  In the  international  markets,  working  capital  constraints  have
limited the  Company's  ability to expand  sales and  marketing  activities  and
continue  efforts to develop new  products  for  distribution.  The Company does
believe  that its existing  sales and  marketing  organization  can perform at a
level  sufficient  to  generate  positive  cash flow for the  Company,  and will
continue to leverage  its  existing,  and new sales and  marketing  resources to
maintain  and  increase  revenues.  This  is a  forward-looking  statement.  See
Forward-Looking Statements and Risk Factors for Further Discussion.

COST OF SALES AND GROSS MARGIN

   Cost of sales consists of the amortized costs of developing new course titles
and  updating  the  Company's  existing   libraries,   product  material  costs,
fulfillment  costs,  reseller  discount  fees,  sales  commissions,  third party
product  royalties and hardware costs.  Cost of sales for the third quarter 2000
totaled $836,000 resulting in a negative gross margin of $12,000, as compared to
cost of sales of $2,221,000 and gross margin of $882,000,  for the third quarter
of 1999.  The  decrease  in cost of sales of  $1,385,000  in 2000 as compared to
1999, was the result of decreased sales volume.  The decrease in gross margin of
$894,000,  was primarily  attributable to decreased revenue in relation to fixed
product  development  amortization costs, as well as changes in the mix of sales
form the Company's direct and indirect sales channels.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

   Selling, general and administrative expenses totaled $1,995,000 for the third
quarter  of 2000,  as  compared  to  $3,128,000  for the third  quarter of 1999,
representing a decrease of $1,133,000 or 36%.

   Selling  expenses consist  primarily of salaries of sales personnel,  travel,
advertising,  marketing and promotional expenses. Selling expenses for the third
quarter of 2000  totaled  $538,000,  as  compared  to  $1,583,000  for the third
quarter of 1999,  representing  a decrease of $1,045,000 or 66%. The decrease in
selling  expenses in the third  quarter of 2000 as compared to the third quarter
of 1999 was primarily due to the Company's reduction of North American sales and
marketing personnel during the last half of 1999.

   General and  administrative  expenses  consist of the costs of developing new
products  and the  costs  of the  Company's  executive  management  and  support
functions such as customer assurance, product fulfillment,  human resources, and
finance and  administration.  General and  administrative  expense for the third
quarter of 2000  totaled  $1,457,000  as  compared to  $1,545,000  for the third
quarter of 1999,  representing  a decrease  of  $88,000 or 6%. The  decrease  in


                                       13
<PAGE>

general and administrative  expenses in the third quarter of 2000 as compared to
the third  quarter of 1999 was  primarily  due to the effect of a  reduction  in
North American  administrative  personnel  during the fourth quarter of 1999 and
other cost reduction measures taken by the Company during 2000.

INCOME BEFORE INCOME TAXES AND NET INCOME

   Operations  for the third  quarter of 2000 resulted in a pre-tax and net loss
of  $1,959,000,  or $0.50 per share,  as  compared  to  pre-tax  and net loss of
$2,267,000, or $0.58 per share, for the third quarter of 1999. The lower pre-tax
and net loss for the third quarter of 2000 was primarily due to a combination of
decreased  operating  costs  and the  recognition  of a gain on the  sale of the
Company's  AdminSTAR(TM)  product line, offset bY reduced revenues and resulting
gross margin, as compared to the third quarter of 1999.

NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER
30, 1999

REVENUES

   Revenues for the nine months ended  September 30, 2000 totaled  $4,153,000 as
compared  to  $14,274,000   for  the  nine  months  ended  September  30,  1999,
representing  a decrease of  $10,121,000  or 71%.  The  decrease in revenues was
primarily  attributable to decreased sales of the Company's learning  management
system -  AdminSTAR(TM),  and  decreased  courseware  producT  sales  within the
Company's  North  American and  international  markets.  As compared to the nine
months  ended  September  30,  1999,  the  Company's  North  American  sales and
marketing  efforts have been  substantially  impacted by the  Company's  working
capital  constraints,  which  hindered  the  Company's  ability to  aggressively
recruit,  train and  support  both  direct  and  indirect  sales  and  marketing
resources.  In the  international  markets,  working  capital  constraints  have
limited the  Company's  ability to expand  sales and  marketing  activities  and
continue  efforts to develop new  products  for  distribution.  The Company does
believe  that its existing  sales and  marketing  organization  can perform at a
level  sufficient  to  generate  positive  cash flow for the  Company,  and will
continue to leverage  its  existing,  and new sales and  marketing  resources to
maintain  and  increase  revenues.  This  is a  forward-looking  statement.  See
Forward-Looking Statements and Risk Factors for Further Discussion.

COST OF SALES AND GROSS MARGIN

   Cost of sales for the nine months ended September 30, 2000 totaled $3,162,000
resulting  in a gross  margin  of  $991,000,  as  compared  to cost of  sales of
$6,733,000  resulting  in gross margin of  $7,540,000  for the nine months ended
September  30,  1999.  The  decrease in cost of sales of  $3,571,000  in 2000 as
compared to 1999 was the result of decreased  sales volume and related  variable
costs of sale.  The  decrease  in  gross  margin  of  $6,549,000  was  primarily
attributable  to  decreased  revenue in  relation to fixed  product  development
amortization  costs,  as well as changes in the mix of sales form the  Company's
direct and indirect sales channels.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

   Selling,  general and administrative expenses totaled $6,384,000 for the nine
months ended  September 30, 2000 as compared to  $9,134,000  for the nine months
ended September 30, 1999, representing a decrease of $2,750,000 or 30%.

   Selling  expenses  for the nine  months  ended  September  30,  2000  totaled
$1,838,000  as compared to  $4,778,000  for the nine months ended  September 30,
1999,  representing  a decrease of  $2,940,000  or 62%.  The decrease in selling
expenses during the nine months ended September 30, 2000 as compared to the nine
months ended September 30, 1999 was primarily due to the Company's  reduction of
sales and marketing personnel during the last half of 1999.


                                       14
<PAGE>


   General and  administrative  expenses for the nine months ended September 30,
2000  totaled  $4,546,000  as compared to  $4,356,000  for the nine months ended
September 30, 1999,  representing an increase of $190,000 or 4%. The increase in
general and  administrative  expenses during the nine months ended September 30,
2000 as compared to the nine months ended  September  30, 1999 was primarily due
to increased depreciation and amortization expense related to the divestiture of
the Company's AdminSTAR(TM) product line, offset by thE effect of a reduction in
North American administrative personnel during the fourth quarter of 1999.

   Effective July 31, 2000, the Company  completed a transaction for the sale of
its AdminSTAR(TM)  product line to Learnframe,  Inc. See NOTE 8 TO THE CONDENSED
AND  CONSOLIDATED  FINANCIAL  STATEMENTS  - SALE OF PRODUCT  LINE.  The  Company
believes  it will  realize  annual  cost  savings of  approximately  $267,000 in
development  and  sales  related  expenses  and  $205,000  in  depreciation  and
amortization  expenses as a result of the divestiture of this product line. This
is a forward-looking  statement. SEE FORWARD-LOOKING STATEMENTS AND RISK FACTORS
FOR FURTHER DISCUSSION.

INCOME BEFORE INCOME TAXES AND NET INCOME

   Operations  for the nine months ended  September 30, 2000 resulted in pre-tax
and net loss of $5,653,000 or $1.44 per share,  as compared to a pre-tax and net
loss of  $1,616,000  or $0.42 per share for the nine months ended  September 30,
1999.  The higher  pre-tax and net loss for the nine months ended  September 30,
2000 was  primarily  due to  decreased  revenues and  resulting  gross margin as
compared to the nine months ended September 30, 1999.

CASH FLOW, LIQUIDITY AND CAPITAL RESOURCES

   Working capital deficit at September 30, 2000 was $3,680,000 as compared to a
deficit of $307,000 at December  31,  1999,  representing  a decrease in working
capital  of  $3,373,000,  primarily  due to the April 2, 2001  maturity  date of
$2,200,000  in  convertible  debt  payable,  as well as the  Company's  negative
operating performance for the first nine months of 2000.

   Cash  provided by operating  activities  totaled  $13,000 for the nine months
ended  September  30,  2000,  as compared to $867,000  for the nine months ended
September  30,  1999,  representing  a decrease of  $854,000.  The  decrease was
primarily due to increased turnover of operating assets in relation to operating
liabilities during the nine months ended September 30, 2000, offset by lower net
income as compared to the nine months ended  September 30, 1999.  Effective July
31, 2000, the Company  completed a transaction for the sale of its AdminSTAR(TM)
product line to  Learnframe,  Inc. See NOTE 8 TO THE CONDENSED AND  CONSOLIDATED
FINANCIAL  STATEMENTS  - SALE OF PRODUCT  LINE.  The  Company  believes  it will
realize annual cash cost savings of  approximately  $267,000 in development  and
sales related expenses as a result of the divestiture of this product line. This
is a forward-looking  statement. SEE FORWARD-LOOKING STATEMENTS AND RISK FACTORS
FOR FURTHER DISCUSSION.

   Cash used for investing activities totaled $359,000 for the nine months ended
September  30,  2000,  as  compared  to cash used for  investing  activities  of
$2,288,000 for the nine months ended September 30, 1999, representing a decrease
of $1,929,000.  The decrease was primarily due to decreased  capital and product
development  expenditures  during the nine months  ended  September  30, 2000 as
compared to the nine months ended September 30, 1999.

   Cash  provided by financing  activities  totaled  $57,000 for the nine months
ended  September 30, 2000, as compared to cash provided by financing  activities
of  $1,450,000  for the nine months ended  September  30, 1999,  representing  a
decrease  of  $1,393,000.  The  decrease  was  primarily  due to  the  Company's
decreased utilization and subsequent payoff of its line of credit, offset by the
issuance of long-term notes payable during 2000.

   The Company believes that its existing cash, anticipated cash flows from 2000
operations,  proceeds from sale of non-core Company assets,  and planned capital
fund  raising  activities  should  provide  sufficient  resources  to  fund  its


                                       15
<PAGE>


activities  for the  remainder of 2000.  However,  the timing of  aforementioned
capital  infusion is critical,  as the Company is currently  receiving  pressure
from some of its larger  suppliers.  Anticipated cash flows from 2000 operations
are largely  dependent upon the Company's ability to achieve its sales and gross
profit  objectives  for its currently  existing  products and new products to be
launched in 2000.  Achievement  of these  objectives  is subject to various risk
factors  related to,  among  other  things:  incremental  sales  resulting  from
expansion of  distribution  capabilities;  the  Company's  ability to deploy its
courseware over the Internet and corporate  intranets;  the Company's ability to
control costs in relation to future  revenues,  the  acceptance of the Company's
new CBT courseware management system and the Company's ability to raise capital.
If the Company is unable to meet these objectives, it will consider expansion of
existing  or  development  of  alternative   sources  of  bank  financing;   the
curtailment of certain capital expenditures and discretionary expenditures (such
as travel,  consulting  and  salaries);  and  various  other  courses of action,
including  the  possible  sale  of  the  Company.   These  are   forward-looking
statements.   SEE  FORWARD-LOOKING  STATEMENTS  AND  RISK  FACTORS  FOR  FURTHER
DISCUSSION.










                                       16
<PAGE>


                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.  OTHER INFORMATION

   On May 23, 2000, the Company received  notification  from the Nasdaq National
Stock  Market,  Inc.  that based on its Form 10-QSB  filed for the period  ended
March 31,  2000,  the Company no longer met the minimum $4 million net  tangible
asset  requirement  for continued  listing on the Nasdaq  National  Market under
Maintenance  Standard  1  as  set  forth  in  Marketplace  Rule  4450(a)(3).  In
accordance with the requirements of the May 23, 2000  notification  from Nasdaq,
the Company  submitted on June 7, 2000, its specific plan to achieve and sustain
compliance with all Nasdaq National Market listing requirements.

   On July 27, 2000, the Company received  notification from the Nasdaq National
Stock Market,  Inc. that its plan of compliance  had been  accepted,  contingent
upon the Company  demonstrating,  based on its Form 10-QSB filing for the period
ended June 30, 2000, due to be filed with the Securities and Exchange Commission
by  August  14,  2000,  compliance  with  all  Nasdaq  National  Market  listing
requirements including an increased net tangible assets base of $5 million.

   Based on the Company's Form 10-QSB filing for the period ended June 30, 2000,
the Company had not met the minimum $5 million net tangible asset requirement in
accordance with the extension granted by Nasdaq on July 27, 2000. As a result of
its  noncompliance  and to avoid immediate  delisting,  the Company has filed an
appeal to the Nasdaq  Listing  Qualifications  Panel  pursuant to procedures set
forth in the Nasdaq  Marketplace  Rule 4800  Series.  Pending the outcome of the
Nasdaq Listing  Qualifications  Panel  hearing,  the Company's  securities  will
continue to be listed on the Nasdaq National Market.

   Under the terms of the July 27, 2000 extension granted by Nasdaq, the Company
was  required  to  maintain  a net  tangible  asset base of $5 million as of the
filing of its Form  10-QSB for the  period  ended  June 30,  2000.  Based on the
Company's  Form 10-QSB filing for the period ended June 30, 2000,  the Company's
net tangible  assets were  $1,503,000,  resulting in a shortfall of  $3,497,000.
Although the Company  intended to comply with the requirements of the extension,
it was unable to meet those  requirements  for the  following  reasons:  (i) the
Company was unable to close a sale  transaction  by June 30, 2000 on the sale of
its  AdminSTAR(TM)   product  line;  (ii)  the  Company's   negative   operating
performance  for the three months ended June 30, 2000 further  deteriorated  its
net  tangible  asset base;  (iii) the  Company  was unable to solicit  favorable
response  form its  convertible  debt holders to convert their debt into equity;
(iv) the Company was unable to raise additional equity capital.

   On September 26, 2000,  the Company  received  notification  that,  effective
immediately,  shares of its common  stock  were no longer  trading on the Nasdaq
National  Market  System as a result of the  Company's  failure to maintain  the
required  minimum net tangible  assets.  The Company's common stock is currently
trading on the OTC Bulletin Board System under the symbol-ITCC.BB.



                                       17
<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

A.   Exhibits

EXHIBIT NO.                    DESCRIPTION
--------------------------------------------------------------------------------


  27.1     Financial Data Schedule (filed herewith).


B.   Reports on Form 8-K:

   None.













                                       18
<PAGE>


                                   SIGNATURES

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

ITC LEARNING CORPORATION
      (Registrant)


By:         /s/CHRISTOPHER E. MACK        DATE        NOVEMBER 14, 2000
      --------------------------------         ----------------------------
      Christopher E. Mack, President,
      Treasurer, and Chief Financial Officer