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

                                   FORM 10-QSB

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

                    FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004

                                       OR

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

                              ____________________

                         Commission File Number 1-07149

                               ITIS HOLDINGS INC.
        (Exact name of small business issuer as specified in its charter)


        NEVADA                                     74-3069407
        (State or other jurisdiction of            (I.R.S. Employer
        incorporation or organization)             Identification No.)

     10750 HAMMERLY, HOUSTON, TEXAS                  77043
     (Address of principal executive office)       (Zip Code)

                    Issuer's telephone number: (281) 600-6000



The number of shares of the issuer's common stock outstanding as of May 21, 2004
was 5,495,743.

Transitional Small Business Disclosure Format (Check One): Yes     No  X
                                                               ---    ---


<PAGE>
<TABLE>
<CAPTION>
                                 ITIS HOLDINGS INC.

                                    FORM 10-QSB

                           FOR THE QUARTER MARCH 31, 2004

                                       INDEX


                                                                     PAGE
                                                                     ----
<S>                                                                  <C>
PART I -- FINANCIAL INFORMATION

Item 1.   Financial Statements. . . . . . . . . . . . . . . . . . . .   3

Item 2.   Management's Discussion and Analysis Or Plan of Operation .   9

Item 3.   Controls and Procedures . . . . . . . . . . . . . . . . . .  13

SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
ITIS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET


                                                                MARCH 31,
                                                                   2004
                                                                ----------
                                                                (Unaudited)
<S>                                                             <C>
    ASSETS

Current assets:

  Cash and cash equivalents                                     $        -
  Accounts receivable, net of allowance for doubtful accounts
    of  $34,127                                                     80,655
  Note receivable-current portion                                  480,000
  Investments available for sale, at fair market value              81,660
  Other current assets                                              32,426
  Inventory                                                         38,762
                                                                ----------

    Total current assets                                           713,503
                                                                ----------

Long term assets:

  Note receivable, net of current portion                          999,232
  Other long term assets                                           107,123
                                                                ----------

    Total long term assets                                       1,106,355
                                                                ----------

Fixed assets, net of depreciation                                  127,720
                                                                ----------

    Total assets                                                $1,947,578
                                                                ==========
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
ITIS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET

                                                                              MARCH 31,
                                                                                2004
                                                                            -------------
                                                                             (Unaudited)
<S>                                                                         <C>
LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Bank overdraft                                                            $     32,225
  Notes payable-other                                                            354,759
  Disputed note to Cootes Drive LLC                                              500,000
  Accounts payable                                                               298,384
  Accounts payable-related parties                                               733,318
  Accrued interest-related parties                                             1,431,996
  Accrued liabilities                                                             65,417
  Deferred revenue                                                                   150
  Series A Convertible Preferred stock, par value $.001;
    50,000,000 shares authorized; 161.08 shares issued and outstanding         2,027,526
                                                                            -------------
    Total current liabilities                                                  5,443,775
                                                                            -------------
  Long term notes payable to Chairman                                          2,150,117
  Long term notes payable to Directors                                         2,022,500
                                                                            -------------
    Total long term liabilities                                                4,172,617
                                                                            -------------
Total liabilities                                                              9,616,392
                                                                            -------------

  Commitments and contingencies

Stockholders' deficit:
  Common stock, par value $.001, 150,000,000 shares
    authorized;  5,697,450 shares issued and 5,495,743 shares outstanding         53,915
  Warrants                                                                     1,405,349
  Additional paid in capital                                                  27,910,868
  Accumulated deficit                                                        (36,637,101)
  Treasury stock, at cost, 201,707 shares                                       (323,127)
  Accumulated other comprehensive income,
    unrealized loss on investments                                               (78,718)
                                                                            -------------
    Total stockholders' deficit                                               (7,668,814)
                                                                            -------------

    Total liabilities and stockholders' deficit                             $  1,947,578
                                                                            =============
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
ITIS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)

                                              For the three months
                                                 ended March 31,
                                                2004         2003
                                             -----------  -----------
                                                          (restated)
<S>                                          <C>          <C>
  REVENUE, NET OF DEFERRED INCOME
    Automated litigation support services    $   35,000   $  103,798
    Database management sales and services            -       31,340
    Pharmaceutical sales                         87,511       56,823
                                             -----------  -----------
    Total revenues                              122,511      191,961
                                             -----------  -----------

  OPERATING EXPENSES:
    Cost of sales-pharmaceuticals                65,228       41,361
    Selling and marketing                        12,000       39,227
    General and administrative                  255,321      610,899
    Production and computer service              17,112      122,211
    Amortization and depreciation                19,137       71,811
                                             -----------  -----------
    Total operating expenses                    368,798      885,509
                                             -----------  -----------

  LOSS FROM OPERATIONS                         (246,287)    (693,548)

  INTEREST INCOME                                51,331        6,786
  INTEREST EXPENSE                              (82,731)    (239,467)
  GAIN ON SALE OF INVESTMENTS
    AND EQUIPMENT                                     -      192,995
                                             -----------  -----------

  NET LOSS                                     (277,687)    (733,234)

  OTHER COMPREHENSIVE GAIN (LOSS)
    Unrealized gain (loss) on investments
      available for sale                         11,734      (78,131)
                                             -----------  -----------

  NET AND COMPREHENSIVE LOSS                   (265,953)    (811,365)
                                             ===========  ===========

  LOSS PER COMMON SHARE                      $    (0.05)  $    (0.16)
                                             ===========  ===========
  WEIGHTED AVERAGE SHARES USED IN
    COMPUTING LOSS PER
    COMMON SHARE                              5,495,743    5,162,493
                                             ===========  ===========
</TABLE>


                                        5
<PAGE>
<TABLE>
<CAPTION>
ITIS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)

                                                  For the three months
                                                     ended March 31,
                                                    2004        2003
                                                 ----------  ----------
                                                             (restated)
<S>                                              <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                       $(277,687)  $(733,234)
  Adjustments to reconcile net loss to net
    cash used in operating activities:
    Amortization and depreciation                   19,137      71,811
    Gain on sales of investments                         -    (192,995)
    Changes in:
      Accounts receivable                           (6,660)   (120,636)
      Accrued interest on notes receivable               -        (983)
      Inventory                                     (3,939)    (20,198)
      Other assets                                  25,098     (62,887)
      Accounts payable                             (46,668)    (55,845)
      Accrued liabilities                           56,747     208,724
      Deferred revenue                                   -    (153,755)
      Deposit on sales contract                          -     313,517
                                                 ----------  ----------

    Net cash used in operating activities         (233,972)   (746,481)
                                                 ----------  ----------

CASH FLOWS FROM INVESTMENT ACTIVITIES:
  Purchase of treasury stock                             -      (2,250)
  Purchase of licensing agreement                        -     (25,000)
  Proceeds from sales of investments                     -     546,827
  Additions to furniture and equipment                   -      (6,307)
                                                 ----------  ----------

    Net cash provided by investment activities           -     513,270
                                                 ----------  ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Bank overdraft                                    32,225           -
  Proceeds from notes payable                      100,000           -
  Advances from related parties                          -     168,188
  Payments on notes payable                        (88,301)   (144,273)
  Payments received on notes receivable             79,072      51,102
                                                 ----------  ----------

    Net cash provided by financing activities      122,996      75,017
                                                 ----------  ----------

NET DECREASE IN CASH AND CASH
  EQUIVALENTS                                     (110,976)   (158,194)

CASH AND CASH EQUIVALENTS, beginning of period     110,976     248,722
                                                 ----------  ----------

CASH AND CASH EQUIVALENTS, end of period         $       -   $  90,528
                                                 ==========  ==========
</TABLE>


                                        6
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1-BASIS OF PRESENTATION:

The accompanying unaudited interim consolidated financial statements of ITIS
Holdings Inc. ("ITIS") have been prepared in accordance with accounting
principles generally accepted in the United States of America and the rules of
the Securities and Exchange Commission ("SEC"), and should be read in
conjunction with the audited financial statements and notes thereto contained
ITIS's Annual Report filed with the SEC on Form 10-KSB. In the opinion of
management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the results of
operations for the interim periods presented have been reflected herein. The
results of operations for interim periods are not necessarily indicative of the
results to be expected for the full year. Notes to the financial statements that
would substantially duplicate the disclosure contained in the audited financial
statements for 2003 as reported in the 10-KSB have been omitted.

NOTE 2-RESTATEMENT OF PREVIOUSLY REPORTED STATEMENT OF OPERATIONS

ITIS recognized revenue from services performed by its litigation support
division based on agreements signed prior to December 31, 2002 with its largest
customer. Subsequent to December 31, 2002, management received an agreement in
April 2003 that asserted the payment for the services performed by IT S were
contingent upon the customer collecting for such services. Management disputes
the alleged agreement; however, management has determined that based on the
contingency and lack of collection, revenue should not have been recognized and
has restated revenues for the first quarter of 2003.

A summary of the restatement follows:

<TABLE>
<CAPTION>
                                       FOR THE QUARTER ENDED MARCH 31, 2003
                                     -----------------------------------------
                                      As previously   Restatement       As
                                        reported      adjustments    restated
                                     ---------------  ------------  ----------
<S>                                  <C>              <C>           <C>
Revenues                             $      589,086      (397,125)  $ 191,961

Net loss attributable to common
  shareholders                       $     (414,240)     (397,125)  $(811,365)

Basic and diluted loss attributable
  to common shareholders per
  common share                       $        (0.08)        (0.08)  $   (0.16)
</TABLE>


NOTE 3-STOCK-BASED COMPENSATION:
                                --

Compensation is recorded for stock-based compensation grants based on the excess
of the estimated fair value of the common stock on the measurement date over the
exercise price. Additionally, for stock-based compensation grants to
consultants, ITIS recognizes as compensation expense the fair value of such
grants as calculated pursuant to SFAS No. 123, recognized over the related
service period. SFAS No. 148 requires companies to disclose proforma results of
the estimated effect on net income and earnings per share to reflect application
of the fair value recognition provision of SFAS No. 123.


                                        7
<PAGE>
<TABLE>
<CAPTION>
                                 For the three months
                                   ended March 31,
                                   2004        2003
                                ----------  ----------
(restated)
<S>                             <C>         <C>
Net loss applicable
  to common shareholders:
  As reported:                  $(277,687)  $(733,234)
  Less: compensation expense
    charged to income:                  -           -
  Plus: proforma compensation
    expense:                            -           -
                                ----------  ----------
Proforma net loss applicable
  to common shareholders:       $(277,687)  $(733,234)
                                ==========  ==========
Basic loss per common share:
  As reported:                  $   (0.05)  $   (0.16)
  Proforma:                     $   (0.05)  $   (0.16)
</TABLE>

NOTE 4-BUSINESS SEGMENTS:

ITIS Holdings owns subsidiaries that provide automated litigation support and
document and Database management, that operate pharmacies, and that provide
technical support for operations.

<TABLE>
<CAPTION>
                                  SEGMENT INFORMATION
                               --------------------------
                                  INCOME
THREE MONTHS ENDED             (LOSS) FROM     INTEREST     TOTAL    DEPRECIATION/
MARCH 31, 2004                  NET SALES     OPERATIONS   EXPENSE       ASSETS      AMORTIZATION
-----------------------------  ------------  ------------  --------  --------------  -------------
<S>                            <C>           <C>           <C>       <C>             <C>
Database Management            $          -  $   (31,251)  $ 41,550  $    1,601,755  $       7,454
Automated Litigation Support         35,000      (61,307)    41,181         199,649          9,455
Pharmacy Operations                  87,511     (153,729)         -         146,174          2,228
                               ------------  ------------  --------  --------------  -------------
Total, ITIS Holdings Inc.      $    122,511  $  (246,287)  $ 82,731  $    1,947,578  $      19,137
                               ============  ============  ========  ==============  =============

        INCOME
THREE MONTHS ENDED              (LOSS) FROM  INTEREST      TOTAL     DEPRECIATION/
MARCH 31, 2003  (RESTATED)     NET SALES     OPERATIONS    EXPENSE   ASSETS          AMORTIZATION
-----------------------------  ------------  ------------  --------  --------------  -------------
Database Management            $     31,340  $  (149,396)  $ 30,456  $    4,995,798  $      53,474
Automated Litigation Support        103,798     (319,191)   116,330         799,074          9,696
Pharmacy Operations                  56,823     (224,961)    92,681         461,187          8,641
                               ------------  ------------  --------  --------------  -------------
Total, ITIS Holdings Inc.      $    191,961  $  (693,548)  $239,467  $    6,256,059  $      71,811
                               ============  ============  ========  ==============  =============
</TABLE>

NOTE 5-NOTES PAYABLE AND FINANCING AGREEMENTS:

On March 15, 2004, ITIS Inc. dba Litidex(R) and National Law Library executed a
new promissory note for $307,451 to Houston RPM, L.C. This note refinanced
$207,451 of the note dated December 2, 2003, and provided $100,000 in new
funding to National Law Library. The note bears interest at 18% per year, and is
secured by assignment of the Asset Purchase Agreement between National Law
Library, Brief Reporter and Jurisearch Holdings, LLC dated August 16, 2002. The


                                        8
<PAGE>
amount of each monthly installment shall equal payments received pursuant to the
Asset Purchase Agreement, but in no event shall the payment be less than $32,500
per month. Any unpaid principal and interest is due in full on November 15,
2004.

NOTE 6-SUBSEQUENT EVENTS

On May 4, 2004, ITIS subsidiary National Law Library executed a promissory note
for $100,000 to Frost National Bank, Houston, Texas. The note bears interest at
4.5% and is payable in one principal payment plus accrued interest on August 2,
2004. Hunter Carr, Chief Executive Officer of ITIS, personally guarantees and
has provided personal assets as collateral for this note payable.


                                        9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion should be read in conjunction with the condensed,
consolidated financial statements of ITIS, which are included elsewhere in this
Form 10-QSB.  Included in this discussion are certain forward-looking statements
regarding ITIS's expectations for its business and its capital resources.   The
reader should not rely on forward-looking statements because they are subject to
known and unknown risks, uncertainties and other factors that may cause our
actual results to differ materially from those contemplated by the
forward-looking statements. ITIS and its subsidiaries may experience high
volatility in operating results and cash flows from quarter to quarter and from
year to year.

Management realizes that anticipated revenues to be generated by the automated
litigation support services of Litidex and the PharmHouse stores will be
critical in providing some of the funds necessary to continue company operations
and to remain in business. Our expense levels are based, in part, on our
expectations as to future revenues. To the extent that revenues are below
expectations, we may be unable or unwilling to reduce expenses proportionately,
and operating results and cash flows are likely to be adversely affected.

The reader of the following discussion of the results of our operations and
liquidity and capital resources should be aware of critical accounting policies
applied by management as follows:

     -    Note receivable at March 31, 2004 in the amount of $1,479,232,
          represents receivables related to the sale of National Law Library
          assets and Brief Reporter. Because we believe all such amounts are
          collectible due to the nature of the agreements and our collection
          experience with the payers, we have not recorded an allowance for
          doubtful accounts for this receivable. The long-term portion
          represents the amounts we estimate will not be paid to us within the
          next twelve months, discounted by 12%.

     -    On July 29, 2002 ITIS entered into an Asset Purchase Agreement with
          American Legal Data, LLC, a Delaware limited liability company
          (Buyer). Under the terms of the Purchase Agreement, ITIS sold to Buyer
          all right, title and interest in one complete copy of data consisting
          of an electronic form of federal and state constitutions, statutes,
          regulations, case law, rules and legal briefs, together with
          additions, derivations and updates, as it existed on July 29, 2002. In
          consideration for these assets, Buyer agreed to pay to ITIS $2
          million, of which $25,000 was paid in 2001 and $66,000 was paid at or
          prior to closing on July 29, 2002. The balance of the consideration
          ($1,909,000) is payable in minimum monthly installments of $16,000 for
          120 months beginning August 16, 2002. Unpaid principal accrues
          interest at the rate of 8% per year, and in the 121st month following
          the closing date, Buyer will make a lump sum payment equal to the
          outstanding principal and any accumulated interest. On February 24,
          2003, ITIS agreed to move seven monthly payments of $16,000 ($112,000)
          to the lump sum payment due at the end of the note. At March 31, 2004,
          the principal balance owed by American Legal Data was $1,892,481.

          Based on the guidelines of SEC Staff Accounting Bulletin No. 101,
          Revenue Recognition in Financial Statements, it is the opinion of
          management that the installment method of accounting is appropriate
          for this sale, as uncertainty exists as to the ultimate collectibility
          of the sale price. Accordingly, management has provided for deferred
          gross profit in an amount equal to the outstanding balance of the note
          receivable at March 31, 2004 or $1,892,481. Principal and interest
          payments on the note receivable will be recorded as income, and a
          reduction for the principal amount will be recorded to the note
          receivable and deferred gross profit, as future payments are received.

     -    The Company is not party to any off balance sheet arrangements.


                                       10
<PAGE>
The following is management's discussion and analysis of certain significant
factors that have affected ITIS's financial condition and results of operations
during the first quarter of, 2004 and 2003.

RESULTS OF OPERATIONS

Revenues.  Revenues decreased by $69,450 to $122,511 during the first quarter of
2004, from $191,961 recorded for the first quarter of 2003. Revenues from the
automated litigation support services of subsidiary Litidex(R) decreased by
$68,798 to $35,000 for the first quarter of 2004 from $103,798 for the first
quarter of 2003. As an indirect result of the July 7, 2003 dismissal of our
claims against Southridge Capital Management LLC and others, production and
receipts related to the Litidex(R) have decreased significantly. At the present
time, our litigation support services are temporarily suspended as we attempt to
renegotiate our service contracts. Revenues generated by pharmacy operations
increased by $30,688 to $87,511 for the first quarter of 2004 compared to
$56,823 for the first quarter of 2003. There were no revenues from database
management services in the first quarter of 2004 as compared to $31,340 in the
first quarter of 2003.

Cost of Sales. Cost of sales increased by $23,867 to $65,228 for the first
quarter of 2004 from $41,361 for the first quarter of 2003. This increase is due
to increased sales of pharmaceutical products sold by subsidiary PharmHouse.

Sales and Marketing Expense. Sales and marketing expense decreased by $27,227,
to $12,000 for the first quarter of 2004, from $39,227 for the first quarter of
2003.  The decrease is primarily due to decreased contract marketing personnel
and telephone expenses.

General and Administrative Expense. General and administrative expense decreased
by $355,578 to $255,321 for the first quarter of 2004, from $610,899 for the
first quarter of 2003, as a result of the following:

     -    Payroll and related costs at the administrative and management level
          decreased by $258,061 to $195,621 for the first quarter of 2004 from
          $453,682 for the first quarter of 2003. Reduction in administrative
          and management level workforce accounts for $218,737 of the decrease,
          while the balance of $39,324 reflects decreased employee automobile
          and travel expense.

     -    Administrative expense reductions were realized in professional fees,
          contract services, and the expense of outside consulting which in
          aggregate decreased by $58,303 to $18,186 for the first quarter of
          2004 from $76,489 for the first quarter of 2003.

     -    Rent, utilities and related expenses decreased by $24,012 to $35,298
          for the first quarter of 2004 from $59,310 for the first quarter of
          2003.

     -    Miscellaneous other general and administrative expenses were reduced
          by $15,202 to $6,216 for the first quarter of 2004 from $21,418 for
          the first quarter of 2003.

Production and Computer Service Expense.  Production and computer service
expense decreased by $105,099 to $17,112 for the first quarter of 2004, from
$122,211 for the first quarter of 2003. The significant decrease is due to
decreased production and related costs of automated litigation support
subsidiary Litidex(R).

Amortization and Depreciation Expense.   Amortization and depreciation expense
decreased by $52,674 to $19,137 for the first quarter of 2004, from $71,811 for
the first quarter of 2003. The decrease is primarily due the reduction in our
capitalized software and other intangibles, which were impaired to a basis of
zero at December 31, 2003.


                                       11
<PAGE>
Interest Expense. Interest expense decreased by $156,736 to $82,731 for the
first quarter of 2004, from $239,467 for the first quarter of 2003. The majority
of the interest expense decrease is due to the reclassification of $2,173,500
imputed note payable to Rainmaker Ventures, Ltd. to addition paid-in-capital at
year-end 2003.

LIQUIDITY AND CAPITAL RESOURCES

ITIS's ability to execute its business strategy depends to a significant degree
on its ability to generate an established source of revenues, working capital,
and positive cash flow, and its ability to attract additional capital. ITIS's
principal demands for liquidity are cash for normal operations, funds to support
its automated litigation support segment, and funds for development of
PharmHouse stores.

For the first quarter of, 2004, ITIS's cash and cash equivalents decreased by
$110,976 from the December 31, 2003 balance of $110,976 in available cash to no
available cash at March 31, 2004. ITIS has a working capital deficit of
$4,730,272 at March 31, 2004. Cash used in operating activities was $233,972 and
cash provided by financing activities was $122,996.

Cash used in operating activities of $233,972 is primarily due to operating
losses. Cash provided by financing activities of $122,996 is due to new loan
proceeds from a third party lender in the amount of $100,000, payments received
on notes receivable in the amount of $79,072, and a bank overdraft in the amount
of $32,225. These amounts are offset by $88,301 in payments made on various
notes payable.

Accounts receivable, net of doubtful accounts, at March 31, 2004 amount to
$155,392. Of this amount, $74,737 has been classified as long-term.

Note receivable at March 31, 2004 in the amount of $1,479,232, represents
receivables related to the sale of National Law Library assets and Brief
Reporter. Because we believe all such amounts are collectible due to the nature
of the agreements and our collection experience with the payers, we have not
recorded an allowance for doubtful accounts for these receivables. The long-term
portion represents the amounts we estimate will not be paid to us within the
next twelve months, discounted by 12%.

The  Company has an unrecorded receivable from American Legal Data, LLC relating
to  the sale of a copy of the National Law Library data. Under the terms of this
sale  agreement,  ITIS is scheduled to receive monthly payments in the amount of
$16,000  for  120  months  beginning  June  1,  2002.

On March 15, 2004, ITIS Inc. dba Litidex(R) and National Law Library executed a
new promissory note for $307,451 to Houston RPM, L.C. This note refinanced
$207,451 of a note dated December 2, 2003, and provided $100,000 in new funding
to National Law Library. The note bears interest at 18% per year, and is secured
by assignment of the Asset Purchase Agreement between National Law Library,
Brief Reporter and Jurisearch Holdings, LLC dated August 16, 2002. The amount of
each monthly installment shall equal payments received pursuant to the Asset
Purchase Agreement, but in no event shall the payment be less than $32,500 per
month. Any unpaid principal and interest is due in full on November 15, 2004.

On May 4, 2004, ITIS subsidiary National Law Library executed a promissory note
for $100,000 to Frost National Bank, Houston, Texas. The note bears interest at
4.5% and is payable in one principal payment plus accrued interest on August 2,
2004. Hunter Carr, Chief Executive Officer of ITIS, personally guarantees and
has provided personal assets as collateral for this note payable.

As of March 31, 2004, the total principal amount owed to Hunter Carr, CEO of
ITIS, was $2,150,117. Accrued but unpaid interest amounted to $625,996 at March
31, 2004.


                                       12
<PAGE>
ITIS's financial statements are prepared using principles applicable to a going
concern, which contemplate the realization of assets and liquidation of
liabilities in the normal course of business. We do not at this time have an
established source of revenues, working capital or cash flow to cover operating
costs to allow the Company to remain in business. Management's business plan
realizes that revenues to be generated by the automated litigation support
services of Litidex and the PharmHouse stores are critical in providing some of
the funds necessary to continue company operations and to remain in business.
However, the litigation support services of Litidex(R) are temporarily suspended
as we attempt to renegotiate our service contracts, and the pharmacy operations
of PharmHouse have not yet produced positive cash flow. It is possible that
revenues from these subsidiaries may never be sufficient to meet company needs.
Management plans to continue to utilize additional loans from Mr. Carr
(President and Chairman of the Board of Directors of ITIS) and other directors
and investors as long as funds from these sources remain available. If adequate
funding from the operations of Litidex, PharmHouse or other sources is not
available, ITIS will be unable to remain in business.

ITIS may be required to obtain additional financing or equity capital to remain
in business, and that capital, if available, may have provisions that could
further suppress current and future stock prices and cause significant dilution
to current shareholders. Our internally generated cash flows from operations
have historically been insufficient for our cash needs and will continue to for
the foreseeable future. While management projects that the internal source of
liquidity may improve, this objective may not be achieved in the near term, if
ever. As of May 21, 2004, sources of external and internal financing are very
limited. It is not expected that the internal source of liquidity will improve
until significant net cash is provided by operating activities (which may not be
achieved), and until such time, ITIS will rely upon external sources for
liquidity. ITIS may not ever become profitable and could fail as a going
concern.

We may in the future experience significant fluctuations in the results of our
operations. Such fluctuations may result in significant volatility in the price
and/or value of ITIS's common stock. Shortfalls in revenues, financing or
capital may adversely and disproportionately affect the results of operations
because a high percentage of current operating expenses are relatively fixed and
are primarily financed through loans and capital contributions. These funds are
not guaranteed and may not continue in the future. Accordingly, management
believes that period-to-period comparisons of results of operations should not
be relied upon as an indication of future results of operations.

ITEM 3. CONTROLS AND PROCEDURES

ITIS has adopted and implemented internal disclosure controls and procedures
designed to provide reasonable assurance that all reportable information will be
recorded, processed, summarized and reported within the time period specified in
the SEC's rules and forms.  Under the supervision and with the participation of
ITIS's management, including ITIS's President and Chief Executive Officer and
ITIS's Controller and Principal Financial Officer, ITIS has evaluated the
effectiveness of the design and operation of its disclosure controls and
procedures pursuant to Exchange Act Rule 13a-15(e) as of the end of the fiscal
quarter covered by this report.  Based on that evaluation, the President and
Chief Executive Officer and the Controller and Principal Financial Officer have
concluded that these disclosure controls and procedures are effective.  There
were no changes in ITIS's internal controls or in other factors during or since
the end of the fiscal quarter covered by this report that have had a material
effect or are reasonably likely to have a material effect on internal controls
subsequent to the end of the fiscal quarter covered by this report.


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ITEM 6. REPORTS ON FORM 8-K

The following reports on Form 8-K were filed during the quarter for which this
report is filed:

     None


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                                   SIGNATURES

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


                               ITIS HOLDINGS INC.




May 24, 2004                          /s/ Hunter M.A. Carr
                                      --------------------------
                                          Hunter M.A. Carr
                                          President and Chief Executive Officer

                                      /s/ Joanna Hoover
                                      --------------------------
May 24, 2004                              Joanna Hoover
                                          Principal Accounting Officer


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