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

                                    FORM 10-Q

 [X]            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                      OF THE SECURITIES EXCHANGE ACTOF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002

                                       OR

 [ ]            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                              ____________________

                         Commission File Number 1-07149

                               ITIS HOLDINGS INC.
                              (Formerly ITIS Inc.)
             (Exact Name of Registrant 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)


   Registrant's telephone number, including area code:     (281) 600-6000


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the registrant was
required  to  file  such  reports),  and  (2)  has  been  subject to such filing
requirements  for  the  past  90  days.
Yes  [X]     No  [ ]

The number of shares of the registrant's common stock outstanding as of November
19, 2002 was 5,189,338.


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

                                     FORM 10-Q

                         FOR THE QUARTER SEPTEMBER 30, 2002

                                       INDEX


                                                                            PAGE
                                                                            ----
<S>                                                                         <C>

PART I - FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements . . . . . . . . . . .     3

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations . . . . . . . . . . . . . . .    26

Item 3.  Quantitative and Qualitative Disclosures About Market Risk. . . .    35

Item 4.  Controls and Procedures . . . . . . . . . . . . . . . . . . . . .    35

PART II. OTHER INFORMATION

Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . .    36

Item 2. Changes in Securities and Use of Proceeds. . . . . . . . . . . . .    37

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . .    37

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    43

CERTIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    44
</TABLE>


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



                                                                     SEPTEMBER 30,   DECEMBER 31,
                                                                          2002           2001
                                                                     --------------  -------------
<S>                                                                  <C>             <C>
                                                                       (Unaudited)
                                 ASSETS

Current assets:

  Cash and cash equivalents                                          $       19,872  $      34,165
  Accounts receivable, net of allowance for doubtful accounts
    of  $34,127 at  September 30, 2002 and December 31, 2001              1,554,886      1,457,328
  Investments available for sale, at fair market value                       41,177        199,250
  Notes receivable less deferred gross profit
    of $192,000 at September 30, 2002                                       125,000              -
  Other current assets                                                       20,950         13,910
  Inventory                                                                  41,279              -
  Assets held for sale                                                   11,229,053              -
  Current assets of entity to be disposed of                                      -        103,291
                                                                     --------------  -------------

    Total current assets                                                 13,032,217      1,807,944
                                                                     --------------  -------------

Long term assets:

  Accounts receivable                                                     1,140,000        760,000
  Licensing agreement                                                       150,000        150,000
                                                                     --------------  -------------

    Total long term assets                                                1,290,000        910,000
                                                                     --------------  -------------

Fixed assets and intangibles, net of amortization and depreciation
  Database content and software costs                                       386,115     11,487,132
  Furniture and equipment                                                   237,011        315,826
  Intangible assets                                                               -        260,868
  Net fixed assets and intangibles of entity to be disposed of                    -      1,305,501
                                                                     --------------  -------------
    Total fixed assets and intangibles, net                                 623,126     13,369,327
                                                                     --------------  -------------

    Total assets                                                     $   14,945,343  $  16,087,271
                                                                     ==============  =============
</TABLE>


    The accompanying notes are an integral part of these condensed consolidated
                              financial statements


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



                                                            SEPTEMBER 30,    DECEMBER 31,
                                                                2002             2001
                                                           ---------------  --------------
<S>                                                        <C>              <C>
                                                             (Unaudited)

             LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Bank overdraft                                           $       55,049   $      40,813
  Notes payable-other                                           2,506,033       1,922,934
  Disputed note to Cootes Drive LLC                               500,000         500,000
  Accounts payable                                                543,116         535,599
  Accounts payable-related parties                                      -          83,125
  Accrued interest                                                699,319         342,658
  Accrued liabilities                                             178,894         439,785
  Deferred revenue                                                759,480         670,245
  Deposit on sales contract                                        24,166               -
  Current liabilities of entity to be disposed of                       -         206,948
                                                           ---------------  --------------
     Total current liabilities                                  5,266,057       4,742,107
                                                           ---------------  --------------
  Long term notes payable from Chairman                         2,150,117       2,150,117
  Imputed note payable to related party                         1,939,500               -
                                                           ---------------  --------------
     Total long term liabilities                                4,089,617       2,150,117
                                                           ---------------  --------------
Total liabilities                                               9,355,674       6,892,224
                                                           ---------------  --------------

  Commitments and contingencies

Stockholders' equity:
  Series A Convertible Preferred stock, par value $.001;
    50,000,000 shares authorized; 161.08 shares issued          2,027,526       2,027,526
    and outstanding
  Common stock, par value $.001, 150,000,000 shares
     authorized;  5,357,450 and 3,938,340 shares issued
     and 5,189,338 and 3,770,228 shares outstanding,
    respectively at September 30, 2002
    and December 31, 2001                                          53,575          39,383
  Warrants                                                      1,405,349       1,213,372
  Additional paid in capital                                   25,475,869      24,801,383
  Accumulated deficit                                         (22,890,745)    (18,557,247)
  Treasury stock, at cost, 168,112 shares                        (284,554)       (284,554)
  Accumulated other comprehensive income,
    unrealized gain/(loss) on investments                        (148,296)          1,083
  Less notes receivable issued for purchase of
    common stock                                                  (49,055)        (45,899)
                                                           ---------------  --------------
     Total stockholders' equity                                 5,589,669       9,195,047
                                                           ---------------  --------------

     Total liabilities and stockholders' equity            $   14,945,343   $  16,087,271
                                                           ===============  ==============
</TABLE>


  The accompanying notes are an integral part of these condensed consolidated
                              financial statements


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


                                                  For the nine months        For the three months
                                                  ended September 30,         ended September 30,
                                              --------------------------  --------------------------
                                                  2002          2001          2002          2001
                                              ------------  ------------  ------------  ------------
<S>                                           <C>           <C>           <C>           <C>
  REVENUE, NET OF DEFERRED INCOME             $   895,469   $ 2,130,400   $   246,042   $ 1,280,400
                                              ------------  ------------  ------------  ------------

  OPERATING EXPENSES:
    Selling and marketing                          94,202       106,405        66,880        11,174
    General and administrative                  2,148,355     1,903,674       918,069       433,079
    Production and computer service               208,287        65,402       118,044        31,642
    Amortization and depreciation                 650,876     1,237,342       101,381       412,903
    Other expense                                 150,000             -             -             -
                                              ------------  ------------  ------------  ------------
    Total operating expenses                    3,251,720     3,312,823     1,204,374       888,798
                                              ------------  ------------  ------------  ------------

  INCOME (LOSS) FROM CONTINUING
    OPERATIONS                                 (2,356,251)   (1,182,423)     (958,332)      391,602

  DISCONTINUED OPERATIONS (Notes 3 and 6):
    Income (loss) from operations of
      discontinued business segments             (152,400)   (1,859,967)        2,248      (569,796)
    (Loss) on disposal of business segments    (1,094,833)     (871,430)     (487,177)     (871,430)

  INTEREST INCOME (EXPENSE), net                 (597,341)     (240,606)     (256,066)      (82,577)
  GAIN (LOSS) ON SALE OF INVESTMENTS
    AND EQUIPMENT                                (132,673)      409,613       (59,077)      255,405
                                              ------------  ------------  ------------  ------------

  NET LOSS                                     (4,333,498)   (3,744,813)   (1,758,404)     (876,796)

  OTHER COMPREHENSIVE INCOME (LOSS)
    Unrealized gain (loss) on investments
      available for sale                         (149,379)        6,584       (71,363)     (238,536)
                                              ------------  ------------  ------------  ------------

  NET AND COMPREHENSIVE LOSS                   (4,482,877)   (3,738,229)   (1,829,767)   (1,115,332)
                                              ============  ============  ============  ============

  LOSS PER COMMON SHARE                       $     (1.12)  $     (1.00)  $     (0.43)  $     (0.29)
                                              ============  ============  ============  ============
  LOSS PER COMMON SHARE AS A RESULT
    OF DISCONTINUED OPERATIONS                $     (0.31)  $     (0.73)  $     (0.11)  $     (0.38)
                                              ============  ============  ============  ============
  WEIGHTED AVERAGE SHARES USED IN
    COMPUTING LOSS PER
    COMMON SHARE                                4,020,465     3,733,604     4,305,229     3,827,036
                                              ============  ============  ============  ============
</TABLE>


  The accompanying notes are an integral part of these condensed consolidated
                              financial statements


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


                                                              For the Nine Months ended September 30,
                                                           --------------------------------------------
                                                                    2002                   2001
                                                           ---------------------  ---------------------
<S>                                                        <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss)                                               $         (4,333,498)  $         (3,744,813)
  Adjustments to reconcile net loss to net
    cash used in operating activities:
    Issuance of common stock, options,
      or warrants for goods or services                                 665,877                195,130
    Amortization of deferred compensation                                     -                 15,625
    Amortization and depreciation                                       874,978              1,537,330
    (Gain) Loss on sales of investments                                  80,492               (405,013)
    (Gain) Loss on sale of equipment                                     10,488                 (5,869)
    Services provided for investments                                  (198,902)              (812,858)
    Disposal of operating segments                                    1,201,844              2,334,257
    Changes in:
      Accounts receivable                                              (555,537)              (830,084)
      Notes receivable                                                 (125,000)              (502,142)
      Accrued interest on notes receivable                               (3,156)                (3,500)
      Other current assets                                               (7,040)                38,308
      Accounts payable                                                   35,554                429,203
      Accrued liabilities                                               109,948                143,891
      Deferred revenue                                                   89,235                205,000
      Deposit on sales contract                                          24,166                      -
      Assets distributable to stockholders                                    -                 (1,761)
                                                           ---------------------  ---------------------

    Net cash (used in) operating activities                          (2,130,551)            (1,407,296)
                                                           ---------------------  ---------------------

CASH FLOWS FROM INVESTMENT ACTIVITIES:
  Purchase of inventory                                                 (41,279)                     -
  Purchases of investments                                               (5,374)                (8,711)
  Proceeds from sales of investments                                    174,896              1,218,141
  Proceeds from sale of equipment                                         7,308                  6,269
  Additions to database content and software costs                     (664,213)            (1,124,786)
  Additions to furniture and equipment                                  (58,607)               (21,186)
  Dispositions of equipment                                              41,692                    949
                                                           ---------------------  ---------------------

    Net cash (used in) provided by investment activities               (545,577)                70,676
                                                           ---------------------  ---------------------
</TABLE>

                                                                     (continued)


    The accompanying notes are an integral part of these condensed consolidated
                              financial statements


                                        6
<PAGE>
<TABLE>
<CAPTION>
ITIS HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)


                                                              For the Nine Months Ended September 30,
                                                           --------------------------------------------
                                                                   2002                    2001
                                                           ---------------------  ---------------------
<S>                                                        <C>                    <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
  Bank overdraft                                           $             14,236   $            113,353
  Proceeds from notes payable                                         1,075,000              1,022,617
  Proceeds from imputed note payable                                  1,939,500                      -
  Payments on notes payable                                            (366,901)               (57,893)
  Payments received on notes receivable                                       -                176,365
  Proceeds from sale of common stock                                          -                 11,836
  Shareholder contribution to paid in capital                                 -                 40,991
  Distribution of Planet Resources assets and liabilities                     -                 13,880
                                                           ---------------------  ---------------------

    Net cash provided by financing activities                         2,661,835              1,321,149
                                                           ---------------------  ---------------------

NET INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS                                                           (14,293)               (15,471)

CASH AND CASH EQUIVALENTS, beginning of period                           34,165                 24,992
                                                           ---------------------  ---------------------

CASH AND CASH EQUIVALENTS, end of period                   $             19,872   $              9,521
                                                           =====================  =====================


SUPPLEMENTAL CASH FLOW INFORMATION:
  Cash paid for interest                                   $            245,295   $            157,478
  Cash paid for income taxes                               $                  -   $                  -
  Non cash investing and financing transactions:
    Fair value of warrants issued                          $            191,977   $             46,000
    Fair value of common stock issued as
      note reduction                                       $            125,000   $            250,000
    Fair value of common stock issued as
      compensation for goods and services                  $            549,500   $             23,248
    Notes receivable issued for exercise
      of stock options                                     $                  -   $            217,700
    Unrealized gains (losses) on investments               $           (149,379)  $            245,120
</TABLE>


    The accompanying notes are an integral part of these condensed consolidated
                              financial statements


                                        7
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

NOTE 1 - BUSINESS:

Under a Plan and Agreement of Merger dated August 26, 2002, as approved by
resolution adopted by the Board of Directors of ITIS Inc. on that date and by
written consent of a majority of the voting interests of ITIS Inc. on September
18, 2002, ITIS Inc., a Delaware corporation, merged into its wholly owned
subsidiary, ITIS Holdings Inc., a Nevada corporation, effective September 18,
2002. ITIS Holdings Inc. became the surviving corporation after the effective
date of the merger. Under the terms of the Agreement, each issued share of the
common stock of the terminating corporation, ITIS Inc., shall be converted into
one-tenth (0.1) share of the surviving corporation, ITIS Holdings Inc. Each
issued share of the preferred stock of ITIS Inc. shall be converted to one share
of preferred stock of ITIS Holdings Inc. ITIS Holdings Inc. has authority to
issue 200,000,000 shares of stock, of which 150,000,000 are common stock, $.001
par value per share, and 50,000,000 are preferred stock, $.001 par value per
share. All prior period share amounts reflected in the condensed consolidated
financial statements and notes thereto have been adjusted to account for the
one-for-ten reverse split in accordance with the Plan.

ITIS Holdings Inc. provides automated litigation support through its subsidiary,
ITIS, Inc., a Texas corporation, which conducts business as Litidex(R).
Litidex(R) currently focuses its attention on litigation support services
related to lawsuits involving stock manipulation of publicly held companies.

PharmHouse Inc. represents a new business segment and newly formed subsidiary of
ITIS. PharmHouse concentrates its efforts in the business of pharmacy
operations. PharmHouse, originally formed as a subsidiary of Litidex(R), became
a wholly owned subsidiary of ITIS in May 2002. In September 2002 PharmHouse
began operation of two pharmacies that focus primarily on specialized
medications. Another new subsidiary, OnPoint Solutions Inc., provides technical
support for PharmHouse and Litidex(R) in the development and operation of the
pharmacies of PharmHouse and in software and hardware services for both
PharmHouse and Litidex(R). OnPoint also provides the RightScript software used
by PharmHouse.

Prior to October 31, 2001, ITIS also provided training and support with federal
regulations through its wholly owned subsidiary, Venco Compliance, Inc., and
marketed a CD-Rom product and Website that assisted in medical billing through
Compass Data Systems, Inc. As more fully disclosed in note 6, on October 31,
2001, the stock of Venco was sold and transferred by ITIS to Venco's former
shareholders and the operations and management of Compass Data Systems were
turned over to current Compass employees.

Until August 15, 2002, ITIS provided electronic publishing services and database
content through Internet sites with subscription access, licenses and
transaction fees for databases through its subsidiaries, GoverNet Affairs, Inc.,
National Law Library, Inc. and Brief Reporter, LLC. The content of the databases
consisted of pending legislation, statutory law, rules and case law at the
federal and state levels. As further disclosed in note 6, management of ITIS
transferred the customers of the Internet Services subsidiary GoverNet Affairs,
Inc. to another provider in June 2002. While ITIS legally sold the Internet
Services operations of National Law Library, Inc. and Brief Reporter, LLC in
August 2002, the sale has been recorded using the deposit method of accounting
because, in management's opinion, the criteria required to permit revenue
recognition in relationship to this sale have not been met at the present time
(see note 6). ITIS no longer maintains any operations in the Internet Services
segment.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation-In management's opinion, the accompanying unaudited
interim consolidated financial statements of ITIS have been prepared by


                                        8
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

management of ITIS in accordance with generally accepted accounting principles
in the U.S. (GAAP) and the rules adopted by the United States Securities and
Exchange Commission (SEC) and should be read in conjunction with the audited
consolidated financial statements and notes thereto contained in ITIS's latest
Annual Report filed with the SEC on Form 10-K at December 31, 2001. As permitted
under these rules, certain footnotes or other financial information that are
normally required under annual, audited financial statements have been condensed
or omitted.  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 in accordance with GAAP 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.

Revenue Recognition-Revenues consist of service fees charged for the automated
litigation support services of Litidex(R) and fees charged for products sold in
the pharmacies of PharmHouse. Revenues are recognized in accordance with the
provisions of Staff Accounting Bulletin No. 101, Revenue Recognition in
Financial Statements, as follows:

     Product Revenue-Revenue from the sales of products is recognized after
     ---------------
     shipment of the products and fulfillment of acceptance terms, if any.

     Services Revenue- ITIS subsidiary Litidex(R) contracts with law firms to
     ----------------
     provide litigation support services. These generally include determining if
     the law firm's potential client has a viable cause of action, providing the
     law firm with a database containing securities litigation data, and the
     development of a --specific case-related database. Litidex(R) does not have
     any future delivery requirements with respect to the first two elements and
     the revenue associated with those elements is recognized when evidence
     exists that indicates that an arrangement with the attorney exists. This
     evidence usually includes receipt of some form of non-refundable
     compensation. The third element of the arrangement requires development of
     a case-specific database of information at a future date. Revenues
     associated with this third element are deferred and recognized as actual
     document production occurs. This method of revenue recognition is
     consistent with the method adopted by the Company in the second quarter of
     2001 when Litidex(R) commenced providing this type of litigation service.

     An average of 22% of litigation support revenues are deferred as a
     substantial portion of the work required has been performed to complete the
     first two elements of the arrangement. Management has calculated the
     deferral amount based upon the future estimated work to complete the
     services under the contract, which includes the development of a case
     specific litigation database in an electronic format with the client's
     information as it becomes available. Management recognizes revenues from
     these services as they are performed. In determining the amount of income
     to defer, management consulted with the experienced personnel of Litidex(R)
     and others regarding the number of documents likely to be processed over
     the course of the litigation support project and an appropriate retail
     price to assign to these services. A consensus was reached that 100,000
     pages of data was an appropriate estimate to use, and management
     accordingly applied a fair market value per page processing charge to
     100,000 pages of production to determine the deferral amount. While it is
     virtually impossible to predict the length of time a case may be in
     litigation, it is reasonable to arrive at a projected number of documents
     to be processed as part of a litigation support project using the Company's
     extensive experience in providing these services.


                                        9
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

     As disclosed in our December 31, 2001 Form 10-K, and March 31and June 30,
     2002 Form10-Q's, management contacted the SEC on a voluntary basis and had
     numerous discussions with the SEC regarding revenue recognition with
     respect to the litigation services of subsidiary Litidex(R). As a result of
     those discussions and further research into this matter, management has
     concluded that the method of accounting used by the Company to record its
     litigation services revenues is in accordance with generally accepted
     accounting principles. However, on August 30, 2002 the Staff of the
     Securities & Exchange Commission requested, on a voluntary basis,
     additional information regarding the Company's position. The Company fully
     complied with this request on September 17, 2002.

Reclassification of Accounts-Certain reclassifications have been made to prior
year balances for discontinued operations to conform to current year
presentation with no effect on net income.

Concentration of Credit Risk- The primary source of the automated litigation
support revenues of subsidiary Litidex(R) at the present time is the law firm of
Christian Smith & Jewell. At September 30, 2002, Christian Smith & Jewell owed
Litidex(R) $2,650,216 for automated litigation support services, which
represents 100% of the accounts receivable of Litidex(R) and approximately 98%
of the accounts receivable of ITIS. Although the Company expects to collect
these receivables, there are no scheduled payments required by the agreements
with the law firm, and collections to date have been irregular. Management has
elected not to provide an allowance for doubtful accounts for these receivables
due to the nature of the agreements, which, in management's opinion, provides
assurance for the ultimate collection of the fees due. Management has classified
a portion of the receivable as long term based upon expected receipts within the
next twelve months.

Basic Loss Per Share-Basic loss per share has been computed by dividing net loss
by the weighted average number of shares outstanding.   Options outstanding at
September 30, 2002 and 2001 have not been included because they are
anti-dilutive.  Accordingly, basic and diluted loss per share is the same for
all periods presented.

NOTE 3 - DISCONTINUED OPERATIONS

SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets",
addresses financial accounting and reporting for the impairment or disposal of
long-lived assets as well as expands the qualifications of discontinued
operations and is effective for financial statements issued for fiscal years
beginning after December 15, 2001. ITIS has elected to early adopt this
statement.

During the year ended December 31, 2001, ITIS recorded a loss on discontinued
operations of $897,418 for the disposal of Compass Data Systems and $73,950 for
the disposal of Venco Compliance as more fully disclosed in note 6. For the
three and nine-month periods ended September 30, 2001, losses related to these
discontinued operations amounted to $10,937 and $33,851, respectively, for Venco
Compliance, and $254,697 and $865,850, respectively, for Compass Data Systems.

A loss from discontinued operations of $163,475 was recorded for the three and
nine months ended September 30, 2002 for the disposal of GoverNet Affairs. For
the three and nine-month periods ended September 30, 2001, losses related to the
discontinued operations of GoverNet Affairs amounted to $141,555 and $423,385,
respectively.


                                       10
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

Income from discontinued operations of $2,248 and $11,075 was recorded for the
three and nine months ended September 30, 2002, respectively, for the disposal
of the consolidated Internet Services operations of National Law Library and
Brief Reporter. For the three and nine-month periods ended September 30, 2001,
losses related to the discontinued consolidated operations of National Law
Library and Brief Reporter amounted to $162,607 and $536,881, respectively.

NOTE 4-BUSINESS SEGMENTS

For the quarter and nine months ended September 30, 2001, ITIS and its
subsidiaries were engaged in the business of providing Internet services,
compliance and safety training materials, and automated litigation support
services. As of October 31, 2001 we no longer provide compliance and safety
training materials, and results from these activities have been classified as
discontinued operations. Further, the results of Internet Services operations of
subsidiary GoverNet Affairs, which discontinued operations in June 2002, and the
results of the consolidated Internet Services operations of subsidiaries
National Law Library and Brief Reporter, which were sold in August 2002, are
classified as discontinued operations. As of August 15, 2002, ITIS no longer has
an ongoing Internet Services operating segment. However, as a result of the July
29, 2002 sale by National Law Library of a copy of data to American Legal Data,
LLC, (see note 6), National Law Library as a corporate entity continues to have
sales proceeds and some ongoing expenses. The results of this activity have been
classified as "Database Management". The new segment, "Pharmacy Operations,"
reflects results of new subsidiary PharmHouse, which began operation of two
pharmacies in September 2002. Corporate overhead amounts have been reallocated
for all periods to the continuing and new business segments. Accordingly,
financial results from continuing operations are as follows:

<TABLE>
<CAPTION>
                                            SEGMENT INFORMATION
                                            ----------------------

                                            INCOME
NINE MONTHS ENDED                           (LOSS) FROM   INTEREST  TOTAL           DEPRECIATION/
SEPTEMBER 30, 2002             NET SALES    OPERATIONS    EXPENSE   ASSETS          AMORTIZATION
----------------------------  ------------  ------------  --------  --------------  -------------
<S>                           <C>           <C>           <C>       <C>             <C>
Database Management           $    135,925  $(1,549,304)  $384,670  $   11,449,845  $     218,686
Automated Litigation Support       758,685     (567,387)   206,812       3,239,582        428,417
Pharmacy Operations                    859     (239,560)    24,651         255,916          3,773
                              ------------  ------------  --------  --------------  -------------
Total, ITIS Holdings Inc.     $    895,469  $(2,356,251)  $616,133  $   14,945,343  $     650,876
                              ============  ============  ========  ==============  =============

                                            INCOME
NINE MONTHS ENDED                           (LOSS) FROM   INTEREST  TOTAL           DEPRECIATION/
SEPTEMBER 30, 2001             NET SALES    OPERATIONS    EXPENSE   ASSETS          AMORTIZATION
----------------------------  ------------  ------------  --------  --------------  -------------
Database Management           $          -  $  (431,426)  $229,422  $   13,847,161  $     420,519
Automated Litigation Support     2,130,400     (750,997)    14,981       2,590,745        816,823
Pharmacy Operations                      -            -          -               -              -
                              ------------  ------------  --------  --------------  -------------
Total, ITIS Holdings Inc.     $  2,130,400  $(1,182,423)  $244,403  $   16,437,906  $   1,237,342
                              ============  ============  ========  ==============  =============
</TABLE>


                                       11
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

<TABLE>
<CAPTION>
                                            INCOME
THREE MONTHS ENDED                          (LOSS) FROM   INTEREST  TOTAL           DEPRECIATION/
SEPTEMBER 30, 2002             NET SALES    OPERATIONS    EXPENSE   ASSETS          AMORTIZATION
----------------------------  ------------  ------------  --------  --------------  -------------
<S>                           <C>           <C>           <C>       <C>             <C>
Database Management           $    133,276  $  (226,158)  $140,650  $   11,449,845  $      62,086
Automated Litigation Support       111,907     (549,059)   107,352       3,239,582         35,553
Pharmacy Operations                    859     (183,115)    24,651         255,916          3,742
                              ------------  ------------  --------  --------------  -------------
Total, ITIS Holdings Inc.     $    246,042  $  (958,332)  $272,653  $   14,945,343  $     101,381
                              ============  ============  ========  ==============  =============


                                            INCOME
THREE MONTHS ENDED                          (LOSS) FROM   INTEREST  TOTAL           DEPRECIATION/
SEPTEMBER 30, 2001            NET SALES     OPERATIONS    EXPENSE   ASSETS          AMORTIZATION
----------------------------  ------------  ------------  --------  --------------  -------------
Database Management           $          -  $  (135,965)  $ 68,967  $   13,847,161  $     140,308
Automated Litigation Support     1,280,400      527,567     14,969       2,590,745        272,595
Pharmacy Operations                      -            -          -               -              -
                              ------------  ------------  --------  --------------  -------------
Total, ITIS Holdings Inc.     $  1,280,400  $   391,602   $ 83,936  $   16,437,906  $     412,903
                              ============  ============  ========  ==============  =============
</TABLE>


NOTE 5-IMPAIRMENT OF LONG-LIVED ASSETS:

Because ITIS had not obtained substantial new capital or long-term funding and
in consideration of significant losses by the Company, especially in the
Internet Services segment, management recorded an impairment charge to our
database assets in the amount of $2,741,955 at December 31, 2001 based on
valuation estimates using net cash flows projected over the estimated useful
lives of the assets.

During the quarter ended September 30, 2002, ITIS subsidiaries National Law
Library, Brief Reporter and Litidex(R) completed the sale of their data and
Internet domains, as well as the trademark for "ITISLAW," the pending
application rights for National Law Library, and the operations of Brief
Reporter in Charlottesville, Virginia, to JuriSearch Holdings, LLC (see note 6).
Payments for the assets will be made monthly over the next twenty-five years
based on a percentage of subscriber income, with a guaranteed monthly minimum
for the first five years. Based on the guidelines of SEC Staff Accounting
Bulletin No. 101, Revenue Recognition in Financial Statements, it is the opinion
of management that the criteria required to permit revenue recognition in
relationship to this sale have not been met at the present time. Specifically,
full delivery of the database assets has not yet occurred (buyer has the right
of access to the ITIS server for a period of six months for the purpose of
copying data from that website; in the interim, National Law Library is
maintaining the site at buyer's expense), and the seller's price to the buyer is
not fixed or readily determinable at the date of this filing (inadequate
information is currently available to reasonably project future payments to be
made based on a percentage of subscriber income). Accordingly, utilizing the
deposit method of accounting, management has reclassified the database assets
from "fixed assets and intangibles" to "assets held for sale" on the September
30, 2002 balance sheet, and has accounted for payments received on the contract
through September 30, 2002 as "deposit on sales contract".


                                       12
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets,"
addresses financial accounting and reporting for the impairment of long-lived
assets to be disposed of by sale. Assets classified as held for sale are to be
reported at the lower of their carrying amount or fair value less cost to sell,
and, if at the date of commitment to the plan to sell the asset, the carrying
amount of the assets to be sold exceeds the fair value of those assets less the
cost to sell, an impairment loss should be recognized. Management hired a third
party to prepare valuation estimates of future net cash flows projected over the
twenty-five year life of the sales contract, and, based on these estimates,
management has determined that no additional impairment exists at this time.
Management's estimate of the fair value of these assets less cost to sell will
be re-evaluated by an independent third party at December 31, 2002 and, if
necessary, in subsequent periods to determine if it has changed until, in
management's opinion, the criteria has been met to permit revenue recognition
and the recording of cost in relationship to the sale. Subsequent decreases in
the fair value less cost to sell the assets, if any, will be reported as
adjustments to the carrying amount of the assets. Losses on sale of assets for
the nine months and quarter ended September 30, 2002 would reflect an increase
of $8,805,303 in both periods had management not recorded this sale using the
deposit method of accounting, and had instead recorded the sale price at the
guaranteed minimum payment total of $2,423,750 less $11,229,053 in cost basis of
the assets sold. This would result in net losses for the nine months and quarter
ended September 30, 2002 in the amount of $13,138,801 and $10,563,707,
respectively.

Management believes that the evaluation of potential future impairment of its
assets held for sale and other intangibles continues to represent an estimate
made by management that is subject to impact in the near term in accordance with
the American Institute of Certified Public Accountant's Statement of Position
(SOP) 94-6 "Disclosure of Certain Significant Risks and Uncertainties".
Accordingly, evaluation of impairment of our assets held for sale and other
intangibles will continue to be addressed on a quarterly basis.

NOTE 6-ACQUISITIONS & DISPOSITIONS:

Compass Data Systems

On July 27, 2000, ITIS's board of directors approved the purchase of a
controlling interest in Compass Data Systems, Inc. (Compass), a private Nevada
corporation that provides electronic information publishing services in a
completely searchable information database to industries and organizations.
Stock purchase agreements by and between ITIS and three stockholders of Compass
were signed with each of the sellers effective as of October 1, 2000. Under the
terms of these stock purchase agreements, ITIS agreed to issue an aggregate of
1,676,105 pre-reverse split restricted, unregistered shares of ITIS's common
stock, valued at approximately $2.3 million, for approximately 63% of the total
outstanding shares of Compass.  As of September 30, 2001, 1,670,378 pre-reverse
split shares had been issued to the selling shareholders. The issuances of ITIS
stock were made in reliance upon the Section 4(2) private placement exemption
from registration. None of the sellers received registration rights for the ITIS
shares they received in this transaction. The acquisition was accounted for
under the purchase method of accounting. The total purchase price of $2,294,425
included ITIS's allocation of $1,294,425 to database content and software costs
and $1 million to a contractual agreement, based on the results of an
independent appraisal.

Under the terms of the purchase agreement dated October 2000, sixty-eight
percent of Compass stock was to be delivered; however, the required percentage
was never received. Further, it appears that the three Compass shareholders
never took appropriate action with respect to the sale of their shares of
Compass stock.


                                       13
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

In August 2001, certain shareholders of Compass filed suit in Washoe County,
Nevada against the aforementioned three Compass shareholders, alleging that the
stock the three individuals delivered to ITIS was not valid, and that as a
result, ITIS has no ownership interest in Compass. The wrongful actions as
alleged in the suit relate to stock ownership of a predecessor of Compass. ITIS
is not a party to this lawsuit and has placed the shares of Compass received in
the transaction in the registry of the Nevada Court. Additionally, ITIS has
canceled the restricted shares of ITIS that were issued to the three
individuals. As of October 31, 2001, the operations and management of Compass,
previously reported as a subsidiary of ITIS, were turned over to current Compass
employees. As a result, ITIS wrote off  $1,229,704 in assets at September 30,
2001, representing the net book value of the Compass database content and
software costs originally valued at $1,294,425. The $1 million value assigned to
a contractual agreement of Compass at the time of acquisition had been fully
amortized as of the date operations were returned. A loss on disposition of
$897,418 for the disposition of Compass was recorded in the quarter ended
December 31, 2001. For the three and nine-month periods ended September 30,
2001, losses related to the operations of Compass Data Systems amounted to
$254,697 and $865,850, respectively. These losses have been reported as
"discontinued operations" in accordance with SFAS 144.

Venco Compliance

On October 1, 2000, ITIS purchased of all of the outstanding stock of Venco
Compliance, Inc., a private Texas corporation in the business of selling
compliance and safety training information to businesses such as dry cleaners
and others that deal with hazardous chemicals, biomaterials and other regulated
substances. In connection with this acquisition, ITIS issued an aggregate of
100,000 unregistered pre-reverse split shares of its common stock at closing on
October 1, 2000, valued then at $90,600, to Donald E. and Cathryn V. Tull. These
issuances were made in reliance upon Section 4(2) private placement exemption
from registration.  Neither of the two sellers received registration rights for
the shares of ITIS they received in this transaction. The results of operations
of Venco Compliance and the fair value of tangible and intangible assets
acquired and liabilities assumed have been included in ITIS's consolidated
financial statements as of the acquisition date.

The acquisition was accounted for under the purchase method of accounting and
resulted in $90,600 of the purchase price being allocated to goodwill. On
October 31, 2001, the stock of Venco was sold and transferred by ITIS to its
former shareholders, Donald E. and Cathryn V. Tull. ITIS received $1,000 on
December 1, 2001 and will receive 5% of any future revenues of Venco in excess
of $10,000 per month. A loss on disposition of $73,950 was recorded in the
quarter ended December 31, 2001. For the three and nine-month periods ended
September 30, 2001, losses related to the operations of Venco amounted to
$10,937 and $33,851, respectively. These losses have been reported as
"discontinued operations" in accordance with SFAS 144. ITIS has not received any
amounts related to the agreement to receive 5% of any future revenues of Venco
in excess of $10,000 per month and no receipts under this agreement are expected
in the near term.

GoverNet Affairs

On November 15, 1999, ITIS's board of directors approved the purchase of
GoverNet Affairs, Inc., a Georgia corporation that owned and operated an
Internet site and connected databases that provided subscribers with a Federal
and state legislative tracking and monitoring system. In connection with this
acquisition, ITIS issued an aggregate of 446,352 pre-reverse split shares of
common stock in exchange for all the outstanding stock of GoverNet Affairs. The
total purchase price of $1,341,400 includes the estimated fair value of common


                                       14
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

stock issued of $1.3 million, $22,000 of promissory notes payable to two
stockholders of GoverNet Affairs, and assumption of $19,400 of other debt. The
acquisition was accounted for under the purchase method of accounting and
resulted in $1,271,854 of the purchase price being allocated to developed
technology, based on the results of an independent appraisal. The results of
operations of GoverNet Affairs and the fair value of tangible and intangible
assets acquired and liabilities assumed have been included in ITIS's
consolidated financial statements as of the acquisition date.

As part of the purchase agreement to acquire GoverNet Affairs, options to
purchase 320,000 pre-reverse split shares of ITIS's common stock were granted to
the former stockholders of GoverNet Affairs. These stock options were
exercisable on August 31, 2000, August 31, 2001, and August 31, 2002 provided
certain revenue and earnings targets were achieved in each of the three
preceding twelve-month periods. The options are subject to an exercise price of
$2.94 per share. None of these options were exercised, and all expired on August
31, 2002.

In June 2002, management of ITIS transferred the customers of GoverNet Affairs
to another provider for no monetary or other consideration and ceased operation
of this subsidiary, which had never reached profitability. As a result, ITIS
wrote off $593,529 in assets at June 30, 2002, representing the net book value
of the developed technology of GoverNet Affairs, originally valued at
$1,271,854. A loss on disposition of $607,656 and a loss from discontinued
operations of $163,475 were recorded in the quarter ended June 30, 2002. For the
three and nine-month periods ended September 30, 2001, losses related to the
operations of GoverNet Affairs amounted to $141,555 and $423,385, respectively.
These losses have been reported as "discontinued operations" in accordance with
SFAS 144.

National Law Library Assets and Brief Reporter

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 dollars,
of which $91,000 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. At September 30, 2002 the principal
balance owed by American Legal Data was $1,892,481. During the quarter ended
September 30, 2002, $16,519 and $15,481 were collected in principal and
interest, respectively, related to this note.

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 September 30, 2002, 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.

National Law Library, a Texas corporation and wholly owned subsidiary of ITIS,
was formed in November 1998 for the purpose of developing and marketing an
Internet destination to be used for legal research. Commercial operations began
in January 1999. On December 10, 1999, ITIS's Board of Directors approved


                                       15
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

National Law Library's purchase of Brief Reporter, LLC, a Virginia limited
liability company which owns and operates an Internet site and a connected
database containing appellate briefs and trial memoranda written by attorneys
for certain significant cases in all Federal and state jurisdictions. In
connection with this acquisition, ITIS issued an aggregate of 483,325
pre-reverse split shares, valued at $1,000,000, in exchange for all of the
outstanding interests of Brief Reporter. The acquisition was accounted for under
the purchase method of accounting and resulted in $710,206 and $250,000 of the
purchase price being allocated to database content and developed technology,
respectively. The results of operations of Brief Reporter and the fair value of
tangible and intangible assets acquired and liabilities assumed have been
included in ITIS's consolidated financial statements as of the acquisition date.

On August 27, 2002, ITIS subsidiaries National Law Library, Brief Reporter and
Litidex(R) completed the sale of their data and Internet domains, as well as the
trademark for "ITISLAW," the pending application rights for National Law
Library, and the operations of Brief Reporter in Charlottesville, Virginia, to
JuriSearch Holdings, LLC. The Asset Purchase Agreement includes a Security
Agreement that grants to ITIS a security interest in all intellectual property,
customers, equipment, machinery, furniture and fixtures, supplies and assets
being purchased. Payments for the assets will be made monthly over the next
twenty-five years based on a percentage of subscriber income, with guaranteed
monthly minimums, totaling in aggregate $2,423,750, over the first five years.
At September 30, 2002, the outstanding balance of guaranteed payments amounted
to $2,399,584, as payments totaling $24,166 were received in the quarter ended
September 30, 2002.

Based on the guidelines of SEC Staff Accounting Bulletin No. 101, Revenue
Recognition in Financial Statements, it is the opinion of management that the
criteria required to permit revenue recognition in relationship to this sale
have not been met at the present time. Specifically, full delivery of the
database assets has not yet occurred (buyer has the right of access to the ITIS
server for a period of six months for the purpose of copying data from that
website; in the interim, National Law Library is maintaining the site at buyer's
expense), and the seller's price to the buyer is not fixed or readily
determinable at the date of this filing (inadequate information is currently
available to reasonably project future payments to be made based on a percentage
of subscriber income). Accordingly, utilizing the deposit method of accounting,
management has reclassified the database assets from "fixed assets and
intangibles" to "assets held for sale" on the September 30, 2002 balance sheet,
and has accounted for payments received on the contract through September 30,
2002 as "deposit on sales contract". When, in management's opinion, the criteria
has been met to permit revenue recognition and the recording of cost in
relationship to this sale, the assets held for sale and the deposit on sales
contract will be reclassified to the statement of operations and a gain or loss
will be recorded on the sale. Losses on sale of assets for the nine months and
quarter ended September 30, 2002 would reflect an increase of $8,805,303 in both
periods had management not recorded this sale using the deposit method, and had
instead recorded the sale price at the guaranteed minimum payment total of
$2,423,750 less $11,229,053 in cost basis of the assets sold. This would result
in net losses for the nine months and quarter ended September 30, 2002 in the
amount of $13,138,801 and $10,563,707, respectively.

Management has recorded a loss on disposition of the operations of Brief
Reporter in the quarter ended September 30, 2002 in the amount of $487,177,
which primarily represents the net book value of the Brief Reporter database
content and developed technology. For the three and nine-month periods ended
September 30, 2002, income related to the consolidated operations of National
Law Library and Brief Reporter amounted to $2,248 and $11,075, respectively,
while losses for the corresponding periods in 2001 amounted to $162,607 and


                                       16
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

$536,881, respectively. The operations of National Law Library related to
Internet Services and the operations of Brief Reporter have been reported as
"discontinued operations" in accordance with SFAS 144.

PharmHouse Net Revenue Interest

On July 1, 2002, ITIS and its wholly owned subsidiary PharmHouse entered into a
Purchase Agreement and Grant of Net Revenue Interest with Rainmaker Ventures,
Ltd., a Texas limited partnership in which Hunter M.A. Carr, W. Paul Thayer and
George Roberts are limited partners. Messrs. Carr, Thayer and Roberts are
directors of ITIS and Mr. Carr is the President, Chief Executive Officer, and
Chairman of the Board of ITIS. Under the terms of the Purchase Agreement,
Rainmaker committed to fund up to $2,500,000 to ITIS in exchange for a 50%
interest in the net revenues of the first 14 specialty medication pharmacy
locations opened by PharmHouse. The Purchase Agreement also grants to Rainmaker
an option to acquire a 50% net revenue interest in an additional 4 stores in
exchange for additional funding of $500,000 to ITIS. As of September 30, 2002,
Rainmaker has funded $1,939,500 of the $2,500,000 purchase price. Although it is
the intent of the parties that a material amount of the purchase price will be
used for the purpose of constructing and opening separately licensed specialty
medication pharmacy locations, the Agreement does not place any restrictions on
the use of such funds by ITIS. The amount of funding of the $2,500,000 is
dependent upon the opening of at least one separately licensed specialty
medication pharmacy for each $166,667 invested by Rainmaker as of the date of
the funding request. While only two pharmacies have begun operations as of the
filing date of this Form 10-Q, Rainmaker has honored all funding requests made
by ITIS. Due to the related- party nature of this transaction and pursuant to
EITF 88-18, management has recorded the funding from Rainmaker as a long-term
liability of ITIS rather than as deferred revenue, and has recorded accrued
interest payable in regard to this liability in the amount of $24,651 during the
quarter ended September 30, 2002. At the time the pharmacies begin to generate
net revenues to distribute to Rainmaker, ITIS will apply those payments to the
long-term liability and accrued interest payable until the recorded liabilities
are extinguished. Payments made thereafter will be recorded as an ordinary
operating expense.


                                       17
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

NOTE 7-NOTES PAYABLE AND FINANCING AGREEMENTS:

The following table summarizes the notes payable and financing agreements of
ITIS excluding a disputed $500,000 note to Cootes Drive L.L.C. (see note 8).

<TABLE>
<CAPTION>
                                DATE OF       SEPTEMBER 30,   DECEMBER 31,
LENDER                          ISSUANCE          2002            2001
---------------------------  --------------  ---------------  -------------
<S>                          <C>             <C>              <C>
Hunter M.A. Carr, CEO        Various         $    2,150,117   $   2,150,117
George A. Roberts, Director  Various              1,840,000       1,590,000
W. Allyn Hoaglund, Director  October 2000            50,000          50,000
Phoenix Energy               January 2001                 -         100,000
Stephen A. Fonicello         February 2001                -          25,000
W. Paul Thayer, Director     Various                182,500         132,500
Frost National Bank          February 2002           20,050          25,434
Houston RPM, L.C.            March 2002             413,483               -
Rainmaker Ventures, Ltd.     July 2002            1,939,500               -
                                             ---------------  -------------
                                                  6,595,650       4,073,051
Less long-term portion to:
Hunter M.A. Carr, CEO                            (2,150,117)    (2,150,117)
Rainmaker Ventures, Ltd.                         (1,939,500)             -
                                             ---------------  -------------

                                             $    2,506,033   $   1,922,934
                                             ===============  =============
</TABLE>

As of September 30, 2002 and December 31, 2001, the total principal amount owed
to Hunter Carr, CEO of ITIS, was $2,150,117. Accrued but unpaid interest
amounted to $316,873 and $160,196 at September 30, 2002 and December 31, 2001,
respectively. Prior to May 22, 2002, notes payable to Mr. Carr bore interest at
the rate of prime plus two percent per year, payable in cash on demand after one
year.  At Mr. Carr's option and with 30 days written notice, the notes could be
repaid in common stock of ITIS at a discounted price based on the lowest price
at which ITIS had sold its common stock during the one-year period preceding the
exercise of this option.  On May 22, 2002, a new note was issued to Mr. Carr in
the amount of $2,150,117 as a renewal and consolidation of all prior notes. The
new note bears interest at the rate of 18% per year, and is payable on demand
after one year.  In connection with the new note, ITIS issued detachable
warrants to Mr. Carr to purchase up to 2,464,977 shares of common stock of ITIS
at $.96 per share and cancelled any and all rights to convert principal and
interest of the prior notes to common stock. Expense of $99,074 related to the
issuance of these warrants was recorded in May 2002.With respect to these notes
payable, Mr. Carr has provided written commitment to ITIS to provide forbearance
and extend the due date on such note to at least July 15, 2003, if to demand
payment would impair ITIS's ability to meet its other existing liabilities and
commitments. Management believes that to demand payment would impair ITIS's
ability to meet other obligations and therefore, the note has been classified as
long-term.

In October 2000, February 2001, and March 2002, ITIS executed demand notes for
$400,000, $190,000, and $250,000 respectively, in favor of George A. Roberts, a
member of its board of directors. The notes bore interest at the rate of prime
plus two percent per year, payable in cash on demand after one year. At the
option of the holder and with 30 days written notice, the notes could be repaid


                                       18
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

in common stock of ITIS at a discounted price based on the lowest price at which
ITIS has sold its common stock during the one-year period preceding the exercise
of this option. On October 24, 2001, ITIS wholly owned subsidiary ITIS, Inc., a
Texas corporation that conducts business as Litidex(R), executed a promissory
note for $1,000,000 in favor of Dr. Roberts. This note bore interest at an
annual fixed rate equal to the lesser of the maximum amount allowed by law as
adjusted from time to time or 18%, and was payable in full with accrued interest
after one year. The note was secured by a Security Agreement covering all
accounts, contract rights and general intangibles arising out of the litigation
support project among Litidex(R), the law firm of Christian Smith & Jewell, and
the law firm of O'Quinn, Laminack & Pirtle. Legal fees of $29,100 were paid from
the proceeds of this note. On May 22, 2002, a new note was issued to Dr. Roberts
in the amount of $1,840,000 as a renewal and consolidation of all prior notes.
The new note bears interest at the rate of 18% per year, and is payable on
demand after one year. In connection with the new note, ITIS issued detachable
warrants to Dr. Roberts to purchase up to 2,107,352 shares of common stock of
ITIS at $.96 per share and cancelled any and all rights to convert principal and
interest of the prior notes to common stock. Expense of $84,700 related to the
issuance of these warrants was recorded in May 2002.

In October 2000, ITIS executed a demand note for $50,000 in favor of W. Allyn
Hoaglund, a member of its board of directors.  The note bears interest at the
rate of prime plus two percent per year and is payable in cash on demand after
one year. At the option of the holder and with 30 days written notice, the note
may be repaid in common stock of ITIS at a discounted price based on the lowest
price at which ITIS has sold its common stock during the one-year period
preceding the exercise of this option.

On January 16, 2001, ITIS executed a demand promissory note in the amount of
$100,000 payable to Phoenix Energy Consulting Services, Inc. The note bore
interest at 10% per year and was payable in cash on demand after one year. At
the option of the holder and with 30 days written notice, the note could be
repaid in common stock of ITIS at a discounted price based on the lowest price
at which ITIS had sold its common stock during the one-year period preceding the
exercise of this option. On April 2, 2002, the lender exercised the option to
convert the note plus accrued interest into restricted common shares of ITIS.
Accordingly, ITIS issued 1,601,565 pre-reverse split restricted common shares to
the lender, such shares representing $100,000 in principal and $12,109 in
accrued and unpaid interest at April 2, 2002.

On February 28, 2001, ITIS executed a demand promissory note in the amount of
$25,000 payable to Stephen A. Fonicello. The note bore interest at the rate of
prime plus two percent per year and was payable in cash on demand after one
year. At the option of the holder and with 30 days written notice, the note
could be repaid in common stock of ITIS at a discounted price based on the
lowest price at which ITIS has sold its common stock during the one-year period
preceding the exercise of this option. On February 28, 2002, Mr. Fonicello
exercised the option to convert the note plus accrued interest into restricted
common shares of ITIS. Accordingly, on March 4, 2002, ITIS issued 192,384
pre-reverse split restricted common shares to Mr. Fonicello, such shares
representing $25,000 in principal and $2,068 in accrued and unpaid interest at
February 28, 2002.

On February 5, March 21, April 11, and May 16 of 2001, and on April 3, 2002,
ITIS executed demand promissory notes for $50,000, $70,000, $25,000, $12,500,
and $50,000 respectively, in favor of W. Paul Thayer, a member of the board of
directors. On May 31, 2001, ITIS repaid Mr. Thayer $25,000 of principal toward
these notes.  Prior to May 22, 2002, the notes bore interest at the rate of
prime plus two percent per year, payable in cash on demand after one year. At


                                       19
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

the option of the holder and with 30 days written notice, the notes could be
repaid in common stock of ITIS at a discounted price based on the lowest price
at which ITIS had sold its common stock during the one-year period preceding the
exercise of this option. On May 22, 2002, a new note was issued to Mr. Thayer in
the amount of $182,500 as a renewal and consolidation of all prior notes. The
new note bears interest at the rate of 18% per year, and is payable on demand
after one year.  In connection with the new note, ITIS issued detachable
warrants to Mr. Thayer to purchase up to 204,102 shares of common stock of ITIS
at $.96 per share and cancelled any and all rights to convert principal and
interest of the prior notes to common stock. Expense of $8,203 related to the
issuance of these warrants was recorded in May 2002.

In March 2002, ITIS wholly owned subsidiary National Law Library executed a
promissory note for $425,000 in favor of Houston RPM, L.C. The note bore
interest at 18% per year and was payable in monthly installments including
principal and interest commencing April 1, 2002. On April 17, 2002, National Law
Library executed a new promissory note for $675,441 in favor of Houston RPM,
L.C. This note refinanced $325,441 of the note dated March 1, 2002 in the
original amount of $425,000, and provided $350,000 in new funding to National
Law Library. The note bears interest at 18% per year and is payable in monthly
installments including principal and interest commencing May 17, 2002. The
amount of each monthly installment shall equal the total amount of credit card
receipts generated by National Law Library, but in no event shall the monthly
installment be less than $65,000. Any unpaid principal and accrued interest is
due in full on April 17, 2003. A Security Agreement covering all proceeds paid
or otherwise due from credit card companies and others pursuant to a Continuing
Service Agreement between Litidex(R) and National Law Library secures the note,
as do guarantees from ITIS Holdings Inc. and Litidex(R). At September 30, 2002,
the total principal amount owed to Houston RPM, L.C. was $413,483. During the
three and nine months ended September 30, 2002, National Law Library paid
$131,786 and $363,042 in principal and $21,251 and $51,403 in interest,
respectively, related to this note.

On July 1, 2002, ITIS and its wholly owned subsidiary PharmHouse entered into a
Purchase Agreement and Grant of Net Revenue Interest with Rainmaker Ventures,
Ltd., a Texas limited partnership in which Hunter M.A. Carr, W. Paul Thayer and
George Roberts are limited partners. Messrs. Carr, Thayer and Roberts are
directors of ITIS and Mr. Carr is the President, Chief Executive Officer, and
Chairman of the Board of ITIS. Under the terms of the Purchase Agreement,
Rainmaker committed to fund up to $2,500,000 to ITIS in exchange for a 50%
interest in the net revenues of the first 14 specialty medication pharmacy
locations opened by PharmHouse. The Purchase Agreement also grants to Rainmaker
an option to acquire a 50% net revenue interest in an additional 4 stores in
exchange for additional funding of $500,000 to ITIS. As of September 30, 2002,
Rainmaker has funded $1,939,500 of the $2,500,000 purchase price. Although it is
the intent of the parties that a material amount of the purchase price will be
used for the purpose of constructing and opening separately licensed specialty
medication pharmacy locations, the Agreement does not place any restrictions on
the use of such funds by ITIS. The amount of funding of the $2,500,000 is
dependent upon the opening of at least one separately licensed specialty
medication pharmacy for each $166,667 invested by Rainmaker as of the date of
the funding request. While only two pharmacies have begun operations as of the
filing date of this Form 10-Q, Rainmaker has honored all funding requests made
by ITIS. Due to the related- party nature of this transaction and pursuant to
EITF 88-18, management has recorded the funding from Rainmaker as a long-term
liability of ITIS rather than as deferred income, and has recorded accrued
interest payable in regard to this liability in the amount of $24,651 during the
quarter ended September 30, 2002. At the time the pharmacies begin to generate


                                       20
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

net revenues to distribute to Rainmaker, ITIS will apply those payments to the
long-term liability and accrued interest payable until the recorded liabilities
are extinguished. Payments made thereafter will be recorded as an ordinary
operating expense.

NOTE 8-FINANCING AGREEMENT WITH COOTES DRIVE L.L.C.

On November 20, 2000, ITIS entered into an equity line financing arrangement
with Cootes Drive LLC. This arrangement was the successor to an intermediate
financing agreement of May 11, 2000. The financing arrangement was in the form
of a Securities Purchase Agreement providing for the purchase by Cootes Drive of
up to $25 million worth of shares of common stock of ITIS over an 18-month
period. Under the terms of the Securities Purchase Agreement, ITIS could have
delivered a put to Cootes Drive specifying the dollar amount of shares ITIS
intended to sell on each put. The maximum amount that ITIS could have received
under the Securities Purchase Agreement was $25 million or a lesser amount
depending on the limitation on the number of shares Cootes Drive (and its
affiliates) were permitted to hold at any one time.  Certain conditions had to
be met before Cootes Drive was obligated to accept a put from ITIS. Due to
litigation in regard to the foregoing financing agreement (see note 9), it is
not expected that Cootes Drive would honor a put even if ITIS were to meet the
funding requirements in the future.

On December 5, 2000, ITIS executed a convertible promissory note in the face
amount of $500,000 in favor of Cootes Drive. The note was a demand note to
accrue interest at the rate of 5% per annum, and the principal could have been
converted to common stock of ITIS. In connection with this promissory note, ITIS
issued a warrant to Cootes Drive for 41,650 shares of ITIS common stock at an
exercise price of $0.288 per share.  A commission of $17,500 and legal fees of
$30,000 related to the equity line financing arrangement were paid from the
proceeds of this note. On December 5, 2000, ITIS also entered into a side letter
agreement that obligated Cootes Drive to provide an additional $500,000 on
January 14, 2001, in exchange for another convertible promissory note, on
similar terms.  This additional funding never occurred.

ITIS disputes the validity of the $500,000 convertible promissory note dated
December 5, 2000, on the grounds that this convertible note is a part of Cootes
Drive's efforts to defraud ITIS and to manipulate the price of ITIS's stock.
This convertible note and the associated funding transactions are all the
subject of ITIS's suit against Cootes Drive and others (see note 9). The note is
reflected on the accompanying balance sheet as a current liability entitled
"Disputed Note to Cootes Drive LLC."

On December 5, 2000, ITIS granted registration rights to Cootes Drive for up to
17,541,650 shares of common stock it could have acquired under the equity line
financing, the convertible promissory note financings and the warrants granted
in connection with all of these financings. ITIS filed a registration statement
with the SEC covering the resale of these shares that was declared effective on
January 11, 2001. Due to litigation as discussed herein (see note 9) and because
ITIS does not meet the funding requirements, it is not expected that any further
funding will occur from this source.

NOTE 9-COMMITMENTS AND CONTINGENCIES:

Litigation

On January 26, 2001, in order to protect ITIS and its stockholders, ITIS filed a
lawsuit in United States District Court for the Southern District of Texas,
Houston Division, against Southridge Capital Management and several other
defendants, including Cootes Drive LLC, an alleged "straw man," for damages
resulting from alleged stock manipulation, federal securities law violations,
civil RICO, fraud, violations of Texas securities laws and other Texas statutes,


                                       21
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

and conspiracy. The case also alleges misrepresentations by co-conspirators in
connection with certain funding transactions by the defendants with ITIS.  All
defendants filed a joint motion to transfer this case to New York to be
consolidated with the lawsuit filed against us as described below.  The United
States District Judge granted this motion and the case has been transferred to
the Southern District of New York.  The defendants filed motions to dismiss the
case, and on July 17, 2002, the Judge issued an opinion refusing dismissal. The
case is ongoing, and discovery is underway. We intend to prosecute the case
vigorously.  Our litigation counsel has advised us that the case is not
sufficiently advanced to evaluate the outcome, but that resolution of the suit
is anticipated in accordance with the Judge's July 17, 2002 ruling which states,
"the court is fully prepared to assist the parties in moving this case forward
to trial without undue delay."

On February 5, 2001, Cootes Drive LLC filed a suit against ITIS in the Southern
District of New York alleging breach of one of the financing agreements with us
for our failure to honor a conversion of its preferred shares to common stock.
The suit seeks monetary damages of $5,000 per day and seeks to compel ITIS to
issue shares of common stock to Cootes Drive LLC.  ITIS filed an answer to this
lawsuit. Cootes Drive LLC amended their complaint in order to add allegations
that ITIS is in default on a $500,000 promissory note in favor of Cootes Drive
LLC (the alleged default occurring after the filing of ITIS's suit against
Cootes Drive LLC and others); that ITIS has not honored a notice of redemption
of preferred shares held by Cootes Drive LLC in the amount of $2,214,012
(allegedly occurring after the filing of ITIS's suit against Southridge Capital
Management, Cootes Drive LLC, and others); and that ITIS defrauded Cootes Drive
by failing to disclose material information with respect to the background of an
officer and a director of ITIS.  ITIS's answer was timely filed on July 20,
2001. The preferred shares and the associated funding transactions at issue are
the subject matter of ITIS's suit against Southridge Capital Management and
others. ITIS intends to defend this case vigorously.  This case has been
consolidated with the ITIS case (above) and the parties have been realigned so
that ITIS is the plaintiff and Cootes Drive is the defendant. Litigation counsel
has advised us that the case is not sufficiently advanced to evaluate the
outcome, but that resolution of the suit is anticipated in accordance with the
Judge's July 17, 2002 ruling which states, "the court is fully prepared to
assist the parties in moving this case forward to trial without undue delay."

John M. O'Quinn, our Texas-based litigation counsel, has agreed to represent
ITIS and our directors, if necessary, in all of these lawsuits on a contingency
fee basis.

On June 4, 2001, Cootes Drive LLC filed a suit in Delaware against certain
directors of ITIS on behalf of itself as a holder of preferred stock and
allegedly derivatively on behalf of ITIS, alleging that the directors breached
their fiduciary duty to the stockholders by approving repayment in common stock
of loans made to ITIS by its directors. This suit was filed in the Court of
Chancery of Delaware in and for New Castle County. The suit has been dismissed
by Order of the Court entered February 15, 2002.

ITIS is also a party to other lawsuits related to matters normally incidental to
the Company's business. No individual case, or group of related cases presenting
substantially similar issues of law or fact, exceeds 10% of the Company's
current assets or is expected to have a material effect on the manner in which
the Company conducts its business.

NOTE 10-STOCKHOLDER'S EQUITY:

Common and Preferred Stock

On February 28, 2002, Stephen A. Fonicello, holder of a demand promissory note
dated February 28, 2001 in the principal amount of $25,000, exercised his option
to convert the note plus accrued interest into restricted common shares of ITIS.


                                       22
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

Accordingly, on March 4, 2002, ITIS issued 192,384 pre-reverse split restricted
common shares to Mr. Fonicello, such shares representing $25,000 in principal
and $2,068 in accrued and unpaid interest at February 28, 2002.

On April 2, 2002, Phoenix Energy Consulting Services, Inc., holder of a demand
promissory note dated January 16, 2001 in the principal amount of $100,000,
exercised the option to convert the note plus accrued interest into restricted
common shares of ITIS. Accordingly, on April 2, 2002, ITIS issued 1,601,565
pre-reverse split restricted common shares to the lender, such shares
representing $100,000 in principal and $12,109 in accrued and unpaid interest at
April 2, 2002.

On April 11, 2002, ITIS entered into an agreement with a vendor pursuant to
which ITIS issued 257,143 shares of pre-reverse split unregistered common stock,
valued at $18,000, as consideration for professional services rendered during
the 1st quarter of 2001.

On September 6, 2002, at the recommendation of the Compensation Committee and
with the approval of the Board of Directors, ITIS issued 1,214,001 shares of
unregistered common stock, valued at $485,600, to members of its Board of
Directors and key employees as compensation for services rendered and in payment
of accrued but unpaid directors fees and expenses as follows:

<TABLE>
<CAPTION>
                                            Number of
Recipient                                    Shares     Value
------------------------------------------  ---------  -------
<S>                                         <C>        <C>
Hunter M.A. Carr, President and CEO           175,000   70,000
George A. Roberts, Director                   119,324   47,729
W. Paul Thayer, Director                      125,000   50,000
W. Allyn Hoaglund, Director                   120,000   48,000
Kelley V. Kirker, Director and COO            152,177   60,871
Walter B. Rae, Director                       117,500   47,000
Donald W. Sapaugh, past Director               80,000   32,000
K. Charles Peterson, General Counsel           87,500   35,000
Carol A. Wilson-Story, Corporate Secretary     75,000   30,000
Kara A. Kirker, Corporate Treasurer            50,000   20,000
Joanna Hoover, CFO                             75,000   30,000
Michael Hluchanek, Chief Programmer            37,500   15,000
                                            ---------  -------

                                            1,214,001  485,600
                                            =========  =======
</TABLE>

Stock Options and Warrants

On March 1, 2002, ITIS issued stock options to Merit Financial, Inc. to purchase
60,000 shares of ITIS's common stock at an exercise price defined as the market
price of the stock on the date that the option is exercised, less fifteen
percent. These options were issued in exchange for consulting services
previously provided to ITIS, and related expense of $45,900 was recorded in
March 2002.

On May 22, 2002, in conjunction with the renewal and consolidation of various
notes payable to Hunter M.A. Carr, W. Paul Thayer, and George A. Roberts (see
note 7), ITIS cancelled any and all rights to convert principal and interest of
the prior notes to common stock and instead issued warrants to Carr, Thayer and


                                       23
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

Roberts to purchase up to 2,464,977, 204,102, and 2,107,352 shares of common
stock, respectively, at $.96 per share. Expense of $191,977 and an equal amount
of equity related to issuance of these warrants was recorded in May 2002.

NOTE 11 - LICENSING AGREEMENT:

On March 8, 2002, Litidex(R) entered into an agreement with MedEx Systems, Inc.
whereby Litidex(R), through a newly formed Litidex(R) subsidiary, PharmHouse,
Inc., intends to operate pharmacies that focus primarily on specialty
medications in 81 exclusive territories identified in a Settlement and
Separation Agreement. MedEx is a Louisiana corporation that has developed a
patent-pending system for technologies related to the operation of such
pharmacies. The agreement between MedEx and Litidex(R) provided for a paid-up
perpetual license from MedEx for the operating system to be used in pharmacies
to be established in territories belonging to Litidex(R). This licensing
agreement has been recorded at its cost of $150,000. Subsequent to signing this
agreement, and by a letter of intent dated March 27, 2002, Litidex(R) paid MedEx
an additional $150,000 as earnest money and consulting fees towards a
contemplated purchase of 50% of the issued and outstanding shares of MedEx and
an associated entity, Pegasus Pharmacy, Inc. This stock purchase was not
consummated, and the $150,000 earnest money and consulting fees was recorded as
"other expense" in March 2002.

An additional $125,000 was advanced to MedEx pursuant to an interim binding
letter agreement dated April 11, 2002. Under the terms of this agreement, MedEx
agreed to repay the $125,000 plus 8% interest within 120 days of demand by
PharmHouse if the stock purchase was not consummated. On May 15, 2002,
PharmHouse issued a demand letter to MedEx for repayment of these funds. On
September 16, 2002, PharmHouse was sued  in Jefferson Parish, Louisiana by
MedEx, Pegasus and others, claiming $50,000 in damages for an alleged breach of
a contract between PharmHouse and MedEx and Pegasus. The alleged contract is
actually the aforementioned letter of intent, which, in the opinion of counsel,
does not constitute an enforceable contract. The case has been removed to United
States District Court and a counterclaim has been filed for $425,000.

PharmHouse began operation of two pharmacies in Houston, Texas in September
2002.

NOTE 12-CONDITIONS AFFECTING ONGOING OPERATIONS

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. While the sale of a net revenue
interest in the first 14 PharmHouse stores in July 2002 provided $2.5 million in
available cash to ITIS, 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
anticipated revenues to be generated by the automated litigation support
services of Litidex(R) and the PharmHouse stores will be critical in providing
some of the funds necessary to continue company operations and to remain in
business. However, cash provided by the automated litigation support services of
Litidex(R) is not received on a scheduled basis, and the pharmacy operations of
PharmHouse are too new to evaluate. While management believes that revenues
provided by these subsidiaries may be adequate to fund company operations, it is
possible that such revenues may never be sufficient to meet company needs. While
additional automated litigation support contracts are anticipated by management,
the revenues of Litidex(R) cannot be sustained if no additional contracts are
obtained. If this should be the case, 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


                                       24
<PAGE>
ITIS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(CONTINUED)

remain available. If the receivables associated with the litigation services
contracts are not collected timely, or at all, cash flow will be severely
restricted and additional reliance will have to be placed on other sources of
cash, if available when needed. Although management believes that the
receivables will be collected, collections to date have been irregular. If
adequate funding from the operations of Litidex(R), 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 be
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 November 19, 2002, 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.

As reflected in the accompanying financial statements, ITIS has incurred
$22,890,745 in losses since inception and has used significant amounts of cash
in operating the company.   Our current working capital is not sufficient to
cover cash requirements for the balance of the 2002 fiscal year or to bring the
Company to a positive cash flow position. 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.


                                       25
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion should be read in conjunction with the condensed,
consolidated financial statements of ITIS, which are included elsewhere in this
Form 10-Q.  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.

Under a Plan and Agreement of Merger dated August 26, 2002, as approved by
resolution adopted by the Board of Directors of ITIS Inc. on that date and by
written consent of a majority of the voting interests of ITIS Inc. on September
18, 2002, ITIS Inc., a Delaware corporation, merged into its wholly owned
subsidiary, ITIS Holdings Inc., a Nevada corporation, effective September 18,
2002. ITIS Holdings Inc. became the surviving corporation after the effective
date of the merger. Under the terms of the Agreement, each issued share of the
common stock of the terminating corporation, ITIS Inc., shall be converted into
one-tenth (0.1) share of the surviving corporation, ITIS Holdings Inc. Each
issued share of the preferred stock of ITIS Inc. shall be converted to one share
of preferred stock of ITIS Holdings Inc. ITIS Holdings Inc. has authority to
issue 200,000,000 shares of stock, of which 150,000,000 are common stock, $.001
par value per share, and 50,000,000 are preferred stock, $.001 par value per
share. All prior period share amounts reflected in the condensed consolidated
financial statements and notes thereto have been adjusted to account for the
one-for-ten reverse split in accordance with the Plan.

ITIS Holdings Inc. provides automated litigation support through its subsidiary,
ITIS, Inc., a Texas corporation, which conducts business as Litidex(R).
Litidex(R) currently focuses its attention on litigation support services
related to lawsuits involving stock manipulation of publicly held companies.

PharmHouse Inc. represents a new business segment and newly formed subsidiary of
ITIS. PharmHouse concentrates its efforts in the business of pharmacy
operations. PharmHouse, originally formed as a subsidiary of Litidex(R), became
a wholly owned subsidiary of ITIS in May 2002. In September 2002 PharmHouse
began operation of two pharmacies that focus primarily on specialized
medications. Another new subsidiary, OnPoint Solutions Inc., provides technical
support for PharmHouse and Litidex(R) in the development and operation of the
pharmacies of PharmHouse and in software and hardware services for both
PharmHouse and Litidex(R). OnPoint also provides the RightScript software used
by PharmHouse.

Prior to October 31, 2001, ITIS also provided training and support with federal
regulations through its wholly owned subsidiary, Venco Compliance, Inc., and
marketed a CD-Rom product and Website that assisted in medical billing through
Compass Data Systems, Inc. As more fully disclosed in note 6, on October 31,
2001, the stock of Venco was sold and transferred by ITIS to Venco's former
shareholders and the operations and management of Compass Data Systems were
turned over to current Compass employees.

Until August 15, 2002, ITIS provided electronic publishing services and database
content through Internet sites with subscription access, licenses and
transaction fees for databases through its subsidiaries, GoverNet Affairs, Inc.,
National Law Library, Inc. and Brief Reporter, LLC. The content of the databases
consisted of pending legislation, statutory law, rules and case law at the
federal and state levels. As further disclosed in note 6, management of ITIS
transferred the customers of the Internet Services subsidiary GoverNet Affairs,
Inc. to another provider in June 2002. While ITIS legally sold the Internet


                                       26
<PAGE>
Services operations of National Law Library, Inc. and Brief Reporter, LLC in
August 2002, the sale has been recorded using the deposit method of accounting
because, in management's opinion, the criteria required to permit revenue
recognition in relationship to this sale have not been met at the present time
(see note 6). ITIS no longer maintains any operations in the Internet Services
segment.

Management realizes that anticipated revenues to be generated by the automated
litigation support services of Litidex(R) 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:

     -    Accounts receivable, net of doubtful accounts, at September 30, 2002
          and December 31, 2001 amount to $2,694,886 and $2,217,328
          respectively. Of the accounts receivable at September 30, 2002, 98%,
          or $2,650,216, represents receivables related to the automated
          litigation support services of subsidiary Litidex(R). Because a
          portion of this amount is to be paid in common shares of publicly
          traded companies and/or by notes receivable, it is likely that
          realization of a significant amount of these receivables may not be
          achieved in a traditional timely fashion and may take twelve months or
          longer to convert to cash. Management has elected not to provide an
          allowance for doubtful accounts for these receivables due to the
          nature of the agreements, which, in management's opinion, provides
          assurance for the ultimate collection of the fees due. Management has
          classified a portion of the receivable as long term based upon
          expected receipts within the next twelve months.

     -    ITIS subsidiary Litidex(R) contracts with law firms to provide
          litigation support services. These generally include determining if
          the law firm's potential client has a viable cause of action,
          providing the law firm with a database containing securities
          litigation data, and the development of a specific case related
          database. Litidex(R) does not have any future delivery requirements
          with respect to the first two elements and the revenue associated with
          those elements is recognized when evidence exists that indicates that
          an arrangement with the attorney exists. This evidence usually
          includes receipt of some form of non-refundable compensation. The
          third element of the arrangement requires development of a case
          specific database of information at a future date. Revenues associated
          with this third element are deferred and recognized as actual document
          production occurs. This method of revenue recognition is consistent
          with the method adopted by the Company in the second quarter of 2001
          when Litidex(R) commenced providing this type of litigation service.

          An average of 22% of litigation support revenues are deferred as a
          substantial portion of the work required has been performed to
          complete the first two elements of the arrangement. Management has
          calculated the deferral amount based upon the future estimated work to
          complete the services under the contract, which includes the
          development of a case specific litigation database in an electronic
          format with the client's information as it becomes available.
          Management recognizes revenues from these services as they are
          performed. In determining the amount of income to defer, management
          consulted with the experienced personnel of Litidex(R) and others
          regarding the number of documents likely to be processed over the
          course of the litigation support project and an appropriate retail


                                       27
<PAGE>
          price to assign to these services. A consensus was reached that
          100,000 pages of data was an appropriate estimate to use, and
          management accordingly applied a fair market value per page processing
          charge to 100,000 pages of production to determine the deferral
          amount. While it is virtually impossible to predict the length of time
          a case may be in litigation, it is reasonable to arrive at a projected
          number of documents to be processed as part of a litigation support
          project using the Company's extensive experience in providing these
          services.

          As disclosed in our December 31, 2001 Form 10-K, and March 31and June
          30, 2002 Form10-Q's, management contacted the SEC on a voluntary basis
          and had numerous discussions with the SEC regarding revenue
          recognition with respect to the litigation services of subsidiary
          Litidex(R). As a result of those discussions and further research into
          this matter, management has concluded that the method of accounting
          used by the Company to record its litigation services revenues is in
          accordance with generally accepted accounting principles. However, on
          August 30, 2002 the Staff of the Securities & Exchange Commission
          requested, on a voluntary basis, additional information regarding the
          Company's position. The Company fully complied with this request on
          September 17, 2002.

     -    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
          dollars, of which $91,000 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. At September 30, 2002 the principal balance
          owed by American Legal Data was $1,892,481. During the quarter ended
          September 30, 2002, $16,519 and $15,481 were collected in principal
          and interest, respectively, related to this note.

          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 September 30, 2002, 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.

     -    On August 27, 2002, ITIS subsidiaries National Law Library, Brief
          Reporter and Litidex(R) completed the sale of their data and Internet
          domains, as well as the trademark for "ITISLAW," the pending
          application rights for National Law Library, and the operations of
          Brief Reporter in Charlottesville, Virginia, to JuriSearch Holdings,
          LLC. The Asset Purchase Agreement includes a Security Agreement that
          grants to ITIS a security interest in all intellectual property,
          customers, equipment, machinery, furniture and fixtures, supplies and
          assets being purchased. Payments for the assets will be made monthly
          over the next twenty-five years based on a percentage of subscriber
          income, with guaranteed monthly minimums, totaling in aggregate
          $2,423,750, over the first five years. At September 30, 2002, the
          outstanding balance of guaranteed payments amounted to $2,399,584, as
          payments totaling $24,166 were received in the quarter ended September
          30, 2002.


                                       28
<PAGE>
          Based on the guidelines of SEC Staff Accounting Bulletin No. 101,
          Revenue Recognition in Financial Statements, it is the opinion of
          management that the criteria required to permit revenue recognition in
          relationship to this sale have not been met at the present time.
          Specifically, full delivery of the database assets has not yet
          occurred (buyer has the right of access to the ITIS server for a
          period of six months for the purpose of copying data from that
          website; in the interim, National Law Library is maintaining the site
          at buyer's expense), and the seller's price to the buyer is not fixed
          or readily determinable at the date of this filing (inadequate
          information is currently available to reasonably project future
          payments to be made based on a percentage of subscriber income).
          Accordingly, utilizing the deposit method of accounting, management
          has reclassified the database assets from "fixed assets and
          intangibles" to "assets held for sale" on the September 30, 2002
          balance sheet, and has accounted for payments received on the contract
          through September 30, 2002 as "deposit on sales contract". When, in
          management's opinion, the criteria has been met to permit revenue
          recognition and the recording of cost in relationship to this sale,
          the assets held for sale and the deposit on sales contract will be
          reclassified to the statement of operations and a gain or loss will be
          recorded on the sale. Losses on sale of assets for the nine months and
          quarter ended September 30, 2002 would reflect an increase of
          $8,805,303 in both periods had management not recorded this sale using
          the deposit method, and had instead recorded the sale price at the
          guaranteed minimum payment total of $2,423,750 less $11,229,053 in
          cost basis of the assets sold. This would result in net losses for the
          nine months and quarter ended September 30, 2002 in the amount of
          $13,138,801 and $10,563,707, respectively.

     -    SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
          Assets," addresses financial accounting and reporting for the
          impairment of long-lived assets to be disposed of by sale. Assets
          classified as held for sale are to be reported at the lower of their
          carrying amount or fair value less cost to sell, and, if at the date
          of commitment to the plan to sell the asset, the carrying amount of
          the assets to be sold exceeds the fair value of those assets less the
          cost to sell, an impairment loss should be recognized. Management
          hired a third party to prepare valuation estimates of future net cash
          flows projected over the twenty-five year life of the JuriSearch sales
          contract discussed above, and, based on these estimates, management
          has determined that no impairment to the assets held for sale exists
          at this time. Management's estimate of the fair value of these assets
          less cost to sell will be re-evaluated by an independent third party
          at December 31, 2002 and, if necessary, in subsequent periods to
          determine if it has changed until, in management's opinion, the
          criteria has been met to permit revenue recognition and the recording
          of cost in relationship to the sale. Subsequent decreases in the fair
          value less cost to sell the assets, if any, will be reported as
          adjustments to the carrying amount of the assets. Losses on sale of
          assets for the nine months and quarter ended September 30, 2002 would
          reflect an increase of $8,805,303 in both periods had management not
          recorded this sale using the deposit method of accounting, and had
          instead recorded the sale price at the guaranteed minimum payment
          total of $2,423,750 less $11,229,053 in cost basis of the assets sold.
          This would result in net losses for the nine months and quarter ended
          September 30, 2002 in the amount of $13,138,801 and $10,563,707,
          respectively.

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 nine and three months ended September 30, 2002 and 2001.


                                       29
<PAGE>
RESULTS OF OPERATIONS

Revenues-Revenues decreased by $1,234,931 to $895,469 during the nine months
ended September 30, 2002, from $2,130,400 recorded for the nine months ended
September 30, 2001. Revenues also decreased by $1,034,358 for the quarter ended
September 30, 2002, from $1,280,400 in recorded revenues for the quarter ended
September 30, 2001 to $246,042 in revenues for the quarter ended September 30,
2002.

Revenues from the automated litigation support services of subsidiary Litidex(R)
decreased by $1,371,715 for the nine months ended September 30, 2002 from
$2,130,400 recorded for the nine months ended September 30, 2001 to $758,685
recorded for the nine months ended September 30, 2002. The revenues of
Litidex(R) also decreased by $1,168,493 for the quarter ended September 30, 2002
from $1,280,400 recorded for the quarter ended September 30, 2001 to $111,907
for the quarter ended September 30, 2002. While three contracts for litigation
support services were recorded during the nine months ended September 30, 2001,
including two in the quarter then ended, only one was recorded during the nine
months ended September 30, 2002. Because the contract received during the nine
months ended September 30, 2002 was recorded in the quarter ended March 31,
2002, the revenues recognized during the quarter ended September 30, 2002
represent production in regard to active cases. While six additional contracts
to provide these services are pending and we have begun due diligence services
in regard to these cases, revenues and cash flow from automated litigation
support services may not be sustained if no additional contracts are obtained.

Revenues generated by our database management segment during the nine months
ended September 30, 2002 amounted to $135,925, of which $133,276 was recorded in
the quarter then ended. The revenues for both the nine months and quarter ended
September 30, 2002 include payments received totaling $82,519 related to the
sale of a copy of the National Law Library data (see note 6).

Revenues of new subsidiary PharmHouse, which did not begin operations until
September 2002, amounted to $859 for the nine months and quarter ended September
30, 2002.

Sales and Marketing Expense-Sales and marketing expense decreased by $12,203 to
$94,202 during the nine months ended September 30, 2002, from $106,405 for the
corresponding period ended September 30, 2001. Sales and marketing expense
increased by $55,706 from $11,174 for the quarter ended September 30, 2001 to
$66,880 for the quarter ended September 30, 2002. The decrease for the nine
months ended September 30, 2002 results from decreased commission expense of
subsidiary Litidex(R) in the amount of $50,000, offset by contract sales and
marketing efforts primarily related to the new PharmHouse stores. The increase
in sales and marketing expense during the quarter ended September 30, 2002 in
the amount of $55,706 primarily relates to PharmHouse marketing.

General and Administrative Expense-General and administrative expense increased
by $244,681 from $1,903,674 during the nine months ended September 30, 2001 to
$2,148,355 for the nine months ended September 30, 2002. General and
administrative expense also increased by $484,990 for the quarter ended
September 30, 2002, from $433,079 in expenses recorded for the quarter ended
September 30, 2001 to $918,069 in expenses for the quarter ended September 30,
2002.

     -    Payroll and related costs at the administrative and management level
          increased by $27,854 from $827,346 for the nine months ended September
          30, 2001 to $855,200 for the nine months ended September 30, 2002, and
          by $44,994 from $284,473 for the quarter ended September 30, 2001 to
          $329,467 for the quarter ended September 30, 2002. New payroll costs


                                       30
<PAGE>
          related to PharmHouse amounted to $64,523 for the nine months ended
          September 30, 2002 and $51,273 for the quarter then ended. These
          increases were offset by reductions at the corporate level in the
          amount of $36,669 for the nine months ended September 30, 2002 and
          $6,279 for the quarter then ended.

     -    Non-cash expense related to stock and option awards for the nine
          months ended September 30, 2002 amounted to $665,877, representing an
          increase of $455,310 from the $210,567 reported for the nine months
          ended September 30, 2001. Stock and option awards increased by
          $419,960 for the quarter ended September 30, 2002, from $8,040
          reported for the quarter ended September 30, 2001 to $428,000 for the
          quarter ended September 30, 2002.

     -    Administrative expense reductions were realized for the nine months
          ended September 30, 2002 in professional fees, contract services, and
          the expense of outside consulting, which in aggregate decreased by
          $164,091 from $493,091 for the nine months ended September 30, 2001 to
          $329,000 for the nine months ended September 30, 2002. These expenses
          increased by $31,958 during the quarter ended September 30, 2002, from
          $54,400 for the quarter ended September 30, 2001 to $86,358 for the
          quarter ended September 30, 2002, primarily as a result of increased
          professional services and consulting related to the opening of the
          PharmHouse stores and the Plan and Agreement of Merger which was
          effected on August 26, 2002.

     -    Rent, utilities and related expenses decreased by $49,964 for the nine
          months ended September 30, 2002 from $189,577 for the nine months
          ended September 30, 2001 to $139,613 for the nine months ended
          September 30, 2002. These expenses increased by $8,875 to $48,598 for
          the quarter ended September 30, 2002 from $39,723 for the quarter
          ended September 30, 2001. The reductions during the nine months ended
          September 30, 2002 are due to renegotiation of the corporate office
          lease in Houston, Texas in January 2001 and a corporate move to
          smaller office space in June 2002. The increase during the quarter
          ended September 30, 2002 results from rent expense relating to the two
          new PharmHouse locations.

     -    Miscellaneous other general and administrative expenses, which include
          materials and supplies, general insurance expense and tax expense
          unrelated to income taxes, were reduced by $24,428 from $183,093 for
          the nine months ended September 30, 2001 to $158,665 for the nine
          months ended September 30, 2002. These expenses also decreased by
          $20,797 to $25,646 for the quarter ended September 30, 2002 from
          $46,443 for the quarter ended September 30, 2001.

Production and Computer Service Expense-Production and computer service expense
increased by $142,885 to $208,287 for the nine months ended September 30, 2002,
from $65,402 for the nine months ended September 30, 2001. Production and
computer service expense also increased by $86,402 from $31,642 for the quarter
ended September 30, 2001 to $118,044 for the quarter ended September 30, 2002.
Production labor costs increased by $123,182 during the nine months ended
September 30, 2002 and by $59,586 during the quarter ended September 30, 2002
primarily due to increased labor costs related to the automated litigation
support services of Litidex. Computer service expense increased by $19,703
during the nine months ended September 30, 2002 and $26,816 during the quarter
ended September 30, 2002 primarily due to a non-recurring co-location expense in
the quarter ended September 30, 2002 in the amount of $21,986.  Additional
increased expense in the amount of $4,830 during the quarter ended September 30,
2002 relates to computer expense for the new PharmHouse locations.

Amortization and Depreciation Expense-Amortization and depreciation expense
decreased by $586,466 to $650,876 for the nine months ended September 30, 2002,
from $1,237,342 for the nine months ended September 30, 2001. Amortization and


                                       31
<PAGE>
depreciation expense also decreased by $311,522 to $101,381 for the quarter
ended September 30, 2002 from $412,903 for the quarter ended September 30, 2001.
These decreases are primarily due to the completion of amortization of a $2
million service contract of subsidiary Litidex(R). Quarterly amortization of the
contract amounted to $260,868 per quarter during 2001 until expiration of the
contract in the first quarter of 2002. The balance of the decrease relates to
discontinued amortization of the National Law Library database, which was sold
in August 2002.

Other Expense-Other expense of $150,000 for the nine months ended September 30,
2002 represents earnest money and consulting fees for the contemplated purchase
of stock in MedEx Systems, Inc. and an associated entity, Pegasus Pharmacy, as
further discussed in note 11 to the financial statements. The purchase was not
consummated, and this expense is not expected to recur.

Interest Expense-Interest expense increased by $371,730 to $616,133 for the nine
months ended September 30, 2002, from $244,403 for the nine months ended
September 30, 2001. Interest expense also increased by $188,717 for the quarter
ended September 30, 2002 from $83,936 for the quarter ended September 30, 2001
to $272,653 for the quarter ended September 30, 2002. The interest expense
increase is due to $1.3 million in new debt acquired in 2001and an additional
$675,000 and $400,000 in new debt acquired in the first and second quarters of
2002, respectively. In addition, proceeds of $1,939,500 received from the sale
of a PharmHouse net revenue interest to Rainmaker Ventures, Ltd., a related
party, have been recorded as a liability of ITIS rather than as a sale. During
the nine months and quarter ended September 30, 2002, ITIS recorded $24,651 as
accrued interest payable in regard to this liability.

LIQUIDITY AND CAPITAL RESOURCES

ITIS's ability to execute its business strategy depends to a significant degree
on its ability 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 nine months ended September 30, 2002, ITIS's cash and cash equivalents
decreased in total by $28,529 from the December 31, 2001 balance of $34,165 in
available cash and a $40,813 bank overdraft at one its banks to $19,872 in
available cash and a $55,049 bank overdraft at September 30, 2002. The Company
has working capital of $7,766,160 at September 30, 2002, including $11,229,053
in assets held for sale. Exclusive of the assets held for sale, the Company has
a working capital deficit of $3,462,893.

The Company had $2,694,886 in accounts receivable at September 30, 2002. Of this
amount, $2,650,216 represents receivables related to the automated litigation
support services of Litidex(R). Because a portion of this amount is to be paid
in common shares of publicly traded companies and/or by notes receivable, it is
likely that realization of a significant amount of these receivables may not be
achieved in a traditional timely fashion and may take twelve months or longer to
convert to cash. Accordingly, management has classified $1,140,000 of accounts
receivable from litigation support services as noncurrent at September 30, 2002.

The Company has an unrecorded receivable from JuriSearch Holdings, LLC relating
to the sale of the National Law Library database and other assets (see note 6).
Under the terms of this sale agreement, ITIS is scheduled to receive a total of
$487,917 in guaranteed minimum monthly payments during the twelve-month period
ending August 2003. Should JuriSearch fail to perform under the terms of the
purchase agreement, ITIS maintains a security interest in all assets purchased
as well as in all intellectual property, customers, equipment, machinery,
furniture and fixtures and supplies of JuriSearch.


                                       32
<PAGE>
The Company also has an unrecorded receivable from American Legal Data, LLC
relating to the sale of a copy of the National Law Library data (see note 6).
Under the terms of this sale agreement, ITIS is scheduled to receive monthly
payments in the amount of $16,000 for 120 months beginning August 16, 2002.

Cash used in operating activities of $2,130,551 is primarily due to operating
losses, disposal of operating segments (GoverNet Affairs and Brief Reporter),
and increases in accounts receivable and notes receivable. These are partially
offset by depreciation and amortization and increases in liabilities.  Cash used
in investment activities of $545,577 is primarily due to additions to the data
of National Law Library prior to its sale ($664,213), partially offset by
proceeds received from the sales of investments ($174,896) and the purchase of
initial inventory for two PharmHouse stores ($41,279). Cash provided by
financing activities of $2,661,835 was due to increased borrowings to finance
working capital needs and the recording of the related party sale of a net
revenue interest in PharmHouse stores in the amount of $1,939,500 as a liability
rather than a sale (see note 7).

As further outlined in note 7 to the financial statements, the Company has
incurred significant amounts of debt to finance its working capital
requirements. As of September 30, 2002, the total principal amount and accrued
but unpaid interest owed to Hunter Carr, CEO of ITIS, was $2,150,117 and
$316,873, respectively.

On February 28, 2002, Stephen Fonicello exercised the option to convert his
$25,000 note plus accrued interest into restricted common shares of ITIS.
Accordingly, on March 4, 2002, ITIS issued 192,384 pre-reverse split restricted
common shares to Mr. Fonicello, such shares representing repayment of $25,000 in
principal and $2,068 in accrued and unpaid interest at February 28, 2002.

In March 2002, ITIS executed a demand note for $250,000 in favor of George A.
Roberts, a member of its board of directors.  The note bore interest at the rate
of prime plus two percent per year and was payable in cash on demand after one
year. At the option of the holder and with 30 days written notice, the note
could be repaid in common stock of ITIS at a discounted price based on the
lowest price at which ITIS has sold its common stock during the one-year period
preceding the exercise of this option. On May 22, 2002, this note was renewed
and consolidated with other notes payable to Dr. Roberts. In connection with the
new note, ITIS issued detachable warrants to Dr. Roberts to purchase up to
2,107,352 shares of common stock at $.96 per share and cancelled any and all
rights to convert principal and interest of the prior notes to common stock. The
new note bears interest at 18% per year, and is payable on demand after one
year.

In March 2002, ITIS wholly owned subsidiary National Law Library executed a
promissory note for $425,000 in favor of Houston RPM, L.C. The note bore
interest at 18% per year and was payable in monthly installments including
principal and interest commencing April 1, 2002. On April 17, 2002, National Law
Library executed a new promissory note for $675,441 in favor of Houston RPM,
L.C. This note refinanced $325,441 of the note dated March 1, 2002 in the
original amount of $425,000, and provided $350,000 in new funding to National
Law Library. The note bears interest at 18% per year and is payable in monthly
installments including principal and interest commencing May 17, 2002. The
amount of each monthly installment shall equal the total amount of credit card
receipts generated by National Law Library, but in no event shall the monthly
installment be less than $65,000. Any unpaid principal and accrued interest is
due in full on April 17, 2003. A Security Agreement covering all proceeds paid
or otherwise due from credit card companies and others pursuant to a Continuing
Service Agreement between Litidex(R) and National Law Library secures the note,
as do guarantees from ITIS Holdings Inc. and Litidex(R). At September 30, 2002,



                                       33
<PAGE>
the total principal amount owed to Houston RPM, L.C. was $413,483. During the
three and nine months ended September 30, 2002, National Law Library paid
$131,786 and $363,042 in principal and $21,251 and $51,403 in interest,
respectively, related to this note.

In April 2002, ITIS executed a demand note for $50,000 in favor of W. Paul
Thayer, a member of its board of directors.  The note bore interest at the rate
of prime plus two percent per year and was payable in cash on demand after one
year. At the option of the holder and with 30 days written notice, the note
could be repaid in common stock of ITIS at a discounted price based on the
lowest price at which ITIS has sold its common stock during the one-year period
preceding the exercise of this option. On May 22, 2002, this note was renewed
and consolidated with other notes payable to Mr. Thayer. In connection with the
new note, ITIS issued detachable warrants to Mr. Thayer to purchase up to
204,102 shares of common stock at $.96 per share and cancelled any and all
rights to convert principal and interest of the prior notes to common stock. The
new note bears interest at 18% per year, and is payable on demand after one
year.

On July 1, 2002, ITIS and its wholly owned subsidiary PharmHouse entered into a
Purchase Agreement and Grant of Net Revenue Interest with Rainmaker Ventures,
Ltd., a Texas limited partnership in which Hunter M.A. Carr, W. Paul Thayer and
George Roberts are limited partners. Messrs. Carr, Thayer and Roberts are
directors of ITIS and Mr. Carr is the President, Chief Executive Officer, and
Chairman of the Board of ITIS. Under the terms of the Purchase Agreement,
Rainmaker committed to fund up to $2,500,000 to ITIS in exchange for a 50%
interest in the net revenues of the first 14 specialty medication pharmacy
locations opened by PharmHouse. The Purchase Agreement also grants to Rainmaker
an option to acquire a 50% net revenue interest in an additional 4 stores in
exchange for additional funding of $500,000 to ITIS. As of September 30, 2002,
Rainmaker has funded $1,939,500 of the $2,500,000 purchase price. Although it is
the intent of the parties that a material amount of the purchase price will be
used for the purpose of constructing and opening separately licensed specialty
medication pharmacy locations, the Agreement does not place any restrictions on
the use of such funds by ITIS. The amount of funding of the $2,500,000 is
dependent upon the opening of at least one separately licensed specialty
medication pharmacy for each $166,667 invested by Rainmaker as of the date of
the funding request. While only two pharmacies have begun operations as of the
filing date of this Form 10-Q, Rainmaker has honored all funding requests made
by ITIS. Due to the related- party nature of this transaction and pursuant to
EITF 88-18, management has recorded the funding from Rainmaker as a long-term
liability of ITIS rather than as deferred revenue, and has recorded accrued
interest payable in regard to this liability in the amount of $24,651 during the
quarter ended September 30, 2002. At the time the pharmacies begin to generate
net revenues to distribute to Rainmaker, ITIS will apply those payments to the
long-term liability and accrued interest payable until the recorded liabilities
are extinguished. Payments made thereafter will be recorded as an ordinary
operating expense.

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. While the sale of a net revenue
interest in the first 14 PharmHouse stores in July 2002 provided $2.5 million in
available cash to ITIS, 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
anticipated revenues to be generated by the automated litigation support
services of Litidex(R) and the PharmHouse stores will be critical in providing
some of the funds necessary to continue company operations and to remain in
business. However, cash provided by the automated litigation support services of
Litidex(R) is not received on a scheduled basis, and the pharmacy operations of
PharmHouse are too new to evaluate. While management believes that revenues
provided by these subsidiaries may be adequate to fund company operations, it is


                                       34
<PAGE>
possible that such revenues may never be sufficient to meet company needs. While
additional automated litigation support contracts are anticipated by management,
the revenues of Litidex(R) cannot be sustained if no additional contracts are
obtained. If this should be the case, 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 the receivables associated with the litigation services
contracts are not collected timely, or at all, cash flow will be severely
restricted and additional reliance will have to be placed on other sources of
cash, if available when needed. Although management believes that the
receivables will be collected, collections to date have been irregular. If
adequate funding from the operations of Litidex(R), 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 be
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 November 19, 2002, 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. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

ITIS is exposed to interest rate risk because additional financing may be
required. The interest rate that ITIS will be able to obtain on debt financing
will depend, among other things, on the financial and operational condition of
ITIS and external market conditions at the time such financing is sought.

At September 30, 2002 and December 31, 2001, ITIS holds investments that include
available-for-sale securities reflected at fair market value. While we have
recorded unrealized gain or loss on these securities in other comprehensive
income, ITIS is subject to market volatility in holding these securities in that
the actual gain or loss to be realized will depend on the market value of the
securities at the time of disposition.

ITEM 4. CONTROLS AND PROCEDURES

The Chief Executive Officer and the Chief Financial Officer have reviewed the
disclosure controls and procedures relating to ITIS Holdings Inc. within the 90
days preceding this report and concluded that such controls and procedures are
effective to make known to us all material information about the financial and
operational activities of the Company.  There were no deficiencies identified in
such controls or procedures and there have been no changes in such controls and
procedures since our evaluation that could significantly affect their
effectiveness.


                                       35
<PAGE>
PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

On January 26, 2001, in order to protect ITIS and its stockholders, ITIS filed a
lawsuit in United States District Court for the Southern District of Texas,
Houston Division, against Southridge Capital Management and several other
defendants, including Cootes Drive LLC, an alleged "straw man," for damages
resulting from alleged stock manipulation, federal securities law violations,
civil RICO, fraud, violations of Texas securities laws and other Texas statutes,
and conspiracy. The case also alleges misrepresentations by co-conspirators in
connection with certain funding transactions by the defendants with ITIS.  All
defendants filed a joint motion to transfer this case to New York to be
consolidated with the lawsuit filed against us as described below.  The United
States District Judge granted this motion and the case has been transferred to
the Southern District of New York.  The defendants filed motions to dismiss the
case, and on July 17, 2002, the Judge issued an opinion refusing dismissal. The
case is ongoing, and discovery is underway. We intend to prosecute the case
vigorously.  Our litigation counsel has advised us that the case is not
sufficiently advanced to evaluate the outcome, but that resolution of the suit
is anticipated in accordance with the Judge's July 17, 2002 ruling which states,
"the court is fully prepared to assist the parties in moving this case forward
to trial without undue delay."

On February 5, 2001, Cootes Drive LLC filed a suit against ITIS in the Southern
District of New York alleging breach of one of the financing agreements with us
for our failure to honor a conversion of its preferred shares to common stock.
The suit seeks monetary damages of $5,000 per day and seeks to compel ITIS to
issue shares of common stock to Cootes Drive LLC.  ITIS filed an answer to this
lawsuit. Cootes Drive LLC amended their complaint in order to add allegations
that ITIS is in default on a $500,000 promissory note in favor of Cootes Drive
LLC (the alleged default occurring after the filing of ITIS's suit against
Cootes Drive LLC and others); that ITIS has not honored a notice of redemption
of preferred shares held by Cootes Drive LLC in the amount of $2,214,012
(allegedly occurring after the filing of ITIS's suit against Southridge Capital
Management, Cootes Drive LLC, and others); and that ITIS defrauded Cootes Drive
by failing to disclose material information with respect to the background of an
officer and a director of ITIS.  ITIS's answer was timely filed on July 20,
2001. The preferred shares and the associated funding transactions at issue are
the subject matter of ITIS's suit against Southridge Capital Management and
others. ITIS intends to defend this case vigorously.  This case has been
consolidated with the ITIS case (above) and the parties have been realigned so
that ITIS is the plaintiff and Cootes Drive is the defendant. Litigation counsel
has advised us that the case is not sufficiently advanced to evaluate the
outcome, but that resolution of the suit is anticipated in accordance with the
Judge's July 17, 2002 ruling which states, "the court is fully prepared to
assist the parties in moving this case forward to trial without undue delay."

John M. O'Quinn, our Texas-based litigation counsel, has agreed to represent
ITIS and our directors, if necessary, in all of these lawsuits on a contingency
fee basis.

On June 4, 2001, Cootes Drive LLC filed a suit in Delaware against certain
directors of ITIS on behalf of itself as a holder of preferred stock and
allegedly derivatively on behalf of ITIS, alleging that the directors breached
their fiduciary duty to the stockholders by approving repayment in common stock
of loans made to ITIS by its directors. This suit was filed in the Court of
Chancery of Delaware in and for New Castle County. The suit has been dismissed
by Order of the Court entered February 15, 2002.

ITIS is also a party to other lawsuits related to matters normally incidental to
the Company's business. No individual case, or group of related cases presenting
substantially similar issues of law or fact, exceeds 10% of the Company's
current assets or is expected to have a material effect on the manner in which
the Company conducts its business.


                                       36
<PAGE>
ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

During the three months ended September 30, 2002 ITIS issued unregistered shares
of its common stock to the persons described below:

     1.   On September 6, 2002, ITIS issued 1,214,001 shares of unregistered
          common stock, valued at $485,600, to members of its Board of Directors
          and key employees as compensation for services rendered and in payment
          of accrued but unpaid directors fees and expenses as follows:

<TABLE>
<CAPTION>
                                                      Number of
          Recipient                                   Shares      Value
          ------------------------------------------  ---------  -------
<S>                                                   <C>        <C>
          Hunter M.A. Carr, President and CEO           175,000   70,000
          George A. Roberts, Director                   119,324   47,729
          W. Paul Thayer, Director                      125,000   50,000
          W. Allyn Hoaglund, Director                   120,000   48,000
          Kelley V. Kirker, Director and COO            152,177   60,871
          Walter B. Rae, Director                       117,500   47,000
          Donald W. Sapaugh, past Director               80,000   32,000
          K. Charles Peterson, General Counsel           87,500   35,000
          Carol A. Wilson-Story, Corporate Secretary     75,000   30,000
          Kara A. Kirker, Corporate Treasurer            50,000   20,000
          Joanna Hoover, CFO                             75,000   30,000
          Michael Hluchanek, Chief Programmer            37,500   15,000
                                                      ---------  -------

                                                      1,214,001  485,600
                                                      =========  =======
</TABLE>

     ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

EXHIBIT        DESCRIPTION
NUMBER         -----------
------

2.1            Agreement and Plan of Reorganization dated March 25, 1999,
               between Planet Resources, National Law Library and the
               stockholders of National Law Library (incorporated by reference
               to Exhibit A to ITIS's Form 8-K filed on April 2, 1999).

2.2            First Amendment to Agreement and Plan of Reorganization dated as
               of March 30, 1999, between Planet Resources, National Law Library
               and the stockholders of National Law Library (incorporated by
               reference to Exhibit 2.2 to ITIS's Form 10-K filed on October 13,
               1999).


                                       37
<PAGE>
EXHIBIT        DESCRIPTION
NUMBER         -----------
------

2.3            Agreement and Plan of Distribution dated as of March 25, 1999,
               between Planet Resources, New Planet Resources, Inc. and National
               Law Library (incorporated by reference to Annex B to ITIS's
               Information Statement Pursuant to Section 14(c) of the Securities
               Exchange Act of 1934 filed on April 19, 1999).

2.4            Contract for Sale of Stock, dated November 8, 1999, by and
               between John R. Marsh, Ronald W. Hogan, and Charles E. Bowen,
               Jr., as Sellers, and ITIS, as Buyer (incorporated by reference to
               Exhibit 2.1 to ITIS's Form 8-K filed on November 30, 1999).

2.5            Option Agreement to Purchase Stock, dated November 8, 1999, by
               and between ITIS, as Seller, and Ronald W. Hogan, as Optionee
               (incorporated by reference to Exhibit 2.2 to ITIS's Form 8-K
               filed on November 30, 1999).

2.6            Option Agreement to Purchase Stock, dated November 8, 1999, by
               and between ITIS, as Seller, and Charles E. Bowen, Jr., as
               Optionee (incorporated by reference to Exhibit 2.3 to ITIS's Form
               8-K filed on November 30, 1999).

2.7            Option Agreement to Purchase Stock, dated November 8, 1999, by
               and between ITIS, as Seller, and John R. Marsh, as Optionee
               (incorporated by reference to Exhibit 2.4 to ITIS's Form 8-K
               filed on November 30, 1999).

2.8            Contract of Sale, dated December 8, 1999, by and between David P.
               Harriman, Andrew Wyszkowski, Eugene Meyung, Suzanne Meyung, and
               Christina Brown, as Sellers, and ITIS, as Buyer (incorporated by
               reference to Exhibit 2.7 to ITIS's Form 8-K filed December 23,
               1999).

2.9            Stock Exchange Agreement by and among ITIS and the shareholders
               of ITIS relating to the acquisition of all of the outstanding
               stock of ITIS, dated April 30, 2000 (incorporated by reference to
               Exhibit 2.9 to ITIS's Form 10-K/A filed on May 24, 2000).

2.10           Stock Purchase Agreement by and between ITIS and Jeremiah Kane,
               dated July 27, 2000, as amended by that amendment dated effective
               October 1, 2000 (Incorporated by reference to Exhibit 2.10 to the
               Registrant's Form 8-K filed on October 16, 2000).

2.11           Stock Purchase Agreement by and between ITIS and John McHugh,
               dated July 27, 2000, as amended by that amendment dated effective
               October 1, 2000 (Incorporated by reference to Exhibit 2.11 to the
               Registrant's Form 8-K filed on October 16, 2000).

2.12           Stock Purchase Agreement by and between ITIS and Jack Ben Ezra,
               dated July 27, 2000, as amended by that amendment dated effective
               October 1, 2000 (Incorporated by reference to Exhibit 2.12 to the
               Registrant's Form 8-K filed on October 16, 2000).

2.13           Stock Exchange Agreement by and among ITIS and all of the
               shareholders of Venco Compliance, Inc., a Texas corporation,
               dated effective October 1, 2000 (Incorporated by reference to
               Exhibit 2.13 to the Registrant's Form 8-K filed on October 16,
               2000).


                                       38
<PAGE>
EXHIBIT        DESCRIPTION
NUMBER         -----------
------

2.14           Amended and Restated Agreement and Plan of Distribution dated as
               of March 13, 2001, between Planet Resources, National Law Library
               and the stockholders of National Law Library (incorporated by
               reference to Exhibit 2.14 to ITIS's form 10-K filed on April 17,
               2001).

2.15           Plan and Agreement of Merger of ITIS Inc. with and into ITIS
               Holdings Inc. dated August 26, 2002 (incorporated by reference to
               Exhibit 2.15 to ITIS's Form 8-K filed on September 23, 2002)

3.1            Amended and Restated Certificate of Incorporation of ITIS
               (incorporated by reference to the Annex A of ITIS's Definitive
               Proxy Statement on Schedule 14A filed on January 31, 2000).

3.2            Bylaws of ITIS, as amended (incorporated by reference to Exhibit
               3.2 to ITIS's Form 10-K filed on October 13, 1999).

3.3            Certificate of Designation for ITIS's 5% Series A Convertible
               Preferred Stock (incorporated by reference to Exhibit 3.3 to
               ITIS's Form 10-K/A filed on May 24, 2000).

3.4            2001 Executive Stock Option Plan dated effective March 15, 2001
               (incorporated by reference to Exhibit 4.4 to ITIS's Registration
               Statement on Form S-8 filed on March 30, 2001).

10.1           Stock Option Agreement between ITIS and Hunter M.A. Carr
               (incorporated by reference to Exhibit D to Schedule 13D filed on
               October 12, 1999, by Hunter M.A. Carr).

10.2           Stock Option Agreement between ITIS and Jack I. Tompkins
               (incorporated by reference to Exhibit D to Schedule 13D filed on
               October 12, 1999, by Jack I. Tompkins).


10.3           Consulting Agreement between National Law Library and Castle
               Development, Ltd. (incorporated by reference to Exhibit 4(A) to
               ITIS's Registration Statement on Form S-8 filed on April 2,
               1999).

10.4           Continuing Service Agreement between National Law Library and
               ITIS, effective December 1, 1998 (incorporated by reference to
               Exhibit 10.4 to Internet Law's Form 10-K filed on October 13,
               1999).

10.5           Management and Financial Services Agreement between National Law
               Library and ITIS, effective March 1, 1999 (incorporated by
               reference to Exhibit 10.5 to ITIS's Form 10-K filed on October
               13, 1999).

10.6           Software Development and Consulting Agreement between National
               Law Library and ITIS, dated March 24, 1999 (incorporated by
               reference to Exhibit 10.6 to ITIS's Form 10-K filed on October
               13, 1999).

10.7           Option Agreement to Purchase Stock, effective March 30, 1999, by
               and between ITIS and Jonathan Gilchrist (incorporated by
               reference to Exhibit 10.7 to ITIS's Form 10-K filed on October
               13, 1999).

10.8           Planet Resources 1999 Stock Option Plan (incorporated by
               reference to Exhibit 10.1 to ITIS's Form 10-K/A filed on October
               28, 1999).


                                       39
<PAGE>
EXHIBIT        DESCRIPTION
NUMBER         -----------
------

10.9           Planet Resources Employee Stock Purchase Plan (incorporated by
               reference to Exhibit 10.2 to ITIS's Form 10-K/A filed on October
               28, 1999).

10.10          New Planet Resources, Inc. Stock Incentive Plan (incorporated by
               reference to Exhibit 10.3 to ITIS's Form 10-K/A filed on October
               28, 1999).

10.11          Planet Resources 1999 Director Option Plan (incorporated by
               reference to Exhibit 10.4 to ITIS's Form 10-K/A filed on October
               28, 1999).

10.12          Consulting and Option Agreement by and between ITIS, Frank Fisher
               and Steve Tebo, dated January 22, 2000, as amended (incorporated
               by reference to Exhibit 10.12 to ITIS's Form 10-K/A filed on May
               24, 2000).

10.13          Convertible Preferred Stock Purchase Agreement by and among ITIS
               and Cootes Drive LLC, dated May 11, 2000 (incorporated by
               reference to Exhibit 10.13 to ITIS's Form 10-K/A filed on May 24,
               2000).

10.14          Registration Rights Agreement by and among ITIS and Cootes Drive
               LLC, dated May 11, 2000 (incorporated by reference to Exhibit
               10.15 to ITIS's Form 10-K/A filed on May 24, 2000).


10.15          Warrant to purchase 200,000 shares of ITIS's common stock issued
               to Aspen Capital Partners, Inc., dated May 19, 2000 (incorporated
               by reference to Exhibit 10.16 to ITIS's Form 10-K/A filed on May
               24, 2000).

10.16          Securities Purchase Agreement by and between ITIS and Cootes
               Drive LLC, dated November 20, 2000 (incorporated by reference to
               Exhibit 10.16 to ITIS's Form S-1 filed on December 22, 2000).

10.17          Amended and Restated Registration Rights Agreement by and between
               ITIS and Cootes Drive LLC, dated November 20, 2000 (incorporated
               by reference to Exhibit 10.17 to ITIS's Form S-1 filed on
               December 22, 2000).

10.18          Warrant to purchase 250,000 shares of ITIS's common stock issued
               to Cootes Drive LLC, dated May 11, 2000 (incorporated by
               reference to Exhibit 10.18 to ITIS's Form S-1 filed on December
               22, 2000).

10.19          Warrant to purchase 250,000 shares of ITIS's common stock issued
               to Cootes Drive LLC, dated November 20, 2000 (incorporated by
               reference to Exhibit 10.19 to ITIS's Form S-1 filed on December
               22, 2000).

10.20          Minimum Commitment Warrant to purchase up to 100,000 shares of
               ITIS's common stock issued to Cootes Drive LLC, dated November
               20, 2000 (incorporated by reference to Exhibit 10.20 to ITIS's
               Form S-1 filed on December 22, 2000).

10.21          Vesting Warrant to purchase 1,000 shares of ITIS's common stock
               per $100,000 invested issued to Cootes Drive LLC, dated November
               20, 2000 (incorporated by reference to Exhibit 10.21 to ITIS's
               Form S-1 filed on December 22, 2000).


                                       40
<PAGE>
EXHIBIT        DESCRIPTION
NUMBER         -----------
------

10.22          Convertible Promissory Note made by ITIS in favor of Cootes Drive
               LLC in the principal amount of $500,000, dated December 5, 2000
               (incorporated by reference to Exhibit 10.22 to ITIS's Form S-1
               filed on December 22, 2000).

10.23          Warrant to purchase 41,650 shares of ITIS's common stock issued
               to Cootes Drive, LLC, dated December 5, 2000 (incorporated by
               reference to Exhibit 10.23 to ITIS's Form S-1 filed on December
               22, 2000).

10.24          Side Letter Agreement dated December 5, 2000, by and between ITIS
               and Cootes Drive LLC to enter into a convertible Promissory Note
               financing arrangement for $500,000 (incorporated by reference to
               Exhibit 10.24 to ITIS's Form S-1 filed on December 22, 2000).

10.25          Consulting Agreement by and between Venco Compliance, Inc. and
               Cathryn Tull d/b/a First Choice Consulting, dated October 1, 2000
               (incorporated by reference to Exhibit 10.17 to the Registrant's
               Form 8-K filed on October 16, 2000).

10.26          Consulting Agreement by and between Venco Compliance, Inc. and
               Cathryn Tull d/b/a First Choice Consulting, dated October 1, 2000
               (incorporated by reference to Exhibit 10.17 to ITIS's Form 8-K
               filed on October 16, 2000).

10.27          Warrant to purchase 300,000 shares of ITIS's common stock issued
               to James W. Christian dated February 22, 2001 (incorporated by
               reference to Exhibit 10.27 to ITIS's Form 10-Q filed on May 15,
               2001).

10.28          Warrant to purchase 24,649,771 shares of ITIS's common stock
               issued to Hunter M.A. Carr dated May 22, 2002 (incorporated by
               reference to Exhibit 10.28 to ITIS's Form 10-Q filed on August
               19, 2002).

10.29          Warrant to purchase 21,073,520 shares of ITIS's common stock
               issued to George A. Roberts dated May 22, 2002 (incorporated by
               reference to Exhibit 10.28 to ITIS's Form 10-Q filed on August
               19, 2002).

10.30          Warrant to purchase 2,041,020 shares of ITIS's common stock
               issued to W. Paul Thayer dated May 22, 2002 (incorporated by
               reference to Exhibit 10.28 to ITIS's Form 10-Q filed on August
               19, 2002).

10.31          Purchase of Net Revenue Interest agreement dated July 1, 2002, by
               and among ITIS Inc., PharmHouse Inc. and Rainmaker Ventures, Ltd.
               (incorporated by reference to Exhibit 2.1 to ITIS'S Form 8-K
               filed on July 15, 2002)

10.32          Asset Purchase Agreement dated August 27, 2002 by and between
               ITIS, Inc., National Law Library, Inc. and Brief Reporter, LLC
               and JuriSearch Holdings, LLC (incorporated by reference to
               Exhibit 2.15 to ITIS'S form 8-K filed on September 11, 2002)

16.1           Letter, dated April 5, 2000, from Harper & Pearson Company to the
               Securities and Exchange Commission (incorporated by reference to
               Exhibit 16.1 to ITIS's Form 8-K/A filed on April 5, 2000).


                                       41
<PAGE>
EXHIBIT        DESCRIPTION
NUMBER         -----------
------

16.2           Letter, dated February 21, 2001 from Arthur Andersen LLP to the
               Securities and Exchange Commission (incorporated by reference to
               Exhibit 16.2 to ITIS's Form 8-K filed on February 23, 2001)

16.3           Letter, dated September 16, 2002 from Harper & Pearson Company to
               the Securities and Exchange Commission (incorporated by reference
               to Exhibit 16.3 to ITIS'S Form 8-K filed on September 19, 2002)

21*            Subsidiaries of ITIS.


     *Filed herewith

     (b)  Reports on Form 8-K

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

          (1)  Form 8-K filed on July 15, 2002, reporting under Item 2, a
               Purchase Agreement and Grant of Net Revenue Interest between ITIS
               Holdings Inc.and its wholly owned subsidiary, PharmHouse Inc.,
               and Rainmaker Ventures, Ltd.

          (2)  Form 8-K filed on September 11, 2002, reporting under Item 2,
               completion of the sales of our data, Internet domains and
               selected other assets to JuriSearch Holdings, LLC.

          (3)  Form 8-K filed on September 19, 2002, reporting under Item 4, the
               change in independent auditors of ITIS Holdings Inc. to Fitts
               Roberts & Co., P.C.

          (4)  Form 8-K filed on September 23, 2002, reporting under Item 5, the
               merger of ITIS Inc. into its wholly owned subsidiary, ITIS
               Holdings Inc.


                                       42
<PAGE>
                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                ITIS HOLDINGS INC.




November 19, 2002                 /s/ Hunter M.A. Carr
                               -----------------------------------------
                                  Hunter M.A. Carr
                                  President and Chief Executive Officer

                                  /s/ Joanna Hoover
                               -----------------------------------------
November 19, 2002                 Joanna Hoover
                                  Principal Accounting Officer


                                       43
<PAGE>
                                  CERTIFICATION
                                  -------------

     I, Hunter M.A. Carr, certify that:

     1.   I have reviewed this quarterly report on Form 10-Q of ITIS Holdings
Inc.;

     2.   Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

     3.   Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

     4.   The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a) designed such disclosure controls and procedures to ensure that material
     information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this quarterly report is being
     prepared;

     b) evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     quarterly report (the "Evaluation Date"); and

     c) presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):

     a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

     6.   The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

     Date: November 19, 2002
     -----------------------
     /s/ Hunter M.A. Carr
     --------------------
     Name: Hunter M.A. Carr
     Title: Chief Executive Officer


                                       44
<PAGE>
                                  CERTIFICATION
                                  -------------

     I, Joanna Hoover, certify that:

     1.   I have reviewed this quarterly report on Form 10-Q of ITIS Holdings
Inc.;

     2.   Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

     3.   Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

     4.   The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a) designed such disclosure controls and procedures to ensure that material
     information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this quarterly report is being
     prepared;

     b) evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     quarterly report (the "Evaluation Date"); and

     c) presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):

     a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

     6.   The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

     Date: November 19, 2002
     -----------------------
     /s/ Joanna Hoover
     -----------------
     Name: Joanna Hoover
     Title: Chief Financial Officer


                                       45
<PAGE>