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
    Act of 1934 for the quarterly period ended November 30, 2001 or

[ ] Transition report pursuant to section 13 of 15(d) of the Securities Exchange
    Act of 1934 for the transition period from                to
                                               --------------    ---------------


                         Commission file number: 0-25104
                                                 -------


                   CONTINENTAL INFORMATION SYSTEMS CORPORATION
                   -------------------------------------------
             (Exact name of registrant as specified in its charter)



         New York                                           16-0956508
         --------                                           ----------
(State or other jurisdiction                             (I.R.S. Employer
     of incorporation)                                  Identification No.)


45 Broadway Atrium, Suite 1105, New York, New York             10006
--------------------------------------------------             -----
     (Address of principal executive offices)               (Zip Code)


                                 (212) 771-1000
                                 --------------
              (Registrant's telephone number, including area code)


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

                           Yes  X              No
                               ---                ---



                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of December 31, 2001, the
registrant has 5,166,152 shares of common stock, par value $.01 per share,
outstanding.
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CONTINENTAL INFORMATION SYSTEMS CORPORATION
AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------


                                TABLE OF CONTENTS


                                                                            Page

PART I  - FINANCIAL INFORMATION                                                3

Item 1.   Financial Statements
          --------------------

          Consolidated Balance Sheets - November 30, 2001 and
            May 31, 2001                                                       3

          Consolidated Statements of Operations - Three and
            Six Months Ended November 30, 2001 and 2000                        4

          Consolidated Statements of Cash Flows - Six Months Ended
            November 30, 2001 and 2000                                       5-6

          Notes to Consolidated Financial Statements                        7-10

Item 2.   Management's Discussion and Analysis of Financial
          -------------------------------------------------
            Condition and Results of Operations                            11-13
            -----------------------------------


PART II - OTHER INFORMATION

Item 1.   Legal Proceedings                                                   14
          -----------------

Item 6.   Exhibits and Reports on Form 8-K                                    14
          --------------------------------


SIGNATURES                                                                    15


                                      -2-
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CONTINENTAL INFORMATION SYSTEMS CORPORATION
AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
        --------------------


CONSOLIDATED BALANCE SHEETS
In Thousands (Except Number of Shares)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                         November 30,     May 31,
                                                             2001          2001
                                                         -----------   -----------
<S>                                                        <C>           <C>
ASSETS:
Cash and cash equivalents                                  $  3,098      $  1,545
Accounts receivable, net                                          9             5
Notes receivable, net                                         1,622         1,811
Investment in mortgage participation notes                      197           201
Real estate held for sale, net                                  367           367
Restricted cash                                                   -           900
Net rental equipment                                              6            20
Property, plant and equipment, net                              139           177
Other assets, net                                               123           239
Net assets of discontinued operations                             -         3,550
                                                         -----------   -----------

      Total assets                                         $  5,561      $  8,815
                                                         ===========   ===========

LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
  Accounts payable and other liabilities                   $    467      $    513
  Loan guarantee                                                  -           900
                                                         -----------   -----------

      Total liabilities                                         467         1,413
                                                         -----------   -----------

SHAREHOLDERS' EQUITY:
Common stock, $.01 par value; authorized
  20,000,000 shares, issued 7,101,668 shares,
  outstanding 5,859,486 shares                                   71            71
Additional paid-in capital                                   35,129        35,129
Accumulated deficit                                         (28,520)      (26,238)
                                                         -----------   -----------
                                                              6,680         8,962
Treasury stock, at cost:  1,242,182 shares at
  November 30, 2001 and 1,217,782 shares at
  May 31, 2001                                               (1,586)       (1,560)
                                                         -----------   -----------

      Total shareholders' equity                              5,094         7,402
                                                         -----------   -----------

      Total liabilities and shareholders' equity           $  5,561      $  8,815
                                                         ===========   ===========
</TABLE>

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

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


                                      -3-
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CONTINENTAL INFORMATION SYSTEMS CORPORATION
AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
In Thousands (Except Per Share Information)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                               Three Months Ended           Six Months Ended
                                                  November 30,                November 30,
                                           -------------------------   -------------------------
                                               2001          2000          2001          2000
                                           -----------   -----------   -----------   -----------
<S>                                          <C>           <C>           <C>           <C>
REVENUES:
  Equipment sales                            $      -      $    492      $      -      $    550
  Equipment rentals                                 7            17            15            58
  Income from direct financing leases               1             8             3            29
  Interest; fees and other income                  71           121           146           284
                                           -----------   -----------   -----------   -----------

                                                   79           638           164           921
                                           -----------   -----------   -----------   -----------
COSTS AND EXPENSES:
  Cost of sales                                     -           491             -           541
  Depreciation of rental equipment                  -             5             5            14
  Interest expense                                  -             1             -             5
  Other operating expenses                         28            44            87            97
  Research and development                        625           581         1,477         1,185
  Selling, general and administrative
   expenses                                       447           515           877           943
                                           -----------   -----------   -----------   -----------

                                                1,100         1,637         2,446         2,785
                                           -----------   -----------   -----------   -----------
      Loss from continuing
       operations                              (1,021)         (999)       (2,282)       (1,864)

      Gain from discontinued operations,
        net of tax benefit                          -         1,500             -         1,500
                                           -----------   -----------   -----------   -----------

      Net income (loss)                      $ (1,021)     $    501      $ (2,282)     $   (364)
                                           ===========   ===========   ===========   ===========


Basic and diluted net loss
  per share (Note 2):
   Loss from continuing operations            $(.17)        $(.15)        $(.38)        $(.28)
   Gain from discontinued operations              -           .23             -           .23
                                           -----------   -----------   -----------   -----------

      Net income (loss) per share             $(.17)        $ .08         $(.38)        $(.05)
                                           ===========   ===========   ===========   ===========

Weighted average number of shares
  of common stock outstanding                 5,859         6,535         5,930         6,556
                                           ===========   ===========   ===========   ===========
</TABLE>


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

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


                                      -4-
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CONTINENTAL INFORMATION SYSTEMS CORPORATION
AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
In Thousands
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                         For the Six Months Ended
                                                                November 30,
                                                         -------------------------
                                                             2001          2000
                                                         -----------   -----------
<S>                                                        <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                 $ (2,282)     $   (364)
  Less:  Gain from discontinued operations                        -         1,500
                                                         -----------   -----------
        Loss from continuing operations                      (2,282)       (1,864)
                                                         -----------   -----------
  Adjustments to reconcile net loss from continuing
   operations to net cash provided by (used in)
   operating activities:
    Gain from sale of equipment subject to lease                  -            (9)
    Depreciation and amortization expense                        57            70
    Effect on cash flows of changes in:
      Accounts receivable, net                                   (4)          758
      Notes receivable                                          189           (87)
      Other assets                                              173           113
      Accounts payable and other liabilities                   (328)         (171)
                                                         -----------   -----------
                                                                 87           674
                                                         -----------   -----------
        Net cash used in continuing operations               (2,195)       (1,190)
        Net cash provided by (used in) discontinued
          operations                                          3,775          (454)
                                                         -----------   -----------
        Net cash provided by (used in) operating
          activities                                          1,580        (1,644)
                                                         -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of equipment                                 -           554
  Purchase of property and equipment                             (5)            -
  Collections of rentals on direct financing leases
    net of amortization of unearned income                        -           117
  Proceeds from investment in mortgage participation
    notes                                                         4           516
                                                         -----------   -----------
        Net cash provided by (used in) investing
          activities                                             (1)        1,187
                                                         -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on lease, bank and institution financings              -          (163)
  Purchase of treasury stock                                    (26)         (654)
                                                         -----------   -----------

        Net cash used in financing activities                   (26)         (817)
                                                         -----------   -----------

        Net increase (decrease) in cash and
          cash equivalents                                    1,553        (1,274)

CASH AND CASH EQUIVALENTS:
  Beginning of period                                         1,545         3,382
                                                         -----------   -----------

  End of period                                            $  3,098      $  2,108
                                                         ===========   ===========
</TABLE>

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

(Continued)

                                      -5-
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CONTINENTAL INFORMATION SYSTEMS CORPORATION
AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)
In Thousands
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                         For the Six Months Ended
                                                                November 30,
                                                         -------------------------
                                                             2001          2000
                                                         -----------   -----------
<S>                                                        <C>           <C>
SUPPLEMENTAL SCHEDULE OF NONCASH ACTIVITIES:
  Inventory arising from transfers of equipment
    that came off-lease                                    $      -      $    685
                                                         ===========   ===========

  Transfer of inventory from discontinued
    operations to other assets                             $     52      $      -
                                                         ===========   ===========

  Transfer of other assets from discontinued
    operations to other assets                             $      5      $      -
                                                         ===========   ===========

  Transfer of payable from discontinued
    operations to accounts payable                         $   (282)     $      -
                                                         ===========   ===========
</TABLE>

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

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


                                      -6-
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CONTINENTAL INFORMATION SYSTEMS CORPORATION
AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  Basis of Presentation
    ---------------------

The accompanying unaudited consolidated financial statements of Continental
Information Systems Corporation ("Company") have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and in accordance with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements. In
the opinion of management, all adjustments (consisting only of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the six months ended November 30, 2001 are not necessarily
indicative of the results that may be expected for the year ending May 31, 2002.
These statements should be read in conjunction with the audited consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended May 31, 2001.

2.  Nature of Operations
    --------------------

T1Xpert Corp.

The Company changed its focus to the development and commercialization of a
Web-enabled electronic securities processing software platform which would use
proprietary technology and adapt to changes in the securities industry including
operational changes related to increased volume, the ability to effect trades
through the Internet, Electronic Crossing Networks, decimalization, expanded
trading hours, various rule changes and the shift from settling trades in three
days to settling trades in one day. This latter shift is commonly referred to as
"T+1." The subsidiary that was formed to engage in this line of business is
T1Xpert Corp. ("T1Xpert").

T1Xpert has been developing a suite of middle and back office brokerage products
and solutions. The products and solutions have been designed to serve as a
software platform for risk reduction for the next generation of real time
systems and in preparation for T + 1. The Company's product development strategy
was to develop T1Xpert incrementally, with a series of independent products
that, in total, would constitute a full real-time straight through transaction
processing, balancing, and risk-management system. Each product has been
designed to build on the functions and infrastructure of the previous products.
Under funding approved by the Board of Directors T1Xpert has expended
approximately $6.0 million from its inception in August 1999 through November
30, 2001.

The terrorist attacks of September 11, 2001 against the United States of America
had a negative effect on the U. S. securities industry and T1Xpert. T1Xpert had
begun work on a software development project for a global investment bank prior
to September 11, 2001. This project was cancelled as a result of the events of
September 11, 2001. In addition, due to security and safety measures taken by
Federal, State and City authorities in lower Manhattan where the Company's
office is located, T1Xpert had to suspend all software development work for
approximately two weeks while still having to meet its payroll obligations.
During this two-week period, communication with T1Xpert's offices was severely
compromised. To conserve cash, on September 24, 2001, 9 employees of T1Xpert
were furloughed.

The need for the securities industry to manage problems arising from the events
of September 11 has resulted in the timetable for implementation of T+1 by the
securities industry to be pushed back one year to June 2005. At the same time
the ability to obtain financing during the economic environment post September
11 has been greatly hampered.

Risk and Uncertainties
----------------------
The Company has decided to stop funding T1Xpert. Accordingly, on December 27,
2001, the Company furloughed its remaining 10 employees, in addition to the 9
employees previously furloughed on September 24, 2001. The Company is now
considering various strategic alternatives without the use of additional Company
funds to continue T1Xperts product development. These alternatives include the
sale of T1Xpert or finding a strategic partner. These alternatives, if
successful, will likely result in a substantial dilution of the Company's
interest in T1Xpert. There can be no assurance that the Company will be
successful in its efforts, in which case no value is likely to be realized from
its T1Xpert subsidiary.


                                      -7-
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CONTINENTAL INFORMATION SYSTEMS CORPORATION
AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


On December 26, 2001 the Company completed a repurchase of 100,800 shares of
outstanding common stock from Mark Jaindl. On that same date, the Company
completed a repurchase of 592,534 shares of common stock from Frederick J.
Jaindl, the father of Mark Jaindl (together the "Jaindl Shares"). The reacquired
shares represented approximately 12% of the issued and outstanding common stock
of the Company. The shares were purchased for a total of $475,000 or $.685 per
share, which was greater than the market price. In connection with the purchase
of the Jaindl Shares, Mark and Frederick Jaindl were granted a 10% passive
carried interest in T1Xpert which may result in additional compensation to the
Jaindls if the Company makes cash distributions to shareholders in excess of
$2,525,000. The Jaindls have agreed not to purchase any more shares of the
Company. The Company and the Jaindls have executed mutual releases.

In December 2001 the Company accepted the resignations of Directors Michael
Bruck, James P. Hassett, George H. Heilborn, Mark W. Jaindl and Paul Solomon.
The Board has been reduced from six to one with Michael Rosen remaining as the
sole director. The Company also sent a letter to NASDAQ Market Governance
requesting that the Company's stock be delisted from the NASDAQ Small Cap Market
as of the close of business on December 31, 2001. The Company's shares were
delisted from trading privileges on the NASDAQ Small Cap Market effective at the
close of business December 31, 2001.

3.  Net Income Per Share
    --------------------

Earnings per share are calculated in accordance with Financial Accounting
Standard No. 128 (SFAS 128), earnings per share, which specifies standards for
computing and disclosing net income or loss per share. Basic and diluted net
loss per share for the six months ended November 30, 2001 and 2000, was computed
based on the weighted average number of shares of common stock outstanding
during the periods. As of November 30, 2001, the Company had issued and
outstanding options to purchase 164,283 shares of common stock (see Note 6). The
effect of these options is anti-dilutive in the computation of diluted net loss
per share.

4.  Estimates
    ---------

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting periods. Actual results could differ from those estimates.

5.  Concentration of Credit Risk
    ----------------------------

Financial instruments which potentially subject the Company to credit risk
consist principally of cash with financial institutions and notes receivable.
The Company maintains cash deposits with major banks and financial institutions
which may exceed federally insured limits. The Company periodically assesses the
financial condition of the institutions and believes the risk of any loss is
minimal. At November 30, 2001, cash in excess of FDIC limits amounted to
approximately $2.9 million.

Of the Company's notes receivable balance of $1.6 million, $1.4 million is owed
by one customer in the aviation business. Thus, the Company is directly affected
by the well-being of this one company and the airline industry in general. The
credit risk associated with this customer is mitigated by the note being
collateralized; however, a substantial portion of such collateral is outside the
United States, thereby creating potential difficulties for recovering of the
collateral in case of default.


                                      -8-
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CONTINENTAL INFORMATION SYSTEMS CORPORATION
AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


6.  Stock Option Plan
    -----------------

In 1995, the Board of Directors adopted and the stockholders approved the
Continental Information Systems Corporation 1995 Stock Compensation Plan (the
"1995 Plan"). The 1995 Plan provides for the issuance of options covering up to
1,000,000 shares of common stock and stock grants of up to 500,000 shares of
common stock to non-employee directors of the Company and, at the discretion of
the Board of Directors, employees of and independent contractors and consultants
to the Company.

In 2000, the Board of Directors of T1Xpert adopted the T1Xpert Corp. Stock
Compensation Plan (the "T1X 2000 Plan"). The T1X 2000 Plan provides for the
issuance of stock options covering up to 2,000,000 shares of common stock to
employees and advisory board members of T1Xpert. Options granted typically do
not become exercisable until at least one year from the date of commencement of
employment and vest ratably over periods of time as provided at the discretion
of the Board of T1Xpert. Option grants expire ten years from date of grant, or
upon termination of the employee's employment with T1Xpert.

As of May 31, 2001 stock option grants representing 1,357,500 shares had been
issued to employees at an option price of $.0675 per share under the T1X 2000
Plan. During the period ended November 30, 2001, 285,000 options were issued at
an option price of $.0675, and 195,000 options were forfeited/expired at an
option price of $.0675. As of November 30, 2001 there were 1,447,500 options
outstanding at an option price of $.0675. The T1X 2000 Plan is immaterial to the
operations of the Company.

A summary of the status of the 1995 Plan as of November 30, 2001:
<TABLE>
<CAPTION>
                                                                    Weighted
                                                 Number of      Average Exercise
                                                  Options       Price Per Option
                                             ----------------   ----------------
<S>                                               <C>                <C>
   Outstanding at
     May 31, 2001 (207,616 exercisable)           222,616            $ 2.09
   Granted                                              -            $    -
   Exercised                                            -            $    -
   Forfeited/expired                              (58,333)           $ 2.32
                                             ----------------
   Outstanding at
     August 31, 2001 (149,283 exercisable)        164,283            $ 2.01
                                             ================
   Granted                                              -            $    -
   Exercised                                            -            $    -
   Forfeited/expired                               (6,000)           $ 1.84
                                             ----------------
   Outstanding at
     November 30, 2001 (143,283 exercisable)      158,283            $ 2.01
                                             ================
</TABLE>

7.  Discontinued Operations
    -----------------------

On July 14, 2000, the Company announced that it was offering for sale its
commercial aircraft engine portfolio by competitive bid, that upon completion of
the sale it would be exiting the aviation business, and that it would account
for and report the Air Group Business as a discontinued operation. As of
November 30, 2001, the majority of the assets and liabilities relating to the
Air Group Business have been sold or settled. Therefore, any remaining assets or
liabilities have not been accounted for as discontinued operations.

The Consolidated Balance Sheets for all periods presented have been reclassified
to report the results of discontinued operations separately from those of
continuing operations.

The Consolidated Balance Sheets and Statements of Operations for all periods
presented have been classified to report the results of discontinued operations
separately from those of continuing operations.


                                      -9-
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CONTINENTAL INFORMATION SYSTEMS CORPORATION
AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
                                                     Six Months     Six Months
                                                       Ended          Ended
                                                    November 30,   November 30,
                                                        2001           2000
                                                    -----------    -----------
<S>                                                    <C>            <C>
   Revenues                                            $    -         $2,300
   Costs and expenses                                       -            800
                                                    -----------    -----------

   Gain (loss)from discontinued operations                  -          1,500
   Income tax benefit                                       -              -
                                                    -----------    -----------

   Net income (loss) from discontinued operations      $    -         $1,500
                                                    ===========    ===========
</TABLE>

A summary of the assets and liabilities of discontinued operations follows (in
thousands):
<TABLE>
<CAPTION>
                                                    November 30,      May 31,
                                                        2001           2001
                                                    -----------    -----------
<S>                                                    <C>            <C>
   Assets:
     Cash and cash equivalents                         $    -         $3,066
     Accounts receivable                                    -            660
     Inventory                                              -            745
     Net investment in direct financing leases              -            250
     Rental equipment                                       -              -
     Other assets                                           -            119
                                                    -----------    -----------

        Total assets                                        -          4,840
                                                    -----------    -----------

   Liabilities:
     Accounts payable and costs of discontinuance           -            524
     Note payable to institution                            -            766
                                                    -----------    -----------

        Total liabilities                                   -          1,290
                                                    -----------    -----------

        Net assets of discontinued operations          $    -         $3,550
                                                    ===========    ===========
</TABLE>

8.  Reclassifications
    -----------------

Certain prior period balances in the financial statements have been reclassified
to conform to the current period financial statement presentation.


                                      -10-
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CONTINENTAL INFORMATION SYSTEMS CORPORATION
AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------


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


                                  Introduction
                                  ------------

The following discussion and analysis of the financial condition and results of
operations of the Company should be read in conjunction with the consolidated
financial statements and the notes thereto for the fiscal year ended May 31,
2001, appearing in the Company's annual report on Form 10-K.

All statements contained herein that are not historical facts, including but not
limited to statements regarding anticipated future capital requirements and the
Company's future business plans, are based on current expectations. These
statements are forward looking in nature and involve a number of risks and
uncertainties. Actual results may differ materially. Among the factors that
could cause actual results to differ materially are those set forth below and
the other risk factors described from time to time in the Company's reports
filed with the SEC. The Company wishes to caution readers not to place undue
reliance on any such forward looking statements, which statements are made
pursuant to the Private Securities Litigation Reform Act of 1995 and, as such,
speak only as of the date made.

                              Results of Operations
                              ---------------------

Comparison of the Three and Six Months Ended November 30, 2001 and 2000
-----------------------------------------------------------------------

Continuing Operations
---------------------

Revenues
--------
For the three months ended November 30, 2001, total revenues decreased to
$79,000 from $638,000 for the comparable fiscal quarter in 2000. With the
discontinuation of lease originations in August 1999 and sale of a substantial
portion of the portfolio in fiscal 2000, equipment sales are expected to be
minimal in fiscal 2002. As such, there were no equipment sales for the three
months and six months ended November 30, 2001 compared to $492,000 and $550,000
for the three and six month periods ending November 30, 2000, respectively.

Equipment rentals and income from direct financing leases decreased to $8,000
and $18,000 for the three and six month periods ended November 30, 2001 from
$25,000 and $87,000 for the comparable periods in 2000. The decrease is
primarily attributable to the sale of the lease portfolio during the fiscal
years 2001 and 2000.

Interest, fees and other income decreased to $71,000 and $146,000 for the three
and six months ended November 30, 2001 from $121,000 and $284,000 for the
corresponding prior year periods. The decrease is the result of lower notes
receivable and lower average cash balances during the periods because of the
funding of T1Xpert operations.

Costs and Expenses
------------------
Costs and expenses decreased to $1.1 million and $2.4 million for the three and
six months ended November 30, 2001 from $1.6 million and $2.8 million for the
comparable fiscal periods in 2000. The decrease is a result of lower costs
incurred in the equipment leasing and sales business, offset by higher research
and development expenses incurred by T1Xpert in the periods.

Research and development expenses were $625,000 and $1.5 million for the three
and six months ended November 30, 2001 compared to $581,000 and $1.2 million for
the comparable periods in 2000. Such increases were due to T1Xpert's development
of its product as the Company assembled a marketing and business development
program. Such research and development costs will be significantly reduced in
future periods as a result of the termination of the T1Xpert employees in
December 2001.


                                      -11-
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CONTINENTAL INFORMATION SYSTEMS CORPORATION
AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------


Selling, general and administrative expenses were $447,000 and $877,000 for the
three and six months ended November 30, 2001 compared to $515,000 and $943,000
for the comparable periods in 2000. These decreases were principally due to cost
containment efforts and staff reductions. General and administrative costs
relating to the Company's prior operations and its continuance as a publicly
traded and reporting company will be subject to certain fixed operating costs in
future periods.

Income Taxes
------------
For the three-month period ended November 30, 2001, provision for deferred
income tax benefit on income from continuing operations was not recorded,
because, in management's opinion, the realizability of the deferred tax asset
was uncertain in light of the Company's actual operating results since
reorganization.

                         Liquidity And Capital Resources
                         -------------------------------

Net cash provided by operations for the six months ended November 30, 2001 was
$1.6 million compared to cash used in operations of $1.6 million for the
comparable period in 2000; net cash used in continuing operations for the six
months ended November 30, 2001 was $2.0 million compared to net cash used in
continuing operations in the amount of $1.2 million for the comparable period in
2000. Net cash provided by discontinued operations for the six months ended
November 30, 2001 was $3.6 million, compared to net cash used in discontinued
operations for the six months ended November 30, 2000, which was $454,000. The
increase in cash used for continuing operations was due to the funding of
T1Xpert operations. The cash provided by discontinued operations was primarily
due to the transfer of the discontinued operations assets to current operations
in the current periods.

Net cash used in investing activities for the six months ended November 30, 2001
was $1,000, compared to cash provided by investing activities of $1.2 million
for the six months ended November 30, 2000. The cash provided by investing
activities in the prior period was mainly due to the Company's investment in
mortgage participation notes which generated proceeds of $516,000, and the
Company's proceeds of $554,000 from equipment sales. During the period ended
November 30, 2001, there was minimal investment activity. In future periods cash
flows from investing activities will depend on cash collections of the mortgage
participation notes. The Company does not expect significant proceeds from
equipment sales in future periods.

Net cash used in financing activities for the six months ended November 30, 2001
was $26,000, compared to $817,000 for the six months ended November 30, 2000.
The decrease in cash used was due to the November 20, 2000 transaction when the
Company completed a repurchase of 607,158 shares of outstanding common stock
from The Chase Manhattan Bank and its wholly owned subsidiaries. The reacquired
shares represented 9.30% of the 6,527,344 shares then outstanding. The shares
were purchased at $ .9882 per share, which was less than the market price.

On December 26, 2001 the Company completed a repurchase of 100,800 shares of
outstanding common stock from Mark Jaindl. On that same date, the Company
completed a repurchase of 592,534 shares of common stock from Frederick J.
Jaindl, the father of Mark Jaindl (together the "Jaindl Shares"). The reacquired
shares represented approximately 12% of the issued and outstanding common stock
of the Company. The shares were purchased for a total of $475,000 or $.685 per
share, which was greater than the market price. In connection with the purchase
of the Jaindl Shares, Mark and Frederick Jaindl were granted a 10% passive
carried interest in T1Xpert which may result in additional compensation to the
Jaindls if the Company makes cash distributions to shareholders in excess of
$2,525,000. The Jaindls have agreed not to purchase any more shares of the
Company. The Company and the Jaindls have executed mutual releases. The
repurchase reduced the number of outstanding shares from 5,859,486 to 5,166,152.
Accordingly, due to this transaction, cash used for financing activities will
increase in the next quarter.

As of November 30, 2001, the Company had $3.1 million in cash and cash
equivalents, as compared to $2.1 million at November 30, 2000 and $1,545,000 at
May 31, 2001. The increase is principally due to the discontinued operations
assets and liabilities being sold or settled. The Company's CIS Air Loan
Facility with a financing institution, which was classified as a liability in
the discontinued operations, was paid in full in June 2001.


                                      -12-
<PAGE>


CONTINENTAL INFORMATION SYSTEMS CORPORATION
AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------


As of November 30, 2001, approximately 1,242,182 shares (including the purchase
of the Chase shares) had been repurchased by the Company at an aggregate cost of
approximately $1,600,000 pursuant to authorizations of the Board of Directors.

The Company anticipated that, in order for T1Xpert to develop and operate past
the beta stage, it would need substantial additional funds to meet its financial
needs. Without additional funding there was no assurance that the Company will
be able to meet its financial needs after it passes the beta stage of
development.

T1Xpert has expended approximately $6.0 million from its inception in August
1999 through November 30, 2001.

The terrorist attacks of September 11, 2001 against the United States of America
had a negative effect on the U. S. securities industry and T1Xpert. T1Xpert had
begun work on a software development project for a global investment bank prior
to September 11, 2001. This project was cancelled as a result of the events of
September 11, 2001. In addition, due to security and safety measures taken by
Federal, State and City authorities in lower Manhattan, where the Company's
office is located, T1Xpert had to suspend all software development work for
approximately two weeks while still having to meet its payroll obligations.
During this two-week period, communication with T1Xpert's offices was severely
compromised. To conserve cash, on September 24, 2001, 9 employees of T1Xpert
were furloughed.

The Company has filed a claim with its insurance carrier under its business
interruption policy for losses that the Company incurred as a result of the
events of September 11, 2001.

The need for the securities industry to manage problems arising from the events
of September 11 has resulted in the timetable for implementation of T+1 by the
securities industry to be pushed back one year to June 2005. At the same time
the ability to obtain financing during the economic environment post September
11 has been greatly hampered.

The Company has decided to stop funding T1Xpert. On December 27, 2001, the
Company furloughed its remaining 10 employees, in addition to the 9 employees
previously furloughed on September 24, 2001. The Company is now considering
various strategic alternatives without the use of Company funds to continue
T1Xpert's product development and client installations. These alternatives
include the sale of T1Xpert or finding a strategic partner. These alternatives
if successful will likely result in a substantial dilution of the Company's
interest in T1Xpert. The President, Chief Executive Officer of T1Xpert, Michael
L. Rosen, has decided not to take any salary in 2002 from either the Company or
T1Xpert and two key employees who were terminated have currently agreed to
assist, without compensation, to help to maximize the value of T1Xpert to
shareholders. There can be no assurance that the Company will be successful in
its efforts, in which case no value is likely to be realized from its T1Xpert
subsidiary.

Market Risk
-----------
The Company is exposed to risk associated with interest rate changes. The
interest rates on the Company's notes receivable are fixed rates; accordingly,
there is not significant exposure to the Company in the near future.


                                      -13-
<PAGE>


CONTINENTAL INFORMATION SYSTEMS CORPORATION
AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------


PART II - OTHER INFORMATION


Item 1.   Legal Proceedings
          -----------------

The Company incorporates by reference prior legal matters reported in the
Company's Form 10-K for the fiscal year ended May 31, 2001 and Form 10-Q for the
period ended August 31, 2001.


Item 6.   Exhibits and Reports on Form 8-K
          --------------------------------
Exhibit No.

   3.1*   Restated Certificate of Incorporation, as amended (filed as Exhibit
          3.1 to the Company's Form 10-Q for the quarter ended November 30, 1997
          and incorporated herein by reference).

   3.2    Restated Bylaws as amended through February 10, 2000 (filed as Exhibit
          3.2 to the Company's Form 10-K for the fiscal year ended May 31, 2000
          and incorporated herein by reference).

  10.1**  1995 Stock Compensation Plan (filed as Exhibit 10.1 to the Company's
          Form 10-Q for the quarter ended August 31, 1995 and incorporated
          herein by reference).

  10.2**  Advisory Agreement for Real Estate Related Investments between
          Continental Information Systems Corporation and Emmes Investment
          Management Co. LLC dated June 30, 1997 (filed as Exhibit 10.13 to the
          Company's Form 10-K for the fiscal year ended May 31, 1997 and
          incorporated herein by reference).

  21      Subsidiaries of the Registrant
            CIS Corporation, a New York corporation.
            CIS Air Corporation, a Delaware corporation.
            T1Xpert Corp., a Delaware corporation.

   *      Filed as an exhibit to the Company's amended Form 10 Registration
          Statement (Commission File No. 0-25104), originally filed November 10,
          1994 and incorporated herein by reference.

  **      Incorporated by reference.

  99.     Reports on Form 8-K - On January 2, 2002, the Company filed Form 8-K
          -------------------
          announcing the resignation of Directors and delisting from the Nasdaq
          Small Cap market.


                                      -14-
<PAGE>


CONTINENTAL INFORMATION SYSTEMS CORPORATION
AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------


                                   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.


                          CONTINENTAL INFORMATION SYSTEMS CORPORATION


Date: January 14, 2002    By:    /s/ Michael L. Rosen
                                 -----------------------------------------------
                          Name:  Michael L. Rosen
                          Title: President, Chief Executive Officer and Director



Date: January 14, 2002    By:    /s/ Jonah M. Meer
                                 -----------------------------------------------
                          Name:  Jonah M. Meer
                          Title: Senior Vice President, Chief Operating Officer
                                 and Chief Financial Officer


                                      -15-