UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                   FORM 10-Q
                                   (Mark One)


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


               For the quarterly period ended September 30, 2002


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


                For the transition period from ______ to ______

                          Commission File No. 0 20660


                              DIRECT INSITE CORP.
             (Exact name of registrant as specified in its charter)


              Delaware                                  11-2895590
   (State or other jurisdiction of                   (I.R.S. Employer
    incorporation or organization)                  Identification  No.)


   80 Orville Drive, Bohemia, N.Y.                        11716
(Address of principal executive offices)                (Zip Code)


Registrant's telephone number, including area code    (631) 244-1500



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 $.0001 par value stock  outstanding  as of November  13,
2002 was: 3,894,795.
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

                                     INDEX


PART I  FINANCIAL INFORMATION                                               Page

  Item 1
   Condensed Consolidated Balance Sheets as of September 30, 2002 and
    December 31, 2001                                                          3

   Condensed Consolidated Statements of Operations and Comprehensive Income
    (Loss) For the Three and Nine Months Ended September 30, 2002 and 2001     4

   Condensed Consolidated Statements of Cash Flows
    For the Nine Months ended September 30, 2002 and 2001                      5

   Notes to Condensed Consolidated Financial Statements                   6 - 12
Item 2
   Management's Discussion and Analysis of Financial Condition and
    Results of Operations                                                13 - 17
Item 3
   Quantitative and Qualitative Disclosure About Market Risk --------         17
    Not Applicable
Item 4
   Controls and Procedures                                                    17

PART II  OTHER INFORMATION

   Item 1. Legal Proceedings                                                  18

   Item 2. Changes in Securities                                              18

   Item 3. Defaults Upon Senior Securities                                    18

   Item 4.  Submission of Matters to a Vote of Security Holders               18

   Item 5. Other Information                                                  18

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

   Signatures                                                                 19
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS

                 AS OF SEPTEMBER 30, 2002 AND DECEMBER 31, 2001
                        (In thousands, except share data)

<TABLE>
<CAPTION>
                                                                         September 30,       December 31,
                                                                             2002                2001
                                                                       -----------------   ---------------
                                                                         (Unaudited)          (Audited)
<S>                                                                    <C>                 <C>
ASSETS
Current assets
    Cash and cash equivalents                                          $           564     $         1,359
    Accounts receivable, net of allowance for doubtful accounts of
      $50 and $53 in 2002 and 2001, respectively                                 1,378               1,098
     Stock subscription receivable                                               2,000                 -
    Prepaid expenses and other current assets                                      400               1,096
    Investment in NetWolves Corporation                                            152               1,209
                                                                       ---------------     ---------------
       Total current assets                                                      4,494               4,762

Software costs, net
                                                                                   441                 508
Property and equipment, net                                                      1,066               1,278
Investment in non-marketable securities                                            519                 656
Other assets                                                                       545                 586
                                                                       ---------------     ---------------

                                                                       $         7,065     $         7,790
                                                                       ===============     ===============
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
    Accounts payable and accrued expenses                              $         1,870     $         2,057
    Restructuring costs payable, current portion                                   130                 294
      Due to bank                                                                  747                 448
      Deferred revenue                                                             763                 -
      Current portion of long-term debt                                            239                 290
                                                                       ---------------     ---------------
       Total current liabilities                                                 3,749               3,089

Long term debt, net of current portion                                             331                 103
Restructuring costs payable, long-term                                             270                 492
                                                                       ---------------     ---------------
           Total liabilities                                                     4,350               3,684
                                                                       ---------------     ---------------
Commitments and contingencies

Shareholders' equity
      Preferred stock, $0.0001 par value; 2,000,000 shares authorized;
            93,458 issued and outstanding in 2002                                  -                   -
    Common stock, $0.0001 par value; 150,000,000 shares authorized;
       3,945,539 and 2,472,866 shares issued in 2002 and 2001,
            respectively; and 3,890,057 and 2,401,828 shares outstanding
            in 2002 and 2001, respectively                                         -                   -
    Additional paid-in capital                                                 108,190             104,573
    Accumulated deficit                                                       (104,946)           (100,114)
     Subscriptions receivable                                                      (77)                -
     Unearned compensation                                                         (45)                -
    Accumulated other comprehensive loss                                           (79)                (25)
                                                                       ---------------     ---------------
                                                                                 3,043               4,434
    Common stock in treasury, at cost  - 24,371 shares                            (328)               (328)
                                                                       ---------------     ---------------

       Total shareholders' equity                                                2,715               4,106
                                                                       ---------------     ---------------
                                                                       $         7,065     $         7,790
                                                                       ===============     ===============
</TABLE>
See notes to condensed consolidated financial statements.

                                       3
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED STATEMENTS OF
                   OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                                   (Unaudited)

         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 and 2001
                      (in thousands, except per share data)
<TABLE>
<CAPTION>

                                                      Three Months Ended                  Nine Months Ended
                                                      ------------------                  -----------------
                                                         September 30,                      September 30,
                                                         -------------                      -------------
                                                    2002            2001             2002             2001
                                                ------------    ------------     ------------     ------------
<S>                                             <C>             <C>              <C>              <C>
Revenue                                         $      1,851    $      1,153     $      5,348     $      2,348
                                                ------------    ------------     ------------     ------------
Costs and expenses
    Operations, research and development               1,189           1,063            3,335            2,646
    Sales and Marketing                                  643             570            1,793            1,692
    General and administrative                           987           1,074            2,929            3,054
    Amortization and depreciation                        212             229              699              707
                                                ------------    ------------     ------------     ------------
                                                       3,031           2,936            8,756            8,099
                                                ------------    ------------     ------------     ------------
Operating loss                                        (1,180)         (1,783)          (3,408)          (5,751)


Other income (expenses)
    Loss on sales of NetWolves common
           stock                                         (14)            -               (264)             (98)
     Other-than-temporary decline in
           Investment in NetWolves                       -               -               (457)             -
      Equity in Loss of Voyant and Valuation
          Adjustment                                    (281)            -               (603)             -
    Interest expense, net                                (52)            (17)            (140)            (324)
    Other income                                          40              33               40               33
                                                ------------    ------------     ------------     ------------
Loss before provision for income taxes                (1,487)         (1,767)          (4,832)          (6,140)

Provision for income taxes                               -               -                -                (46)
                                                ------------    ------------     ------------     ------------
Net loss                                        $     (1,487)   $     (1,767)    $     (4,832)    $     (6,186)
                                                ============    ============     ============     ============

Other comprehensive income
    Reclassification adjustment and
    unrealized gain/(loss) on marketable
    securities                                           (54)         (1,229)             (54)              91
                                                ------------    ------------     ------------     ------------
Comprehensive loss                              $     (1,541)   $     (2,996)    $     (4,886)    $     (6,095)
                                                ============    ============     ============     ============

Basic and diluted net loss per share            $     (0.39)   $      (0.90)    $      (1.37)    $      (3.69)
                                                ============    ============     ============     ============
Basic and diluted weighted average common
shares outstanding                                    3,847           1,953            3,532            1,678
                                                ============    ============     ============     ============
</TABLE>
See notes to condensed consolidated financial statements.

                                       4
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                                    For the nine months ended
                                                                                          September 30,
                                                                                   ---------------------------
                                                                                     2002               2001
                                                                                   --------           --------
                                                                                        (In thousands)
<S>                                                                                <C>                <C>
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
Cash flows from operating activities
    Net loss                                                                       $ (4,832)          $ (6,186)
    Adjustments to reconcile net loss to net cash used in
      operating activities
       Depreciation and amortization
          Property and equipment                                                        610                700
          Software costs                                                                 87                 24
          Other                                                                           -                  2
       Non-cash interest charge pertaining to the discount on
             convertible debentures and loss on prepayment                                -                346
       Provision for doubtful accounts                                                   56                 36
       Loss on sales of NetWolves common stock                                          264                 98
       Other-than-temporary decline in Investment in NetWolves                          457                  -
       Equity in Loss of Voyant and Valuation Adjustment                                603                  -
       Common stock and options issued for services                                     671                576
       Common stock issued for settlement of restructuring charges                       50                183
    Changes in operating assets and liabilities
       Accounts receivable                                                             (336)              (613)
       Prepaid expenses and other current assets                                        733                140
       Other assets                                                                      40                 28
       Accounts payable and accrued expenses                                            (41)               247
       Restructuring costs payable                                                     (386)             (1,587)
       Deferred revenue                                                                 763                 -
       Income taxes payable                                                               -                (802)
                                                                                   --------           --------
              Net cash used in operating activities                                  (1,261)            (6,808)
                                                                                   --------           --------
Cash flows from investing activities
    Proceeds from the sale of NetWolves common stock                                    282              1,124
    Advances to and Investment in Voyant                                               (465)              (500)
      Increase in cash resulting from the acquisition of Platinum Communications          -                 15
      Consideration paid in Platinum Communications acquisition                           -               (123)
      Capital expenditures                                                             (351)              (782)
                                                                                   --------           --------
              Net cash used in investing activities                                    (534)              (266)
                                                                                   --------           --------
Cash flows from financing activities
      Proceeds from bank advances, net                                                  299                  -
      Proceeds from the sale of common stock                                            573                500
      Consideration paid in connection with the sale of common stock                     (3)
      Proceeds from long term debt                                                      250                  -
      Repayments of long-term debt                                                     (119)               (50)
      Repayments of convertible debentures                                                -             (3,751)
                                                                                   --------           --------
              Net cash provided by (used in) financing activities                     1,000             (3,301)
                                                                                   --------           --------
Net decrease in cash and cash equivalents                                              (795)           (10,375)

Cash and cash equivalents, beginning of period                                        1,359             10,851
                                                                                   --------           --------
Cash and cash equivalents, end of period                                           $    564           $    476
                                                                                   ========           ========

</TABLE>
Additional non-cash investing and financing activities for the nine months ended
September 30, 2002:

In September  2002,  the Company  issued  93,458  shares of  Preferred  Stock in
exchange for a $2,000,000 Subscription Receivable. See Note 4.

See notes to condensed consolidated financial statements.

                                       5
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

        FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001



1    Interim financial information

     The condensed  consolidated balance sheet as of September 30, 2002, and the
     condensed  consolidated  statements of operations and comprehensive  income
     (loss) and cash flows for the periods  ended  September  30, 2002 and 2001,
     have been prepared by the Company  without audit.  These interim  financial
     statements  include all  adjustments,  consisting only of normal  recurring
     accruals,  which management  considers necessary for a fair presentation of
     the financial  statements.  The results of  operations  for the nine months
     ended  September 30, 2002, are not  necessarily  indicative of results that
     may be expected for any other interim periods or for the full year.

     These  condensed  consolidated  financial  statements  should  be  read  in
     conjunction  with the consolidated  financial  statements and notes thereto
     for the year ended  December  31, 2001.  The  accounting  policies  used in
     preparing the condensed  consolidated  financial  statements are consistent
     with those  described  in the  December  31,  2001  consolidated  financial
     statements.


2    The Company

     Direct Insite Corp. and subsidiaries (the "Company"), primarily operates as
     an application  service provider ("ASP"),  which markets an integrated "fee
     for services"  offering  providing high volume  processing of transactional
     data for billing  purposes,  electronic bill presentation as well as visual
     data  analysis  and  reporting  tools  delivered  via the  Internet for its
     customers.  The Company's core technology is d.b.Express?,  the proprietary
     and patented  management  information  tool, which provides targeted access
     through the mining of large volumes of transactional data via the Internet.
     In  May  2001,  the  Company   acquired   Platinum   Communications,   Inc.
     ("Platinum"),  a Dallas,  Texas  based  company  which  markets  integrated
     business and operational support systems to the telecommunications industry
     primarily as an ASP, marketed as Account  Management  Systems ("AMS").  The
     Company and  Platinum  completed a merger  under an  Agreement  and Plan of
     Merger ("Merger  Agreement").  Under the Merger  Agreement,  a newly formed
     wholly owned  subsidiary  of the Company  acquired  all of the  outstanding
     common  stock of  Platinum.  Further,  as an added  source of revenue,  the
     Company,  during 2001, began providing custom engineering  services for its
     customers.

     New Accounting Pronouncements
     -----------------------------

     Statement of Financial  Accounting  Standards  ("SFAS") No. 141,  "Business
     Combinations,"  and SFAS No. 142,  "Goodwill and Other  Intangible  Assets"
     became  effective  for the Company  during 2002.  The  provisions  of these
     interpretations  that are  applicable to the Company were  implemented on a
     prospective  basis as of January 1, 2002,  which had no material  effect on
     the Company's financial statements.

     SFAS No. 144,  "Accounting  for the  Impairment  or Disposal of  Long-Lived
     Assets" became effective for the Company during 2002. The provisions of the
     interpretations  that are  applicable to the Company were  implemented on a
     prospective  basis as of January 1, 2002,  which had no material  effect on
     the Company's financial statements.

     SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of
     FASB  Statement  No.  13,  and  Technical  Corrections"  is  effective  for
     transactions  occurring  after May 15, 2002.  SFAS No. 145  eliminates  the
     requirement  that  gains  and  losses  from the  extinguishment  of debt be
     aggregated and, if material,  classified as an  extraordinary  item, net of
     the related income tax effect and eliminates an  inconsistency  between the
     accounting for sale- leaseback transactions and certain lease modifications
     that have economic effects that are similar to sale-leaseback transactions.
     The adoption of this  standard  has had no impact to the Company.

                                       6
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

        FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001


     SFAS No.  146,  "Accounting  for Costs  Associated  with  Exit or  Disposal
     Activities"  ("SFAS  146"),   provides  guidance  on  the  recognition  and
     measurement  of  liabilities  for cost  associated  with  exit or  disposal
     activities.  The  provisions  of this  Statement  are effective for exit or
     disposal activities that are initiated after December 31, 2002. The Company
     is currently reviewing SFAS 146 to determine the impact upon adoption.


3    Restructuring

     The Company  implemented a restructuring  plan and recorded a non-recurring
     charge  during  the year ended  December  31,  2000.  The  activity  in the
     restructuring  accrual  for the nine  months  ended  September  30, 2002 is
     summarized below:
<TABLE>
<CAPTION>
                                                Officer/director
                                                ----------------
                                    Employee       retirement     Consulting     Operating
                                 ------------      ----------     ----------     ---------
                                 terminations       packages       contracts       leases         Total
                                 ------------       --------       ---------       ------         -----
     <S>                           <C>             <C>             <C>           <C>           <C>
     Restructuring accrual,
        as of December 31,
        2001                       $ 2,000         $ 10,000        $686,000      $ 88,000      $ 786,000

     Company stock
        Issuances                        -                -         (50,000)            -        (50,000)

     Cash expenditures,
        nine months ended
        September 30, 2002          (2,000)         (10,000)       (246,000)      (78,000)      (336,000)
                                   -------        ---------       ---------      --------      ---------
     Restructuring accrual,
        September 30, 2002         $     -        $       -       $ 390,000      $ 10,000      $ 400,000
                                   =======        =========       =========      ========      =========
</TABLE>
4    Shareholders' equity

The  Company  displays  earnings  per share in  accordance  with  SFAS No.  128,
"Earnings  Per Share".  SFAS No. 128  requires  dual  presentation  of basic and
diluted earnings per share. Basic earnings per share includes no dilution and is
computed by dividing net income (loss)  available to common  shareholders by the
weighted  average number of common shares  outstanding  for the period.  Diluted
earnings per share include the potential dilution that could occur if securities
or other contracts to issue common stock were exercised or converted into common
stock.  Outstanding stock options,  warrants and other potential stock issuances
have not been  considered  in the  computation  of  diluted  earnings  per share
amounts since the effect of their inclusion would be antidilutive.

On  September  25,  2002,  the  Company  sold  93,458  shares  of its  Series  A
Convertible  Preferred Stock, par value $.0001 per share ("Preferred  Stock") in
consideration  for  $2,000,000  to  Metropolitan  Venture  Partners  II, L.P., a
Delaware limited partnership ("Metropolitan") and private equity investment firm
with its principal  headquarters  in New York,  pursuant to the terms of a Stock
Purchase and Registration Rights Agreement (the "Stock Purchase Agreement"). The
funds were  received by the Company  October 8, 2002.  The holders of  Preferred
Stock are entitled to receive dividends of 9-% per annum,  compounded  quarterly
and payable on September 25, 2004 and September 25, 2005. Dividends are payable,
at the option of the holders of the Preferred Stock, in cash or in the Company's
common stock.  The holders of Preferred  Stock have certain demand and piggyback
registration  rights,  have  preference  in the  event of  liquidation,  and are
entitled  to ten votes for each share of  Preferred  Stock on all  matters as to
which holders of common stock are entitled to vote.



The shares of  Preferred  Stock can be  converted  into shares of the  Company's
common  stock at any time at the option of the holder.  The  conversion  feature

                                       7
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

        FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

allows the holder to receive ten shares of the Company's  common stock for every
share of Preferred  Stock,  which, on the date of the transaction was equivalent
to $2.14 per share of common stock,  an amount in excess of the closing price on
the  date of the  transaction.  Further,  shares  of the  Preferred  Stock  will
automatically  convert  if, (a) on or after  April 10,  2003,  there is a Public
Offering and the underlying  shares of common stock issuable upon  conversion of
the Preferred Stock are included;  (b) the closing price of the Company's common
stock for twenty  consecutive  trading days has been equal to or exceeds $6.42 a
share;  (c) any  remaining  shares of  Preferred  Stock are  converted  into the
Company's common stock three years from the closing date of the transaction.

Pursuant to the Stock Purchase Agreement,  the Company appointed  Metropolitan's
designee,  Peter B.  Yunich,  as a director to serve on the  Company's  Board of
Directors.

As a result of this  transaction,  during  October  2002,  the Company  received
$2,000,000 less fees and expenses of  approximately  $178,000 payable in cash or
Company common stock.

During the quarter ended  September 30, 2002,  the Company issued 146,445 shares
of its common stock and 834,500 stock options as detailed below:

     --   In lieu of cash,  the Company issued 60,000 shares of its common stock
          valued at $106,000 to the Company's  Board of Directors for Board fees
          in 2002.
     --   Issued  21,445  shares  of its  common  stock as  payment  of  certain
          consultant liabilities, valued at $45,000.
     --   As per the terms of an agreement with a financial advisor entered into
          in January 2002 (see below),  the Company  issued 30,000 shares of its
          common stock valued at $30,000.
     --   Issued  35,000  shares of its  common  stock as  payment  for fees and
          services  incurred  related to the sale of 93,458  shares of Preferred
          Stock to Metropolitan Ventures Partners
     --   169,000  stock  options  were  granted  to  the  Company's   Board  of
          Directors.
     --   167,500 stock options were granted to the  Company's  named  executive
          officers.
     --   498,000 stock options were granted to employees.

All options granted during the quarter ended September 30, 2002 have an exercise
price of $2.05,  which was at or above the fair market  value on the date of the
grants, expire in ten years, and vest through June 30, 2005.

During the quarter ended June 30, 2002, the Company issued 470,074 shares of its
common stock and granted 50,000 options to purchase its common stock as detailed
below:

     --   During April 2002 the Company sold, at market,  an aggregate of 71,000
          shares to four key  employees.  The  Company  accepted  full  recourse
          notes,  aggregating  $88,750,  which bear interest at a rate of 6% and
          will be repaid to the Company over twelve  months.  Additionally,  the
          shares   further   collateralize   the   obligation  to  the  Company.
          Approximately $77,000 remains unpaid as of September 30, 2002.
     --   During April 2002 the Company  also sold 160,000  shares of its common
          stock at an  aggregate  price of  $200,000,  or $1.25 per  share,  the
          market  price on such date,  to unrelated  third  parties in a private
          transaction.
     --   In lieu of cash,  the Company issued 40,000 shares of its common stock
          valued  at  $50,000  in  partial  settlement  of  certain  restructure
          liabilities.
     --   Issued  169,074  shares of its  common  stock as  payment  of  certain
          consultant liabilities, valued at $216,000.
     --   Granted  50,000  options to  purchase  its common  stock as payment of
          certain   consultant   liabilities,   valued  at  $31,000   using  the
          Black-Scholes option-pricing model.
     --   As per the terms of an agreement with a financial advisor entered into
          in January 2002 (see below),  the Company  issued 30,000 shares of its
          common stock, valued at $30,000.

                                       8
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

        FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

During the quarter ended March 31, 2002, the Company issued 856,154 shares of
its common stock and granted 645,000 options to purchase its common stock as
detailed below:

     --   The Company raised approximately  $359,000 through the sale of 344,524
          shares of the Company's common stock to members of the Company's Board
          of Directors, senior executives and other non-related parties.
     --   In lieu of cash, the Company issued 211,680 shares of its common stock
          valued at $222,000  ($1.05) to its  employees in  settlement  of bonus
          awards granted in 2001.
     --   Issued  89,950  shares  of its  common  stock as  payment  of  certain
          consultant liabilities, valued at $111,000.
     --   The Company granted 405,000 stock options to several of its employees.
          The options vest in one-third  increments on April 30, 2002,  December
          31, 2002 and June 30, 2003, with an exercise price of $1.05 per share.
     --   In  January  2002,  the  Company  entered  into  a  two-year  services
          agreement  with its Chairman.  During the first year of the agreement,
          compensation  will  consist  of  180,000   restricted  shares  of  the
          Company's  common  stock,  valued at $180,000,  which will be expensed
          over the first twelve months of the agreement.  During the second year
          of the  agreement,  compensation  will  consist  of a  monthly  fee of
          $15,000.  Further, the Chairman received 240,000 stock options,  which
          vest ratably  during the  two-year  term of the  agreement.  The stock
          options  have an  exercise  price  equal to the  closing  price of the
          Company's common stock on the date of the agreement.
     --   In January 2002, the Company  retained a financial  advisor to provide
          general financial advisory services.  The term of the agreement is for
          12 months,  with a fee of $10,000 per month. The parties  subsequently
          agreed that the fee would be paid with 120,000 shares of the Company's
          common  stock  in  lieu  of  cash  issued  ratably  over  the  period.
          Accordingly,  through  March 31, 2002,  30,000  shares of common stock
          valued at $30,000 had been issued.

5    Long Term Debt

In January 2002, the Company's Chairman loaned the Company $250,000. The term of
the loan is three years and bears interest at 5%, payable  quarterly in arrears.

6    Reclassifications

Certain reclassifications have been made to the condensed consolidated financial
statements shown for the prior period in order to have it conform to the current
period's classifications.


7    Products and Services

The Company and its subsidiaries  currently  operate in one business segment and
have,  during the years 2002 and 2001,  provided  three separate  products:  ASP
Services,  custom  engineering  fees and AMS Services.  The  recognition  of AMS
revenue  commenced on the effective date of the acquisition of Platinum,  May 1,
2001.

                                       9
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

        FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

<TABLE>
<CAPTION>
                                            Three Months Ended September        Nine Months Ended
                                                       30,                         September 30,
                                               2002            2001            2002            2001
                                            ----------------------------------------------------------
       <S>                                  <C>             <C>             <C>          <C>
       ASP fees                             $    1,195      $      637      $    3,128    $      1,632
       Custom engineering fees                     458             315           1,682             425
       AMS fees                                    198             201             538             291
                                            ----------      ----------      ----------    ------------
            Total Revenue                      $ 1,851       $   1,153         $ 5,348       $   2,348
                                            ==========      ==========      ==========    ============
</TABLE>

Major customer
--------------

For the three  months  ended  September  30, 2002 and 2001,  the Company has one
major  customer  that  accounted  for  87.8% and  73.7% of the  Company's  total
revenue,  respectively.  For the nine months ended  September 30, 2002 and 2001,
this  major  customer  accounted  for  88.4% and  79.8% of the  Company's  total
revenue,  respectively.  Accounts  receivable  from this  customer  amounted  to
$950,000 at September 30, 2002.


8    Investments In Securities

The  Company  periodically  reviews the  carrying  value of the  investments  in
securities as well as other assets to determine if impairment has occurred. When
required,  the Company has  adjusted the carrying  value of an  investment  in a
security to reflect such impairment.  Further adjustments in the carrying values
of these investments may be required in the near term.

Non-Marketable
--------------

In February 2001, the Company acquired  2,000,000  shares of Voyant  Corporation
("Voyant") through an equity investment of $500,000.  Additionally,  in November
2001, the Company  acquired  15,680,167  shares in exchange for 60,000 shares of
NetWolves  common  stock,  with a  value  of  $156,000.  Further,  as part of an
anti-dilution protection clause in the initial investment agreement, the Company
is entitled to approximately 48,000,000 additional shares. Voyant is a privately
held company,  and  accordingly,  through  December 31, 2001, the investment had
been reflected on the Company's balance sheet as a non-marketable  security,  at
cost. The Company's Chairman is also the Chairman of Voyant.

The Company has  achieved a level of  influence  such that the Company  began to
account for its  investment in Voyant  utilizing the equity method of accounting
commencing  January 1, 2002.  As a result,  the  Company  recorded a $37,000 and
$138,000  non-operating  loss for its pro rata share of Voyant's  operations for
the three and nine month periods ended September 30, 2002, respectively.

During the three and nine months ended September 30, 2002, the Company  directly
and indirectly advanced  approximately $244,000 and $465,000,  respectively,  to
Voyant,  for which it is to receive an aggregate of 46,400,000  shares of Voyant
common stock in settlement thereof. With respect to these additional shares, the
Company did not increase the carrying  value of its investment in Voyant and has
therefore  recognized  an  additional  loss in Voyant  during the three and nine
months ended  September  30, 2002 of $244,000 and $465,000,  respectively.  As a
result,  the  Company  recorded  an  "Equity  in Loss of  Voyant  and  Valuation
Adjustment"  aggregating  $281,000  and  $603,000  for the three and nine months
ended  September 30, 2002,  respectively.  The Company began  providing  various
services  for Voyant  late in the second  quarter  of 2002,  continuing  through
September 30, 2002.  The Company  agreed to accept  12,300,000  shares of Voyant
common stock as payment for these services increasing its ownership in Voyant to
approximately 20%.

                                       10
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

        FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001


Marketable  Available for sale
------------------------------

The  Company,  as of  December  31,  2001,  held  298,500  shares  of  NetWolves
Corporation  common  stock.  During the three month period ended  September  30,
2002,  the Company sold 40,600 shares in the open market at prices  ranging from
$1.11 to $1.41 aggregating proceeds of approximately  $48,000,  and, as a result
realized a loss of $14,000.  During the  nine-month  period ended  September 30,
2002, the Company sold 160,600 shares in the open market aggregating proceeds of
approximately  $282,000.  For that same time period, a realized loss of $264,000
was recorded.  Further,  at June 30, 2002, the Company wrote down its investment
in NetWolves to the then current market value of $1.49 per share, resulting in a
loss  of  $457,000  that  was  included  in  "Other-than-temporary   decline  in
Investment  in  NetWolves."  At September  30, 2002,  the Company  holds 137,900
common shares of Netwolves with a market value of $152,000.


9    Management's Plans

For the nine months ended September 30, 2002, the Company incurred net operating
losses thereby  requiring cash from sources other than normal operations to fund
its operating activities. In order to fund its operating losses, the Company:

     --   As  described  in Note 4,  in  October  2002,  the  Company  received,
          $2,000,000 from the sale of Preferred Stock, less fees and expenses of
          $178,000,  portions  of  which  are  payable  in  either  cash  or the
          Company's  common stock;
     --   as described in Note 4, received  $573,000 from the sale of its common
          stock;
     --   as  described  in Note 5, the  Company's  chairman  loaned the Company
          $250,000;
     --   as described in Note 8, the Company partially  liquidated its holdings
          of NetWolves common stock by selling 160,600 shares in the open market
          for aggregate proceeds of $282,000;
     --   continues to make use of the financing arrangement with an asset based
          lending institution;

     The Company's  management has and will continue to take numerous steps that
     it believes will create positive  operating cash flow for the Company.  Key
     measures are as follows:

          --   Expanding the Company's products and services:

               --   The Company is  continually  expanding its suite of products
                    and services. The current ASP offering includes, among other
                    things, electronic bill presentation. In the near future the
                    Company  expects to release an enhanced ASP offering,  which
                    will provide electronic payment capability

               --   The Company acquired Platinum, which broadened the Company's
                    product  offerings.  Management  believes  this  acquisition
                    significantly enhances the Company's current market strategy
                    by  allowing  it to  capitalize  on the  growing  trend  for
                    outsource  services  within the  communications  sector.  It
                    should be noted that with  respect to products  and services
                    offered through Platinum, during the three months ended June
                    30, 2002,  the Company  entered  into a three-year  services
                    agreement  with a Fortune 100 company.  Further,  during the
                    three   months   ended   September   30,  2002  the  Company
                    consummated  another services  agreement with a Fortune 1000
                    company.

                                       11
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

        FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

          --   Expanding custom engineering / development services:

               --   The Company  generated  custom  engineering fees of $458,000
                    during the third quarter of 2002 and  $1,682,000  during the
                    nine months ended September 30, 2002;


          -- In  2002,  the  Company  entered  into  a new  ASP  agreement  with
          International Business Machines Corporation ("IBM"), which will enable
          IBM to provide an electronic invoice to their customers.

          --  Additionally,  the  Company  has  obtained a  commitment  from its
          Chairman,  other  members  of the  Board of  Directors  as well as its
          executive   officers  in  which  they  will  provide,   under  certain
          circumstances,  up to an  aggregate  of $750,000  for working  capital
          purposes, if needed, through June 30, 2003.

Management believes that its plan will ultimately enable the Company to generate
positive cash flows from operations.  Until such time, the Company believes that
its present  cash on hand,  the sale of the  remainder of its  NetWolves  common
stock,  as well as obtaining  additional  debt and/or  equity  financing  should
provide adequate funding through at least September 30, 2003. However, there can
be no assurances  that the Company will have  sufficient  funds to implement its
current  plan. In such an event,  the Company  could be forced to  significantly
alter its plan and reduce its  operating  expenses,  which could have an adverse
effect on revenue generation and operations in the near term.

                                       12
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS


Forward looking statements

All statements  other than  statements of historical  fact included in this Form
10-Q including,  without limitation,  statements under, "Management's Discussion
and Analysis of Financial  Condition  and Results of  Operations"  regarding the
Company's financial position,  business strategy and the plans and objectives of
management for future operations, are forward-looking  statements.  When used in
this Form 10-Q, words such as  "anticipate,"  "believe,"  "estimate,"  "expect,"
"intend"  and  similar  expressions,  as  they  relate  to  the  Company  or its
management, identify forward-looking statements. Such forward-looking statements
are based on the  beliefs of  management,  as well as  assumptions  made by, and
information  currently  available to, the Company's  management.  Actual results
could  differ  materially  from  those   contemplated  by  the   forward-looking
statements  as a  result  of  certain  factors  including  but not  limited  to,
fluctuations in future operating results, technological changes or difficulties,
management  of future  growth,  the risk of errors or failures in the  Company's
software products,  dependence on proprietary  technology,  competitive factors,
risks associated with potential  acquisitions,  the ability to recruit personnel
and the dependence on key personnel.  Such statements  reflect the current views
of  management  with respect to future events and are subject to these and other
risks,  uncertainties  and assumptions  relating to the  operations,  results of
operations, growth strategy and liquidity of the Company. All subsequent written
and oral  forward-  looking  statements  attributable  to the Company or persons
acting  on its  behalf  are  expressly  qualified  in  their  entirety  by  this
paragraph.

Overview

Direct Insite Corp. and subsidiaries  (the "Company"),  primarily  operate as an
application  service  provider  ("ASP"),  which markets an  integrated  "fee for
services"  offering  providing high volume processing of transactional  data for
billing  purposes,  electronic bill presentation as well as visual data analysis
and reporting tools delivered via the Internet for its customers.  The Company's
core  technology  is  d.b.Express?,  the  proprietary  and  patented  management
information  tool,  which provides  targeted  access through the mining of large
volumes  of  transactional  data via the  Internet.  In May  2001,  the  Company
acquired  Platinum  Communications,  Inc.  ("Platinum"),  a Dallas,  Texas based
company which markets integrated business and operational support systems to the
telecommunications  industry primarily as an ASP, marketed as Account Management
Systems ("AMS").  The Company and Platinum completed a merger under an Agreement
and Plan of Merger ("Merger  Agreement").  Under the Merger  Agreement,  a newly
formed wholly owned  subsidiary of the Company  acquired all of the  outstanding
common stock of Platinum.  Further, as an added source of revenue,  the Company,
during 2001, began providing custom engineering services for its customers.

During the year 2001,  due to negligible  revenue and as part of its  continuing
effort to reduce costs and strive towards achieving operating profitability, the
Company halted all marketing efforts of its Global  Telecommunications  Services
offering.

                                       13
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS


Results of operations


For the three months ended September 30, 2002, total revenue increased  $698,000
or 61%  from  $1,153,000  for the  three  months  ended  September  30,  2001 to
$1,851,000 for the three months ended  September 30, 2002.  When compared to the
third quarter of 2001, the current quarter reflected the following growth in its
three product offerings: ASP increased $558,000 to $1,195,000;  engineering fees
increased  $143,000 to $ 458,000;  and AMS revenue remained  virtually the same,
decreasing  $3,000 to $198,000 for the three months ended September 30, 2002. On
a year to date basis, the Company's revenue  increased  $3,000,000 over the nine
months ended  September  30, 2001, or 128%,  as follows:  ASP revenue  increased
$1,496,000  to  $3,128,000,  representing  a 92%  increase in revenue  from this
service  compared  to the  nine  month  total  reported  in 2001 of  $1,632,000.
Significant factors  contributing to the overall growth include expansion of the
Company's  product  offerings  as  well  as  increases  in  the  customer  base.
Engineering  revenue grew by $1,257,000,  to  $1,682,000,  nearly four times the
$425,000 of like kind  revenue  recognized  during the  nine-month  period ended
September 30, 2001. The Company believes that revenue generated from engineering
services  is the  precursor  to added  recurring  revenue  sources.  During  the
nine-month  period ended September 30, 2002, AMS revenue  increased  $247,000 to
$538,000,  when  compared to $291,000 in the 2001  period.  However,  it must be
noted that AMS revenue for 2001 is for the  five-month  period May 1, 2001,  the
effective date of the acquisition,  through  September 30, 2001.

International   Business  Machines  Corporation  ("IBM")  continues  to  be  the
Company's  largest  customer  accounting  for  88%  of  total  revenue  for  the
three-month  period ended  September 30, 2002.  For the nine- month period ended
September 30, 2002, 88% of the Company's total revenue was  attributable to IBM,
up from 80% of total revenue for the nine-month period ended September 30, 2001.
In 2001,  the  Company  entered  into an  agreement  with IBM  wherein for a per
transaction fee, the Company enables IBM to present invoices to a portion of its
customers via the Internet. This Electronic Bill Presentment & Payment ("EBP&P")
offering has since been expanded to include additional  functionality.  In March
2002, the parties signed a new agreement,  which allows IBM to expand this EBP&P
offering to more of its customers, both domestic and international. In addition,
the Company continues to provide data analysis and reporting  services for IBM's
telecommunications  customers.  During the quarter the  Company  entered  into a
three year  agreement  with a Fortune  1000  company,  for which it received and
reported as deferred  revenue  $180,000.  The Company is actively  pursuing  new
sales opportunities to further reduce sales concentration.

Operations,  research and development expenses consist primarily of salaries and
related costs (benefits, travel, training) for developers,  programmers,  custom
engineers,   network   services,   quality  control  /  quality   assurance  and
documentation personnel, applicable overhead allocations, as well as co-location
facilities expenses and all costs directly associated with the production and or
development of the Company's services.

     --   When comparing the three months ended September 30, 2002 and 2001, the
          Company increased its operations, research and development expenses by
          $126,000 or 18% of  incremental  revenue  growth of $698,000  achieved
          during the same  period.  Further,  the Company  continues to upgrade,
          improve and enhance its current  products and  services.  As a result,
          the  most  significant   items   contributing  to  this  increase  was
          additional  staffing  costs and  professional  fees totaling  $89,000.
          Additionally,  operations,  research and development expenses incurred
          as a result of the acquisition of Platinum  increased  $14,000.  Other
          expenses showed a net increase of $23,000.

     --   When comparing the nine months ended  September 30, 2002 and 2001, the
          Company increased its operations, research and development expenses by

                                       14
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS


          $689,000  or 23% of  incremental  revenue  growth of  $3,000,000.  The
          single  most  significant  area   contributing  to  the  increase  was
          additional operations, research and development expenses incurred as a
          result of the acquisition of Platinum of $260,000.  It should be noted
          that as detailed above,  incremental  revenue from custom  engineering
          increased $1,257,000.  This source of revenue,  while the precursor to
          probable  recurring revenue sources,  requires a significantly  higher
          cost of revenue.  Further,  the Company continues to upgrade,  improve
          and enhance  its current  products  and  services.  As a result of the
          aforementioned,  expenses  unrelated to Platinum  increased  $429,000.
          Management  believes  that it is  critical  to  maintain  a  qualified
          personnel  staff  and,  further,  to  continue  to  enhance as well as
          develop new and innovative services and products.  It is expected that
          operations,  research and  development  costs will  increase in future
          periods as a result of anticipated increases in future revenue as well
          as  costs   associated  with  its   product/service   enhancement  and
          development activities.

Sales and marketing  expenses include  salaries and related costs,  commissions,
travel,  facilities,  communications  costs  and  promotional  expenses  for the
Company's direct sales organization and marketing staff.


     Sales and marketing  expenses  increased  $73,000 to $643,000 for the three
     months ended  September  30, 2002,  when compared to $570,000 for the three
     months  ended  September  30, 2001.  Wages and  consulting  fees  increased
     $57,000  and  $27,000,  respectively.  All  other  items,  such as  travel,
     entertainment,  commissions and rent, in the aggregate, increased $134,000.
     Offsetting  these  increases was the  elimination of the Global  Technology
     Services product offering which incurred expenses totaling $126,000 for the
     2001 period.

     --   Sales and marketing  expenses increased $101,000 to $1,793,000 for the
          nine months ended  September 30, 2002 when compared to $1,692,000  for
          the nine months ended  September 30, 2001. The acquisition of Platinum
          increased  expenses by $103,000.  Further,  consulting  fees increased
          $171,000.  Additionally,  wages and rent expense increased $48,000 and
          $78,000, respectively. Offsetting these additions, among other things,
          was a reduction in advertising  expense of $39,000 and the elimination
          of the Global  Technology  Services  product  offering  which  totaled
          $365,000 for the 2001 period. Additionally,  the Company paid $100,000
          in commissions  during the nine-month period ended September 30, 2002,
          including  $50,000 earned by a sales  consulting firm, which is wholly
          owned by the Company's president.

     General and  administrative  expenses include  administrative and executive
     salaries and related  benefits,  legal,  accounting and other  professional
     fees as well as general corporate overhead.

     --   Expenses   decreased  $87,000  to  $987,000  for  three  months  ended
          September 30, 2002, when compared to $1,074,000 reported for the three
          months ended  September 30, 2001.  Major factors  contributing to this
          decrease  include  reductions  in legal fees and expenses as well as a
          reduction  in expenses  related to the  Company's  annual  shareholder
          meeting totaling $150,000.  Additionally,  the Company further reduced
          expenses by  approximately  $26,000 as a result of the  elimination of
          the Global Technology  Services offering.  Offsetting these decreases,
          among other things,  were general and administrative  expenses related
          to Platinum that increased by $35,000 when compared to the same period
          in 2001.

     --   Expenses  decreased  $125,000 to $2,929,000  for the nine months ended
          September  30, 2002 when  compared to the nine months ended  September
          30, 2001. Major factors  contributing to this decrease include,  among
          other  things,  decreases  in wages,  bad debts and legal  expenses of
          $127,000, $35,000 and $210,000,  respectively,  and the elimination of
          the Global Technology Services product offering of $98,000. Offsetting

                                       15
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS


          the reductions was an increase in consulting fees of $187,000, as well
          as $87,000 of expenses attributable to Platinum.

Amortization and depreciation expenses varied slightly.

As  discussed  in Note 8, for the nine months  ended  September  30,  2002,  the
Company sold 160,600 shares of NetWolves  common stock,  resulting in a net loss
of  $264,000.  Further,  as  discussed  in Note 8, at June 30,  2002 the Company
determined to adjust the carrying value on its remaining shares of NetWolves and
recorded  an  other-than-temporary  decline  in  its  Investment  in  NetWolves,
resulting in a loss of $457,000.

As discussed in Note 8, for the three and nine months ended  September 30, 2002,
the Company  recorded  losses  pertaining to its equity  investment in Voyant of
$37,000  and  $138,000,  respectively.  Additionally,  during the three and nine
months ended  September 30, 2002, the Company  directly and indirectly  advanced
approximately $244,000 and $465,000, respectively, to Voyant, for which it is to
receive an aggregate of approximately  46,400,000  shares of Voyant common stock
in settlement  thereof.  The Company did not increase the carrying  value of its
investment in Voyant and has therefore  recognized an additional  loss in Voyant
of $244,000.  As a result, the Company recorded an "Equity in Loss of Voyant and
Valuation  Adjustment"  aggregating  to $281,000  and $603,000 for the three and
nine months ended September 30, 2002, respectively.  The Company began providing
various  services  for  Voyant  late in the second  quarter of 2002,  continuing
through  September 30, 2002. The Company agreed to accept  12,300,000  shares of
Voyant stock as payment for these services increasing its ownership in Voyant to
approximately 20%.


The Company made no  provision  for taxes during the three and nine months ended
September  30,  2002.  The tax  provision  for the three and nine  months  ended
September 30, 2001 was none and $46,000, respectively,  which consisted entirely
of current tax expense.

Financial Condition and Liquidity

For the nine months ended September 30, 2002, the Company incurred net operating
losses thereby  requiring cash from sources other than normal operations to fund
its operating activities. In order to fund its operating losses, the Company:

     --   As  described  in  Note 4,  in  October  2002,  the  Company  received
          $2,000,000 from the sale of Preferred Stock, less fees and expenses of
          $178,000,  portions  of  which  are  payable  in  either  cash  or the
          Company's  common stock;
     --   as described in Note 4, received  $573,000 from the sale of its common
          stock;
     --   as  described  in Note 5, the  Company's  chairman  loaned the Company
          $250,000;
     --   as described in Note 8, the Company partially  liquidated its holdings
          of NetWolves common stock by selling 160,600 shares in the open market
          for aggregate proceeds of approximately $282,000;
     --   continues to make use of the financing arrangement with an asset based
          lending institution;

As detailed in the Condensed  Consolidated  Statement of Cash Flows,  during the
nine month period ended September 30, 2002, the Company  utilized  $1,261,000 in
operating  activities,  which  includes,  among  other  items,  a  net  loss  of
$4,832,000,  an increase in accounts  receivable  of $336,000 and $336,000  paid
toward  the  restructuring,  partially  offset  by  non-cash  expenses  totaling
$2,748,000,  an increase in  deferred  revenue of  $763,000,  and  decreases  in
prepaid expenses and other current assets of $733,000.  Further, during the nine
months ended September 30, 2002, the Company expended approximately $351,000 for

                                       16
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

capital  expenditures,  which included $99,000 of additional data processing and
Internet connectivity  equipment for its co-location facility. In addition,  the
Company advanced $465,000 to Voyant.

The Company's  management  has and will continue to take numerous  steps that it
believes will create positive operating cash flow for the Company.  Key measures
are as follows:

     --   Expanding the Company's products and services:

               --   The Company is  continually  expanding its suite of products
                    and services. The current ASP offering includes, among other
                    things,  electronic bill presentation.In the near future the
                    Company  expects to release an enhanced ASP offering,  which
                    will provide electronic payment capability.
               --   The acquisition of Platinum in 2001,  expanded the Company's
                    product  offerings.  Management  believes  this  acquisition
                    significantly enhances the Company's current market strategy
                    by  allowing  it to  capitalize  on the  growing  trend  for
                    outsource  services  within the  communications  sector.  It
                    should be noted that with  respect to products  and services
                    offered through Platinum, during the three months ended June
                    30, 2002,  the Company  entered  into a three year  services
                    agreement  with a Fortune 100 company.  Further,  during the
                    three   months   ended   September   30,  2002  the  Company
                    consummated  another services  agreement with a Fortune 1000
                    company.

     --   Expanding custom engineering / development services:

               --   The Company  generated  custom  engineering fees of $458,000
                    during the third quarter of 2002 and  $1,682,000  during the
                    nine months ended  September 30, 2002.  Management  believes
                    that this source of revenue should continue through 2003. It
                    has been shown that this  source of revenue  more often than
                    not leads to the more profitable recurring revenue streams;

          --   In 2002,  the Company  entered into a new ASP agreement with IBM,
               which will enable IBM to provide an  electronic  invoice to their
               customers.

-- Additionally,  the Company has obtained a commitment from its Chairman, other
members of the Board of  Directors  as well as its  executive  officers in which
they will provide, under certain  circumstances,  up to an aggregate of $750,000
for working capital purposes, if needed, through June 30, 2003.

Management believes that its plan will ultimately enable the Company to generate
positive cash flows from operations.  Until such time, the Company believes that
its present  cash on hand,  the sale of the  remainder of its  NetWolves  common
stock,  as well as obtaining  additional  debt and/or  equity  financing  should
provide adequate funding through at least September 30, 2003. However, there can
be no assurances  that the Company will have  sufficient  funds to implement its
current  plan. In such an event,  the Company  could be forced to  significantly
alter its plan and reduce its  operating  expenses,  which could have an adverse
effect on revenue generation and operations in the near term.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        Not applicable

ITEM 4 - CONTROLS AND PROCEDURES

Our chief  executive  officer and chief  financial  officer have  supervised and
participated in an evaluation of the  effectiveness  of our disclosure  controls
and  procedures  as of a date  within 90 days of the date of this  report,  and,
based on their  evaluations,  they  believe  that our  disclosure  controls  and
procedures (as defined in Rule 13a-14(c) of the Securities Exchange Act of 1934,
as amended) are designed to ensure that information  required to be disclosed by
us in the reports  that we file or submit under the  Securities  Exchange Act of
1934 is recorded,  processed,  summarized and reported,  within the time periods
specified in the  Commission's  rules and forms.  As a result of the evaluation,
there were no significant  changes in our internal  controls or in other factors
that could  significantly  affect these controls subsequent to the date of their
evaluation.



                                       17
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

                           PART II OTHER INFORMATION



Item 1. Legal Proceedings
     None

Item 2. Changes in Securities
     At the Annual Meeting of Shareholders,  a proposal to amend the Certificate
of  Incorporation  to authorize  2,000,000  shares of preferred stock, par value
$0.0001  was  approved.  The  Company,  pursuant  to an  agreement  dated  as of
September  25,  2002,  sold 93,458  shares of a Series A  Convertible  Preferred
Stock,  par value  $.0001 per share in  consideration  for  $2,000,000  in cash,
pursuant to the terms of a Stock Purchase Agreement. See Note 4 to the Condensed
Consolidated Financial Statements.

Item 3. Defaults Upon Senior Securities
     None.

Item 4. Submission of Matters to a Vote of Security Holders
The Company held its annual shareholders  meeting on August 5, 2002 at the Grand
Hyatt Hotel in New York City, New York.

1. Four  members  of the  Board  were  elected  to serve  until the next  Annual
Shareholders  Meeting.  The  names  of these  directors  and  votes  cast are as
follows:

                                          FOR                  WITHHELD
                                          ---                  --------

James  A  Cannavino                     3,376,243               22,350
Charles Feld                            3,376,243               22,350
Dr. Dennis Murray                       3,376,243               22,350
Carla J. Stovall                        3,376,243               22,350

2. A  proposal  to  amend  the  Certificate  of  Incorporation  eliminating  the
requirement  to annually  elect  directors and  substituting  in its stead,  the
creation of a classified Board of Directors was passed by a vote of 2,322,343 in
favor, 69,849 against and 6,485 abstained.

3. A proposal to amend the Certificate of Incorporation  to authorize  2,000,000
shares of preferred  stock,  par value $0.0001 was passed by a vote of 2,306,346
for; 85,519 against and 6,851 abstained.

4. A proposal to amend the By-Laws of the Company by requiring a 66-2/3% vote of
shareholders to call a special  meeting of shareholders  was passed by a vote of
2,309,178 in favor, 82,100 voted against and 13,417 abstained.

5. The shareholders ratified the appointment by the Board of Directors of Marcum
& Kliegman,  LLP as the Company's  independent  certified public accountants for
the year ending  December 31, 2002 with  3,394,916 in favor,  25,793 opposed and
12,309 abstaining.

6. A proposal to ratify and approve the  Company's  2002-A  Stock Option / Stock
Issuance Plan  granting the Board of Directors  authority to grant up to 875,000
shares of stock or stock  options  was passed by a vote of  2,309,303  voting in
favor, 79,462 opposing and 8,476 abstaining.

Item 5. Other Information
     None.

Item 6. Exhibits and Reports on Form 8-K.
     None.

                                       18
<PAGE>
                      DIRECT INSITE CORP. AND 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.


DIRECT INSITE CORP.



/s/ Warren Wright
--------------------------
Warren Wright              Chief Executive Officer           November 14, 2002


/s/ George Aronson
--------------------------
George Aronson             Chief Financial Officer           November 14, 2002

                                       19
<PAGE>



                                 CERTIFICATIONS




I, Warren Wright certify that:

     1. I have  reviewed  this  quarterly  report on Form 10-Q of  Direct Insite
Corp.;

     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 we 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 function):

          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 or not 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 14, 2002

                                                /s/ Warren Wright
                                                ________________________________
                                                Warren Wright
                                                Chief Executive Officer

                                       20
<PAGE>
                                 CERTIFICATIONS

I, George Aronson, certify that:

     1. I have  reviewed  this  quarterly  report on Form 10-Q of Direct  Insite
Corp.;

     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 we 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 I 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 function):

          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 or not 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 14, 2002

                                        /s/ George Aronson
                                        ________________________________________
                                        George Aronson
                                        Chief Financial Officer

                                       21
<PAGE>

                                 CERTIFICATIONS


             Certificate Pursuant to
             18 U.S.C. Section 1350,
             as Adopted Pursuant to
             Section 906 of the Sarbanes-Oxley Act of 2002

In connection  with the Quarterly  Report of Direct Insite Corp. (the "Company")
on Form  10-Q for the  quarter  ending  September  30,  2002 as  filed  with the
Securities and Exchange Commission on the date hereof (the "Report"),  I, Warren
Wright, Chief Executive Officer, certify, pursuant to 18 U.S.C. 1350, as adopted
pursuant to 906 of the Sarbanes-Oxley Act of 2002, that:

     (1)  The Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects, the financial condition and result of operations of
          the Company.

Date: November 14, 2002

                                   /s/ Warren Wright
                                   ____________________________________________
                                   Warren Wright
                                   Chief Executive Officer

                                       22
<PAGE>
                                 CERTIFICATIONS

            Certificate Pursuant to
            18 U.S.C. Section 1350,
            as Adopted Pursuant to
            Section 906 of the Sarbanes-Oxley Act of 2002

In connection  with the Quarterly  Report of Direct Insite Corp. (the "Company")
on Form  10-Q for the  quarter  ending  September  30,  2002 as  filed  with the
Securities and Exchange Commission on the date hereof (the "Report"),  I, George
Aronson,  Secretary,  Treasurer  and Chief  Financial  Officer  of the  Company,
certify,  pursuant  to 18  U.S.C.  1350,  as  adopted  pursuant  to  906  of the
Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the  requirements  of Section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

(2)  The information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and result of operations of the Company.

Date: November 14, 2002

                                       /s/ George Aronson
                                       _________________________________________
                                       George Aronson
                                       Secretary, Treasurer and
                                       Chief Financial Officer



                                       23