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 June 30, 2002
                                       OR


        [ ]    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 August 02, 2002
was: 3,805,512.

<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

                                     INDEX


PART I - FINANCIAL INFORMATION                                          Page

   Condensed Consolidated Balance Sheets as of June 30, 2002 and
   December 31, 2001                                                       3

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

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

   Notes to Condensed Consolidated Financial Statements               6 - 11

   Management's Discussion and Analysis of Financial Condition
   and Results of Operations                                         12 - 16

   Quantitative and Qualitative Disclosure About Market
      Risk -------- Not Applicable

PART II - OTHER INFORMATION

   Item 1. Legal Proceedings                                              17

   Item 2. Changes in Securities                                          17

   Item 3. Defaults Upon Senior Securities                                17

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

   Item 5. Other Information                                              17

   Item 6. Exhibits and Reports on Form 8-K                               17

   Signatures                                                             18

<PAGE>


                      DIRECT INSITE CORP. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS

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


<TABLE>
<CAPTION>
                                                     June 30,          December 31,
                                                      2002                2001
                                                     --------          ------------
                                                    (Unaudited)          (Audited)
ASSETS
Current assets
<S>                                                <C>                  <C>
  Cash and cash equivalents                        $     595            $   1,359
  Accounts receivable, net of allowance for
    doubtful accounts of $76 and $53 in 2002
    and 2001, respectively                             1,071                1,098
  Prepaid expenses and other current assets              857                1,096
  Investment in NetWolves Corporation                    266                1,209
                                                   ---------            ---------
    Total current assets                               2,789                4,762

Software costs, net                                      470                  508
Property and equipment, net                            1,059                1,278
Investment in non-marketable securities                  555                  656
Other assets                                             576                  586
                                                   ---------            ---------
                                                   $   5,449            $   7,790
                                                   =========            =========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
  Accounts payable and accrued expenses            $   1,593            $   2,057
  Restructuring costs payable, current portion           218                  294
  Due to bank                                            704                  448
  Current portion of long-term debt                      251                  290
                                                   ---------            ---------
    Total current liabilities                          2,766                3,089

Long term debt, net of current portion                   326                  103
Restructuring costs payable, long-term                   237                  492
                                                   ---------            ---------
    Total liabilities                                  3,329                3,684
                                                   ---------            ---------
Commitments and contingencies

Shareholders' equity
  Common  stock, $.0001 par value; 150,000,000
    shares authorized; 3,800,994 and 2,472,866
    shares issued in 2002 and 2001, respectively;
    and 3,745,512 and 2,401,828 shares outstanding
    in 2002 and 2001, respectively                         -                    -
  Additional paid-in capital                         106,111              104,573
  Accumulated deficit                               (103,459)            (100,114)
  Subscriptions receivable                               (89)                   -
  Unearned compensation                                  (90)                   -
  Accumulated other comprehensive loss                   (25)                 (25)
                                                   ---------            ---------
                                                       2,448                4,434
  Common stock in treasury, at cost-24,371 shares       (328)                (328)
                                                   ---------            ---------
    Total shareholders' equity                         2,120                4,106
                                                   ---------            ---------
                                                   $   5,449            $   7,790
                                                   =========            =========

See notes to condensed consolidated financial statements
</TABLE>

                                       3
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

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

            FOR THE THREE AND SIX MNTHS ENDED JUNE 30, 2002 AND 2001
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                Three Months Ended                Six Months Ended
                                                     June 30,                         June 30,
                                               --------------------             --------------------
                                               2002            2001             2002            2001
                                               ----            ----             ----            ----
<S>                                        <C>              <C>              <C>             <C>
Revenue                                    $   1,982        $     677        $   3,496       $   1,194
                                           ---------        ---------        ---------       ---------
Costs and expenses
  Operations, research and development         1,088              937            2,146           1,582
  Sales and marketing                            615              617            1,150           1,122
  General and administrative                     996            1,149            1,941           1,979
  Amortization and depreciation                  233              241              487             479
                                           ---------        ---------        ---------       ---------
                                               2,932            2,944            5,724           5,162
                                           ---------        ---------        ---------       ---------
Operating loss                                  (950)          (2,267)          (2,228)         (3,968)

Other income (expenses)
  Loss on sales of NetWolves common stock          -              (98)            (250)            (98)
  Other-than-temporary decline in
    Investment in NetWolves                     (457)               -             (457)              -
  Equity in Loss of Voyant and Valuation
    Adjustment                                  (259)               -             (322)              -
  Interest income (expense), net                 (51)              10              (88)           (307)
                                           ---------        ---------        ---------       ---------
Loss before provision for income taxes        (1,717)          (2,355)          (3,345)         (4,373)

Provision for income taxes                         -              (13)               -             (46)
                                           ---------        ---------        ---------       ---------
Net loss                                   $  (1,717)       $  (2,368)       $  (3,345)      $  (4,419)
                                           =========        =========        =========       =========
Other comprehensive income
  Reclassification adjustment and
  unrealized gain on marketable securities       303              616                -           1,319
                                           ---------        ---------        ---------       ---------

Comprehensive loss                         $  (1,414)       $  (1,752)       $  (3,345)      $  (3,100)
                                           =========        =========        =========       =========
Basic and diluted net loss per share       $   (0.46)       $   (1.44)       $   (0.99)      $   (2.87)
                                           =========        =========        =========       =========
Basic and diluted weighted average
  common shares outstanding                    3,701            1,650            3,395           1,538
                                           =========        =========        =========       =========

See notes to condensed consolidated financial statements
</TABLE>

                                       4
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                               For the six months ended
                                                                       June 30,
                                                               -------------------------
                                                                 2002             2001
                                                                 ----             ----
                                                                     (In thousands)
<S>                                                            <C>             <C>
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
Cash flows from operating activities
  Net loss                                                     $   (3,345)     $   (4,419)
  Adjustments to reconcile net loss to net cash used in
    operating activities
      Depreciation and amortization
        Property and equipment                                        427             477
        Software costs                                                 58              10
        Other                                                           -               1
      Non-cash interest charge pertaining to the discount on
        convertible debentures and loss on prepayment                   -             346
      Provision for doubtful accounts                                  35              36
      Loss on sales of NetWolves common stock                         250              98
      Other-than-temporary decline in Investment in NetWolves         457               -
      Equity in Loss of Voyant and Valuation Adjustment               322               -
      Common stock and options issued for services                    464             481
  Changes in operating assets and liabilities
      Accounts receivable                                              (8)           (203)
      Prepaid expenses and other current assets                       239             327
      Other assets                                                     10              76
      Accounts payable and accrued expenses                          (226)              2
      Restructuring costs payable                                    (281)         (1,296)
      Income taxes payable                                              -            (802)
                                                                ----------     ----------
           Net cash used in operating activities                   (1,598)         (4,866)
                                                                ----------     ----------
Cash flows from investing activities
      Proceeds from the sale of NetWolves common stock                236               -
      Advances to Voyant                                             (194)              -
      Increase in cash resulting from the acquisition of
        Platinum Communications                                         -              15
      Consideration paid in Platinum Communications acquisition         -            (142)
      Investment in non-marketable securities                           -            (500)
      Capital expenditures                                           (188)           (620)
                                                                ----------     ----------
           Net cash used in investing activities                     (146)         (1,247)
                                                                ----------     ----------
Cash flows from financing activities
      Proceeds from bank advances, net                                256               -
      Proceeds from the sale of common stock                          560               -
      Proceeds from long term debt                                    250               -
      Repayments of long-term debt                                    (86)            (22)
      Repayments of convertible debentures                             -           (3,751)
                                                                ----------     ----------
           Net cash provided by (used in) financing activities        980          (3,773)
                                                                ----------     ----------
Net decrease in cash and cash equivalents                            (764)         (9,886)

Cash and cash equivalents, beginning of period                       1,359         10,851
                                                                ----------     ----------
Cash and cash equivalents, end of period                        $      595     $      965
                                                                ==========     ==========

See notes to condensed consolidated financial statements
</TABLE>

                                       5
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001


1    Interim financial information

     The  condensed  consolidated  balance  sheet as of June 30,  2002,  and the
     condensed  consolidated  statements of operations and comprehensive  income
     (loss) and cash flows for the periods  ended June 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 six months
     ended June 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 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.

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

     On April 30, 2002 the Financial  Accounting Standards Board issued SFAS No.
     145,  "Rescission of FASB  Statements  No. 4, 44 and 64,  Amendment of FASB
     Statement No. 13, and Technical  Corrections".  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.
     Generally,  SFAS No. 145 is effective for transactions  occurring after May
     15, 2002.  The  adoption of this  standard is expected to have no impact to
     the Company.

                                       6
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001


     Statement of Financial  Accounting Standards 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 six months ended June 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,
   six months ended
   June 30, 2002                 (2,000)           (9,000)        (209,000)     (61,000)    (281,000)
                             -----------       -----------      -----------  -----------  -----------
Restructuring accrual,
   June 30, 2002              $       -        $    1,000       $  427,000     $ 27,000     $455,000
                             ===========       ===========      ===========  ===========  ===========
</TABLE>

4    Shareholders' equity

     In January 2002,  the Company's  Board of Directors  authorized and adopted
     the 2002 Stock / Stock  Option Plan  whereby  625,000  shares of its common
     stock were  reserved.  The 2002 Plan is divided  into two  separate  equity
     programs:  an option grant program and a stock issuance program.  Under the
     stock issuance program,  the purchase price per share is fixed by the Board
     of Directors or committee  but cannot be less than the fair market value of
     the common stock on the issuance date.

     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.

     --   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.

                                       7
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001


     --   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  entered  into in January  2002 (see
          below),  the Company issued 30,000 shares of its common stock,  valued
          at $30,000.

During the quarter ended March 31, 2002,  the Company  issued  858,054 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 213,580 shares of its common stock
          valued at $224,000  ($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 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.

                                       8
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001


<TABLE>
<CAPTION>
                                       Three Months Ended       Six Months Ended
                                            June 30,                June 30,
                                        2002        2001        2002        2001
                                        ----        ----        ----        ----
<S>                                   <C>        <C>          <C>         <C>
  ASP fees                            $ 1,111    $   515      $ 1,933     $   995
  Custom engineering fees                 646         73        1,224         110
  AMS fees                                225         89          339          89
                                      -------    -------      -------     -------
  Total Revenue                       $ 1,982    $   677      $ 3,496     $ 1,194
                                      =======    =======      =======     =======
</TABLE>

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

     For the three  months  ended June 30,  2002 and 2001,  the  Company has one
     major  customer that  accounted for 80.0% and 81.4% of the Company's  total
     revenue, respectively. For the three months ended March 31, 2002 this major
     customer  accounted  for 90.9% of total  revenue.  For the six months ended
     June 30, 2002 and 2001,  this major customer  accounted for 88.7% and 85.3%
     of the Company's total revenue, respectively. Accounts receivable from this
     customer  amounted to  $954,000  and  $401,000,  at June 30, 2002 and 2001,
     respectively.

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
     46,000,000  additional shares,  which will increase the Company's ownership
     in Voyant to approximately  10.5%. 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
     $38,000 and $101,000  non-operating loss for its pro rata share of Voyant's
     operations  for the  three  and six  month  periods  ended  June 30,  2002,
     respectively.

     The Company recently began providing administrative services to Voyant, the
     value of which are not  readily  determinable.  Further,  during  the three
     months ended June 30, 2002, the Company  directly and  indirectly  advanced
     approximately  $221,000 to Voyant, for which it is to receive approximately
     22,000,000 shares of Voyant common stock in settlement thereof,  increasing
     the  Company's  ownership in Voyant to  approximately  15%. 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 of $221,000. As a result, the Company recorded an "Equity in Loss of
     Voyant and Valuation Adjustment"  aggregating $259,000 and $322,000 for the
     three and six months ended June 30, 2002.

                                       9
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

            FOR THE THREE AND SIX MONTHS ENDED JUNE 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 March 31,
     2002,  the Company sold 120,000 shares in the open market at prices ranging
     from $2.00 to $2.06  aggregating  proceeds of  approximately  $236,000  and
     resulting in a realized loss of $250,000.  No shares of NetWolves were sold
     during the three months ended June 30, 2002; accordingly, at June 30, 2002,
     the Company  owned 178,500  shares of NetWolves  common stock with a quoted
     market value of $266,000 ($1.49 per share).  Further, at June 30, 2002, the
     Company wrote down its investment in NetWolves to the current market value.
     The loss of $457,000 has been included in "Other-than- temporary decline in
     Investment in NetWolves."


9    Management's Plans

     For the six months ended June 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:

     A.   continues to make use of the financing arrangement with an asset based
          lending institution;

     B.   as described in Note 4, received  approximately $560,000 from the sale
          of its common stock;

     C.   as  described  in Note 5, the  Company's  chairman  loaned the Company
          $250,000;

     D.   as described in Note 8, the Company partially  liquidated its holdings
          of NetWolves common stock by selling 120,000 shares in the open market
          for aggregate proceeds of approximately $236,000.

     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.  Later in the year,  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.  During the three months ended June 30, 2002,
               revenue increased to $225,000 up from $89,000 recorded during the
               same period in 2001. However, during the 2001 period, the Company
               only reported revenue from Platinum  operations for the two-month
               period May and June 2001.  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,   in  July  2002  the  Company
               consummated  another  services  agreement  with  a  Fortune  1000
               company.

                                       10
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001



     --   Expanding custom engineering / development services:

          --   The Company generated custom  engineering fees of $646,000 during
               the second  quarter of 2002 and believes that this revenue should
               continue for the remainder of 2002;

          --   The Company  believes  that revenue  generated  from  engineering
               services is the precursor to added recurring revenue sources.

     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 June 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.

10   Subsequent Events

     The Company held its annual meeting of  shareholders  on August 5, 2002 and
     approved the following  significant  matters:

     --   Amended the Certificate of  Incorporation  eliminating the requirement
          to annually elect directors and substituting in its stead, creation of
          a classified Board of Directors;

     --   Amended the Certificate of Incorporation to authorize 2,000,000 shares
          of preferred stock;

     --   Amended  the By-Laws of the  Company by  requiring  a 66-2/3%  vote of
          shareholders to call a special meeting of shareholders;

     --   Approved  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.

     In July 2002, the Board of Directors  granted 60,000 shares of common stock
     and 787,000 stock options as follows:

     o    60,000 shares of common stock were granted to the  Company's  Board of
          Directors as compensation for Board services in 2002;

     o    169,000  stock  options  were  granted  to  the  Company's   Board  of
          Directors;

     o    167,500 stock options were granted to the  Company's  named  executive
          officers;

     o    400,500 stock options were granted to employees;  and

     o    50,000 options were granted to a consultant.

     All options have an exercise  price of $2.05,  the fair market value on the
     date of grant, and vest in 1/3 increments on each anniversary date.

                                       11

<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

                       MANAGEMENT DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001



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.

                                       12
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

                       MANAGEMENT DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001


Results of operations

For the three months ended June 30, 2002, total revenue increased  $1,305,000 or
193% when compared to the  three-month  period ended June 30, 2001. This was the
fifth  consecutive  quarter in which the Company  reported  revenue  growth.  An
analysis of the revenue for the  current  quarter  reflects  growth in all three
product offerings: ASP increased $596,000 when compared to the second quarter of
2001;  engineering fees increased to $646,000 compared to $73,000  recognized in
the three months ended June 30, 2001 resulting in a $573,000  increase;  and AMS
also  experienced  revenue  growth from $89,000 in the second quarter of 2001 to
$225,000 for the three months ended June 30, 2002. On a year to date basis,  the
Company's revenue increased  $2,302,000 over the six months ended June 30, 2001,
or 193%, as follows: ASP revenue increased $938,000, representing a 94% increase
in revenue from this service.  Significant  factors  contributing to the overall
growth  include  expansion of product  offerings  and  increases in the customer
base.  Engineering revenue grew by $1,114,000,  a ten-fold growth impact. During
2001, the Company began providing custom integration / engineering services. The
Company  believes  that  revenue  generated  from  engineering  services  is the
precursor to added recurring  revenue sources.  In an effort to better serve its
customers,  in 2001, the Company built a fully redundant  facility within an IBM
co- location  center,  the purpose of which is to ensure virtual zero down time.
During the  six-month  period ended June 30, 2002,  AMS witnessed an increase of
$250,000  in revenue,  or 279%,  when  compared  to $89,000 in the 2001  period.
However,  during the 2001  period,  the Company only  reported  revenue from AMS
operations  for the  two-month  period May and June 2001.  While there can be no
assurances,  management  believes that total revenue should continue to increase
for the remainder of 2002.

International   Business  Machines  Corporation  ("IBM")  continues  to  be  the
Company's  largest  customer  accounting  for  80%  of  total  revenue  for  the
three-month  period ended June 30, 2002.  However,  as a result of the continued
growth  realized  during the quarter  ended June 30, 2002,  IBM's  percentage of
total  revenue  began  to  decrease,  down  from 91% of  total  revenue  for the
three-month  period ended March 31, 2002.  For the six-month  periods ended June
30, 2002 and 2001, IBM accounted for 88% and 85% of total revenue, respectively.
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.  Further,  in an  effort  to  reduce  this  sales
concentration, the Company is actively pursuing new sales opportunities.

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 June 30, 2002 and 2001,  the
          Company increased its operations, research and development expenses by
          $151,000.  The most significant item contributing to this increase was
          additional operations, research and development expenses incurred as a
          result  of  the  acquisition  of  Platinum  of  $87,000.  The  Company
          continues  to upgrade,  improve and enhance its current  products  and
          services.  As a  result,  expenses  unrelated  to  Platinum  increased
          $64,000.

     --   When  comparing  the six  months  ended  June 30,  2002 and 2001,  the
          Company increased its operations, research and development expenses by
          $564,000.  Here again, the most significant item  contributing to this
          increase was additional operations,  research and development expenses
          incurred as a result of the  acquisition of Platinum of $246,000.  The
          Company continues to upgrade, improve and enhance its current products

                                       13
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

                       MANAGEMENT DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001


          and services.  As a result,  expenses  unrelated to Platinum increased
          $318,000.  As  described  above  the  Company  has  increased  revenue
          $2,302,000 when comparing the six month periods ended June 30 2002 and
          2001,  yet have only increased  expenses in the category  unrelated to
          the Platinum  acquisition by $318,000.  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  decreased  $2,000 to $615,000  for the
          three months ended June 30,  2002,  when  compared to $617,000 for the
          three  months  ended  June 30,  2001.  The  acquisition  of  Platinum,
          contributed  approximately  $31,000 of additional  expenses.  Further,
          wages and consulting fees increased $42,000 and $87,000, respectively.
          Offsetting these additions, among other things, was the elimination of
          the Global Technology Services product offering which totaled $159,000
          for the 2001  period.  Additionally,  the Company  paid  $50,000 for a
          commission earned by a sales consulting firm, which is wholly owned by
          the Company's president.

     --   Sales and marketing  expenses  increased $28,000 to $1,150,000 for the
          six months ended June 30, 2002 when compared to $1,122,000 for the six
          months  ended June 30, 2001.  The  acquisition  of Platinum  increased
          expenses by $138,000.  Further,  consulting  fees increased  $196,000.
          Offsetting  these  additions,  among other things,  was a reduction in
          advertising  expense  of  $34,000  and the  elimination  of the Global
          Technology  Services  product  offering which totaled $241,000 for the
          2001 period.

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  $153,000 to $996,000  for three months ended June
          30, 2002,  when compared to  $1,149,000  reported for the three months
          ended June 30,  2001.  Major  factors  contributing  to this  decrease
          include,  among  other  things,  decreases  in wages  and bad debts of
          $83,000 and $28,000, respectively. General and administrative expenses
          related to Platinum  decreased  by $12,000  when  compared to the same
          period in 2001. Additionally,  the Company further reduced expenses by
          approximately  $40,000,  as a result of the  elimination of the Global
          Technology Services offering.

     --   Expenses decreased $38,000 to $1,941,000 for the six months ended June
          30, 2002 when  compared to the six months ended June 30,  2001.  Major
          factors  contributing  to this decrease  include,  among other things,
          decreases   in  wages  and  bad  debts  of   $125,000   and   $35,000,
          respectively,  and the elimination of the Global  Technology  Services
          product  offering  which  totaled  $72,000,  offset  by  increases  in
          consulting   fees  of   $139,000   as  well  as  $54,000  of  expenses
          attributable to the Company's newly acquired subsidiary, Platinum.

Amortization and depreciation expenses varied slightly.

                                       14
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

                       MANAGEMENT DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001



As discussed in Note 8, for the six months ended June 30, 2002, the Company sold
120,000 shares of NetWolves  common stock,  resulting in a net loss of $250,000.
Further,  as discussed in Note 8, 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 six months  ended June 30, 2002,  the
Company recorded losses pertaining to its equity investment in Voyant of $38,000
and $101,000, respectively. Additionally, during the three months ended June 30,
2002, the Company  directly and indirectly  advanced  approximately  $221,000 to
Voyant,  for which it is to receive  approximately  22,000,000  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 $221,000. As a result, the Company recorded an "Equity in Loss
of Voyant and Valuation Adjustment" aggregating to $259,000 and $322,000 for the
three and six months ended June 30, 2002, respectively.

The Company  made no  provision  for taxes during the three and six months ended
June 30,  2002.  The tax  provision  for the three and six months ended June 30,
2001 was $13,000 and $46,000, respectively,  which consisted entirely of current
tax expense.

Financial Condition and Liquidity

For the six months  ended June 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:

     1.   continues to make use of the financing arrangement with an asset based
          lending institution;

     2.   as described in Note 4, received  approximately $560,000 from the sale
          of its common stock;

     3.   as  described  in Note 5, the  Company's  chairman  loaned the Company
          $250,000;

     4.   as described in Note 8, the Company partially  liquidated its holdings
          of NetWolves common stock by selling 120,000 shares in the open market
          for aggregate proceeds of approximately $236,000.

As detailed in the Condensed  Consolidated  Statement of Cash Flows,  during the
six month  period  ended June 30,  2002,  the  Company  utilized  $1,598,000  in
operating  activities,  which  includes,  among  other  items,  a  net  loss  of
$3,345,000, an increase in accounts payable and accrued expenses of $226,000 and
$281,000 paid toward the  restructuring,  partially offset by non-cash  expenses
totaling  $2,013,000 and decreases in prepaid  expenses and other current assets
of $239,000.  Further,  during the six months  ended June 30, 2002,  the Company
expended approximately $188,000 for capital expenditures, which included $84,000
of  additional  data  processing  and Internet  connectivity  equipment  for its
co-location facility. In addition, the Company advanced $194,000 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.  Later in the year,  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.  During the three months ended June 30, 2002,
               revenue increased to $225,000 up from $89,000 recorded during the
               same period in 2001. However, during the 2001 period, the Company
               only reported revenue from Platinum  operations for the two-month
               period May and June 2001.  Management  believes this  acquisition

                                       15
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

                       MANAGEMENT DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001


               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,   in  July  2002  the  Company
               consummated  another  services  agreement  with  a  Fortune  1000
               company.

          --   Expanding custom engineering / development services:

               --   The Company  generated  custom  engineering fees of $646,000
                    during the second  quarter  of 2002 and  believes  that this
                    revenue should continue for the remainder of 2002;

               --   The Company believes that revenue generated from engineering
                    services  is  the  precursor  to  added  recurring   revenue
                    sources.

     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 June 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.

                                       16
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

                          PART II - OTHER INFORMATION

           FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001



Item 1. Legal Proceedings
        None

Item 2. Changes in Securities
        None.

Item 3. Defaults Upon Senior Securities
        None.

Item 4. Submission of Matters to a Vote of Security Holders
        None.

Item 5. Other Information
        None.

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

     (a)  Exhibit 99 -  Certifications pursuant  to 18 U.S.C.  Section  1350 as
          adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



                                       17
<PAGE>


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                         August 14, 2002


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





                                       18