UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                ---------------
                                    FORM 10-K
(MARK ONE)

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

                       For the Year Ended December 31, 2001
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                                       OR
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[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
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                            Commission File number: 1-07149
                                 ---------------
                                     ITIS INC.
                 (Exact name of Registrant as specified in its charter)

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          DELAWARE                                                82-0277987
 (State or other jurisdiction of                              (I.R.S. Employer
  incorporation or organization)                            Identification no.)
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              4301 WINDFERN ROAD, SUITE 200, HOUSTON, TEXAS, 77041
          (Address of principal executive offices including zip code)
                                 (281) 600-6000
               (Registrant's telephone number, including area code)

          Securities registered pursuant to Section 12(b) of the Act:

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                  TITLE OF EACH CLASS                  NAME OF EACH EXCHANGE
                                                        ON WHICH REGISTERED
                       None                                     None

           Securities registered pursuant to Section 12(g) of the Act:

                    COMMON STOCK, PAR VALUE $0.001 PER SHARE
                                (Title of Class)
                                 ---------------
Indicate by check mark whether 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 Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates of
Registrant as of March 29, 2002 was $1,669,910 (based on the closing price of
$0.08 per share on March 28, 2002 as reported on the over-the-counter Bulletin
Board).

         There were 39,575,780 shares of Registrant's Common Stock were
outstanding as of March 29, 2002.






                                    ITIS INC
                                    Form 10-K
                      For the Year Ended December 31, 2001

                                TABLE OF CONTENTS

                                        PART I
       1. Business.............................................................3
       2. Properties..........................................................14
       3. Legal Proceedings...................................................15
       4. Submission of Matters to a Vote of Security Holders.................15

                                        PART II
       5. Market for Registrant's Common Equity and Related Stockholder
          Matters.............................................................15
       6. Selected Consolidated Financial Data................................16
       7. Management's Discussion and Analysis of Financial Condition and
          Results of Operations...............................................18
       7A. Quantitative and Qualitative Disclosures about Market Risk.........25
       8. Consolidated Financial Statements and Supplementary Data............25
       9. Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure................................................25

                                         PART III
      10. Directors and Executive Officers of Registrant......................26
      11. Executive Compensation..............................................28
      12. Security Ownership of Certain Beneficial Owners and Management......33
      13. Certain Relationships and Related Transactions......................33

                                         PART IV
      14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.....36


                                     PART I

This Report contains certain forward-looking statements of the intentions,
hopes, beliefs, expectations, strategies and predictions of ITIS or its
management with respect to future activities or other future events or
conditions within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These statements are usually identified by the use of words such as "believes,"
"will," "anticipates," "estimates," "expects," "projects," "plans," "intends,"
"should," "could" or similar expressions. Investors are cautioned that all
forward-looking statements involve risks and uncertainty, including, without
limitation, variations in quarterly results, volatility of ITIS's stock price,
development by competitors of new or competitive products or services, the entry
into the market by new competitors, the sufficiency of ITIS's working capital
and the ability of ITIS to retain management, to implement its business
strategy, to assimilate and integrate any acquisitions, to retain customers or
attract customers from other businesses and to successfully defend itself in
ongoing and future litigation. Although ITIS believes that the assumptions
underlying the forward-looking statements contained in this Report are
reasonable, any of the assumptions could be inaccurate, and, therefore, there
can be no assurance that the forward-looking statements included in this Report
will prove to be accurate. In light of the significant uncertainties inherent in
the forward-looking statements included in this Report, the inclusion of such
information should not be regarded as a representation by ITIS or any other
person that the objectives and plans of ITIS will be achieved. Except for its
ongoing obligation to disclose material information as required by the federal
securities laws, ITIS undertakes no obligation to release publicly any revisions
to any forward-looking statements to reflect events or circumstances after the
date of this Report or to reflect the occurrence of unanticipated events.
Accordingly, the reader should not rely on forward-looking statements because
they are subject to known and unknown risks, uncertainties and other factors
that may cause our actual results to differ materially from those contemplated
by the forward-looking statements.

Item 1.  Business

General

ITIS Inc., formerly known as Internet Law Library, Inc. and Planet Resources,
Inc., is a Delaware corporation that provides electronic publishing services and
database content through Internet sites with subscription access, licenses and
transaction fees for databases through its subsidiaries, National Law Library,
Inc., GoverNet Affairs, Inc., and Brief Reporter, LLC. The content of the
databases consists of pending legislation, statutory law, rules and case law at
the federal and state levels. Legal briefs from certain important cases before
federal and state courts are also available, as are litigation forms. This
material can be useful to legislators, corporate regulatory personnel,
lobbyists, individual lawyers, judges, law firms, corporate legal departments,
government agencies, and businesses and individuals involved in legislative
efforts, litigation and corporate legal planning. Interfacing with these
databases are retrieval engines that are owned by ITIS or its subsidiaries. ITIS
also provides database content, data conversion, automated litigation support,
software, and hardware through its subsidiary, ITIS, Inc., a Texas corporation,
which conducts business as Litidex(R). Litidex(R) currently focuses its
attention on the automated litigation support aspect of the legal services
industry, with which it has had more than fifteen years experience. In cases
involving large numbers of documents, attorneys need to have a system for fast
data retrieval. The experienced staff of this subsidiary, along with the
Litidex(R) search engine, is ideally suited for the task of compiling databases
of documents that can be searched for instant information retrieval. These
databases are then put on secure Websites so that they can be available to
attorneys in multiple locations.

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

ITIS's common stock is traded on the over-the-counter Bulletin Board under the
symbol "ITII.OB."

Corporate History

ITIS was originally incorporated as Allied Silver-Lead Company in the State of
Idaho in 1967 and, until 1992, operated as an exploratory mining company. In
January 1996, ITIS was reincorporated in Delaware as a result of a merger and,
among other shareholder actions taken at that time, the corporate name was
changed to Planet Resources, Inc. Between 1992 and the reverse acquisition by
National Law Library in March of 1999, ITIS had no operations; however, the
Company maintained certain mining properties which were to be indirectly
distributed to those stockholders who were stockholders of ITIS prior to the
reverse acquisition by National Law Library. Effective March 27, 2001, the
mineral rights and certain cash were indirectly distributed to the original
stockholders of ITIS pursuant to an Amended and Restated Agreement and Plan of
Distribution dated March 13, 2001, whereby Planet Resources was spun-off from
ITIS and acquired the mining and other interests. ITIS no longer maintains any
interest in these properties.

National Law Library, a Texas corporation, was formed in November 1998 for the
purpose of developing and marketing an Internet destination to be used for legal
research. Following its formation, National Law Library's then sole stockholder,
who is the current President, Chief Executive Officer and Chairman of ITIS,
contributed to National Law Library all of his rights and interests in the
Litidex(R) search, retrieval and database software, and database content valued
at $934,000 and $1,096,000, respectively, in exchange for 15,152,500 shares of
common stock of National Law Library. Commercial operations began in January
1999, the same month in which National Law Library agreed in principle to be
acquired by ITIS. Under the Agreement and Plan of Distribution, each share of
National Law Library common stock was exchanged for one share of the
unregistered common stock of ITIS. In contemplation of this transaction, ITIS's
original stockholders agreed to a one-for-two reverse stock split, which
resulted in 2 million shares of ITIS's common stock being outstanding
immediately prior to the merger. After giving effect to these transactions,
former National Law Library stockholders owned 18 million shares of unregistered
common stock of ITIS and the original stockholders of ITIS owned 2 million
shares of ITIS common stock. Following the transaction, the stockholders voted
to change the name of Planet Resources, Inc. to Internet Law Library, Inc. Under
the terms of the agreement and plan of reorganization, the majority of the
original board of directors resigned and was replaced with directors elected by
the new stockholders At the annual meeting in September 2001, stockholders
approved a name change from Internet Law Library to "ITIS Inc." to better
describe the products of ITIS as being information technology and information
services.

Recent Transactions

On March 23, 2000, ITIS's board of directors approved the purchase of ITIS, Inc.
(Litidex(R)), a Texas corporation, subject to certain final reviews and
negotiations that were concluded in April 2000. According to the terms of a
Stock Exchange Agreement, effective April 30, 2000, ITIS exchanged 5,044,903
shares of its common stock, of which all were unregistered shares, for all of
the shares of Litidex(R). In addition to the exchange of stock, ITIS assumed
liabilities to Hunter M. A. Carr in the amount of $425,050. Mr. Carr forgave
these liabilities in September 2001.

Since National Law Library's inception on November 30, 1998 until ITIS's
acquisition of Litidex(R) on April 30, 2000, Litidex(R) served as one of
National Law Library's primary vendors of new case law content while also
providing various executive, sales, production, and administrative services. In
addition, Litidex(R) is a provider of automated litigation support services.
During the period from National Law Library's inception to December 31, 1999,
Hunter M.A. Carr was the sole stockholder of ITIS. During the three months ended
March 31, 2000, Mr. Carr sold or otherwise conveyed approximately 92% of his
stock in ITIS to various individuals and entities, some of which are directors,
officers or shareholders of ITIS or are entities controlled by directors of
ITIS. Of the 5,044,903 shares issued to Litidex(R) stockholders, 1,721,003
shares were issued to five directors of ITIS or their beneficiaries and 332,300
shares were issued to five officers of ITIS. The results of operations of
Litidex(R) have been included in ITIS's consolidated financial statements as of
the acquisition date.

The acquisition has been accounted for under the purchase method of accounting.
The total purchase price of $11,917,400 includes ITIS's allocation to intangible
assets for this acquisition of $6.9 million to database content and software
costs and $2 million to contractual agreements, based on the results of an
independent appraisal.

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

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

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

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

The acquisition was accounted for under the purchase method of accounting and
resulted in $90,600 of the purchase price being allocated to goodwill. On
October 31, 2001, the stock of Venco was sold and transferred by ITIS to its
former shareholders, Donald E. and Cathryn V. Tull. ITIS received $1,000 on
December 1, 2001 and will receive 5% of any future revenues of Venco in excess
of $10,000 per month. Including a provision for operating losses during
phase-out period, a loss on disposition of $73,950 was recorded in the quarter
ended December 31, 2001. These losses have been reported as "discontinued
operations" in accordance with SFAS 144. ITIS has not received any amounts
related to the agreement to receive 5% of any future revenues of Venco in excess
of $10,000 per month and no receipts under this agreement are expected in the
near term. During the year ended December 31, 2000, ITIS borrowed a total of
$1,805,000 from Hunter M.A. Carr, its CEO, to fund working capital requirements.
Additionally, Mr. Carr advanced $255,000 during January and February 2001. The
borrowings through February 28, 2001 were evidenced by unsecured promissory
notes, each bearing an annual interest rate of 11.75% and payable in full with
accrued interest after six months. On February 28, 2001, the notes through that
date were consolidated into one demand note in the amount of $2,060,000 bearing
interest at the rate of prime plus two percent per year, payable in cash on
demand after one year. At Mr. Carr's option and with 30 days written notice, the
note may be repaid in common stock of ITIS at a discounted price based on the
lowest price at which ITIS has sold its common stock during the one-year period
preceding the exercise of this option. On March 10, 2001, ITIS retired $250,000
in principal from this note by issuing 1,153,828 restricted shares of common
stock to Mr. Carr at a price of $.216667 per share. New promissory notes,
totaling $340,117 and bearing the same terms, have been issued to Mr. Carr for
advances to ITIS since March 1, 2001. With respect to these notes payable, Mr.
Carr has provided written commitment to ITIS to provide forbearance and extend
the due date on such notes to at least July 15, 2003, if to demand payment would
impair ITIS's ability to meet its other existing liabilities and commitments. As
of December 31, 2001, the total principal amount and accrued but unpaid interest
owed to Mr. Carr was $2,150,117 and $160,196, respectively. As of December 31,
2000, the total principal amount and accrued but unpaid interest owed to Mr.
Carr was $2,230,050 and $129,221, respectively. While Mr. Carr has no obligation
to continue funding the negative cash flow of the Company, the Company would
have been unable to remain in business in 2001 and 2000 without his funding.

In connection with the acquisition of Litidex(R),  ITIS assumed liabilities to
Hunter M. A. Carr in the amount of $425,050.  In September 2001 Mr. Carr
forgave this debt and the $425,050 was recorded as additional paid in capital.

In November and December 2000 ITIS entered into financing agreements with Cootes
Drive LLC as described below. Due to recent litigation in regard to these
financing agreements, it is not expected that any further funding will occur
from this source.

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

On December 5, 2000, ITIS executed a convertible promissory note in the face
amount of $500,000 in favor of Cootes Drive. The note was a demand note to
accrue interest at the rate of 5% per annum, and the principal could have been
converted to common stock of ITIS. In connection with this promissory note, ITIS
issued a warrant to Cootes Drive for 41,650 shares of ITIS common stock at an
exercise price of $0.288 per share. A commission of $17,500 and legal fees of
$30,000 related to the equity line financing arrangement were paid from the
proceeds of this note. On December 5, 2000, ITIS also entered into a side letter
agreement that obligated Cootes Drive to provide an additional $500,000 on
January 14, 2001, in exchange for another convertible promissory note, on
similar terms. This additional funding never occurred, nor is it expected to
occur in the future.

ITIS disputes the validity of the $500,000 convertible promissory note dated
December 5, 2000, on the grounds that this convertible note is a part of Cootes
Drive's efforts to defraud ITIS and to manipulate the price of ITIS's stock.
This convertible note and the associated funding transactions are all the
subject of ITIS's suit against Cootes Drive and others. See Item 3, Legal
Proceedings.

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

On January 16, 2001, ITIS executed a demand promissory note in the amount of
$100,000 payable to an unaffiliated third party. The note bears interest at 10%
per year and is payable in cash on demand after one year. At the option of the
holder and with 30 days written notice, the note may be repaid in common stock
of ITIS at a discounted price based on the lowest price at which ITIS has sold
its common stock during the one-year period preceding the exercise of this
option.

On February 1, 2001, ITIS executed a demand note for $190,000 in favor of George
A. Roberts, a member of its board of directors. The note bears interest at the
rate of prime plus two percent per year and is payable in cash on demand after
one year. At the option of the holder and with 30 days written notice, the note
may be repaid in common stock of ITIS at a discounted price based on the lowest
price at which ITIS has sold its common stock during the one-year period
preceding the exercise of this option.

On February 28, 2001, ITIS executed a demand promissory note in the amount of
$25,000 payable to an unaffiliated third party. The note bears interest at the
rate of prime plus two percent per year and is payable in cash on demand after
one year. At the option of the holder and with 30 days written notice, the note
may be repaid in common stock of ITIS at a discounted price based on the lowest
price at which ITIS has sold its common stock during the one-year period
preceding the exercise of this option. On February 28, 2002, the payee exercised
the option to convert the note plus accrued interest into restricted common
shares of ITIS.

On February 5, March 21, April 11, and May 16, 2001, ITIS executed demand
promissory notes for $50,000, $70,000, $25,000, and $12,500, respectively, in
favor of W. Paul Thayer, a member of the board of directors. The notes bear
interest at the rate of prime plus two percent per year and are payable in cash
on demand after one year. At the option of the holder and with 30 days written
notice, the notes may be repaid in common stock of ITIS at a discounted price
based on the lowest price at which ITIS has sold its common stock during the
one-year period preceding the exercise of this option. On May 31, 2001, ITIS
repaid Mr. Thayer $25,000 of principal toward these notes.

On October 24, 2001, ITIS wholly owned subsidiary ITIS, Inc., a Texas
corporation that conducts business as Litidex(R), executed a promissory note for
$1,000,000 in favor of George A. Roberts, a member of its board of directors.
The note bears interest at an annual fixed rate equal to the lesser of the
maximum amount allowed by law as adjusted from time to time or 18%, and is
payable in full with accrued interest after one year. The note is secured by a
Security Agreement covering all accounts, contract rights and general
intangibles arising out of the litigation support project among Litidex(R), the
law firm of Christian Wukoson Smith and Jewell, and the law firm of O'Quinn,
Laminack and Pirtle. Legal fees of $29,100 were paid from the proceeds of this
note.

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

During the year ended December 31, 2001, ITIS's cash and cash equivalents
decreased in total by $1,400 from the December 31, 2000 balance of $29,867 to
$69,280 in available cash and a bank overdraft in the amount of $40,813 at
December 31, 2001. Cash used in operating activities was $1,836,792, cash used
in investment activities was $415,683, and cash provided by financing activities
was $2,291,888. During the year ended December 31, 2000, ITIS borrowed a total
of $1,805,000 from Hunter M.A. Carr, its CEO, to fund working capital
requirements. Additionally, Mr. Carr advanced $255,000 during January and
February 2001. The borrowings through February 28, 2001 were evidenced by
unsecured promissory notes, each bearing an annual interest rate of 11.75% and
payable in full with accrued interest after six months. On February 28, 2001,
the notes through that date were consolidated into one demand note in the amount
of $2,060,000 bearing interest at the rate of prime plus two percent per year,
payable in cash on demand after one year. At Mr. Carr's option and with 30 days
written notice, the note may be repaid in common stock of ITIS at a discounted
price based on the lowest price at which ITIS has sold its common stock during
the one-year period preceding the exercise of this option. On March 10, 2001,
ITIS retired $250,000 in principal from this note by issuing 1,153,828
restricted shares of common stock to Mr. Carr at a price of $.216667 per share.
New promissory notes, totaling $340,117 and bearing the same terms, have been
issued to Mr. Carr for advances to ITIS since March 1, 2001. With respect to
these notes payable, Mr. Carr has provided written commitment to ITIS to provide
forbearance and extend the due date on such notes to at least July 15, 2002, if
to demand payment would impair ITIS's ability to meet its other existing
liabilities and commitments. As of December 31, 2001, the total principal amount
and accrued but unpaid interest owed to Mr. Carr was $2,150,117 and $160,196,
respectively. Since inception of the Company, we have been unsuccessful in
increasing our sales sufficiently in order to become a profitable enterprise.
Because of our current financial and operating condition, we may never become
profitable and may not remain in business. Without the funding from Mr. Carr,
the Company would not have been able to remain in business in 2001 and 2000. Mr.
Carr has no obligation to continue funding the Company's negative cash flow.

As reflected in the accompanying financial statements, ITIS has incurred
$18,557,247 in losses since inception, has a working capital deficit of
$2,934,163 at December 31, 2001, and has used significant amounts of cash in
operating the company. Accordingly, ITIS will require additional debt or equity
financing to fund its operations and execute its business plan. The inability to
obtain additional financing will substantially impact ITIS's ability to continue
as a going concern. Because future operating revenues may not be sufficient to
fund operations, management plans to continue to utilize additional loans from
Mr. Carr (President and Chairman of the Board of Directors of ITIS) and other
directors and investors as long as funds from these sources remain available. If
adequate funding from operations or other sources is not available, ITIS will
not be able to remain in business.

As shown in the accompanying consolidated financial statements, ITIS has
incurred significant losses since inception, maintains a working capital deficit
and has used significant amounts of cash in operating the company. Accordingly,
ITIS will require additional debt or equity financing to fund its operations and
execute its business plan. Management intends to seek required additional
financing from debt or equity issuances from insiders and third parties. If
these are not obtained the inability to obtain additional financing will
substantially impact ITIS's ability to continue as a going concern. Because
future operating revenues may not be sufficient to fund operations, management
plans to continue to utilize additional loans from Mr. Carr (President and
Chairman of the Board of Directors of ITIS) and other directors and investors as
long as funds from these sources remain available. If adequate funding from
operations or other sources is not available, ITIS will not be able to remain in
business. In its report on ITIS's Financial Statements for the year ended
December 31, 2001, Harper and Pearson Company, ITIS's independent auditors,
state that ITIS's recurring losses from operations, negative working capital
and cash flows, and retained deficits derived from its continuing losses, among
other things, raise substantial doubt about its ability to continue as a going
concern.

Products and Services

ITIS is engaged primarily in providing Internet Services through Brief Reporter,
GoverNetAffairs, and National Law Library, and automated litigation support
services through Litidex(R). Prior to October 1, 2001, ITIS provided compliance
and safety training materials through Venco Compliance. See Note 3 of the Notes
to Consolidated Financial Statements for financial information relating to
ITIS's business segments.

Brief Reporter offers more than 7,000 legal briefs on its Website
(www.briefreporter.com), making it one of the largest brief banks on the
Internet. Subscribers and transactional users can search among legal briefs from
actual cases. The Website offers featured briefs as well as notification of new
materials. Brief Reporter also earns some of its revenue from advertising.

GoverNet Affairs offers subscribers a cost-effective legislative information
management service that uses the Internet to save time and money by monitoring
and reporting the progress of pending legislation in all 50 states and the U.S.
Congress. Using GoverNet Affairs' Website, www.govaffairs.com, subscribers may
sign up for the following services:

o        customized daily, weekly or monthly reports showing the status of
         targeted legislation that may be summarized by topic or by legislator,
         and may be downloaded for internal use;

o        e-mail alerts that can be sent when pending bills are revised;

o        legislative  tracking  teams  comprised of  management,  lobbyists
         and attorneys  who may  communicate  with one another with
         password-protected privacy; and

o        behind-the-scenes commentaries on pending bills that are available
         from a network of political consultants.

GoverNet Affairs was built to be one of the most powerful online search tools on
the Internet for state and federal legislation. Using a multiple-matrix
database, nightly searches are conducted of every source of state and federal
legislation available on the Internet, and then this data is stored for
retrieval and processing. With this system, GoverNet Affairs performs text
comparisons and attaches information such as user notes and other user-specific
fields to any pending bill that is described over an Internet site. The system
is monitored to provide maximum coverage by jurisdiction and by topic. GoverNet
Affairs' legislative information is available at its Website,
www.govaffairs.com.

National Law Library provides a "virtual" law library that is designed for
performing legal research from offices, homes, or portable laptops. National Law
Library attracts people who need to conduct legal research, and prefer to do so
quickly, easily and inexpensively over the Internet. Built upon Web-based
architecture, National Law Library's virtual library enables users to access a
database providing core legal information at an attractive price. National Law
Library endeavors to grow by continuing to improve its search engine, publishing
accurate and current databases, adding to its forms and legal articles
libraries, maintaining its low cost, and developing Internet-oriented editorial
features, among other legal products.

The Litidex(R) search engine used by National Law Library's subscribers provides
for high-speed data retrieval using Boolean, proximity and citation search
criteria. National Law Library's primary products are case law and statutory law
databases. National Law Library's legal information is available through its
Website at www.itislaw.com and can be searched, downloaded and printed at no
additional cost.

Litidex(R) and its predecessor entities have provided automated litigation
support and other document handling services for more than fifteen years. During
1999 and 2000, Litidex(R) concentrated its efforts in assisting National Law
Library in its content and Website development and continues today to maintain
National Law Library's commercial Internet sites and databases. In 2001
Litidex(R) was hired by attorneys for complex securities litigation and other
automated litigation support work. Using the Litidex(R) search engine, millions
of documents are processed to create databases that are instantly searchable for
data retrieval.

In addition to its existing products and services, ITIS expects to provide a
number of additional services in the future, which may include the following:

o        database content and similar products for additional industries and
         business endeavors;

o        continued fast and frequent updating of all data;

o        linking statutes to proposed and pending legislation;

o        increased linking of citations among databases;

o        linking cases and briefs;

o        citation service;

o        additional forms;

o        topical classification of legal information; and

o        other such related legal research tools as needed by customers.

Our ability to provide these additional services and expand our market depends
upon a number of factors, many of which are beyond our control. These factors
include the rates of and costs associated with new debt or equity financing, new
customer acquisition, customer retention, capital expenditures, and other costs
relating to the expansion of operations, the timing of new product and service
announcements, changes in our pricing policies and those of our competitors,
market acceptance of our services, changes in operating expenses, strategy and
personnel, increased competition, technology changes, and general economic
factors including the financial and operating condition of the Company. There
can be no assurance that we will be successful in selling our services,
obtaining the needed debt or equity financing, developing the new products and
services, achieving profitability or positive cash flow in the future, or
remaining in business.

Raw Materials

The primary raw materials for Internet Services are pending legislation, court
opinions, and statutes not protected by copyright law. New content, including
new or pending legislation and recently decided case law, is acquired
electronically at no charge or purchased directly from the respective
legislatures and courts or other third parties. National Law Library also
obtains content for its databases from ITIS, which also formats and uploads the
content to National Law Library's Website.

For automated litigation support clients, the raw materials are the documents
produced by the law firms as well as from our own research efforts on behalf of
clients.

Customers

National Law Library has historically targeted its sales to small law firms and
solo practitioners who may find competitors' products too expensive. Small firms
and solo practitioners typically require legal information for the states in
which they practice. National Law Library intends to continue to increase the
number of state law databases available through its Website, and also intends to
continue to continue to market its products and services to additional small law
firms and solo practitioners, as well as larger law firms and corporate legal
departments. Through a presence on AOL, we intend to increase our potential
customer base and even market our services to non-lawyers. However, there can be
no assurance that National Law Library will be successful in these efforts, and
since inception we have been unable to attract enough customers to become
profitable.

The customers of GoverNet Affairs are primarily large law firms, trade
associations, and corporations doing business in many states, while Brief
Reporter's customers range from lawyers in sole practice to large nationally
recognized law firms.

While the major clients of Litidex(R) have been and continue to be law firms,
many businesses such as Boeing, Raytheon, Lone Star Steel, and even the United
States Government have hired Litidex(R) for litigation support whereby millions
of documents are processed to create searchable databases. In 2001, the law firm
of Christian Wukoson Smith and Jewell was the major client of Litidex(R).

Business Strategy

Although there can be no assurances that we will be successful in these
endeavors, our objective is to become one of the leading and most affordable
providers of information technology and information services. Our strategy to
accomplish this objective is to gain market share by:

o        the innovative use of the Internet and other technology;

o        offering our products and services at competitive prices;

o        the use of various media to attract and retain customers;

o        enriching core legal information with Internet-focused editorial
         enhancements;

o        providing excellent customer service and technical support;

o        adding content databases in fields outside of the legal field;

o        increased marketing of our automated litigation support services; and

o        being alert for opportunities to mesh the talents of our staff and our
         technology and experience with the needs of the public.

Internet and Technology

We expect to remain competitive in the market for legal research and automated
litigation support services through the continued use of the Internet and other
forms of technology. We believe that National Law Library, GoverNet Affairs and
Brief Reporter are at the forefront in the use of technology in the legal and
legislative research industry. In the case of National Law Library, this belief
stems from the portability of National Law Library's products and services, and
because of the speed of National Law Library's search engine, Litidex(R), that
is not available to our competitors. We believe that the Litidex(R) search
engine is a superior product to those used by our competitors. We also believe
that our litigation support package and experience in the industry provide a
superior alternative to in-house programs used by attorneys.

National Law Library and Brief Reporter strive to be at the forefront of
cutting-edge technology in both hardware and software as it relates to the needs
of the legal profession, and to document automation and data search and
retrieval methods. Specifically , as long as we are able to continue funding
these efforts, we intend to:

o        keep our databases current with immediate updates to case law,
         statutes, and rules and regulations online;

o        provide enhanced search capabilities including additional fielded and
         multiple database searching;

o        retain staff that are proficient and experienced legal researchers;

o        retain staff who are proficient in all phases of the Internet;

o        develop extensive linking across databases and Websites to facilitate
         legal research;

o        strengthen our Litidex(R)search engine by remaining current in
         software and hardware development; and

o        combine word search and subject indexing to enhance search efficiency.

GoverNet Affairs has developed a technology capable of crossing state and
federal jurisdictions and integrating related legislation in a manner that is
neither easily replicated nor available through a competitor. While there are
other single-state vendors of legislative tracking and reporting services, we
believe that GoverNet Affairs is without peer on a National basis.

GoverNet Affairs intends to maintain its technological advantage by:

o        hiring and retaining experienced staff with successful backgrounds in
         technology development; and

o        maintaining system reliability by continually upgrading servers, data
         lines, and redundancy components.

However, there can be no assurance that we will be successful in hiring the
necessary personnel who are qualified to use these new technologies effectively,
develop new services or enhance existing services on a timely basis or that such
new technologies or enhancements will achieve market acceptance. In addition,
there can be no assurance that services or technologies developed by others will
not render our services or technology non-competitive or obsolete.

Our Litidex(R) subsidiary uses up-to-date technology for scanning and coding
documents to databases and for retrieval by our clients. Stringent measures are
in place for the security of our client's information. However, as Internet
technology progresses, so does the knowledge of hackers, and we are constantly
alert to potential breaches of security, with a view to prevention.

The growth of the market for Internet services is unpredictable. Our services
will depend upon the continuing development and expansion of the market for
Internet services. If the demand for Internet services fails to continue to
grow, grows more slowly than anticipated, or becomes saturated with competitors,
we will be materially adversely affected.

We are also at risk to fundamental changes in the way Internet access is
delivered. As the Internet becomes accessible through other devices and
services, we will have to develop new technology or modify our existing
technology to accommodate these developments. There can be no assurance that we
will succeed in adapting our Internet access business to alternative devices

Competitive Pricing

We expect to achieve our business strategy in part through competitive pricing.
National Law Library charges its subscribers a monthly fee for its services as
well as offers services on a transactional, or "per-use" basis. Upon payment of
the monthly fee, subscribers receive unlimited search and retrieval services and
related products. Presently, aside from promotional and introductory discounts,
National Law Library's basic monthly fee is $34 for one state database and $75
for all the states and the federal databases offered by National Law Library.
Monthly pricing will change as additional databases and enhanced features are
included in the National Law Library's library. National Law Library has also
developed transactional pricing for non-subscribers as an added revenue source.

We believe the fees charged by National Law Library are significantly less than
most of our competitors. National Law Library expects to be able to maintain
this price advantage over its competitors because we believe that we have
relatively low overhead and infrastructure expenses relative to our competition.
National Law Library's goal is to remain substantially less expensive than its
major competitors.

National Law Library's customers have the option of discontinuing their service
at the end of any month for any reason. If a significant number of customers so
elect, and we are unable to attract new customers, our financial results will be
materially adversely affected.

GoverNet Affairs prices its services on an annual basis, and typically bills its
customers in December for the legislative sessions beginning in January of the
next year. Annual subscription amounts are based on the number of legislative
bodies covered, the number of legislative issues profiled, the nature of this
profiling and the extent and number of customer users requiring access to the
database. Annual fees can range from $600 for access to the database with no
downloading, tracking or reporting capability, to several thousand dollars for
access to profiled data that is tracked and reported daily for one or more
states and the U.S. Congress.

The fee for the automated litigation support service of building a Litidex(R)
database for a legal case is currently $760,000 per case. When additional
research is performed for the attorneys involved, additional fees are charged.
Similar databases built by our competitors can cost as much as $3 million.

Sales and Marketing

National Law Library intends to focus on a very broad and expansive market,
including:

o        solo legal practitioners;

o        local, state and National law firms;

o        public libraries;

o        judges and court personnel;

o        legal assistants and paralegals; and

o        other companies.

In addition, in order to sell its products and services to lawyers and other
market participants, National Law Library uses a marketing strategy that has
several elements:

o        telemarketing directly to licensed attorneys;

o        electronic mail distributions;

o        sales through My Texas Bar and other bar association avenues;

o        Internet affiliate marketing programs;

o        direct selling via National Law Library's Website.

GoverNet Affairs expects to gain sales in several significant markets,
including:

o        corporate regulatory and governmental affairs departments;

o        the lobbyist and legal communities;

o        trade, professional and nonprofit associations;

o        county and municipal governments and educational institutions; and

o        the legislative community itself.

GoverNet Affairs presently employs outside sales professionals who call directly
on potential customers and inside telephone sales professionals who make
presentations through phone call demonstrations. Additionally, our sales
representatives and executives appear at trade shows and present live
demonstrations. We do not anticipate that any significant amount of marketing
will be done by mail, flyers or direct print media campaigns.

Brief Reporter, GoverNet Affairs and National Law Library offer their services
to each other's customers, and intend to conduct their sales and marketing
efforts on a mutual basis.

The market for the automated litigation support services provided by Litidex(R)
continues to grow as more class action suits and other big document cases are
filed. In particular, there is increased demand for our services in regard to
stock fraud cases. We have not needed to do any outside marketing in this area.

Customer Service and Technical Support

National Law Library strives to retain its customers and obtain new customers
through its dedication to customer service and technical support. National Law
Library employs customer service technicians whose primary job is to help
customers when they have questions or problems with its products or services.
Customer support is available 24 hours a day, 7 days a week.

GoverNet Affairs and Brief Reporter maintain a customer service and technical
support staff adequate to meet current customer needs. Available during normal
working hours, such service and support is generally needed only when customers
undergo staff turnover and retraining is necessary.

Litidex(R) has staff on call 24 hours day, 7 days a week.

Intellectual Property Rights

We regard our search engines, software technologies, databases and database
management software as proprietary. We depend on trade secrets for protection of
our software. We have entered into confidentiality agreements with our
management and key employees covering this software, and limit access to this
software and other proprietary information. There can be no assurance that the
steps taken by us will be adequate to prevent misappropriation of our technology
or that competitors will not independently develop technologies that are
equivalent or superior to our services or technologies.

Competition

The competition in the legal research industry is intense. National Law
Library's principal competitors have significantly greater resources than it
does, and this competition among other things has adversely affect ITIS's
consolidated results of operations. The market for electronic legal information
is currently dominated by West Group, a division of The Thomson Corporation, a
Canadian company, and LEXIS/NEXIS(R), which is owned by Reed-Elsevier, an
Anglo-Dutch company. These competitors are both large, well-established
companies. They offer databases that are similar to and larger than the
databases that National Law Library offers. These competitors have longer
operating histories, greater name recognition, larger customer bases and
significantly greater financial, technical and marketing resources than us. They
can undertake more extensive marketing campaigns, respond more quickly to new or
emerging technologies and changes in customer requirements, and devote greater
resources to the development, promotion and sale of their products than we can.
West and LEXIS have significant penetration in the large law firm market, a
market in which ITIS intends to compete. National Law Library also competes with
other companies that offer fee-based access to selected legal databases over the
Internet. Several of these companies have recently been acquired by West and
LEXIS. These companies may be more successful than National Law Library in
capturing market share.
While many legal briefs are available from document retrieval services, we
believe that Brief Reporter is without competition in providing legal briefs to
attorneys and other interested parties in a searchable database format.

We believe that GoverNet Affairs has a significant technological lead over its
competitors. With one known exception, GoverNet Affairs' current competitors are
computer-based, not Internet-based. The increased use of the Internet is
expected to cause our competitors to make an effort to switch to an
Internet-based delivery model, and we cannot gauge if they will be successful in
the changeover, or if they would even impact our business. Should some of these
competitors become Internet-based, it is very possible, given their existing
customer and revenue bases, that they could experience greater success than
GoverNet Affairs in capturing market share.

The only significant competitors to the automated litigation support services of
Litidex(R) are law firms that maintain their own databases and retrieval
systems. However, our 15 years of experience in the business makes it possible
for our prices to be more affordable to most attorneys and law firms than
in-house costs.

Employees

ITIS and its subsidiaries had 62 full-time employees and 2 contract employees as
of March 29, 2002. Our employees are not represented by any collective
bargaining organization, we have never experienced a work stoppage, and we
believe that our relationships with our employees are good.

Item 2.  Properties

Facilities

Our primary executive offices are at 4301 Windfern Road, Houston, Texas 77041,
where our monthly rent is approximately $7,600. Brief Reporter, a subsidiary of
National Law Library, maintains its principal offices at 310 East Main St.,
Charlottesville, Virginia 22902, where its monthly rent is approximately $2,600.
Management believes that our current facilities are adequate to meet our needs
through the next 12 months and that, if required, suitable additional space will
be available on commercially reasonable terms to accommodate expansion of our
operations.
Other Property

We formerly owned subsurface mineral rights on approximately 190 acres located
in the City of Mullan, Idaho. We have no competitive economic position in the
mining industry as no mineral production has ever been realized. Further, we
have not received revenue from our mineral rights for the last several years. At
December 31, 1999, we recorded $10,000 as other current assets related to these
mineral rights. At December 31, 2000, we were advised that these mining assets
had no realizable value and accordingly we wrote off the $10,000 related to this
asset. Effective March 27, 2001, the foregoing mineral rights were indirectly
distributed to the original stockholders of ITIS pursuant to an Amended and
Restated Agreement and Plan of Distribution dated March 13, 2001, whereby Planet
Resources, one of ITIS's wholly owned subsidiaries, was spun-off from ITIS and
acquired the mining and related interests. ITIS no longer maintains any interest
in these properties

Item 3.  Legal Proceedings

On January 26, 2001, in order to protect ITIS and its stockholders, ITIS filed a
lawsuit in United States District Court for the Southern District of Texas,
Houston Division, against Southridge Capital Management and several other
defendants, including Cootes Drive LLC, an alleged "straw man," for damages
resulting from alleged stock manipulation, federal securities law violations,
civil RICO, fraud, violations of Texas securities laws and other Texas statutes,
and conspiracy. The case also alleges misrepresentations by co-conspirators in
connection with certain funding transactions by the defendants with ITIS. All
defendants filed a joint motion to transfer this case to New York to be
consolidated with the lawsuit filed against us as described below. The United
States District Judge granted this motion and the case has been transferred to
the Southern District of New York. We intend to prosecute the case vigorously.
Our litigation counsel has advised us that the case is not sufficiently advanced
to evaluate the outcome, and that resolution of the suit is not anticipated in
the short term.

On February 5, 2001, Cootes Drive LLC filed a suit against ITIS in the Southern
District of New York alleging breach of one of the financing agreements with us
for failure to honor a conversion of its preferred shares to common stock. The
suit seeks monetary damages of $10,000 per day and seeks to compel ITIS to issue
shares of common stock to Cootes Drive LLC. ITIS filed an answer to this
lawsuit. Cootes Drive LLC filed a motion requesting leave to amend their
complaint in order to add allegations that ITIS is in default on a $500,000
promissory note in favor of Cootes Drive LLC (the alleged default occurring
after the filing of ITIS's suit against Cootes Drive LLC and others); that ITIS
has not honored a notice of redemption of preferred shares held by Cootes Drive
LLC in the amount of $2,214,012 (allegedly occurring after the filing of ITIS's
suit against Southridge Capital Management, Cootes Drive LLC, and others); and
that ITIS defrauded Cootes Drive by failing to disclose material information
with respect to the background of a key officer at ITIS. The United States
District Judge granted this motion, and the suit has been amended. ITIS's answer
was timely filed on July 20, 2001. The preferred shares and the associated
funding transactions at issue are the subject matter of ITIS's suit against
Southridge Capital Management and others. ITIS intends to defend this case
vigorously. Litigation counsel has advised us that the case is not sufficiently
advanced to evaluate the outcome, and that resolution of the suit is not
anticipated in the short term.

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

John M. O'Quinn, our Texas-based litigation counsel, has agreed to represent
ITIS and our directors, if necessary, in all of these lawsuits on a 50%
contingent fee basis, with his law firm paying all expenses of the litigation.
The fee will be calculated after all expenses have been reimbursed to Mr.
O'Quinn's law firm.

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

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

There were no matters submitted to ITIS's security holders during the fourth
quarter of the fiscal year ended December 31, 2001.

PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

Market Information

ITIS's common stock trades on the over-the-counter Bulletin Board under the
symbol "ITII.OB" The following table shows the high and low of closing bid
prices for the common stock as reported by the over-the-counter Bulletin Board.
The closing bid price quotations reflect inter-dealer prices, without retail
mark-up, markdown or commission and may not necessarily represent actual
transactions.

Holders

At December 31, 2001, there were 1,523 holders of record of ITIS's common stock
and 39,372,658 shares outstanding.

Dividends

ITIS has never declared any cash dividends on its common stock. ITIS does not
anticipate paying any cash dividends on its common stock in the foreseeable
future and intends to retain its earnings, if any, to finance the expansion of
its business and for general corporate purposes. Any payment of future dividends
will be at the discretion of the board of directors and will depend upon, among
other things, ITIS's earnings, financial condition, capital requirements, level
of indebtedness, contractual restrictions and other factors that ITIS's board of
directors deems relevant.

Sales of Unregistered Securities

During the three months ended December 31, 2001, ITIS issued unregistered shares
of its common stock in the following transactions that have not been previously
disclosed by ITIS:

1.       In October 2001 we issued 20,000 shares of unregistered common stock
valued at $5,000 to a vendor as compensation for services rendered.

The foregoing transactions did not involve any underwriters, underwriting
discounts or commissions, or any public offering, and ITIS believes that the
transaction was exempt from the registration requirements of the Securities Act
by virtue of Section 4(2) thereof. The recipient in such transaction represented
his intention to acquire the securities for investment only and not with a view
to or for sale in connection with any distribution thereof, and appropriate
legends were affixed to the share certificates and instruments issued in such
transactions. The recipient had adequate access, through his relationships with
ITIS, to information about ITIS.

Item 6.  Selected Consolidated Financial Data

Pursuant to a merger agreement, the stockholders of National Law Library became
beneficial owners of 90% of the outstanding common stock of ITIS (formerly
Internet Law Library), a majority slate of new directors were elected by the new
stockholders, and the name of the company was changed from Planet Resources,
Inc. to Internet Law Library, Inc. In return, the original stockholders of
Planet Resources, who once owned 100% of a company with no operations and some
mining assets, became 10% percent owners of ITIS, National Law Library's parent
company. Because of these fundamental changes in the control and in the
operations of ITIS, the selected financial data shown below and the consolidated
financial statements contained in Part IV of this Form 10-K are presented as if
National Law Library had acquired Planet Resources.

The historical financial data presented in the table below are derived from the
Consolidated Financial Statements of ITIS. The financial results are not
necessarily indicative of ITIS's future operations or financial results. The
data presented below should be read in conjunction with ITIS's Consolidated
Financial Statements and the notes thereto included elsewhere herein and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

<TABLE>
                                                  Year Ended            Year Ended             Six Months     Period from Inception
                                                 December 31,          December 31,        Ended December 31,   (November 30, 1998)
                                                     2001                  2000                   1999             to June 30, 1999
                                             --------------------- ---------------------- --------------------- -------------------
<S>                                          <C>                   <C>                    <C>                   <C>
Consolidated Statements of Operations Data:


Revenues                                     $4,059,250            $1,038,069             $222,697               53,520
Operating Expenses:

        Selling and marketing                  (830,984)             (1,385,902)            (372,324)             (244,775)
        General and
        administrative                       (3,151,185)           (4,138,242)            (1,108,645)           (211,891)

        Production and computer service        (357,640)             (454,946)              (73,628)              (65,073)

        Amortization and depreciation        (2,479,415)           (1,913,410)            (197,037)             (142,783)

        Impairment charge                    (2,741,955)           (748,024)              -                     -
        Loss from operations of
        discontinued business segments         (916,183)             (376,579)              -                     -
        Loss on disposal of business
        segments                               (971,368)             -                      -                     -
        Interest income
        (expense)                              (398,929)             (154,957)              3,150                 (1,212)
        Gain on sale of investments and
          equipment                             409,404               -                      -                     -
                                             --------------------- ---------------------- --------------------- -------------------
Net loss                                     (7,379,005)           (8,133,991)            (1,525,787)           (612,214)

        Deemed preferred stock dividends              -                     (906,250)              -                     -
                                             --------------------- ---------------------- --------------------- -------------------
Net loss applicable to common shareholders    $                     $                      $                     $
                                             (7,379,005)           (9,040,241)            (1,525,787)           (612,214)
                                             ===================== ====================== ===================== ===================
Net loss per common share
                                             $                     $                      $                     $
                                             (0.19)                (0.31)                 (0.07)                (0.06)
                                             ===================== ====================== ===================== ===================

</TABLE>
(1) Included in revenues for the year ended December 31, 2001 are approximately
$2.2 million of uncollected revenues related to the automated litigation support
services of Litidex(R). Management is currently seeking a letter of preference
from the SEC regarding the proper revenue recognition procedure for these
services. Depending on their response, the reporting of the automated litigation
support revenue could require restatement, and it is possible that additional
income may be deferred.
<TABLE>
                                        December 31. 2001             December 31, 2000         December 31, 1999
                                        ----------------------------  ------------------------- --------------------------------

<S>                                     <C>                           <C>                       <C>
Consolidated Balance Sheet Data:

Cash (1)                                 $              6,280          $           9,867         $         78,544
Working capital (deficit) (1)                      (2,934,163)                (1,594,743)                 341,745

Total assets                                       16,087,271                  19,592,854               5,920,651

Long term notes payable                             2,150,117                   2,230,050                       -

Redeemable common stock                                     -                           -                       -

Stockholders' equity                                9,195,047                  15,441,026               5,454,130

</TABLE>

(1)      At December 31, 2001, 2000 and 1999, cash includes $-0-, $1,761 and
         $20,235, respectively, that is to be indirectly distributed to New
         Planet's stockholders pursuant to a distribution agreement dated March
         25, 1999. In addition, at December 31, 1999, working capital includes
         mining assets of $10,000 that were to be distributed under this
         agreement. At December 31, 2000, these mining assets were deemed
         worthless. At December 31, 2000 and 1999, ITIS recorded a current
         liability in the amount of $1,761 and $30,235, respectively,
         representing its total obligation under the distribution agreement. As
         of March 27, 2001 these mining assets and cash were indirectly
         distributed to the original stockholders of ITIS. ITIS no longer
         maintains any interest in these properties.

                               QUARTERLY FINANCIAL INFORMATION

<TABLE>
                                                       FIRST QUARTER               SECOND QUARTER
                                                ---------------------------- ---------------------------
                                                    2001           2000          2001          2000
                                                -------------  ------------- ------------- -------------
<S>                                             <C>            <C>           <C>           <C>
REVENUES                                          $364,865       $208,382     $1,010,371    $251,198


OPERATING EXPENSES                              (2,069,135)    (1,985,640)   (2,233,440)   (1,715,643)
                                                -------------  ------------- ------------- -------------

LOSS BEFORE

 DISCONTINUED OPERATIONS                        $(1,704,270)    $(1,777,258)   $(1,223,069)   (1,464,445)
                                                =============  ============= ============= =============

            $
NET LOSS                                        $(1,826,857)    $(1,782,765)   $(1,041,160)   (1,497,189)

NET LOSS PER COMMON

SHARE                                            $(0.05)         $(0.07)        $(0.02)        $(0.05)

</TABLE>
                               QUARTERLY FINANCIAL INFORMATION
<TABLE>
                                                        THIRD QUARTER                FOURTH QUARTER
                                                 ----------------------------------------------------------
                                                     2001           2000          2001           2000
                                                 -------------- ---------------------------- --------------
<S>                                              <C>            <C>             <C>          <C>

REVENUES                                         $1,770,844      $264,652       $913,170        $313,837


OPERATING EXPENSES                               (1,998,948)    (1,984,887)   (3,259,656)    (2,954,354)
                                                 -------------- ---------------------------- --------------

LOSS BEFORE

 DISCONTINUED OPERATIONS                         $(228,104)      $(1,720,235)   $(2,346,486)    $(2,640,517)
                                                 ============== ============================ ==============


NET LOSS                                         $(876,796)      $(1,823,027)   $(3,634,192)    $(3,937,260)

NET LOSS PER COMMON

SHARE                                          $(0.02)         $(0.06)       $(0.10)         $(0.13)

</TABLE>

Item 7.  Management's Discussion and Analysis of Financial Condition and
Results of Operations

The following discussion should be read in conjunction with the Consolidated
Financial Statements of ITIS, which are included elsewhere in this Form 10-K.
Included in this discussion are certain forward-looking statements regarding
ITIS's expectations for its business and its capital resources. The reader
should not rely on forward-looking statements because they are subject to known
and unknown risks, uncertainties and other factors that may cause our actual
results to differ materially from those contemplated by the forward-looking
statements. ITIS and its subsidiaries may experience high volatility in
operating results and cash flows from quarter to quarter and from year to year.
Our revenues depend on our ability to attract and retain customers. Most of the
customers of National Law Library have the option of discontinuing their service
at the end of their monthly subscription period for any reason. Additionally,
management realizes that anticipated revenues to be generated by the automated
litigation support services of Litidex(R) will be critical in providing some of
the funds necessary to continue company operations and to remain in business.
Our expense levels are based, in part, on our expectations as to future
revenues. Also, ITIS expects that its operations often will require upfront
expenses, but will result in trailing revenues. To the extent that revenues are
below expectations, we may be unable or unwilling to reduce expenses
proportionately, and operating results and cash flows are likely to be adversely
affected.

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

o         Accounts receivable, net of doubtful accounts, at December 31, 2001
          and 2000 amount to $2,284,704 and $151,876, respectively. Of the
          accounts receivable at December 31, 2001, 95%, or $2,176,540,
          represents receivables related to the automated litigation support
          services of Litidex(R). Because a portion of this amount is to be paid
          in common shares of publicly traded companies and/or by notes
          receivable, it is likely that realization of a significant amount of
          these receivables may not be achieved in a traditional timely fashion
          and may take twelve months or longer to convert to cash. Although the
          Company expects to collect these receivables, there are no scheduled
          payments, and consequently a portion of the receivable has been
          classified as long-term.  Management has elected not to provide an
          allowance for doubtful accounts for these receivables due to the
          nature of the agreements with the customer, which, in management's
          opinion, provides assurance for the ultimate collection of the fees
          due.

o        Database content and software costs, which amount to $11,914,639 and
         $14,237,586 at December 31, 2001 and 2000 respectively,
         are a significant asset of the Company. At December 31, 2000, based on
         the results of a third party appraisal, ITIS recorded an impairment
         charge to the database content and software costs in the amount of
         $748,024. Due to continued poor financial condition of the Company,
         the inability to obtain an established source of outside financing and
         inability to generate positive cash flows, management has determined,
         based on an internally prepared estimate of the net present value of
         projected net cash flows period, that an additional impairment of
         $2,741,955 is needed to properly reflect the value of the Company's
         database content at December 31, 2001. This judgment was made based on
         various management assumptions as to the anticipated growth of
         revenues and maintenance of expenses related to the database and
         software assets and evaluation of the probabilities of potential
         different financial results. While it is management's judgment that
         the database and content assets will continue to be of significant
         value to the Company in the future, management believes the current
         impairment charge to be prudent and reasonable given the financial
         condition of the Company; however, there is no guarantee that material
         impairments will not be needed in the future.

o        Under Statement of Accounting Standards ("SFAS") No. 142, "Goodwill
         and Other Intangible Assets", which was issued in June 2001, goodwill
         and intangible assets with indeterminate lives will no longer be
         amortized as expense over estimated useful lives after December 31,
         2001. While management believes that the database content and software
         costs represents case law  that can be used indefinitely, and
         therefore qualify as assets that will no longer be amortized,
         management is requesting a letter of preference from the SEC regarding
         its accounting policy to treat its database and content as an
         intangible asset that should not be subject to amortization.
         Additionally, the Emerging Issues Task Force (EITF) of the Financial
         Account Standards Board (FASB) is currently addressing how to account
         for the costs associated with developing and maintaining database
         assets.  Specifically, the EITF has stated in its abstract EITF 00-20
         "Accounting for Costs Incurred to Acquire or Originate Information for
         Database Content and Other Collections of Information" that it will
         address in future meetings:

1.       How to account for the costs incurred to acquire or originate such
         information for a collection in a database,
2.       If a consensus is reached on issue 1, the nature of the costs that
         should be capitalized, and
3.       If a consensus is reached on issue 1, how to account for subsequent
         costs incurred to maintain and refresh the information in the database.

         Depending upon opinions of the SEC or future issuances of accounting
         principles by the EITF, it is possible that the database content and
         software costs may continue to be amortized in 2002 or even expensed as
         incurred. Either outcome would have a material negative impact to the
         future results of operations reported by the Company.

         Revenues from the automated litigation support services of Litidex(R)
         are currently recognized progressively based on document production
         related to each litigation project. An initial amount of the revenue,
         representing the value of an estimated total amount of production
         services to be rendered, is recorded as deferred income, while the
         balance of the revenue is treated as earned immediately. As the case
         progresses, actual production is determined monthly and a corresponding
         amount of income is recognized. Due to the unique nature of the
         services rendered and the large advance payments received, management
         is currently requesting a letter of preference from the SEC to
         determine whether the Company's revenue recognition policy is
         appropriate for these services. Depending upon the response from the
         SEC, the reporting of the automated litigation support revenue could
         require restatement, and it is possible that additional revenues may be
         deferred.

The following is management's discussion and analysis of certain significant
factors that have affected ITIS's financial condition and results of operations
during the periods ended December 31, 2001, 2000 and 1999.

RESULTS OF OPERATIONS

Comparison of Results for the year ended December 31, 2001 and the year ended
December 31, 2000

Revenues. Revenue increased by $3,021,181 from $1,038,069 for the year ended
December 31, 2000 to $4,059,250 for the year ended December 31, 2001. The
increase is primarily due to revenues produced by automated litigation support
services of Litidex(R), which account for $2,691,855, while revenues of National
Law Library increased by $284,342. The balance of the increased revenues
primarily relates to GoverNet Affairs. While revenue growth of National Law
Library declined in early and mid 2001 due to cancellations related to our price
increase and commencement of free subscriptions due to a marketing partnership
with the State Bar of Texas, subscription revenue stabilized in late 2001.
Included in revenues for the year ended December 31, 2001 are approximately $2.2
million of uncollected revenues related to the automated litigation support
services of Litidex(R). Management is currently seeking a letter of preference
from the SEC regarding the proper revenue recognition procedure for these
services. Depending on their response, the reporting of the automated litigation
support revenue could require restatement, and it is possible that additional
income may be deferred.

Sales and Marketing Expense. Sales and marketing expense decreased by $554,918
from $1,385,902 for the year ended December 31, 2000 to $830,984 for the year
ended December 31, 2001. The majority of the decrease, $518,395, resulted from
reductions in the inside and outside sales forces of National Law Library and
GoverNet Affairs. In addition, management consolidated telemarketing efforts for
all subsidiaries in our Houston, Texas corporate offices and reduced
non-productive advertising expenditures. The reduction in sales force is
expected to have a negative impact on future revenues.

General and Administrative Expense. General and administrative expense decreased
by $987,057 from $4,138,242 for the year ended December 31, 2000 to $3,151,185
for the year ended December 31, 2001 as a result of the following.

o        Payroll and related costs at the administrative and management level
         decreased by $165,307 from $1,694,905 for the year ended December 31,
         2000 to $1,529,598 for the year ended December 31, 2001.

o        Non-cash expense related to stock and option awards for the year ended
         December 31, 2001 amounted to $459,567, representing a decrease of
         $305,186 from the $764,753 reported for the year ended December 31,
         2000.

o        A significant administrative expense reduction was realized in
         professional fees, both legal and accounting, contract services, and
         the expense of outside consulting which in aggregate decreased by
         $513,090 from $1,048,899 for the year ended December 31, 2000 to
         $535,809 for the year ended December 31, 2001.

o        Rent, utilities and related expenses increased by $100,278 from
         $131,947 to $232,225 primarily due to an escalating lease agreement.

o        Miscellaneous other general and administrative expenses including
         office supplies and repairs and maintenance were reduced by $103,752
         from $497,738 for the year ended December 31, 2000 to $393,986 for the
         year ended December 31, 2001.

Production and Computer Service Expense. Production and computer service expense
decreased by $97,306 from $454,946 for the year ended December 31, 2000 to
$357,640 for the year ended December 31, 2001 as a result of the following.

o        Production costs were reduced by $57,938 from $88,855 for the year
         ended December 31, 2000 to $30,917 primarily due to the corporate
         office in Houston assuming various software and computer services
         previously provided to GoverNet Affairs by an outside vendor.

o        Reductions in production labor force decreased production expenses
         by $52,266 from $346,423 for the year ended December 31,
         2000 to $294,157 for the year ended December 31, 2001.

o        Internet service provider and co-location expense increased by $12,898,
         from $19,668 for the year ended December 31, 2000 to $32,566 for the
         year ended December 31, 2001 due to the addition of faster Internet
         connections and a more secure server location.

Amortization and Depreciation Expense. Amortization and depreciation expense
increased by $566,005 from $1,913,410 for the year ended December 31, 2000 to
$2,479,415 for the year ended December 31, 2001. The increase is due to
amortization of intangible assets relating to the acquisitions of GoverNet
Affairs, Brief Reporter and Litidex(R), and the depreciation of fixed asset
additions.

Impairment Charge. In the first quarter of 2001, ITIS, in accordance with
Statement of Financial Accounting Standards No. 121 ("SFAS 121"), "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of," and with the assistance of an independent appraisal firm, conducted a
strategic review of certain aspects of its business, and based on the results of
this evaluation, recorded a non-cash impairment charge by writing down
capitalized database content and software costs by $748,024 in the fourth
quarter of 2000. In the first quarter of 2002, in accordance with Statement of
Financial Standards No. 144 ("SFAS 144"), "Accounting for the Impairment or
Disposal of Long-Lived Assets," which superseded SFAS 121, management of ITIS
internally conducted a similar review. Based on the results of this evaluation,
management determined that an additional impairment in the amount of $2,741,955
exists at December 31, 2001. The additional impairment charge was determined as
a result of valuation estimates provided by management using net cash flow
projections over the estimated useful lives of the asset. Management believes
this impairment charge is appropriate because ITIS has not obtained substantial
new capital or equity funding, and in consideration of significant losses by the
Company, especially in the Internet Services segment.

Interest Expense. Interest expense increased by $210,365 from $193,480 for the
year ended December 31, 2000 to $403,845 for the year ended December 31, 2001.
The primary reason for the increased interest expense is approximately $1.3
million in new debt acquired in 2001. Interest expense in 2000 includes accrued
interest payable to Mr. Carr and two directors of ITIS in the amount of $141,420
and non-cash interest expense relating to the Series A Preferred Stock
conversion in the amount of $45,946. Interest expense in the year 2001 includes
accrued interest payable to Mr. Carr and three directors of ITIS in the amount
of $314,855, interest payable to third party lenders in the total amount of
$11,383, and interest payable related to a disputed note payable to Cootes Drive
LLC (see Legal proceedings, Item 3) in the amount of $25,000. The balance of
interest expense in both years relates to other notes payable and late charges.

Comparison of Results for the year ended December 31, 2000 and the six months
ended December 31, 1999

Discussion includes reclassification of amounts for the year ended December 31,
2000 to reflect discontinued operations.

Revenues. Revenue increased by $815,372 from $222,697 for the six months ended
December 31, 1999 to $1,038,069 for the year ended December 31, 2000. As a
result of the acquisitions of GoverNet Affairs and Brief Reporter during the
last calendar quarter of 1999, consolidated revenues increased $114,565 from
$10,478 for the six months ended December 31, 1999 to $125,043 for the year
ended December 31, 2000. Our revenue increases were also due to growing
subscriptions to National Law Library's expanding databases, and to subscription
price increases and the addition of transactional pricing to National Law
Library's product availability.

Sales and Marketing Expense. Sales and marketing expense increased $1,013,578
from $372,324 for the six months ended December 31, 1999 to $1,385,902 for the
year ended December 31, 2000. The increase was primarily attributable to
development of a sales and marketing program, which was implemented in April
1999 with contract telemarketing personnel. During 2000, National Law Library
continued to expand its telemarketing force and also engaged a field sales
force. Additional sales and marketing expense was incurred in placing banner ads
on Internet sites, increased print advertising in legal publications, and
participation in major legal industry meetings and conferences. Increased
selling and marketing expenses due to the acquisitions of GoverNet Affairs and
Brief Reporter were not a significant element of consolidated sales and
marketing expense.

General and Administrative Expense. For the year ended December 31, 2000,
general and administrative expenses increased by $3,029,597 from $1,108,645 for
the six months ended December 31, 1999, to $4,138,242 for the year ended
December 31, 2000. In connection with internal expansion and acquisitions,
payroll and related costs at the administrative and management level increased
by $859,535 from $267,898 for the six months ended December 31, 1999 to
$1,127,433 for the year ended December 31, 2000. Included in general and
administrative expense is $764,753 of non-cash expense related to stock and
option awards for the year ended December 31, 2000, representing an increase of
$639,496 over the $125,257 reported for the six months ended December 31, 1999.
As a result of ITIS's acquisitions of GoverNet Affairs, Brief Reporter and
Litidex(R), general and administrative expenses increased $603,052 from $55,015
for the six months ended December 31, 1999 to $658,067 for the year ended
December 31, 2000. Additionally, due to increased consulting, auditing and legal
expenses related to securities law compliance, litigation, capital raising
transactions, due diligence and financial reporting obligations, professional
fees increased by $421,558 from $254,827 for the six months ended December 31,
1999 to $676,385 for the year ended December 31, 2000.
 Production and Computer Service Expense. Production and computer service
expense increased $381,318 from $73,628 for the six months ended December 31,
1999 to $454,946 for the year ended December 31, 2000. Ongoing updates of
legislative tracking information by ITIS's subsidiary, GoverNet Affairs, account
for approximately $290,000 in production and computer service expense for the
year ended December 31, 2000. Other increases relate primarily to Internet
service provider co-location costs, contract programming expense and ongoing
maintenance of computer equipment and software for all subsidiaries.

Amortization and Depreciation Expense. Amortization and depreciation expense
increased $1,716,373 from $197,037 for the six months ended December 31, 1999 to
$1,913,410 for the year ended December 31, 2000. The increase is primarily
attributable to amortization of intangible assets relating to the acquisitions
of GoverNet Affairs, Brief Reporter and Litidex(R), while the balance of the
increase relates to depreciation of fixed-asset acquisitions.

Impairment Charge. An impairment charge in the amount of $748,024 was recorded
in the fourth quarter of 2000 in accordance with Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of." ITIS, with the assistance
of an independent appraisal firm, conducted a strategic review of certain
aspects of its business, and based on the results of this evaluation, recorded a
non-cash impairment charge by writing down capitalized database content and
software costs by $748,024.

Interest Expense. Interest expense of $193,480 incurred for the year ended
December 31, 2000 includes accrued interest payable to Mr. Carr and two
directors of ITIS in the amount of $141,420 and non-cash interest expense
relating to the Series A Preferred Stock conversions in the amount of $45,946.
ITIS calculated the interest based on the terms of twelve unsecured promissory
notes payable to Mr. Carr in the total amount of $1,805,000 and promissory notes
payable to George A. Roberts and W. Allyn Hoaglund, directors of ITIS, in the
total amount of $400,000 and $50,000, respectively. The balance of interest
expense relates to other notes payable.

LIQUIDITY AND CAPITAL RESOURCES

ITIS's ability to execute its business strategy depends to a highly significant
degree on its ability to attract additional capital. ITIS's principal demands
for liquidity are cash for operations and funds for investment in new database
content.

During the year ended December 31, 2001, ITIS's cash and cash equivalents
decreased in total by $1,400 from the December 31, 2000 balance of $29,867 to
$69,280 in available cash and a $40,813 bank overdraft at one of its banks at
December 31, 2001. The Company further had a working capital deficit of
$2,934,163. Cash used in operating activities was $1,836,792, cash used in
investment activities was $415,683 and cash provided by financing activities was
$2,291,888. During the year ended December 31, 2001, ITIS borrowed a total of
$595,117 from Hunter M.A. Carr, its CEO, to fund working capital requirements.
The borrowings through February 28, 2001 were evidenced by unsecured promissory
notes, each bearing an annual interest rate of 11.75% and payable in full with
accrued interest after six months. On February 28, 2001, the notes through that
date were consolidated into one demand note in the amount of $2,060,000 bearing
interest at the rate of prime plus two percent per year, payable in cash on
demand after one year. At Mr. Carr's option and with 30 days written notice, the
note may be repaid in common stock of ITIS at a discounted price based on the
lowest price at which ITIS has sold its common stock during the one-year period
preceding the exercise of this option. On March 10, 2001, ITIS retired $250,000
in principal from this note by issuing 1,153,828 restricted shares of common
stock to Mr. Carr at a price of $.216667 per share. New promissory notes,
totaling $340,117 and bearing the same terms, have been issued to Mr. Carr for
advances to ITIS since March 1, 2001. With respect to these notes payable, Mr.
Carr has provided written commitment to ITIS to provide forbearance and extend
the due date on such notes to at least July 15, 2002, if to demand payment would
impair ITIS's ability to meet its other existing liabilities and commitments. As
of December 31, 2001, the total principal amount and accrued but unpaid interest
owed to Mr. Carr was $2,150,117 and $160,196, respectively.

In October 2000, ITIS executed demand notes for $400,000 and $50,000 in favor of
George A. Roberts and W. Allyn Hoaglund, respectively, members of its board of
directors. The notes bear interest at the rate of prime plus two percent per
year and are payable in cash on demand after one year. At the option of the
holder and with 30 days written notice, the notes may be repaid in common stock
of ITIS at a discounted price based on the lowest price at which ITIS has sold
its common stock during the one-year period preceding the exercise of this
option.

In November and December 2000 ITIS entered into financing agreements with Cootes
Drive LLC as described below. Due to recent litigation in regard to these
financing agreements, it is not expected that any further funding will occur
from this source .

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

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

ITIS disputes the validity of the $500,000 convertible promissory note dated
December 5, 2000, on the grounds that this convertible note is a part of Cootes
Drive's efforts to defraud ITIS and to manipulate the price of ITIS's stock.
This convertible note and the associated funding transactions are all the
subject of ITIS's suit against Cootes Drive and others.

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

On January 16, 2001, ITIS executed a demand promissory note in the amount of
$100,000 payable to an unaffiliated third party. The note bears interest at 10%
per year and is payable in cash on demand after one year. At the option of the
holder and with 30 days written notice, the note may be repaid in common stock
of ITIS at a discounted price based on the lowest price at which ITIS has sold
its common stock during the one-year period preceding the exercise of this
option.

On February 1, 2001, ITIS executed a demand note for $190,000 in favor of George
A. Roberts, a member of its board of directors. The note bears interest at the
rate of prime plus two percent per year and is payable in cash on demand after
one year. At the option of the holder and with 30 days written notice, the note
may be repaid in common stock of ITIS at a discounted price based on the lowest
price at which ITIS has sold its common stock during the one-year period
preceding the exercise of this option.

On February 28, 2001, ITIS executed a demand promissory note in the amount of
$25,000 payable to an unaffiliated third party. The note bears interest at the
rate of prime plus two percent per year and is payable in cash on demand after
one year. At the option of the holder and with 30 days written notice, the note
may be repaid in common stock of ITIS at a discounted price based on the lowest
price at which ITIS has sold its common stock during the one-year period
preceding the exercise of this option. On February 28, 2002, the payee exercised
the option to convert the note plus accrued interest into 192,384 shares of
restricted common stock of ITIS.

On February 5, March 21, April 11, and May 16, 2001, ITIS executed demand
promissory notes for $50,000, $70,000, $25,000, and $12,500, respectively, in
favor of W. Paul Thayer, a member of the board of directors. The notes bear
interest at the rate of prime plus two percent per year and are payable in cash
on demand after one year. At the option of the holder and with 30 days written
notice, the notes may be repaid in common stock of ITIS at a discounted price
based on the lowest price at which ITIS has sold its common stock during the
one-year period preceding the exercise of this option.

On October 24, 2001, ITIS wholly owned subsidiary ITIS, Inc., a Texas
corporation that conducts business as Litidex(R), executed a promissory note for
$1,000,000 in favor of George A. Roberts, a member of its board of directors.
The note bears interest at an annual fixed rate equal to the lesser of the
maximum amount allowed by law as adjusted from time to time or 18%, and is
payable in full with accrued interest after one year. The note is secured by a
Security Agreement covering all accounts, contract rights and general
intangibles arising out of the litigation support project among Litidex(R), the
law firm of Christian Wukoson Smith and Jewell, and the law firm of O'Quinn,
Laminack and Pirtle. Legal fees of $29,100 were paid from the proceeds of this
note.

ITIS's financial statements are prepared using principles applicable to a going
concern, which contemplate the realization of assets and liquidation of
liabilities in the normal course of business. However, at this time ITIS does
not have significant cash or other material liquid assets, or an established
source of revenues, sufficient to cover operating costs to allow the Company to
remain in business. Management's business plan realizes that anticipated
revenues to be generated by the automated litigation support services of
Litidex(R) will be critical in providing some of the funds necessary to continue
company operations and to remain in business. While management believes that
such revenues may be adequate to fund company operations, it is possible that
such revenues may never be sufficient to meet company needs. While additional
automated litigation support contracts are anticipated, the revenues of
Litidex(R) cannot be sustained if no additional contracts are obtained. If this
should be the case, management plans to continue to utilize additional loans
from Mr. Carr (President and Chairman of the Board of Directors of ITIS) and
other directors and investors as long as funds from these sources remain
available. If adequate funding from the operations of Litidex(R) or other
sources is not available, ITIS will be unable to remain in business.

ITIS will be required to obtain additional financing or capital to remain in
business, and that capital may have provisions that could suppress future stock
prices or cause significant dilution to current shareholders. Our internally
generated cash flows from operations have historically been insufficient for our
cash needs and will continue to be for the foreseeable future. While management
projects that the internal source of liquidity may improve, this objective may
not be achieved in the near term, if ever. As of March 31, 2002 sources of
external and internal financing are very limited. It is not expected that the
internal source of liquidity will improve until significant net cash is provided
by operating activities (which may not be achieved), and until such time, ITIS
will rely upon external sources for liquidity. ITIS's current working capital is
not sufficient to cover cash requirements for the balance of the 2002 fiscal
year or to bring the Company to a positive cash flow position. ITIS may not ever
become profitable and could fail as a going concern.

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

As of March 31, 2002, ITIS's regular monthly cash operating expenditures
exceeded monthly cash receipts, not including cash receipts related to the
automated litigation support services of Litidex(R), by approximately $225,000.
Cash receipts related to the automated litigation support services,
approximately $1.2 million for the year ended December 31, 2001, are received on
an inconsistent basis and are therefore not included in the above negative cash
flow calculation.

The Company has continued to obtain financing from third party sources
subsequent to December 31, 2001. On March 1, 2002, ITIS wholly owned subsidiary
National Law Library, Inc. executed a promissory note for $425,000 in favor of
Houston RPM, L.C. The note bears interest at 18% per year and is payable in
monthly installments including principal and interest commencing April 1, 2002.
The amount of each monthly installment shall equal the total amount of credit
card receipts generated by National Law Library, but in no event shall the
monthly installment be less than $65,000. Any unpaid principal and accrued
interest is due in full on March 1, 2003. A Security Agreement covering all
proceeds paid or otherwise due from credit card companies and others pursuant to
a Continuing Service Agreement between Litidex(R) and National Law Library
secures the note, as do guarantees from ITIS Inc. and Litidex(R).

Continued development of database and content revenues and obtaining additional
automated litigation support contracts through Litidex(R) are critical to the
success of the Company's business plan. Continued integration of prior period
acquisitions of GoverNet, Brief Reporter, and Litidex(R), as well as any
potential future acquisitions, is also critical to the success of the Company's
business plan. Management hopes to continue reductions in administrative costs
and to increase revenues through increased marketing and the pursuit of joint
marketing relationships with other entities. While many factors can impact
future operations and these improvements cannot be assured of success, the
management of ITIS intends to take all actions deemed prudent and necessary.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

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

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

Item 8.  Financial Statements and Supplementary Data

Included herein beginning on page F-1.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

On February 28, 2000, upon the recommendation of the Audit Committee, the board
of directors of ITIS voted to dismiss and replace Harper and Pearson Company as
ITIS's independent accountants with Arthur Andersen LLP. ITIS's consolidated
financial statements for the six months ended December 31, 1999, have been
audited by Arthur Andersen LLP.

For the period from the inception of National Law Library on November 30, 1998,
to June 30, 1999 ("Inception to June 30, 1999") Harper and Pearson Company's
reports did not contain any adverse opinions or disclaimers of opinion and were
not qualified or modified as to uncertainty, audit scope, or accounting
principles. During the period Inception to June 30, 1999 and the subsequent
interim period ended April 5, 2000, there were no disagreements with Harper and
Pearson Company on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreement, if not
resolved to the satisfaction of Harper and Pearson Company, would have caused it
to make reference to the subject matter of the disagreement in connection with
its reports on the financial statements of ITIS for such periods. ITIS
authorized Harper and Pearson Company to respond fully to the inquiries of
Arthur Andersen LLP.

On February 19, 2001, upon recommendation of the Audit Committee, the board of
directors of ITIS voted to dismiss and replace Arthur Andersen LLP as ITIS's
independent accountants with Harper and Pearson Company. ITIS's consolidated
financial statements for the fiscal years ended December 31, 2000 and 2001 have
been audited by Harper and Pearson Company.

For the period July 1, 1999 to December 31, 1999, Arthur Andersen LLP's report
did not contain any adverse opinions or disclaimers of opinion and was not
qualified or modified as to uncertainty, audit scope, or accounting principles.
During the period July 1, 1999 to December 31, 1999, and the subsequent interim
period through February 19, 2001, there were no disagreements with Arthur
Andersen LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreement, if not
resolved to the satisfaction of Arthur Andersen LLP, would have caused it to
make reference to the subject matter of the disagreement in connection with its
reports on the financial statements of ITIS for such period. ITIS authorized
Arthur Andersen LLP to respond fully to the inquiries of Harper and Pearson
Company.

PART III

Item 10.  Directors and Executive Officers of Registrant

There are currently eight directors on our board of directors. Our board of
directors is divided into three classes with staggered three-year terms.

The following table sets forth certain information concerning our directors and
executive officers who were either serving or had been chosen to serve in this
capacity as of March 29, 2002:
<TABLE>
Name                                    Age    Position with ITIS
<S>                                     <C>    <C>
Hunter M.A. Carr......................  54     Chairman of the Board of Directors, President and Chief Executive
                                               Officer
W. Allyn Hoaglund.....................  53     Director, Chairman of Audit Committee
Kelley V. Kirker......................  42     Director and Chief Operations Officer
George A. Roberts.....................  83     Director and member of Compensation Committee
W. Paul Thayer........................  82     Director and Chairman of Compensation Committee
David P. Harriman.....................  53     Director and President of National Law Library
K. Charles Peterson...................  58     General Counsel
Kara A. Kirker........................  39     Treasurer, and Chief Financial Officer and Treasurer of National Law
                                               Library
Joanna Hoover.........................  52     Chief Financial Officer
Carol Ann Wilson......................  60     Corporate Secretary

</TABLE>
Hunter M.A. Carr has been our chairman of the board of directors, president and
chief executive officer since March 30, 1999. Mr. Carr is the founder of
National Law Library, Inc. and has served as chairman of the board and
president of National Law Library since its founding in November 1998. From
April 1994 until July 1999, Mr. Carr served as chairman of the board and chief
executive officer of ITIS, Inc. (Litidex(R)), a Texas corporation in which he
was the sole stockholder at that time. In July 1999, Mr. Carr resigned as
chief executive officer of Litidex(R), and in April 2000 the Texas corporation
became a wholly owned subsidiary of ITIS. Mr. Carr serves as a director of
IExalt, Inc.

W. Allyn Hoaglund is an experienced trial attorney in Houston, Texas, Mr.
Hoaglund concentrates his law practice on civil matters, including personal
injury, malpractice, products liability, condemnation law, and major commercial
litigation. He has been in solo practice since 1987, having previously been
associated with both Vinson and Elkins and Helm, Pletcher and Hogan. Mr.
Hoaglund holds a B.A. from Louisiana State University and a J.D. from the
University of Houston Law Center and is admitted to practice before the United
States Supreme Court. He is board certified in Civil Trial Law by the Texas
Board of Legal Specialization. He is a member of Phi Alpha Delta and the Order
of the Barons, and a Fellow of the Houston Bar Foundation.

Kelley V. Kirker served as one of our vice presidents from June 15, 1999 until
July 13, 1999. Mr. Kirker has also served as a director of National Law Library
since July 1, 1999.  On October 1, 1999, Mr. Kirker was appointed chief
executive officer of ITIS. Prior to that, since April 1994, Mr. Kirker has
served as president and chief operating officer of ITIS.  From 1987 until 1994,
Mr. Kirker was employed by MLSI, Inc., a company engaged in litigation support
service and owned by Mr. Carr. Prior to 1987, Mr. Kirker was employed for
approximately five years by Texaco, Inc. in its computer information service
area.

George A. Roberts served Teledyne, Inc. in various positions from 1966 until his
retirement in 1993. He began his service as president, became chief executive
officer and president in 1986, was elected vice chairman of the board and chief
executive officer in 1991, and became chairman of the board in 1991. Prior to
that time, from 1941 until 1966, Dr. Roberts was employed by the Vasco Metals
Corporation, first as research metallurgist, as chief metallurgist in 1945, as
vice president-technology in 1953, and was elected president in 1961.

Dr. Roberts is a member of the National Academy of Engineering, a fellow of The
American Society for Metals, The Metallurgical Society and The Society of
Manufacturing Engineers.  He is also a life trustee of the Carnegie-Mellon
University.  In 1980, he was awarded the Carnegie-Mellon University
Distinguished Achievement Award.  In 1984, Dr. Roberts received an award from
the National Conference of Christians and Jews for distinguished service in the
field of human relations, and he also received the 1984 Americanism Award from
the Boy Scouts of America. Dr. Roberts is a director of Argonaut Group Inc.

Paul Thayer's background provides a wealth of experience from which he can draw
as a director. From 1983 to 1984, he served in the Reagan Administration as
Deputy Secretary of Defense and received many awards for his service. Prior to
this time, from 1970 to 1983, Mr. Thayer served as chairman of Ling-Temco-Vought
in Dallas, Texas. Mr. Thayer graduated number one in his Navy Aviation Cadet
Class. He later served as a test pilot, combat ace, commercial airline pilot,
and he flew around the world in 1993. Mr. Thayer was a U.S. Navy combat ace in
World War II and an experimental test pilot. He was the first pilot to break the
sound barrier in a production Navy fighter. In 1994, he was inducted into the
Navy Experimental Test Pilots Hall of Fame, and he is a past recipient of the J.
H. Doolittle Award and the Kitty Hawk Award. Among his many other honors are the
Distinguished Flying Cross, two presidential citations, and the distinguished
Horatio Alger Award. Mr. Thayer's notable community service includes the Robert
M. Thompson Navy League Award for outstanding civilian leadership, the
University of Kansas Distinguished Service Citation for outstanding achievements
and service to mankind, and the Air Force Medal and Decoration for Exceptional
Civilian Service. In addition, Mr. Thayer is a past chairman of the Chamber of
Commerce of the United States and of the National Corporate Advisory Board of
the Vietnam Veterans Memorial Fund.

David P. Harriman has served as the President of National Law Library since
December 1, 1999. In 1996, Mr. Harriman founded Brief Reporter as a publishing
start-up with a database of appellate briefs for attorneys on the Internet.
Prior to that time, Mr. Harriman served in various positions at The Michie
Company, most recently as president and chief executive officer from 1989 to
1996.

K. Charles Peterson joined us as our general counsel in May 2000. He graduated
from Harvard College, Class of 1965, with an A.B. in Mathematics. Peterson was a
first lieutenant in the U.S. Army and was decorated for service in Vietnam. In
1976 he graduated summa cum laude from South Texas College of Law, where he
received the Mary Moody Northen Award for Scholastic Excellence, was on Law
Review, and received numerous American Jurisprudence awards. A former partner of
the Reynolds, Allen and Cook Law Firm, Peterson has continued in private
practice since 1976. In recent years he co-founded the Trinity Life Center,
which provides services for more than 4,500 abused children each year.

Kara A. Kirker has served as our Treasurer and as National Law Library's Chief
Financial Officer and Treasurer since October 1, 1999. Prior to joining us, Ms.
Kirker provided services to National Law Library on a contract basis as an
officer of ITIS. From January 1994 until National Law Library's inception in
November 1998, Ms. Kirker served as the controller and treasurer of ITIS, in
which positions she continues to serve. From 1981 to 1994, Ms. Kirker served as
assistant treasurer of Stone and Webster Oil Company, Inc. in the revenue
accounting area.

Joanna Hoover joined us on May 1, 2000, after having served as outside Certified
Public Accountant for ITIS and its related entities since 1994. Ms. Hoover has
been in the practice of public accounting since 1973 and has been a
shareholder/partner in the Houston accounting firm of Nommensen, Hoover and
Williams, P.C., since 1985. In addition to being a CPA, she holds licenses in
the fields of insurance, securities and investments. On June 6, 2000, Ms. Hoover
became our Chief Financial Officer.

Carol Ann Wilson joined us as Secretary and Vice President of Content and
Secretary for National Law Library in June 1999.  Since July 2000 she has
served as Corporate Secretary for ITIS and worked exclusively in the ITIS's
executive offices.  From September 1995 to April 1999, Ms. Wilson served as the
legal secretary and personal assistant to John M. O'Quinn, P.C.  From 1980 to
1995, she was the legal secretary to Joe H. Reynolds.  Since 1985, Ms. Wilson
has been an active member and speaker in various state and national legal
secretarial and paralegal organizations.  She is the author of Plain Language
Pleadings (Prentice Hall 1996), and has been published in national trade
journals and other publications.  She is active in Plain Language Association
International, Legal Secretaries International, Inc., and Gulf Coast Mensa.

Family Relationships

Kara A. Kirker is a niece by marriage of Hunter M.A. Carr.  Kelley V. Kirker is
married to Ms. Kirker.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires that
ITIS's executive officers and directors, and beneficial owners of more than 10%
of any class of equity security registered pursuant to the Exchange Act, make
certain filings with the SEC. ITIS believes, based solely on a review of the
copies of such reports furnished to ITIS during the fiscal year ended December
31, 2001, that all Section 16(a) filing requirements applicable to its
directors, officers and 10% beneficial owners were satisfied by each such
person.

Item 11.  Executive Compensation

The following table summarizes the compensation paid by ITIS directly to certain
executive officers during the six months ended December 31, 1999 and the fiscal
years ended December 31, 2000 and 2001. Apart from these officers, ITIS did not
pay any other executive officers an annual salary and bonus exceeding $100,000
during these periods.

During the years ended December 31, 2001 and 2000 and the six months ended
December 31, 1999, ITIS did not grant any stock appreciation rights.

The following table sets forth the grants of stock options made to employees of
ITIS or its subsidiaries during the year ended December 31, 2001 and for the six
months ended December 31, 1999. There were no grants of stock options during the
year ended December 31, 2000.

(1) Grant date value was determined using the Black-Scholes option valuation
model. The following assumptions were made in using this model: Assumed expected
volatility factors ranging from 58% to 92%, a 6% risk-free rate of return, a
dividend yield of zero, and terms for exercising the options of between three
and 10 years. The actual value, if any, a person may realize will depend on the
excess of the stock price over the exercise price on the date the option is
exercised.

(2) Options issued to former officers of acquired companies. These individuals
subsequently became officers of ITIS or one of its subsidiaries. Before the
options may vest, certain future subsidiary financial results or personal
performance criteria must be satisfied. The earliest date on which one -third of
these options could have been exercised was August 31, 2000, and the latest date
on which the last one -third of these options may be exercised is August 31,
2007. In the case of Mr. Hogan, the criteria for options scheduled to vest on
August 30, 2000 and 2001 was not satisfied, and 48,750 options were cancelled in
2000 and 2001, respectively. As of March 25, 2002, 200,000 of Mr. Harriman's
options were vested but have not been exercised.

The following table set forth information concerning the exercises of stock
options by employees of ITIS during the year ended December 31, 2001, and the
number and value of securities underlying unexercised options held on December
31, 2001, 2000 and 1999. There were no exercises of stock options during the
year ended December 31, 2000 or the six months ended December 31, 1999.
<TABLE>
                                Individual Grants
                                 ---------------------------------------------------------------------
                                 Number of      Percent of total
                                 securities     options granted
                                 underlying     to employees          Exercise or
                                 options        during the            base price       Expiration      Grant date
Name                             granted        period                ($/Sh)           date            value (1)
-------------------------------  --------------------------------------------------------------------- ---------------
<S>                              <C>            <C>                   <C>              <C>             <C>
For the year ended
  December 31, 2001
     Joanna Hoover                    500,000            27%           $      0.1540          4/19/04   $    38,000
     Kelley V. Kirker              1,000,000             54%           $      0.1407          4/16/04   $    69,000
For the six months ended
  December 31, 1999
     Ronald W. Hogan (2)              166,250            31%           $         3.00         8/31/02   $  295,835
     David P. Harriman (2)            300,000            55%           $         3.00         8/31/07   $  300,019

</TABLE>
(1) Based on the difference between the option exercise prices and either sales
prices for shares already sold or, for unsold shares, the closing sale price of
$.10 of our common stock as reported on the over-the-counter bulletin board on
December 31, 2001.

(2) Based on the difference between the option exercise prices and the closing
sale prices of $.10, $.1875, and $5.00 of our common stock as reported on the
over-the-counter bulletin board on December 31, 2001, 2000, and 1999,
respectively, multiplied by the number of shares underlying the options.

Compensation of Directors

On March 26, 1999, we adopted the 1999 Director Option Plan pursuant to which
our outside directors are granted options for the purchase of our common stock.
Under the Director Option Plan, each outside director is automatically granted
options to purchase 15,000 shares of common stock on the date he or she becomes
a director. Thereafter, each outside director who serves for six months or
longer is awarded options to purchase an additional 1,000 shares of common stock
at our annual meeting of stockholders. These options have a term of ten years,
and carry an exercise price of 100% of the fair market value of our common stock
on the date of grant.

In April 1999, the board of directors approved a stock option grant to Mr. Jack
Tompkins covering 1,000,000 shares of common stock. This option was exercisable
at $3.00 per share, and could be exercised in whole or in part over a term of 10
years from date of grant. The board approved this grant as an incentive for Mr.
Tompkins to serve as our first outside director. Mr. Tompkins became one of our
directors on August 31, 1999, and resigned on June 9, 2000.

In December 1999, the board of directors approved outside director compensation
in the form of awards of our common stock. These awards are to be for 25,000
shares of our common stock payable to each outside director at the beginning of
each year of service. In March 2000 and April 2001, we issued a total of 125,000
shares of our common stock, valued at $551,200 and $23,248 respectively, to
outside directors. In July 2000, we issued 50,000 shares, valued at $53,075, to
two new outside directors. In addition, the board voted in January 2000 to pay
each director a meeting fee of $1,000 per in-person meeting and $500 per
telephone meeting. The board agreed to hold monthly telephone meetings and
quarterly in-person meetings.

Compensation Committee Interlocks and Insider Participation

Messrs. Thayer and Roberts served on the Compensation Committee of the board of
directors of ITIS. None of the members of the Compensation Committee were
executive officers of ITIS at any time. No executive officer of ITIS served on
the Compensation Committee or other body responsible for similar functions of
any company one of whose executive officers served on the Compensation Committee
of ITIS.

Report of the Compensation Committee on Executive Compensation

In accordance with the rules of the SEC, the following report of the
Compensation Committee of ITIS shall not be deemed to be "soliciting material"
or to be "filed" with the SEC under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended. Such information shall not be
deemed to be incorporated by reference into any statements or reports filed by
ITIS with the SEC that do not specifically incorporate such information by
reference.

Compensation for our executive officers is administered under the direction of
the Compensation Committee with all recommendations of the Compensation
Committee being subject to approval by the board of directors. The Chairman of
the Compensation Committee meets personally with all executive officers and
their management team members each year and receives materials describing their
job performance for evaluation purposes. The following is the Compensation
Committee's report on compensation practices during the year ended December 31,
2001 for the executive officers of ITIS.

         Base Salary. The Compensation Committee recommends base salaries for
executive officers and for officers of its subsidiaries:

a.       by evaluating the responsibilities of each position held and the
experience of the individual;

b.       by reference to the competitive marketplace for executive talent,
including a comparison to base salaries for  comparable positions at other
companies of similar size and location, to historical levels of salary paid,
where available; and

c.      by reference to recommendations of independent compensation consultants.

Salary adjustments are based on periodic evaluation of the performance of the
Company, its subsidiaries and each officer, and added or changed
responsibilities as well as market place changes are considered. Some executives
perform duties for subsidiaries, and portions of their salaries are prorated.
There were no salary adjustments to the executive officers' base salaries for
the year ended December 31, 2001. Mr. Hunter M.A. Carr, who has served as
president and chief executive officer since the commencement of the Company,
received a base salary of $180,000 for the year 2001; Mr. David P. Harriman, who
serves as president of National Law Library received a base salary of $120,000
for the year 2001; Ms. Joanna Hoover, who serves as Chief Financial Officer of
ITIS, received a base salary of $120,000 for the year 2001; and Mr. Kelley V.
Kirker, who serves as President of ITIS, Inc. (Texas), received a base salary of
$120,000 for the year 2001. All other executive officers received salaries of
less than $100,000 for the year.

         Executive Incentives. The Compensation Committee has recommended an
executive incentive stock option plan, which has been approved by the board of
directors for the year ended December 31, 2001. In April 2001 and May 2001,
respectively, stock option awards were granted to Kelley V. Kirker in the amount
of 1,000,000 options and to Joanna Hoover in the amount of 500,000 options. To
date, there has been no other performance-based or other bonus plan put into
place for ITIS's executives.

         Other Compensation. Other compensation paid to executive officers
includes partial payment of insurance premiums on medical, dental, life, and
long-tem disability plans.

The board of directors of ITIS did not modify or reject any recommendations of
the Compensation Committee during the year ended December 31, 2001.

Respectfully submitted,

The Compensation Committee
George A. Roberts
W. Paul Thayer


Stock Performance Graph

SEC rules require presentation of a performance graph comparing the performance
of our common stock against a broad equity market index and against either a
published industry or line-of-business index or group of peer issuers through
the end of our latest fiscal year. We chose the NASDAQ Composite Index (COMPX)
as the relevant broad equity market index and GSTI Internet Index (GIN) as the
relevant line-of-business index.

ITII vs NASDAQ Composite Index (COMPX)

[GRAPHIC OMITTED]


ITII vs GSTI Internet Index (GIN)
[GRAPHIC OMITTED]

Item 12.  Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information as of March 29, 2002, regarding the
beneficial ownership of our common stock (i) by each person or group known by
our management to own more than 5% of the outstanding shares of common stock,
(ii) by each director, and (iii) by all directors and executive officers as a
group. Unless otherwise noted, each person has sole voting and investment power
over the shares indicated below, subject to applicable community property laws.

The mailing address for each person identified below is c/o IT IS Inc., 4301
Windfern Road, Suite 200, Houston, Texas, 77041.

(1)      Percentage of beneficial ownership is based on 39,575,780 shares of
         common stock outstanding as of March 29, 2002. In computing an
         individual's beneficial ownership, the number of shares of common stock
         subject to options held by that individual that are exercisable as of
         or within 60 days of March 29, 2002, are deemed outstanding. Such
         shares, however, are not deemed outstanding for the purpose of
         computing the beneficial ownership of any other person.

(2)      Includes options to purchase 1,250,000 common shares that are
         currently exercisable.

(3)      Includes 350,000 shares held by Mr. Kirker's spouse, as to which Mr.
         Kirker disclaims beneficial ownership.

(4)      Includes options to purchase 200,000 common shares that are currently
         exercisable.

(5)      Includes options to purchase 100,000 common shares that are currently
         exercisable.

Item 13.  Certain Relationships and Related Transactions

Mr. Carr, our chairman of the board of directors, chief executive officer and
president, was also the sole stockholder of ITIS, Inc. (Litidex(R)) during the
period from National Law Library's inception on November 30, 1998, to December
31, 1999. During the three months ended March 31, 2000, Mr. Carr sold
approximately 92% of his stock in Litidex(R) to various individuals and
entities, some of which are either directors or officers of ITIS or are entities
controlled by directors of ITIS. Under a stock exchange agreement dated April
30, 2000, we exchanged 5,044,903 shares of our common stock for all of the
outstanding common stock of Litidex(R). The closing price of our common stock at
April 28, 2000 was $4.125 per share. Of the 5,044,903 shares so issued,
1,721,003 shares were issued to five of our directors or their beneficiaries and
332,300 shares were issued to five of our officers as shown below:

<TABLE>

Name of Director/Officer                                         Position                      Number of
                                                                                               Shares
<S>                                                              <C>                           <C>
Hunter M.A. Carr..............................................   Director and officer              196,003
W. Paul Thayer (Thayer Investment Co.)........................   Director                          750,000
Kelley V. Kirker..............................................   Director and officer              500,000
Eugene A. Cernan (1)..........................................   Director                           25,000
George A. Roberts.............................................   Director                          250,000
Edward P. Stevens (1).........................................   Officer                           150,000
Donald H. Kellam (1)..........................................   Officer                           150,000
David P. Harriman.............................................   Officer                            25,000
Robert Sarlay (1).............................................   Officer                             3,300
K. Charles Peterson...........................................   Officer                             4,000
                                                                                               ------------
      Total...................................................                                   2,053,303
                                                                                                 =========
</TABLE>

(1)      At March 29, 2002, these parties are no longer officers or directors
 of ITIS Inc.

Prior to its acquisition by ITIS, Litidex(R) provided National Law Library with
various executive, sales and marketing, and administrative services since
National Law Library's inception on November 30, 1998. In addition, Litidex(R)
was and continues to be a primary provider of case law content to National Law
Library. Set forth below is a summary of the agreements between National Law
Library and ITIS.

In December 1998, National Law Library and Litidex(R) entered into a continuing
service agreement under which Litidex(R) provided database content to National
Law Library. Under the terms of this agreement, Litidex(R) provided National Law
Library with data files containing case law and statutes that are in the public
domain together with coding and proprietary editing services covering these data
files. National Law Library was charged $.65 per 1,000 characters for those data
files that satisfy certain prescribed quality control requirements. Under the
agreement, National Law Library was obligated for a three-year period to provide
Litidex(R) with minimum orders for data files containing an aggregate of 750
million characters per month. However, pricing under this agreement was to
reflect market prices for comparable work, and National Law Library had the
option to select another vendor should the pricing of Litidex(R) not be
competitive.

Despite the contract rate of $0.65 per 1,000 characters, during the six months
ended December 31, 1999, National Law Library revised its method of accounting
for its purchases of content from Litidex(R) due to the common control exercised
over both entities by Mr. Carr and due to the increasing materiality of the
transactions. During this period, approximately 10,332,200,000 bytes of case law
content was delivered by Litidex(R) to National Law Library at a contract value
of $6,722,000. National Law Library, however, recorded this content at the
estimated cost to Litidex(R) of $987,594. In addition, ITIS has restated its
case law content purchased from Litidex(R) during the period from National Law
Library's inception on November 30, 1998, to June 30, 1999. As a result of this
revaluation, at June 30, 1999, case law content was revised from approximately
$1,787,000 to approximately $1,197,000, and the related payable to affiliated
company of $115,700 was revised to reflect a receivable from affiliated company
of approximately $474,300.

Effective beginning in March 1999, National Law Library and Litidex(R) operated
under a management agreement. Under this agreement, Litidex(R) provided
accounting, staffing, and procurement services and office space to National Law
Library. Accounting services were charged at the rate of $85 per hour, staffing
services were charged at 125% of cost, office supplies, equipment, and telephone
services were charged at 120% of cost, and office space rental was based on 115%
of cost. In addition, Litidex(R) was entitled to charge a $3,600 monthly
management fee under the agreement. During the six months ended December 31,
1999, and the period from inception of National Law Library on November 30,
1998, National Law Library incurred charges totaling approximately $342,800 and
$298,800, respectively, and, at December 31, 1999 and June 30, 1999, National
Law Library owed Litidex(R) approximately $32,400 and $97,800, respectively,
under this agreement.

Effective in December 1998, National Law Library entered into an agreement with
Litidex(R) to receive software development and consulting services for its
database and retrieval. During the six months ended December 31, 1999, National
Law Library incurred charges totaling approximately $34,600 and, at December 31,
1999, National Law Library owed Litidex(R) approximately $3,800 under this
agreement.

During the year ended December 31, 2000, ITIS borrowed a total of $1,805,000
from Hunter M.A. Carr, its CEO, to fund working capital requirements.
Additionally, Mr. Carr advanced $255,000 during January and February 2001. The
borrowings through February 28, 2001 were evidenced by unsecured promissory
notes, each bearing an annual interest rate of 11.75% and payable in full with
accrued interest after six months. On February 28, 2001, the notes through that
date were consolidated into one demand note in the amount of $2,060,000 bearing
interest at the rate of prime plus two percent per year, payable in cash on
demand after one year. At Mr. Carr's option and with 30 days written notice, the
note may be repaid in common stock of ITIS at a discounted price based on the
lowest price at which ITIS has sold its common stock during the one-year period
preceding the exercise of this option. On March 10, 2001, ITIS retired $250,000
in principal from this note by issuing 1,153,828 restricted shares of common
stock to Mr. Carr at a price of $.216667 per share. New promissory notes,
totaling $340,117 and bearing the same terms, have been issued to Mr. Carr for
advances to ITIS since March 1, 2001. With respect to these notes payable, Mr.
Carr has provided written commitment to ITIS to provide forbearance and extend
the due date on such notes to at least July 15, 2002, if to demand payment would
impair ITIS's ability to meet its other existing liabilities and commitments.
Without these borrowings, of which there are no assurances of continuation, the
Company would not have remained in business. As of December 31, 2001, the total
principal amount and accrued but unpaid interest owed to Mr. Carr was $2,150,117
and $160,196, respectively.

In connection with the acquisition of Litidex(R), ITIS assumed liabilities to
Hunter M. A. Carr in the amount of $425,050. In September 2001 Mr. Carr forgave
this debt and the $425,050 was recorded as additional paid in capital.

In October 2000, ITIS executed demand notes for $400,000 and $50,000 in favor of
George A. Roberts and W. Allyn Hoaglund, respectively, members of its board of
directors. The notes bear interest at the rate of prime plus two percent per
year and are payable in cash on demand after one year. At the option of the
holder and with 30 days written notice, the notes may be repaid in common stock
of ITIS at a discounted price based on the lowest price at which ITIS has sold
its common stock during the one-year period preceding the exercise of this
option.

On February 1, 2001, ITIS executed a demand note for $190,000 in favor of George
A. Roberts, a member of its board of directors. The note bears interest at the
rate of prime plus two percent per year and is payable in cash on demand after
one year. At the option of the holder and with 30 days written notice, the note
may be repaid in common stock of ITIS at a discounted price based on the lowest
price at which ITIS has sold its common stock during the one-year period
preceding the exercise of this option.

On February 5, March 21, April 11, and May 16, 2001, ITIS executed demand
promissory notes for $50,000, $70,000, $25,000, and $12,500, respectively, in
favor of W. Paul Thayer, a member of the board of directors. The notes bear
interest at the rate of prime plus two percent per year and are payable in cash
on demand after one year. At the option of the holder and with 30 days written
notice, the notes may be repaid in common stock of ITIS at a discounted price
based on the lowest price at which ITIS has sold its common stock during the
one-year period preceding the exercise of this option.

On October 24, 2001, ITIS wholly owned subsidiary ITIS, Inc., a Texas
corporation that conducts business as Litidex(R), executed a promissory note for
$1,000,000 in favor of George A. Roberts, a member of its board of directors.
The note bears interest at an annual fixed rate equal to the lesser of the
maximum amount allowed by law as adjusted from time to time or 18%, and is
payable in full with accrued interest after one year. The note is secured by a
Security Agreement covering all accounts, contract rights and general
intangibles arising out of the litigation support project among Litidex(R), the
law firm of Christian Wukoson Smith and Jewell, and the law firm of O'Quinn,
Laminack and Pirtle. Legal fees of $29,100 were paid from the proceeds of this
note.

PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)      The following documents are being filed as part of this Report:

         (1)      Consolidated Financial Statements

                           See Index to Consolidated Financial Statements on
                           page F-1.

(2)            All other schedules are omitted because they are not applicable,
               not required or the required information is in the Consolidated
               Financial Statements or the notes thereto.

(3)      The following exhibits are filed or incorporated by reference as part
         of this report as required by Item 601 of Regulation S-K.

<TABLE>
Exhibit      Description
Number

<S>          <C>
2.1          Agreement and Plan of Reorganization dated March 25, 1999, between Planet Resources, National Law Library
             and the stockholders of National Law Library  (incorporated by reference to Exhibit A to ITIS's Form 8-K
             filed on April 2, 1999).
2.2          First Amendment to Agreement and Plan of Reorganization dated as of March 30, 1999, between Planet
             Resources, National Law Library and the stockholders of National Law Library (incorporated by reference to
             Exhibit 2.2 to ITIS's Form 10-K filed on October 13, 1999).
2.3          Agreement and Plan of Distribution dated as of March 25, 1999,
             between Planet Resources, New Planet Resources, Inc. and National
             Law Library (incorporated by reference to Annex B to ITIS's
             Information Statement Pursuant to Section 14(c) of the Securities
             Exchange Act of 1934 filed on April 19, 1999).
2.4          Contract for Sale of Stock, dated November 8, 1999, by and between John R. Marsh, Ronald W. Hogan, and
             Charles E. Bowen, Jr., as Sellers, and ITIS, as Buyer (incorporated by reference to Exhibit 2.1 to ITIS's
             Form 8-K filed on November 30, 1999).
2.5          Option Agreement to Purchase Stock, dated November 8, 1999, by and
             between ITIS, as Seller, and Ronald W. Hogan, as Optionee
             (incorporated by reference to Exhibit 2.2 to ITIS's Form 8-K filed
             on November 30, 1999).
2.6          Option Agreement to Purchase Stock, dated November 8, 1999, by and between ITIS, as Seller, and Charles E.
             Bowen, Jr., as Optionee (incorporated by reference to Exhibit 2.3 to ITIS's Form 8-K filed on November 30,
             1999).
2.7          Option Agreement to Purchase Stock, dated November 8, 1999, by and
             between ITIS, as Seller, and John R. Marsh, as Optionee
             (incorporated by reference to Exhibit 2.4 to ITIS's Form 8-K filed
             on November 30, 1999).
2.8          Contract of Sale, dated December 8, 1999, by and between David P. Harriman, Andrew Wyszkowski, Eugene
             Meyung, Suzanne Meyung, and Christina Brown, as Sellers, and ITIS, as Buyer (incorporated by reference to
             Exhibit 2.7 to ITIS's Form 8-K filed December 23, 1999).
2.9          Stock Exchange Agreement by and among ITIS and the shareholders of ITIS relating to the acquisition of all
             of the outstanding stock of ITIS, dated April 30, 2000 (incorporated by reference to Exhibit 2.9 to ITIS's
             Form 10-K/A filed on May 24, 2000).
2.10         Stock Purchase Agreement by and between ITIS and Jeremiah Kane,
             dated July 27, 2000, as amended by that amendment dated effective
             October 1, 2000 (Incorporated by reference to Exhibit 2.10 to the
             Registrant's Form 8-K filed with the SEC on October 16, 2000).
2.11         Stock Purchase Agreement by and between ITIS and John McHugh, dated
             July 27, 2000, as amended by that amendment dated effective October
             1, 2000 (Incorporated by reference to Exhibit 2.11 to the
             Registrant's Form 8-K filed with the SEC on October 16, 2000).
2.12         Stock Purchase Agreement by and between ITIS and Jack Ben Ezra,
             dated July 27, 2000, as amended by that amendment dated effective
             October 1, 2000 (Incorporated by reference to Exhibit 2.12 to the
             Registrant's Form 8-K filed with the SEC on October 16, 2000).
2.13         Stock Exchange Agreement by and among ITIS and all of the
             shareholders of Venco Compliance, Inc., a Texas corporation, dated
             effective October 1, 2000 (Incorporated by reference to Exhibit
             2.13 to the Registrant's Form 8-K filed with the SEC on October 16,
             2000).
2.14         Amended and Restated Agreement and Plan of Distribution dated as of
             March 13, 2001, between Planet Resources, National Law Library and
             the stockholders of National Law Library.
3.1          Amended and Restated Certificate of Incorporation of ITIS (incorporated by reference to the Annex A of
             ITIS's Definitive Proxy Statement on Schedule 14A filed on January 31, 2000).
3.2          Bylaws of ITIS, as amended (incorporated by reference to Exhibit 3.2 to ITIS's Form 10-K filed on
             October 13, 1999).
3.3          Certificate of Designation for ITIS's 5% Series A Convertible Preferred Stock (incorporated by reference to
             Exhibit 3.3 to ITIS's Form 10-K/A filed on May 24, 2000).
3.4          2001 Executive Stock Option Plan dated effective March 15, 2001 (incorporated by reference to Exhibit 4.4
             to ITIS's Registration Statement on Form S-8 filed on March 30, 2001).
10.1         Stock Option Agreement between ITIS and Hunter M.A. Carr (incorporated by reference to Exhibit D to
             Schedule 13D filed on October 12, 1999, by Hunter M.A. Carr).
10.2         Stock Option Agreement between ITIS and Jack I. Tompkins (incorporated by reference to Exhibit D to
             Schedule 13D filed on October 12, 1999, by Jack I. Tompkins).
10.3         Consulting Agreement between National Law Library and Castle Development, Ltd.  (incorporated by reference
             to Exhibit 4(A) to ITIS's Registration Statement on Form S-8 filed on April 2, 1999).
10.4         Continuing Service Agreement between National Law Library and ITIS,
             effective December 1, 1998 (incorporated by reference to Exhibit
             10.4 to Internet Law's Form 10-K filed on October 13, 1999).
10.5         Management and Financial Services Agreement between National Law
             Library and ITIS, effective March 1, 1999 (incorporated by
             reference to Exhibit 10.5 to ITIS's Form 10-K filed on October 13,
             1999).
10.6         Software Development and Consulting Agreement between National Law
             Library and ITIS, dated March 24, 1999 (incorporated by reference
             to Exhibit 10.6 to ITIS's Form 10-K filed on October 13, 1999).
10.7         Option Agreement to Purchase Stock, effective March 30, 1999, by
             and between ITIS and Jonathan Gilchrist (incorporated by reference
             to Exhibit 10.7 to ITIS's Form 10-K filed on October 13, 1999).
10.8         Planet Resources 1999 Stock Option Plan (incorporated by reference to Exhibit 10.1 to ITIS's Form 10-K/A
             filed on October 28, 1999).
10.9         Planet Resources Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.2 to ITIS's
             Form 10-K/A filed on October 28, 1999).
10.10        New Planet Resources, Inc.  Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to ITIS's
             Form 10-K/A filed on October 28, 1999).
10.11        Planet Resources 1999 Director Option Plan (incorporated by reference to Exhibit 10.4 to ITIS's Form 10-K/A
             filed on October 28, 1999).
10.12        Consulting and Option Agreement by and between ITIS, Frank Fisher
             and Steve Tebo, dated January 22, 2000, as amended (incorporated by
             reference to Exhibit 10.12 to ITIS's Form 10-K/A filed on May 24,
             2000).
10.13        Convertible Preferred Stock Purchase Agreement by and among ITIS
             and Cootes Drive LLC, dated May 11, 2000 (incorporated by reference
             to Exhibit 10.13 to ITIS's Form 10-K/A filed on May 24, 2000).
10.14        Registration Rights Agreement by and among ITIS and Cootes Drive LLC, dated May 11, 2000 (incorporated by
             reference to Exhibit 10.15 to ITIS's Form 10-K/A filed on May 24, 2000).
10.15        Warrant to purchase 200,000 shares of ITIS's common stock issued to
             Aspen Capital Partners, Inc., dated May 19, 2000 (incorporated by
             reference to Exhibit 10.16 to ITIS's Form 10-K/A filed on May 24,
             2000).
10.16        Securities Purchase Agreement by and between ITIS and Cootes Drive LLC, dated November 20, 2000.
10.17        Amended and Restated Registration Rights Agreement by and between ITIS and Cootes Drive LLC, dated November
             20, 2000.
10.18        Warrant to purchase 250,000 shares of ITIS's common stock issued to Cootes Drive LLC, dated May 11, 2000.
10.19        Warrant to purchase 250,000 shares of ITIS's common stock issued to Cootes Drive LLC, dated November 20,
             2000.
10.20        Minimum Commitment Warrant to purchase up to 100,000 shares of ITIS's common stock issued to Cootes Drive
             LLC, dated November 20, 2000.
10.21        Vesting Warrant to purchase 1,000 shares of ITIS's common stock per $100,000 invested issued to Cootes
             Drive LLC, dated November 20, 2000.
10.22        Convertible Promissory Note made by ITIS in favor of Cootes Drive LLC in the principal amount of $500,000,
             dated December 5, 2000.
10.23        Warrant to purchase 41,650 shares of ITIS's common stock issued to Cootes Drive, LLC, dated December 5,
             2000.
10.24        Side Letter Agreement dated December 5, 2000, by and between ITIS
             and Cootes Drive LLC to enter into a convertible Promissory Note
             financing arrangement for $500,000.
10.25        Consulting Agreement by and between Venco Compliance, Inc. and
             Cathryn Tull d/b/a First Choice Consulting, dated October 1, 2000
             (incorporated by reference to Exhibit 10.17 to the Registrant's
             Form 8-K filed with the SEC on October 16, 2000).
10.26        Consulting Agreement by and between Venco Compliance, Inc. and
             Cathryn Tull d/b/a First Choice Consulting, dated October 1, 2000
             (incorporated by reference to Exhibit 10.17 to ITIS's Form 8-K
             filed with the SEC on October 16, 2000).
10.27        Warrant to purchase 300,000 shares of ITIS's common stock issued to
             James W. Christian dated February 22, 2001 (incorporated by
             reference to Exhibit 10.27 to ITIS's Form 10-Q filed with the SEC
             on May 15, 2001).
16.1         Letter, dated April 5, 2000, from Harper and Pearson Company to the
             Securities and Exchange Commission (incorporated by reference to
             Exhibit 16.1 to ITIS's Form 8-K/A filed on April 5, 2000).
16.2         Letter, dated February 21, 2001 from Arthur Andersen LLP to the
             Securities and Exchange Commission (incorporated by reference to
             Exhibit 16.2 to ITIS's Form 8-K filed on February 23, 2001)
21*          Subsidiaries of ITIS.
24*          Power of Attorney (included on signature page)
*Filed herewith

</TABLE>
(b)      Reports on Form 8-K

The following reports on Form 8-K were filed during the last quarter of the
period covered by this report:

(1)      Form 8-K filed on November 1, 2001, reporting under Item 5,
         shareholder approval of the corporate name change from Internet
         Law Library, Inc. to ITIS Inc.

(2)      Form 8-K, filed on November 14, 2001, reporting under Item 2, the
         disposition of Venco Compliance, Inc. and Compass Data
         Systems, Inc. as of October 31, 2001.



                                   SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                            ITIS Inc.

                            By: /s/ Hunter M.A. Carr
                                Hunter M.A. Carr

                                POWER OF ATTORNEY

Each person whose signature appears below hereby authorizes and constitutes
Hunter M.A. Carr and Joanna Hoover, and each of them singly, his true and lawful
attorneys-in-fact with full power of substitution and re-substitution, for him
and in his name, place and stead, in any and all capacities to sign and file any
and all amendments to this report with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, and he
hereby ratifies and confirms all that said attorneys-in-fact or any of them, or
their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

<TABLE>

<S>                              <C>                                                                <C>
/s/ Hunter M.A. Carr             Chairman of the Board, President and Chief Executive               April 1, 2002
------------------------------
Hunter M.A. Carr                 Officer (Principal Executive Officer)

 /s/ Kelley V. Kirker            Director, President of ITIS, Inc. (Texas)                          April 1, 2002
------------------------------
Kelley V. Kirker

 /s/ George A. Roberts           Director                                                           April 1, 2002
------------------------------
George A. Roberts

 /s/ W. Paul Thayer              Director                                                           April 1, 2002
------------------------------
W. Paul Thayer

 /s/ David P. Harriman           Director, President of National Law Library                        April 1, 2002
------------------------------
David P. Harriman

 /s/ W. Allyn Hoaglund           Director                                                           April 1, 2002
------------------------------
W. Allyn Hoaglund

 /s/ Joanna Hoover               Chief Financial Officer (Principal Financial and                   April 1, 2002
------------------------------
Joanna Hoover                    Accounting Officer)

</TABLE>






REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS AND

FINANCIAL STATEMENTS



Reports of Independent Public Accountants..............................F-1 - F-3
Consolidated Balance Sheets as of December 31, 2001 and
  December 31, 2000..................................................F-4 and F-5
Consolidated Statements of Operations for the years ended December 31, 2001
  and December 31, 2000 and for the six months ended
   December 31, 1999.........................................................F-6
Consolidated Statements of Stockholders' Equity for the years ended
  December 31, 2001 and December 31, 2000 and for the six months ended
  December 31, 1999..........................................................F-7
Consolidated Statements of Cash Flow for the years ended December 31, 2001
  and December 31, 2000 and for the six months ended
  December 31, 1999..................................................F-8 and F-9
Notes to Consolidated Financial Statements..................................F-10


                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Shareholders of ITIS Inc.:

      We have audited the accompanying consolidated balance sheets of ITIS Inc.
(formerly Internet Law Library, Inc.) and Subsidiaries as of December 31, 2001
and 2000 and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for the years then ended. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit. The accompanying consolidated statements of
operations, changes in stockholders' equity and cash flows for the six months
ended December 31, 1999, were audited by other auditors, whose report thereon
dated May 11, 2000, expressed an unqualified opinion on those statements.

      We conducted our audits in accordance with generally accepted auditing
standards in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall consolidated
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

      In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of ITIS Inc.
and Subsidiaries at December 31, 2001 and 2000 and the results of their
operations and their cash flows for the years then ended. in conformity with
generally accepted accounting principles in the United States.

      The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As reflected in the
accompanying consolidated financial statements and more fully discussed in Note
14 to the consolidated financial statements, the Company's recurring losses from
operations, negative working capital and cash flows, and retained deficits raise
substantial doubt about its ability to continue as a going concern. Because the
Company does not have significant cash or other material liquid assets, nor an
established source of revenues sufficient to cover its operating expenses, the
Company will be required to obtain substantial additional financing and capital
or to dramatically reduce operating expenses in order to continue as a going
concern. As of March 29, 2002, the date of this report, the Company's sources of
an adequate supply of financing or capital are severely limited. In order to
remain in business during the years 2001 and 2000, and the first quarter of
2002, the Company received substantial debt and equity financing from the
Company's Chairman of the Board and other shareholders and directors. If
additional equity or debt financings are not timely consummated, projected
revenues do not meet management's expectations, or costs are not reduced and
instead exceed projections, the Company may be able to remain in business.
Management's plans in regards to these matters are also discussed in Note 14. If
the Company is unable to remain in business and continue as a going concern,
assets as now reflected on the accompanying consolidated balance sheet, will be
severely impaired resulting in significant charge offs and declines in values
coupled with an increase in contingent liabilities resulting from the Company's
inability to timely and adequately service its credit obligations as they become
due. While impairment charges of $2,741,955 and $748,024 to the Company's
database, content and software have been recognized at December 31, 2001 and
2000, the consolidated financial statements do not include any future
adjustments relating to the recoverability and classification of asset carrying
amounts or the amounts and classification of liabilities that might result
should the Company be unable to remain in business.

      As more fully discussed in Note 4 to the consolidated financial
statements, the Company incurred impairment charges of $2,741,955 and $748,024
during 2001 and 2000 to capitalized database content and software costs based on
estimates of future cash flows and other considerations. As a result of the
issuance of Statement of Financial Standards No. 142, "Goodwill and Other
Intangible Assets", issued during 2001 and effective for the Company on January
1, 2002, the Company plans to seek a "preference letter" from the United States
Securities and Exchange Commission (the Commission) during the second quarter of
2002, with respect to their accounting for these assets. See Note 2 to the
consolidated financial statements for more information on this matter. At this
time, it is not possible to determine what, if any, response the Commission may
have to this accounting matter.

      During 2001, the Company recognized revenues amounting to $2,691,855
related to its automated litigation support services. See Notes 2 and 3 to the
consolidated financial statements for more information on this matter. Due to
the unique nature of the services provided by the Company's subsidiary, Litidex,
the Company plans to seek a "preference letter" from the United States
Securities and Exchange Commission (the Commission) during the second quarter of
2002 to determine whether their revenue recognition policy is appropriate for
these services. Depending upon the response of the United States Securities and
Exchange Commission, the reporting of these revenues may require restatement,
which may result in additional revenues being deferred and recognized in future
periods. At this time, it is not possible to determine what, if any, response
the Commission may have to this accounting matter. At December 31, 2001,
$2,103,598 of these revenues are uncollected and due from a single law firm
located in Houston, Texas. Management believes that these uncollateralized
receivables are fully collectible.

      As more fully discussed in Note 8 to the consolidated financial
statements, the Company has entered into material financing agreements with the
Company's Chairman of the Board and other directors of the Company.

      As more fully discussed in Notes 9 and 11 to the consolidated financial
statements, the Company is involved in substantial litigation as both plaintiff
and defendant.



/s/ Harper and Pearson Company


Houston, Texas
March 29, 2002


THE FOLLOWING IS A COPY OF A PREVIOUS REPORT OF ARTHUR ANDERSEN LLP AS
ORIGINALLY ISSUED ON MAY 11, 2000. THIS REPORT HAS NOT BEEN REISSUED SINCE THAT
DATE.



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Internet Law Library, Inc.:

We have audited the accompanying consolidated balance sheet of Internet Law
Library, Inc. (formerly Planet Resources, Inc.) and subsidiaries, as of December
31, 1999, and the related consolidated statements of operations, stockholders'
equity and cash flows for the six months ended December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Internet Law Library, Inc., and
subsidiaries as of December 31, 1999 and the results of their operations and
their cash flows for the six months ended December 31, 1999 in conformity with
accounting principles generally accepted in the United States.


/s/ Arthur Andersen LLP

Houston, Texas
May 11, 2000



ITIS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
                                                                       December 31,            December 31,
                                                                           2001                    2000
                                                                  -----------------------   --------------------

                               ASSETS

<S>                                                               <C>                        <C>
Current assets:

 Cash and cash equivalents                                                 $      69,280          $      29,867
 Accounts receivable, net of allowance for doubtful accounts
  of $34,127 and $-0- respectively
                                                                               1,524,704                151,876

 Investments available for sale, at fair market value                            199,250                      -
  Other current assets
                                                                                 14,710                 57,103

 Current assets of entity to be disposed of                                           -                 88,189
                                                                  -----------------------   --------------------


  Total current assets                                                        1,807,944                327,035
                                                                  -----------------------   --------------------

Long term assets:

 Accounts receivable                                                             760,000                      -

 Deposit                                                                         150,000                      -
                                                                  -----------------------   --------------------


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

Fixed assets and intangibles, net of amortization and depreciation

 Database content and software costs                                          11,914,639             14,237,586
 Furniture and equipment                                                         327,272                424,731
 Intangible assets                                                             1,127,416              2,475,268
 Net fixed assets and intangibles of entity to be disposed of                          -              2,128,234
                                                                  -----------------------   --------------------
  Total fixed assets and intangibles, net
                                                                              13,369,327             19,265,819
                                                                  -----------------------   --------------------

  Total assets                                                           $    16,087,271         $   19,592,854
                                                                  =======================   ====================

</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.






ITIS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
                                                               December 31,           December 31,
                                                                   2001                   2000
                                                           ---------------------- ---------------------

            LIABILITIES AND STOCKHOLDERS' EQUITY

<S>                                                        <C>                    <C>
Current liabilities:
 Bank overdraft                                                    $      40,813            $        -
 Notes payable-other                                                   1,922,934               510,048
 Disputed note payable to Cootes Drive LLC                               500,000               500,000
 Accounts payable                                                        544,010               369,647
 Accounts payable-related parties                                         83,125
 Accrued interest                                                        342,658               141,420
 Accrued liabilities                                                     454,827               155,110
 Deferred revenue                                                        853,740               105,684
 Assets distributable to stockholders                                          -                 1,761
 Current liabilities of entity to be disposed of                               -               138,108
                                                          ---------------------- ---------------------
  Total current liabilities
                                                                       4,742,107             1,921,778
Long term notes payable from Chairman
                                                                       2,150,117             2,230,050
                                                           ---------------------- ---------------------
Total liabilities
                                                                       6,892,224             4,151,828
                                                           ---------------------- ---------------------

Commitments and contingencies

Stockholders' equity:
 Series A Convertible Preferred stock, par value $.001; 50,000,000 shares
  authorized; 161.08 shares issued and
  outstanding, respectively                                            2,027,526             2,027,526
 Common stock, par value $.001, 100,000,000 shares
  authorized;  39,383,396 and 35,421,284 shares issued,
  respectively; and 37,702,280 and 35,410,546 shares
  outstanding, respectively                                               39,383                35,422
 Warrants                                                              1,213,372             1,167,372
 Additional paid in capital                                           24,801,383            23,447,757
 Deferred compensation                                                         -              (15,625)
 Accumulated deficit                                                (18,557,247)          (11,178,242)
 Treasury stock, at cost, 1,681,116 shares
  and 10,738 shares, respectively                                      (284,554)              (43,184)
 Accumulated other comprehensive income,
  unrealized gain on investments                                           1,083                     -
 Less notes receivable issued for purchase of
  common stock                                                          (45,899)                     -
                                                           ---------------------- ---------------------
  Total stockholders' equity
                                                                       9,195,047            15,441,026
                                                           ---------------------- ---------------------

  Total liabilities and stockholders' equity                     $    16,087,271        $   19,592,854
                                                           ====================== =====================

</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.



ITIS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
<TABLE>
                                                                                                   For the six months
                                                     For theYear ended       For theYear ended     ended December 31,
                                                     December 31, 2001      December 31, 2000             1999
                                                   ---------------------- ------------------------ ---------------------

<S>                                                <C>                    <C>                      <C>
 REVENUE, NET OF DEFERRED INCOME                         $     4,059,250         $     1,038,069         $      222,697
                                                   ---------------------- ----------------------------------------------
 OPERATING EXPENSES:
   Selling and marketing                                         830,984               1,385,902                372,324
  General and administrative                                   3,151,185               4,138,242              1,108,645
  Production and computer service                                357,640                 454,946                 73,628
  Amortization and depreciation                                2,479,415               1,913,410                197,037
  Impairment charge                                            2,741,955                 748,024                      -
                                                   ---------------------- ----------------------------------------------
  Total operating expenses                                     9,561,179               8,640,524              1,751,634
                                                   ---------------------- ----------------------------------------------
 LOSS FROM CONTINUING

  OPERATIONS                                                 (5,501,929)             (7,602,455)            (1,528,937)

 DISCONTINUED OPERATIONS:
  Loss from operations of
  discontinued business segments                               (916,183)               (376,579)                      -
  Loss on disposal of business segments,
  including provision for operating
  losses during phase-out period                               (971,368)                       -                      -

 INTEREST (EXPENSE) INCOME, net                                (398,929)               (154,957)                  3,150
 GAIN ON SALE OF INVESTMENTS

  AND EQUIPMENT                                                  409,404                       -                      -
                                                   ---------------------- ----------------------------------------------
 NET LOSS
                                                             (7,379,005)             (8,133,991)            (1,525,787)

 DEEMED PREFERRED STOCK DIVIDENDS                                   -               (906,250)                      -
                                                   ---------------------- ----------------------------------------------

 NET LOSS APPLICABLE TO COMMON

  SHAREHOLDERS                                               (7,379,005)             (9,040,241)            (1,525,787)

 OTHER COMPREHENSIVE INCOME
  Unrealized gain on investments
  available for sale                                             1,083                       -                      -
                                                   ---------------------- ----------------------------------------------
 NET AND COMPREHENSIVE LOSS
  APPLICABLE TO COMMON
  SHAREHOLDERS                                          $    (7,377,922)       $     (9,040,241)      $     (1,525,787)
                                                   ====================== ==============================================

 LOSS PER COMMON SHARE                                    $       (0.19)         $        (0.31)        $        (0.07)
                                                   ====================== ==============================================

 LOSS PER COMMON SHARE AS A RESULT
  OF DISCONTINUED OPERATIONS                              $       (0.05)         $        (0.01)            $         -
                                                   ====================== ==============================================

 WEIGHTED AVERAGE SHARES USED IN
  COMPUTING LOSS PER
  COMMON SHARE                                               37,846,478              29,436,122             22,840,676
                                                   ====================== ==============================================

</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

ITIS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY For the year ended December 31, 2001, the year ended December 31, 2000,
and the six months ended December 31, 1999
<TABLE>
                                                                                                             Comp.
                                                                     Add'l                       Rec'vble   Unreal.
                                            #ComStk     Com           PdIn   Def'rd Rt'd  Treas.    from    Gain on
                                   Pref.Stk ShsIssd     Stk     War.  Cap.   Comp.  Def     Stk      S/h    Invest.       TOTAL
                                   ------------------------------------------------------------------------------------------------


<S>                                    <C>

Balance, June 30, 1999                  -    21,132,288  21,133   -  2,775,072  -  (612,214) (43,184)   -      -       2,140,807
                                       -------------------------------------------------------------------------------------------


Exercise of common stock options        -       600,000     600   -    179,400  -         -        -    -      -         180,000

Issuance of common stock for cash       -     2,207,526   2,207   -  2,243,468  -         -        -    -      -       2,245,675

Issuance of common stock for services   -        51,500      51   -    215,706  -         -        -    -      -         215,757
Issuance of variable common stock
options                                 -             -       -   -    375,000 (375,000)  -        -    -      -                -

Amortization of deferred compensation   -             -       -   -       -      10,400   -        -    -      -           10,400
Issuance of common stock for
acquisitions
net of redeemable common stock          -        929,677    930   -   2,174,070       -   -        -    -      -         2,175,000
Change in assets distributable to
stockholders                            -              -      -   -      12,278       -   -        -    -      -            12,278

Net Loss                                -              -      -   -           -       - (1,525,787)-    -      -        (1,525,787)
                                       --------------------------------------------------------------------------------------------



Balance December 31, 1999               -     24,920,991 24,921   -    7,974,994(364,600)(2,138,001)(43,184) -  -        5,454,130
                                       --------------------------------------------------------------------------------------------

Issuance of common stock shares
 for 1999 compensation                  -        33,042     33    -         (33)    -     -        -    -       -                -

Change in assets distributable to
stockholders                            -            -       -     -       1,761    -     -        -    -        -            1,761
Change in variable stock options
                                        -            -       -     -   (375,000)  364,600 -        -    -        -          (10,400)
Issuance of stock options for services
                                        -            -       -     -     103,184  (15,625)-        -    -        -           87,559
Issuance of Series A preferred stock 2,870,000       -       -     -           -    -                                     2,870,000

Issuance of common stock for
 acquisition-ITIS                      -     5,044,903    5,045    -  11,913,233    -      -       -     -        -       11,918,278

Issuance of common stock for
 acquisition-Compass
                                       -     1,670,378    1,670    -   2,292,754     -     -        -     -       -       2,294,424
Issuance of common stock for
 acquisition-Venco                     -       100,000      100    -      90,500     -     -        -     -       -          90,600

Issuance of common stock for services  -       514,825      515    -     707,583     -     -        -     -       -         708,098

Conversion of Series A preferred
 stock to common stock          (1,748,724)  3,137,145    3,138    -   1,781,153     -      -       -     -       -          35,567

Issuance of common stock warrants      -       -             -      -  1,167,372(1,167,372) -       -     -       -             -

Series A preferred stock deemed
 dividend                        906,250          -          -     -      -       -      (906,250)  -     -       -             -

Lapse of redemption on common stock   -          -            -    -     125,000  -          -      -     -       -         125,000

Net Loss                              -          -            -    -          -   -     (8,133,991) -     -       -      (8,133,991)
                                       --------------------------------------------------------------------------------------------


Balance, December 31, 2000    2,027,526   35,421,284  35,422 1,167,372 23,447,757(15,625)(11,178,242)(43,184)-      -   15,441,026
                                       --------------------------------------------------------------------------------------------

Issuance of common stock in
  exchange for debt                   -   1,153,828    1,153  - 248,847       -   -         -       -       -     -         250,000

Spin off of Planet Resources, Inc.    -         -        -         -      13,880  -          -      -       -     -          13,880

Issuance of stock options for services-     50,000      50         -       7,990  -          -      -       -     -           8,040

Issuance of common stock for services -  1,145,000   1,145         -     271,103  -          -      -       -      -        272,248

Issuance of common stock for
 insurance premium                    -    47,139      47                 10,795                                             10,842

Amortization of deferred compensation-         -       -           -          - 15,625        -     -       -     -          15,625

Issuance of common stock warrants                                46,000                                                      46,000

Issuance of common stock pursuant
 to the "2001 Executive Stock
 Option Plan"                         - 1,500,000   1,500         -      323,200   -          -     -        -     -        324,700

Issuance of common stock pursuant
 to the "1999 Employee Stock
 purchase Plan"
                                                   66,145        66       11,770                                              11,836
Shareholder contribution of profit
 on sale of common stock              -     -       -             -       40,991   -           -    -        -     -          40,991

Debt forgiveness by Shareholder                                          425,050                                            425,050

Fair value adjustment to available
 for sale securities                  -      -       -            -           -    -          -      -       -   1,083        1,083

Reposession of Compass Data
 Systems stock                        -      -       -            -            -   -          -  (241,370)   -     -       (241,370)

Notes Receivable issued for purchase of
 common stock                         -      -       -             -          -    -         -       -   (45,899)  -       (45,899)

Net loss                                                                                  (7,379,005)                   (7,379,005)
                                       --------------------------------------------------------------------------------------------

Balance, December 31, 2001       2,027,526  39,383,396  39,383  1,213,372  24,801,383   -  (18,557,247) (45,899)     1,083 9,195,047
                                        ============================================================================================

 </TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.




<TABLE>

ITIS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
                                                         For the Year ended          For the Year ended        For the six months
                                                         December 31, 2001           December 31, 2000      ended December 31, 1999
                                                     --------------------------  -------------------------- -----------------------

<S>                                                  <C>                         <C>                        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                         (7,379,005)                 (8,133,991)                (1,525,787)
    Adjustments to reconcile net loss to net
         cash used in operating activities:
         Issuance of common stock, options,
             or warrants for goods or services          444,130                     708,098                    215,757
         Note payable assumed for services                    -                      33,668                     -
         Amortization of deferred compensation           15,625                      87,559                     10,400
         Amortization and depreciation                2,479,415                   1,913,410                  197,037
         provision for doubtful accounts                     -                           -                          5,534
         change in variable stock options                    -                     (10,400)                   -
         Conversion of Series A preferred stock to
             settle interest                                 -                       35,567                     -
         Impairment charge                             2,741,955                   748,024                    -

         Gain on sales of investments                   (403,535)                   -                          -
         Gain on sale of equipment                        (5,869)                     -                          -
         Services provided for investments              (976,192)                   -                          -
         Disposal of operating segments                 1,836,945                   -                          -
         Changes in:
             Due from stockholders                            -                           -                          11,295
             Accounts receivable                      (2,132,828)                 (65,861)                   (84,131)
             Accrued interest on notes receivable         (4,564)                     -                          -
             Other current assets                         42,393                      11,604                     (3,284)
             Accounts payable                            257,488                     213,175                    76,598
             Accrued liabilities                         500,955                     224,116                    67,523
             Deferred revenue                            748,056                     23,284                     74,061
             Assets distributable to stockholders        (1,761)                     (28,474)                   -
                                                     --------------------------  -------------------------- ------------------------

         Net cash used in operating activities        (1,836,792)                 (4,240,221)                (954,997)
                                                     --------------------------  -------------------------- ------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    purchases of investments                             (189,462)                   -                          (450,000)
    proceeds from sales of investments                  1,221,022                   450,000                    -
    proceeds from sale of equipment                        6,269                       -                          -
    Additions to database content and software costs   (1,433,274)                 (2,140,415)                (1,033,363)
    Additions to furniture and equipment                 (20,238)                    (195,025)                  (65,570)
    Cash acquired in acquisitions                             -                        20,554                     35,166
                                                     --------------------------  -------------------------- ------------------------

         Net cash used in investing activities        (415,683)                   (1,864,886)                (1,513,767)
                                                     --------------------------  -------------------------- ------------------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.





ITIS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
                                                                                                                 For the six months
                                                             For the Year ended       For the Year ended        ended December 31,
                                                             December 31, 2001        December 31, 2000                1999
                                                        ------------------------ ------------------------   ---------------------

<S>                                                       <C>                       <C>                       <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
 Due to (due from) affiliated company                     -                        -                          269,004
 Proceeds from notes payable                              2,067,617                3,211,063                  -
 Payments on notes payable                                 (59,614)                 (24,633)                   (180,000)
 Payment on notes acquired in acquisition                 -                        -                          (22,000)
 Payments received on notes receivable                     176,365                  -                          -
 Proceeds from exercise of stock options                  -                        -                          180,000
 Issuance of common stock                                 11,836                   -                          2,245,675
 Issuance of preferred stock                              -                        2,870,000                  -
 Shareholder contribution to paid in capital              40,991                   -                          -
 Bank overdraft                                           40,813                   -                          -
 Distribution of Planet Resources assets and liabilities  13,880                   -                          -
                                                        ------------------------ ------------------------   ---------------------

  Net cash provided by financing activities               2,291,888                6,056,430                  2,492,679
                                                        ------------------------ ------------------------   ------------------------

NET INCREASE/(DECREASE) IN CASH
 AND CASH EQUIVALENTS                                     39,413                   (48,677)                   23,915

CASH AND CASH EQUIVALENTS, beginning of period
                                                          29,867                   78,544                     54,629
                                                        ------------------------ ------------------------   ------------------------

CASH AND CASH EQUIVALENTS, end of period                   69,280                   29,867                     78,544
                                                        ======================== ========================   ========================



SUPPLEMENTAL CASH FLOW INFORMATION:
 Cash paid for interest                                     61,187                   23,721                     6,693

 Cash paid for income taxes                                 -                        -                          -
 Non cash investing and financing transactions:
  Fair value of common stock issued as
   note reduction                                           250,000                  -                          -
  Fair value of common stock issued
   for acquisitions                                        -                        14,300,000                 2,300,000
  Lapse of redemption on common stock                      -                        125,000                    -
  Deemed preferred stock dividend                          -                        906,250                    -
  Conversion of preferred stock                            -                        1,748,724                  -
  Notes receivable issued for exercise
   of stock options                                        217,700                  -                          -
  Unrealized gains on investments                          1,083                    -                          -
  Long-term debt forgiveness by Chairman                   425,050                  -                          -

</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.






NOTE 1-BUSINESS:

ITIS Inc., formerly known as Internet Law Library and Planet Resources, is a
Delaware corporation that provides electronic publishing services and database
content through Internet sites with subscription access, licenses and
transaction fees for databases through its subsidiaries, National Law Library,
Inc., GoverNet Affairs, Inc., and Brief Reporter, LLC. The content of the
databases consists of pending legislation, statutory law, rules and case law at
the federal and state levels. Legal briefs from certain important cases before
federal and state courts are also available, as are litigation forms. This
material can be useful to legislators, corporate regulatory personnel,
lobbyists, individual lawyers, judges, law firms, corporate legal departments,
government agencies, and businesses and individuals involved in legislative
efforts, litigation and corporate legal planning. Interfacing with these
databases are retrieval engines that are owned by ITIS or its subsidiaries. ITIS
also provides database content, data conversion, automated litigation support,
software, and hardware through its subsidiary, ITIS, Inc., a Texas corporation,
which conducts business as Litidex(R). Litidex(R) currently focuses its
attention on the automated litigation support aspect of the legal services
industry, with which it has had more than fifteen years experience. In cases
involving large numbers of documents, attorneys need to have a system for fast
data retrieval. The experienced staff of this subsidiary, along with the
Litidex(R) search engine, is ideally suited for the task of compiling databases
of documents that can be searched for instant information retrieval. These
databases are then put on secure Websites so that they can be available to
attorneys in multiple locations.

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

ITIS's common stock is traded on the over-the-counter Bulletin Board under the
symbol "ITII.OB."ITIS was originally incorporated as Allied Silver-Lead Company
in the State of Idaho in 1967 and, until 1992, operated as an exploratory mining
company with extremely limited operations. In January 1996, ITIS was
reincorporated in Delaware as a result of a merger and, among other shareholder
actions taken at that time, the corporate name was changed to Planet Resources,
Inc. Between 1992 and the reverse acquisition by National Law Library in March
of 1999, ITIS had no operations; however, the Company maintained certain mining
properties which were indirectly distributed to those stockholders who were
stockholders of ITIS prior to the reverse acquisition by National Law Library.
On March 27, 2001, pursuant to an Amended and Restated Agreement and Plan of
Distribution dated March 13, 2001, Planet Resources was spun-off from ITIS and
acquired the mining and other interests. ITIS no longer maintains any interest
in these properties.

National Law Library, a Texas corporation, was formed in November 1998 for the
purpose of developing and marketing an Internet destination to be used for legal
research. Following its formation, National Law Library's then sole stockholder,
who is the current President, Chief Executive Officer and Chairman of ITIS,
contributed to National Law Library all of his rights and interests in the
Litidex(R) search, retrieval and database software, and database content valued
at $934,000 and $1,096,000, respectively, in exchange for 15,152,500 shares of
common stock of National Law Library. Commercial operations began in January
1999, the same month in which National Law Library agreed in principle to be
acquired by ITIS. Under the Agreement and Plan of Distribution, each share of
National Law Library common stock was exchanged for one share of the
unregistered common stock of ITIS. In contemplation of this transaction, ITIS's
original stockholders agreed to a one-for-two reverse stock split, which
resulted in 2 million shares of ITIS's common stock being outstanding
immediately prior to the merger. After giving effect to these transactions,
former National Law Library stockholders owned 18 million shares of unregistered
common stock of ITIS and the original stockholders of ITIS owned 2 million
shares of ITIS common stock. Following the transaction, the stockholders voted
to change the name of Planet Resources, Inc. to Internet Law Library, Inc. Under
the terms of the agreement and plan of reorganization, the majority of the
original board of directors resigned and was replaced with directors elected by
the new stockholders At the annual meeting in September 2001, stockholders
approved a name change from Internet Law Library to "ITIS Inc." to better
describe the products of ITIS as being information technology and information
services.

As more fully disclosed in note 14 and as reflected in the accompanying
financial statements, ITIS, as a result of its inability to generate sufficient
amounts of revenue, has incurred $18,557,247 in losses since inception, has a
working capital deficit of $2,934,163 at December 31, 2001, and has used
significant amounts of cash obtained through debt and equity capital in
operating the company. Accordingly, ITIS will require significant amounts of
additional debt or equity capital just to remain in business. The inability to
obtain significant amounts of additional debt or equity capital will negatively
impact ITIS's ability to continue in business. Because future operating revenues
may not be sufficient to fund operations, management plans to continue to
utilize additional loans from Mr. Carr (President and Chairman of the Board of
Directors of ITIS) and other directors and investors as long as funds from these
sources remain available. In March 2002, wholly owned subsidiary National Law
Library executed a promissory note for $425,000 to an outside lender. The need
for substantially more borrowings is anticipated. If adequate funding from
operations or other sources is not available, ITIS will not be able to remain in
business.

NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation-In January 2000, ITIS's board of directors approved a
resolution changing ITIS's fiscal year end from June 30 to December 31.
Accordingly, these consolidated financial statements reflect the assets,
liabilities, results of operations, and cash flows of the business conducted by
ITIS for the six-month transition period ended December 31, 1999 and for the
years ended December 31, 2000 and 2001.

Principles of Consolidation-The accompanying consolidated financial statements
include the accounts of ITIS and its wholly owned subsidiaries, National Law
Library, GoverNet Affairs, Brief Reporter, and ITIS, Inc. (Litidex(R)). All
significant inter-company balances and transactions have been eliminated in
consolidation.

Reclassification of Accounts- Certain reclassifications have been made to prior
year balances for discontinued operations to conform to current year
presentation.

Use of Estimates-The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
revenues and expenses and the disclosure of contingent assets and liabilities.
Actual results could differ from those estimates. The Company has made
significant estimates related to revenue recognition for automated litigation
support revenues, valuation and impairment of database content and continued
amortization of database content. Management believes that it has accounted for
these items properly based upon all of the information available and that the
estimates included in the financial statements accurately reflect the substance
of the transactions and accounts presented. Management is also in the process of
seeking letters of preference from the SEC related to revenue recognition for
litigation support revenues and accounting for its database content as assets
with an indefinite life that will no longer be subject to amortization. The SEC
could require the Company to record revenue recognition differently for
automated litigation support services and could require the Company to continue
to amortize the value of database content in future. Additionally, new
information could come to the attention of management that could result in
adverse changes in the amounts presented as of December 31, 2001 or additional
impairments of its database content in the future. Accordingly, these estimates
are subject to impact in the near term in accordance with the American Institute
of Certified Public Accountant's Statement of Position (SOP) 94-6 "Disclosure of
Certain Significant Risks and Uncertainties".


Cash and Cash Equivalents-ITIS considers all highly liquid investments with
maturities of three months or less at the time of purchase to be cash
equivalents. Cash equivalents are stated at cost, which approximates fair value.

Investments-Investments include available-for-sale equity securities at their
fair value. For the available-for-sale securities, any unrealized holding gains
and losses are excluded from operating results and are recognized as other
comprehensive income. The fair values of the securities are determined based on
prevailing market prices.

Deposit-Deposits include a cash payment for a licensing agreement recorded at
cost. See note 15, Subsequent Events.

Revenue Recognition-Revenues consist of subscription and other fees charged for
access to ITIS's databases, products, and services, as well as revenues from
automated litigation support services. Revenues are recognized in accordance
with the provisions of Staff Accounting Bulletin No. 101, Revenue Recognition in
Financial Statements, as follows:

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

         Services Revenue-Revenue from subscriptions, transactional fees,
         customer training, technical support and other services is recognized
         as the service is performed.

         Automated Litigation Support Revenue- Revenues from the automated
         litigation support services of Litidex(R) are currently recognized
         progressively based on document production related to each litigation
         project. An initial amount of the revenue, representing the value of an
         estimated total amount of production services to be rendered, is
         recorded as deferred income, while the balance of the revenue is
         treated as earned immediately. As the case progresses, actual
         production is determined monthly and a corresponding amount of income
         is recognized. Due to the unique nature of the services rendered and
         the large advance payments received, management is currently requesting
         a letter of preference from the SEC to determine whether the Company's
         revenue recognition policy is appropriate for these services. Depending
         upon the response from the SEC, the reporting of the automated
         litigation support revenue could require restatement, and it is
         possible that additional revenues may be deferred.

Concentration of Credit Risk-While National Law Library and GoverNet Affairs
sell their products to varied individuals and entities, the primary source of
the automated litigation support revenues of Litidex(R) at the present time is
the law firm of Christian Wukoson Smith and Jewell. At December 31, 2001,
Christian Wukoson Smith and Jewell owed Litidex(R) $2,103,598 for automated
litigation support services, which represents approximately 92% of the accounts
receivable of ITIS. Although the Company expects to collect these receivables,
there are no scheduled payments, and consequently a portion of the receivable
has been classified as long term.

Fair value of Financial Instruments-The fair values of financial instruments
approximate their reported carrying amounts at December 31, 2001 due to their
relative short lives for current assets, and liabilities and long-term
liabilities are at interest rates comparable to current market rates.

Database and development costs-Database and development costs include content
databases containing federal and state case law, statutory law, rules, pending
legislation, and database and retrieval software. The capitalized value of a
content database is determined from the cost of purchasing, verifying and
installing the database for release to Internet customers. Once a case law
database has been capitalized, the cost of updating the database with current
case law is expensed. The cost of updating statutory law and pending legislation
databases is capitalized.

ITIS applies SOP 98-1, "Software for Internal Use," which provides guidance on
accounting for the cost of computer software developed or obtained for internal
use. The capitalized value of software is derived from programming expenses
incurred directly in the application or development of the database and
retrieval software.

ITIS uses the straight-line method to amortize the components of the content
databases. Content and software development assets at December 31, 2001 and 2000
consist of the following:

<TABLE>
                                             Useful life
                                             (in years)             2001                  2000
                                             ----------   -         ----                  ----

<S>                                          <C>                <C>                  <C>
Database content and software costs........          8-20          $14,441,126           $15,749,806
Less:  Accumulated amortization............                         (2,526,487)           (1,512,220)
                                                                ---------------      ----------------
                                                                   $11,914,639           $14,237,586
                                                                 =============          ============
</TABLE>


Furniture and Equipment-Furniture and equipment is stated at cost less
accumulated depreciation. Depreciation is computed using the straight-line
method over a five-year period. At December 31, 2001 and 2000 accumulated
depreciation was $225,982 and $116,354 respectively.

Intangible Assets-Intangible assets consist of values associated with developed
technologies and other intangibles acquired in the acquisitions of GoverNet,
Brief Reporter, and Litidex(R). Amortization of these intangibles is calculated
on a straight-line basis over one to eight years. ITIS has adopted Statement of
Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." SFAS No. 144 requires that long-lived assets
and certain identifiable intangibles to be held and used by an entity be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. If the sum of the
expected future cash flows from the use of the asset and its eventual
disposition is less than the carrying amount of the asset, an impairment loss is
recognized based on the fair value of the asset. See note 4.

Income Taxes-ITIS accounts for income taxes in accordance with the liability
method prescribed by SFAS No. 109, "Accounting for Income Taxes." Under this
method, deferred income taxes reflect the impact of temporary differences
between financial accounting and tax bases of assets and liabilities. Such
differences relate primarily to the capitalization, amortization and write-off
of certain intangibles, the deductibility of certain accruals and reserves and
the effect of tax loss and tax credit carry-forwards not yet utilized. Deferred
tax assets are evaluated for realization based on a more-likely-than-not
criteria in determining if a valuation allowance should be provided.

Stock-Based Compensation-Under SFAS No. 123, "Accounting for Stock-Based
Compensation," ITIS has elected the method that requires disclosure of
stock-based compensation. Because of this election, ITIS accounts for its
employee stock-based compensation plan under Accounting Principles Board ("APB")
Opinion No. 25 and the related interpretations. Accordingly, deferred
compensation is recorded for stock-based compensation grants to employees based
on the excess of the estimated fair value of the common stock on the measurement
date over the exercise price. The deferred compensation is amortized over the
vesting period of each unit of stock-based compensation. If the exercise price
of the stock-based compensation grant is equal to the estimated fair value of
ITIS's stock on the date of grant, no compensation expense is recorded.
Additionally, for stock-based compensation grants to consultants, ITIS
recognizes as compensation expense the fair value of such grants as calculated
pursuant to SFAS No. 123, recognized over the related service period.

Basic Loss Per Share-Basic loss per share has been computed by dividing net loss
by the weighted average number of shares outstanding. All options outstanding at
December 31,1999, 2000 and 2001 have not been included because they are
anti-dilutive. Accordingly, basic and diluted loss per share is the same for all
periods presented.

New Accounting Pronouncements-Statement of Financial Accounting Standards
("SFAS") No. 141, "Business Combinations", was issued in June 2001 and
effectively eliminates the use of the "pooling of interests" method to account
for business combinations after July 1, 2001. Management believes that the
adoption of this statement will not adversely impact future operations, and all
potential future acquisitions, if consummated, will be accounted for using the
"purchase" method.

Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and
Other Intangible Assets", was issued in June 2001. Required adoption of this
statement is effective for all fiscal years beginning after December 31, 2001.
This statement amends SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of", to exclude from its scope
goodwill and intangible assets that are not amortized. Under SFAS No. 142,
goodwill and intangible assets with indeterminate lives will no longer be
amortized as expense over estimated useful lives after December 31, 2001 for
assets acquired prior to July 1, 2001, and no amortization will occur for any
goodwill and intangible assets acquired after June 30, 2001. These costs are to
be tested for impairment at least annually, or more frequently if events or
changes in circumstances indicate that the asset might be impaired. Impairment
in the amount of $2,741,955 and $748,024 was recorded at December 31, 2001 and
2000, respectively.

Because database content and software costs represent case law that can be used
indefinitely, management believes that this asset qualifies as an intangible
asset that will no longer be amortized under SFAS No. 142. However, due to the
unique nature of this asset, management is requesting a letter of preference
from the SEC regarding its accounting policy to treat its database and content
as an intangible asset that should not be subject to amortization. Additionally,
the Emerging Issues Task Force (EITF) of the Financial Account Standards Board
(FASB) is currently addressing how to account for the costs associated with
developing and maintaining database assets. Specifically, the EITF has stated in
its abstract EITF 00-20 "Accounting for Costs Incurred to Acquire or Originate
Information for Database Content and Other Collections of Information" that it
will address in future meetings:

4.       How to account for the costs incurred to acquire or originate such
         information for a collection in a database,
5.       If a consensus is reached on issue 1, the nature of the costs that
         should be capitalized, and
6.       If a consensus is reached on issue 1, how to account for subsequent
         costs incurred to maintain and refresh the information in the database.

Depending upon opinions of the SEC or future issuances of accounting principles
by the EITF, it is possible that the database content and software costs may
continue to be amortized in 2002 or even expensed as incurred. Either outcome
would have a material negative impact on the future results of operations
reported by the Company.

SFAS NO. 143, "Accounting for Asset Retirement Obligations", addresses financial
reporting for obligations associated with the retirement of long-lived assets
that result from the acquisition, construction, development and (or) the normal
operation of a long-lived asset (except for certain obligations of lessees) and
is effective for financial statements issued for fiscal years beginning after
June 15, 2002. The implementation of this standard is not anticipated to have a
material impact on the financial statements of the Company.

SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets",
addresses financial accounting and reporting for the impairment or disposal of
long-lived assets as well as expands the qualifications of discontinued
operations and is effective for financial statements issued for fiscal years
beginning after December 15, 2001. ITIS has elected to early adopt this
statement. Accordingly, ITIS has recorded a loss on discontinued operations in
2001 of $897,418 for the disposal of Compass Data Systems and $73,950 for the
disposal of Venco Compliance as more fully disclosed in note 6. The
implementation of this standard does not represent a significant change from
prior Generally Accepted Accounting Principles.

NOTE 3 - BUSINESS SEGMENTS

For the six months ended December 31, 1999 and the years ended December 31, 2000
and 2001, ITIS and its subsidiaries were engaged in the business of providing
Internet services, compliance and safety training materials, and automated
litigation support services. As of October 31, 2001 we no longer provide
compliance and safety training materials, and results from these activities have
been classified as discontinued operations. Financial results from continuing
operations are as follows:
<TABLE>

                                                   SEGMENT INFORMATION
                                                   ---------------------------------

<S>                             <C>                <C>               <C>             <C>               <C>
                                                   Income
Twelve months ended                                 (Loss) from      Interest        Total             Depreciation/
December 31, 2001                Net Sales         Operations        Expense         Assets            Amortization
-------------------------------------------------- --------------------------------- ----------------- ------------------

                                  $                 $                 $               $                 $
Internet Services                1,367,395         (6,381,314)       351,277         13,112,442        1,390,002

Automated Litigation Support            2,691,855            879,385 52,568                 2,974,829          1,089,413
                                 ----------------- --------------------------------- ----------------- ------------------
                                  $                 $                 $               $                 $
Total, ITIS Inc.                 4,059,250         (5,501,929)       403,845         16,087,271        2,479,415
                                 ================= ================================= ================= ==================

                                                   Income
Twelve months ended                                (Loss) from       Interest        Total             Depreciation/
December 31, 2000                Net Sales         Operations        Expense         Assets            Amortization
-------------------------------------------------- --------------------------------- ----------------- ------------------

                                  $                 $                 $               $                 $
Internet Services                1,038,069         (7,602,455)       193,480         17,376,431        1,913,410

Automated Litigation Support     -                 -                 -               -                 -
                                 ----------------- --------------------------------- ----------------- ------------------
Total, ITIS Inc.                  $                 $                 $               $                 $
                                 1,038,069         (7,602,455)       193,480         17,376,431        1,913,410
                                 ================= ================================= ================= ==================
                                                   Income
Six months ended                                   (Loss) from       Interest        Total             Depreciation/
December 31, 1999                Net Sales         Operations        Expense         Assets            Amortization
-------------------------------------------------- --------------------------------- ----------------- ------------------

                                  $                 $                 $               $                 $
Internet Services                222,697           (1,528,937)       6,693           5,920,651         197,037

Automated Litigation Support     -                 -                 -               -                 -
                                 ----------------- --------------------------------- ----------------- ------------------
Total, ITIS Inc.                  $                 $                 $               $                 $
                                 222,697           (1,528,937)       6,693           5,920,651         197,037
                                 ================= ================================= ================= ==================

</TABLE>

NOTE 4 - IMPAIRMENT OF LONG-LIVED ASSETS

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other
Intangible Assets," which removed goodwill and intangible assets that have
indefinite lives from the scope of Statement of Financial Accounting Standards
No. 121 ("SFAS 121"), "Accounting for the Impairment of Long- Lived Assets and
for Long-Lived Assets to Be Disposed Of." In August 2001, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 144 ("SFAS 144"), "Accounting for the Impairment or Disposal of Long-Lived
Assets," which supersedes SFAS 121. SFAS 144 retains the requirements of SFAS
121 that long-lived assets and certain identifiable intangibles that are subject
to amortization to be held and used by an entity be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Additionally, subsequent to December 31, 2001,
Statement of Financial Accounting Standards 142 ("SFAS 142"), "Goodwill and
Other Intangible Assets", requires that goodwill and intangible assets with
indefinite lives no longer be amortized to earnings, but instead be reviewed for
impairment at least annually.

In connection with its revised operating plan to restructure and stabilize its
business, at December 2000, ITIS, with the assistance of an independent
appraisal firm, conducted a strategic review of certain aspects of its business.
The strategic review included review and evaluation of certain long-lived assets
including content, goodwill and other intangibles. The projections provided the
basis for measurement of an asset impairment charge. Accordingly, ITIS recorded
non-cash impairment charges and wrote down capitalized database content and
software costs by $748,024 at December 31, 2000.

ITIS has continued to address the impairment of its database content, goodwill
and other intangibles in 2001. Because ITIS has not obtained substantial new
capital or long-term funding and in consideration of significant additional
losses by the Company and especially the Internet Services segment of ITIS,
management believes that additional impairment in the amount of $2,741,955
exists at December 31, 2001. This opinion of management is based on updated
valuation estimates using replacement cost and net cash flows projected over the
estimated useful lives of the assets.

The net cash flow estimates used by management assume increased revenue growth
of National Law Library in 2002 and 2003 with decreasing revenue growth rates in
future years. The estimates also assume continued costs to maintain and update
the database content. Management believes that its current estimates are
reasonable and attainable, while acknowledging that the revenues of National Law
Library are subject to an extraordinarily high degree of volatility and are
extremely difficult to accurately predict.

At this time, ITIS has been unable to secure the additional debt or equity
capital that will insure its ability to meet its operational forecasts. If
additional funding is not obtained, it is reasonably possible that the Company
will not be able to remain in business and that additional impairment will
result that will have a material negative impact on the consolidated financial
statements of ITIS. Management believes that the evaluation of potential future
impairment of content, goodwill, and other intangibles continues to represent an
estimate made by management that is subject to impact in the near term in
accordance with the American Institute of Certified Public Accountant's
Statement of Position (SOP) 94-6 "Disclosure of Certain Significant Risks and
Uncertainties".

Evaluation of impairment will continue to be addressed quarterly until ITIS has
an established history on which to better assess anticipated cash flows.

NOTE 5-SPIN-OFF OF PLANET RESOURCES:

Under an Agreement and Plan of Distribution dated March 25, 1999 between ITIS
(then Planet Resources, Inc.) and National Law Library, ITIS was obligated to
distribute certain assets consisting of cash and mining rights to its original
stockholders. Effective March 27, 2001, the foregoing cash and mineral rights
were indirectly distributed to the original stockholders of ITIS pursuant to an
Amended and Restated Agreement and Plan of Distribution dated March 13, 2001,
whereby Planet Resources, one of ITIS's wholly owned subsidiaries, was spun-off
from ITIS and acquired the cash and mining rights. ITIS no longer maintains any
interest in these properties.

NOTE 6-ACQUISITIONS and DISPOSITIONS:

ITIS, Inc. (Litidex(R))

On March 23, 2000, ITIS's board of directors approved the purchase of ITIS, Inc.
(Litidex(R)), a Texas corporation, subject to certain final reviews and
negotiations that were concluded in April 2000. According to the terms of a
Stock Exchange Agreement, effective April 30, 2000, ITIS exchanged 5,044,903
shares of its common stock, of which all were unregistered shares, for all of
the shares of Litidex(R). In addition to the exchange of stock, ITIS assumed
liabilities to Hunter M. A. Carr (ITIS's President and Chairman of the Board of
Directors) in the amount of $425,050. Mr. Carr forgave these liabilities in
September 2001. Since National Law Library's inception on November 30, 1998
until ITIS's acquisition of Litidex(R) on April 30, 2000, Litidex(R) served as
one of National Law Library's primary vendors of new case law content while also
providing various executive, sales, production, and administrative services. In
addition, Litidex(R) is a provider of automated litigation support services.
During the period from National Law Library's inception to December 31, 1999,
Hunter M.A. Carr was the sole stockholder of Litidex(R). During the three months
ended March 31, 2000, Mr. Carr sold or otherwise conveyed approximately 92% of
his stock in Litidex(R) to various individuals and entities, some of which are
either directors or officers of ITIS or are entities controlled by directors of
ITIS. Of the 5,044,903 shares issued to Litidex(R) stockholders, 1,721,003
shares were issued to five directors of ITIS or their beneficiaries and 332,300
shares were issued to five officers of ITIS. The results of operations of
Litidex(R) have been included in ITIS's consolidated financial statements as of
the acquisition date.

The acquisition was accounted for under the purchase method of accounting. The
total purchase price of $11,917,400 includes ITIS's allocation to intangible
assets for this acquisition of $6.9 million to database content and software
costs and $2 million to contractual agreements, based on the results of an
independent appraisal.

Compass Data Systems

On July 27, 2000, ITIS's board of directors approved the purchase of a
controlling interest in Compass Data Systems, Inc. (Compass), a private Nevada
corporation that provides electronic information publishing services in a
completely searchable information database to industries and organizations.
Stock purchase agreements by and between ITIS and three stockholders of Compass
were signed with each of the sellers effective as of October 1, 2000. Under the
terms of these stock purchase agreements, ITIS agreed to issue an aggregate of
1,676,105 restricted, unregistered shares of ITIS's common stock, valued at
approximately $2.3 million, for approximately 63% of the total outstanding
shares of Compass. As of September 30, 2001, 1,670,378 shares had been issued to
the selling shareholders. The issuances of ITIS stock were made in reliance upon
the Section 4(2) private placement exemption from registration. None of the
sellers received registration rights for the ITIS shares they received in this
transaction. The acquisition was accounted for under the purchase method of
accounting. The total purchase price of $2,294,425 included ITIS's allocation of
$1,294,425 to database content and software costs and $1 million to a
contractual agreement, based on the results of an independent appraisal.
Under the terms of the purchase agreement dated October 2000, sixty-eight
percent of Compass stock was to be delivered; the required percentage was never
received. Further, it appears that the three Compass shareholders never took
appropriate action with respect to the sale of their shares of Compass stock.
In August 2001, certain shareholders of Compass filed suit in Washoe County,
Nevada against the aforementioned three Compass shareholders, alleging that the
stock the three individuals delivered to ITIS was not valid, and that as a
result, ITIS has no ownership interest in Compass. The wrongful actions as
alleged in the suit relate to stock ownership of a predecessor of Compass. ITIS
is not a party to this lawsuit and has placed the shares of Compass received in
the transaction in the registry of the Nevada Court. Additionally, ITIS has
canceled the restricted shares of ITIS that were issued to the three
individuals. As of October 31, 2001, the operations and management of Compass,
previously reported as a subsidiary of ITIS, were turned over to current Compass
employees. As a result, ITIS wrote off $1,229,704 in assets at September 30,
2001, representing the net book value of the Compass database content and
software costs originally valued at $1,294,425. The $1 million value assigned to
a contractual agreement of Compass at the time of acquisition had been fully
amortized as of the date operations were returned. After accrual of other
expenses relating to the disposition of Compass and providing for continued
losses from this disposal, a loss of $897,418 on disposal has been recorded for
the year ended December 31, 2001. These losses have been reported as
"discontinued operations" in accordance with SFAS 144.

Venco Compliance

On October 1, 2000, ITIS purchased of all of the outstanding stock of Venco
Compliance, Inc., a private Texas corporation in the business of selling
compliance and safety training information to businesses such as dry cleaners
and others that deal with hazardous chemicals, biomaterials and other regulated
substances. In connection with this acquisition, ITIS issued an aggregate of
100,000 unregistered shares of its common stock at closing on October 1, 2000,
valued then at $90,600, to Donald E. and Cathryn V. Tull. These issuances were
made in reliance upon Section 4(2) private placement exemption from
registration. Neither of the two sellers received registration rights for the
shares of ITIS they received in this transaction. The results of operations of
Venco Compliance and the fair value of tangible and intangible assets acquired
and liabilities assumed have been included in ITIS's consolidated financial
statements as of the acquisition date.
The acquisition was accounted for under the purchase method of accounting and
resulted in $90,600 of the purchase price being allocated to goodwill. On
October 31, 2001, the stock of Venco was sold and transferred by ITIS to its
former shareholders, Donald E. and Cathryn V. Tull. ITIS received $1,000 on
December 1, 2001 and will receive 5% of any future revenues of Venco in excess
of $10,000 per month. Including a provision for operating losses during
phase-out period, a loss on disposition of $73,950 was recorded in the quarter
ended December 31, 2001. These losses have been reported as "discontinued
operations" in accordance with SFAS 144. ITIS has not received any amounts
related to the agreement to receive 5% of any future revenues of Venco in excess
of $10,000 per month and no receipts under this agreement are expected in the
near term.

NOTE 7-INTANGIBLE ASSETS:

         Intangible assets as of December 31, 2001 and 2000 consist of the
following:

NOTE 8-NOTES PAYABLE AND FINANCING AGREEMENTS:

The following table summarizes the notes payable and financing agreements of
ITIS excluding a disputed $500,000 note payable to Cootes Drive L.L.C. (see note
9).
<TABLE>

                                      Date of                         December 31,
Lender                                issuance                   2001                2000
---------------------------------------------------------------------------------------------------
<S>                                   <C>                  <C>                <C>
Hunter M.A. Carr, CEO                 Various              $   2,150,117      $      2,230,050
George A. Roberts, Director           October 2000               400,000               400,000
W. Allyn Hoaglund, Director           October 2000                50,000                50,000
Phoenix Energy                        January 2001               100,000                     -
George A. Roberts, Director           February 2001              190,000                     -
Stephen A. Fonicello (1)              February 2001               25,000                     -
W. Paul Thayer, Director              Various                    132,500                     -
George A. Roberts, Director           October 2001             1,000,000                     -
Frost National Bank                   February 2002               25,434                32,088
Imperial Premium Finance              November 2000                    -                27,960
                                                          -----------------------------------------
                                                               4,073,051             2,740,098
Less long-term portion to
Hunter M.A. Carr, CEO                                         (2,150,117)           (2,230,050)
                                                          -----------------------------------------

                                                           $   1,922,934      $        510,048
                                                          =========================================


</TABLE>
During the year ended December 31, 2000, ITIS borrowed a total of $1,805,000
from Hunter M.A. Carr, its CEO, to fund working capital requirements.
Additionally, Mr. Carr advanced $255,000 during January and February 2001. The
borrowings through February 28, 2001 were evidenced by unsecured promissory
notes, each bearing an annual interest rate of 11.75% and payable in full with
accrued interest after six months. On February 28, 2001, the notes through that
date were consolidated into one demand note in the amount of $2,060,000 bearing
interest at the rate of prime plus two percent per year, payable in cash on
demand after one year. At Mr. Carr's option and with 30 days written notice, the
note may be repaid in common stock of ITIS at a discounted price based on the
lowest price at which ITIS has sold its common stock during the one-year period
preceding the exercise of this option. On March 10, 2001, ITIS retired $250,000
in principal from this note by issuing 1,153,828 restricted shares of common
stock to Mr. Carr at a price of $.216667 per share. New promissory notes,
totaling $340,117 and bearing the same terms, have been issued to Mr. Carr for
advances to ITIS since March 1, 2001. With respect to these notes payable, Mr.
Carr has provided written commitment to ITIS to provide forbearance and extend
the due date on such notes to at least July 15, 2002, if to demand payment would
impair ITIS's ability to meet its other existing liabilities and commitments. As
of December 31, 2001, the total principal amount and accrued but unpaid interest
owed to Mr. Carr was $2,150,117 and $160,196, respectively. As of December 31,
2000, the total principal amount and accrued but unpaid interest owed to Mr.
Carr was $2,230,050 and $129,221, respectively.

In connection with the acquisition of Litidex(R),  ITIS assumed liabilities to
Hunter M. A. Carr in the amount of $425,050.  In September 2001 Mr. Carr
forgave this debt and the $425,050 was recorded as additional paid in capital.

In October 2000, ITIS executed demand notes for $400,000 and $50,000 in favor of
George A. Roberts and W. Allyn Hoaglund, respectively, members of its board of
directors. The notes bear interest at the rate of prime plus two percent per
year and are payable in cash on demand after one year. At the option of the
holder and with 30 days written notice, the notes may be repaid in common stock
of ITIS at a discounted price based on the lowest price at which ITIS has sold
its common stock during the one-year period preceding the exercise of this
option.

In November and December 2000 ITIS entered into financing agreements with Cootes
Drive LLC. Due to recent litigation in regard to these financing agreements, it
is not expected that any further funding will occur from this source (see notes
9 and 11).

On January 16, 2001, ITIS executed a demand promissory note in the amount of
$100,000 payable to Phoenix Energy. The note bears interest at 10% per year and
is payable in cash on demand after one year. At the option of the holder and
with 30 days written notice, the note may be repaid in common stock of ITIS at a
discounted price based on the lowest price at which ITIS has sold its common
stock during the one-year period preceding the exercise of this option. As of
the date of our accountants' report, this amount has not been paid. Renewal or
conversion of this note into common shares of ITIS is under discussion.

On February 1, 2001, ITIS executed a demand note for $190,000 in favor of George
A. Roberts, a member of its board of directors. The note bears interest at the
rate of prime plus two percent per year and is payable in cash on demand after
one year. At the option of the holder and with 30 days written notice, the note
may be repaid in common stock of ITIS at a discounted price based on the lowest
price at which ITIS has sold its common stock during the one-year period
preceding the exercise of this option. No demand has been made for payment.

On February 28, 2001, ITIS executed a demand promissory note in the amount of
$25,000 payable to Stephen A. Fonicello. The note bears interest at the rate of
prime plus two percent per year and is payable in cash on demand after one year.
At the option of the holder and with 30 days written notice, the note may be
repaid in common stock of ITIS at a discounted price based on the lowest price
at which ITIS has sold its common stock during the one-year period preceding the
exercise of this option. On February 28, 2002, the payee exercised the option to
convert the note plus accrued interest into restricted common shares of ITIS.
(see note 15).

On February 5, March 21, April 11, and May 16, 2001, ITIS executed demand
promissory notes for $50,000, $70,000, $25,000, and $12,500, respectively, in
favor of W. Paul Thayer, a member of the board of directors. The notes bear
interest at the rate of prime plus two percent per year and are payable in cash
on demand after one year. At the option of the holder and with 30 days written
notice, the notes may be repaid in common stock of ITIS at a discounted price
based on the lowest price at which ITIS has sold its common stock during the
one-year period preceding the exercise of this option. On May 31, 2001, ITIS
repaid Mr. Thayer $25,000 of principal toward these notes.

On October 24, 2001, ITIS wholly owned subsidiary ITIS, Inc., a Texas
corporation that conducts business as Litidex(R), executed a promissory note for
$1,000,000 in favor of George A. Roberts, a member of its board of directors.
The note bears interest at an annual fixed rate equal to the lesser of the
maximum amount allowed by law as adjusted from time to time or 18%, and is
payable in full with accrued interest after one year. The note is secured by a
Security Agreement covering all accounts, contract rights and general
intangibles arising out of the litigation support project among Litidex(R), the
law firm of Christian Wukoson Smith and Jewell, and the law firm of O'Quinn,
Laminack and Pirtle. Legal fees of $29,100 were paid from the proceeds of this
note.

NOTE 9-FINANCING AGREEMENT WITH COOTES DRIVE L.L.C.

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

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

ITIS disputes the validity of the $500,000 convertible promissory note dated
December 5, 2000, on the grounds that this convertible note is a part of Cootes
Drive's efforts to defraud ITIS and to manipulate the price of ITIS's stock.
This convertible note and the associated funding transactions are all the
subject of ITIS's suit against Cootes Drive and others (see note 11). The note
is reflected on the accompanying balance sheet as a current liability entitled
"Disputed Note Payable to Cootes Drive LLC."

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

NOTE 10-INCOME TAXES:

ITIS has had losses since inception and, therefore, has not been subject to
federal income taxes. As of December 31, 2001 and 2000, ITIS had accumulated net
operating loss ("NOL") carryforwards for income tax purposes of approximately
$14.9 million and $10.3 million, respectively, resulting in deferred tax asset
amounts of $5,100,000 and $3,500,000, respectively. These carryforwards begin to
expire in 2018 through 2021. The Tax Reform Act of 1986 provided for an annual
limitation on the use of NOL and tax credit carryforwards following certain
ownership changes that limit ITIS's ability to utilize these carryforwards.
Additionally, because U.S. tax laws limit the time during which NOL and tax
credit carryforwards may be applied against future taxable income and tax
liabilities, ITIS may not be able to take full advantage of its NOL and tax
credits for federal income tax purposes. Since ITIS has had recurring operating
losses since inception and there is no assurance of future taxable income, a
valuation allowance has been established to fully offset the deferred tax
assets.

NOTE 11-COMMITMENTS AND CONTINGENCIES:

Leases for Office Space

ITIS leases its office space under the terms operating leases. ITIS is committed
to making monthly payments of at least $7,620 under a lease agreement for office
space that expires in June 2004. Under the terms of a January 2002 amendment to
this lease agreement, both ITIS and the landlord have the right to terminate the
agreement by giving 180 days advance written notice. If ITIS is not successful
in maintaining existing sub-leasing arrangements with a related party tenant,
this monthly obligation may increase to approximately $12,248. Brief Reporter
leases office space pursuant to a lease agreement requiring monthly payments of
$2,626 through December 31, 2002.


            Future minimum lease payments under operating leases are:

                                                 2002   $  178,484
                                                 2003       146,972
                                                 2004         61,238
                                                 2005                 -
                                      -------------------------------------
            Total                                           386,694
            Less minimum receipts under subleases          (157,361)
                                       ------------------------------------
            Net minimum lease payments                  $  229,333
                                       =====================================

Rent expense under operating leases was $178,935, $180,203, and $3,746 for the
years ended December 31, 2001, December 31, 2000, and the six months ended
December 31, 1999, respectively.

Employment Contracts

ITIS has signed employment agreements with certain employees. At December 31,
2001, under these agreements, ITIS is obligated to pay compensation of $166,667
in 2002. All contracts in effect at December 31, 2001 will expire by the end of
the year 2002.

Litigation

On September 9, 1999, Loislaw.com, Inc. filed a lawsuit in the District Court of
Harris County, Texas, 11th Judicial District (Case No. 1999-45563), against ITIS
Inc., National Law Library and ITIS, Inc. dba Litidex(R). Loislaw.com, one of
the Company's competitors, alleged that ITIS breached an agreement between
Loislaw.com and ITIS by allegedly providing certain materials to National Law
Library for use on National Law Library's Website, which allegations were denied
by the Company and its subsidiaries. In December 2000, all parties entered into
a confidential agreement to settle the litigation. Settlement documents were
prepared and executed by all parties on December 28, 2000.

On January 26, 2001, in order to protect ITIS and its stockholders, ITIS filed a
lawsuit in United States District Court for the Southern District of Texas,
Houston Division, against Southridge Capital Management and several other
defendants, including Cootes Drive LLC, an alleged "straw man," for damages
resulting from alleged stock manipulation, federal securities law violations,
civil RICO, fraud, violations of Texas securities laws and other Texas statutes,
and conspiracy. The case also alleges misrepresentations by co-conspirators in
connection with certain funding transactions by the defendants with ITIS. All
defendants filed a joint motion to transfer this case to New York to be
consolidated with the lawsuit filed against us as described below. The United
States District Judge granted this motion and the case has been transferred to
the Southern District of New York. We intend to prosecute the case vigorously.
Our litigation counsel has advised us that the case is not sufficiently advanced
to evaluate the outcome, and that resolution of the suit is not anticipated in
the short term.

On February 5, 2001, Cootes Drive LLC filed a suit against ITIS in the Southern
District of New York alleging breach of one of the financing agreements with us
for our failure to honor a conversion of its preferred shares to common stock.
The suit seeks monetary damages of $10,000 per day and seeks to compel ITIS to
issue shares of common stock to Cootes Drive LLC. ITIS filed an answer to this
lawsuit. Cootes Drive LLC filed a motion requesting leave to amend their
complaint in order to add allegations that ITIS is in default on a $500,000
promissory note in favor of Cootes Drive LLC (the alleged default occurring
after the filing of ITIS's suit against Cootes Drive LLC and others); that ITIS
has not honored a notice of redemption of preferred shares held by Cootes Drive
LLC in the amount of $2,214,012 (allegedly occurring after the filing of ITIS's
suit against Southridge Capital Management, Cootes Drive LLC, and others); and
that ITIS defrauded Cootes Drive by failing to disclose material information
with respect to the background of a key officer at ITIS. The United States
District Judge granted this motion, and the suit has been amended. ITIS's answer
was timely filed on July 20, 2001. The preferred shares and the associated
funding transactions at issue are the subject matter of ITIS's suit against
Southridge Capital Management and others. ITIS intends to defend this case
vigorously. Litigation counsel has advised us that the case is not sufficiently
advanced to evaluate the outcome, and that resolution of the suit is not
anticipated in the short term.

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

John M. O'Quinn, our Texas-based litigation counsel, has agreed to represent
ITIS and our directors, if necessary, in all of these lawsuits on a 50%
contingent fee basis, with his law firm paying all expenses of the litigation.
The fee will be calculated after all expenses have been reimbursed to Mr.
O'Quinn's law firm.

On or about January 28, 2002, West Group sued ITIS in Hennepin County,
Minnesota. The suit alleges that ITIS owes the plaintiff $43,829 for breach of a
contract to provide advertising on the Internet. ITIS is contesting jurisdiction
and venue in Minnesota. The suit is too recent for an evaluation by litigation
counsel of its likely outcome.

NOTE 12-COMMON AND PREFERRED STOCK:

Since inception, ITIS has sold unregistered shares of its common stock to a
number of investors pursuant to Regulation D of the Securities Act of 1933, as
amended. During the six months ended December 31, 1999, 2,207,526 shares were
sold at an average price of $1.02 per share for net cash proceeds of $2,245,675,
after commissions totaling $42,250.

During the six months ended December 31, 1999, ITIS issued 51,500 shares of
common stock for services rendered. Additionally, in December 1999, ITIS
approved a bonus to various employees and two board members for services
rendered in 1999. The bonus consisted of 33,042 aggregate shares of common
stock, which were issued in January 2000. The aggregate value of the award,
totaling $105,404, was recorded to compensation expense and additional paid-in
capital as of December 31, 1999. Since the common shares were not issued until
January 2000, no par value was recorded as of December 31, 1999. Also in
December 1999, the board of directors approved outside directors' compensation
in the form of annual awards of 25,000 shares of ITIS's common stock issuable to
each outside director at the beginning of each calendar year. In March 2000,
ITIS issued a total of 125,000 shares of its common stock, valued at $551,200,
to its outside directors. In July 2000, ITIS issued 50,000 shares of its common
stock, valued at $53,075, to new outside directors. The awards were recorded as
compensation expense in March and July 2000 respectively.

In February 2000, ITIS's stockholders approved an amendment to the certificate
of incorporation increasing the number of authorized shares of preferred and
common stock. Pursuant to this amendment, shares of authorized preferred stock
were increased from 1,000,000 shares to 50,000,000 shares, and shares of
authorized common stock were increased from 30,000,000 shares to 100,000,000
shares.

On April 30, 2000, ITIS issued 5,044,903 shares of common stock valued at
approximately $21.4 million in connection with the acquisition of ITIS, Inc.
(Litidex(R)) (see note 6). Of the 5,044,903 shares issued to ITIS' stockholders,
1,721,003 shares were issued to five directors of ITIS or their beneficiaries
and 332,300 shares were issued to five officers of ITIS. Mr. Carr owned
approximately 8% of the ITIS, Inc. (Litidex(R)) common shares at the time of the
acquisition of Litidex(R) by ITIS

On May 11, 2000, ITIS entered into an intermediate financing agreement with
Cootes Drive LLC, and privately placed 300 shares of 5% Series A Convertible
Preferred Stock for $3 million. This preferred stock was convertible into shares
of ITIS's common stock based on a price equal to the lesser of (i) $3.2375 or
(ii) 80% of the average of the three lowest closing bid prices during a 20-day
trading period prior to the date of conversion. ITIS was entitled to redeem the
convertible preferred stock at a cash price equal to 120% of the issue price,
provided there was an effective registration statement for the underlying shares
of common stock. On July 5, 2000, the SEC declared the registration statement
filed by ITIS effective, which registered an amount of shares of its common
stock then sufficient to satisfy any conversion, warrant exercise, and dividend
requirements under the terms of this financing agreement. The convertible
preferred stock purchased by the investor was subject to mandatory redemption by
ITIS upon the occurrence of a change in control or certain other events. As part
of this financing agreement and in consideration for negotiating a $25 million
equity line completed on November 20, 2000, ITIS agreed to issue a five-year
warrant to the investor for the purchase of 500,000 shares of its common stock
at an exercise price of $3.56 per share. In the equity line agreement completed
on November 20, 2000, this warrant was replaced with 2 five-year warrants for
the purchase of 250,000 shares each at exercise prices of $3.56 and $.60 per
share. The estimated fair value of these warrants totals $710,397 and was
recorded in stockholders' equity. Additionally, at May 11, 2000, ITIS agreed to
issue a five-year warrant to a third party for the purchase of 200,000 common
shares at an exercise price of $3.3994 per share. The estimated fair value of
this warrant totals $448,817 and was recorded in stockholders' equity. On
December 5, 2000 ITIS agreed to issue a five-year warrant to the investor for
the purchase of 41,650 shares of its common stock at an exercise price of $.288
per share. The estimated value of this warrant totals $8,158 and was recorded in
stockholders' equity. A commission of $100,000 and legal fees of $30,000 related
to this financing arrangement were recorded net of preferred stock proceeds in
stockholders' equity. Due to the litigation and failure of ITIS to meet funding
requirements, ITIS will not receive any funds under this agreement.

On January 26, 2001, in order to protect ITIS and its stockholders, ITIS filed a
lawsuit in the United States District Court against Cootes Drive and several
other defendants for damages resulting from alleged stock manipulation, SEC
violations, civil RICO, fraud, violations of Texas securities laws, and other
Texas statutes and conspiracy. Due to this litigation we will not receive any
funding from this private capital fund, and Cootes Drive will not honor a put
even if ITIS were to meet the requirements of the financing agreement in the
future. For more information on this litigation, see note 11.

In connection with the issuance of the preferred stock, ITIS incurred a deemed
dividend. Such dividends are calculated as the discount from the fair market
value as of the date the preferred stock was sold to the investors. This
aggregate discount amount of $906,250 for the Series A Preferred Stock was
treated as dividends to the holders of the Series A Preferred Stock and was
recorded during the period from issuance through the earliest available date of
conversion, July 5, 2000.

In May 2000, ITIS entered into an agreement with a vendor pursuant to which ITIS
agreed to issue an aggregate of 39,825 shares of common stock as consideration
for services over the vendor's service period. Upon completion of the service
agreement in September 2000, total expense of $55,988 was recorded for the
aggregate fair value of the 39,825 shares issued.

In August 2000, ITIS entered into an agreement with a vendor pursuant to which
ITIS issued an aggregate of 300,000 shares of common stock as consideration for
services over the vendor's service period. Upon completion of the service
agreement in February 2001, total expense of $48,000 had been recorded for the
aggregate fair value of the 300,000 shares issued.

In October 2000 ITIS issued 1,670,378 shares of common stock valued at
approximately $2.3 million in connection with the acquisition of Compass Data
Systems, Inc. and 100,000 shares of common stock valued at approximately $90,600
in connection with the acquisition of Venco Compliance, Inc. (See note 6)

On March 10, 2001, in accordance with conversion terms in the February 28, 2001
demand note payable to Hunter M.A. Carr, ITIS issued 1,153,828 restricted shares
of common stock priced at $.216667 per share to Mr. Carr, representing payment
of $250,000 towards the note payable to Mr. Carr in the original amount of
$2,060,000.

On April 6, 2001, ITIS issued 125,000 shares of common stock, valued at $23,248,
as compensation to its outside directors. These awards were recorded as
compensation expense in April 2001.

On April 19, 2001, ITIS issued 1,000,000 shares of common stock to Kelley V.
Kirker, Director and Chief Operations Office of ITIS, who purchased the shares
for $140,700 pursuant to exercising stock options issued to him under the 2001
Executive Stock Option Plan.

On May 17, 2001, ITIS issued 500,000 shares of common stock to Joanna Hoover,
Chief Financial Officer of ITIS, who purchased the shares for $77,000 pursuant
to exercising stock options issued to her under the 2001 Executive Stock Option
Plan.

On July 20, 2001, ITIS issued 50,000 shares of common stock to Robert Sarlay,
previously Vice President for Special Programs and Shareholder Relations for
ITIS, who was awarded the shares pursuant to exercising stock options issued to
him under the 2001 Executive Stock Option Plan. The shares were valued at
$8,040.

In September 2001, ITIS entered into an agreement with a vendor pursuant to
which ITIS agreed to issue 47,139 shares of unregistered common stock, valued at
$10,842, as consideration for insurance coverage. Insurance expense of $10,842
was recorded on September 5, 2001.

Pursuant to the 1999 Employee Stock Purchase Plan, 66,145 shares of ITIS common
stock were issued to employees of ITIS and its subsidiaries in September 2001.
The employees paid an aggregate $11,836 for these shares.

In October 2001, ITIS issued 20,000 shares of unregistered common stock, valued
at $5,000, to a vendor as compensation for services rendered. Consulting expense
of $5,000 was recorded in October 2001.

In October 2001, ITIS entered into a compensation agreement with James W.
Christian pursuant to which ITIS agreed to issue 1,000,000 shares of common
stock as consideration for legal services rendered and to provide an effective
registration statement for these shares. On October 3, 2001, the SEC accepted
the registration statement for these shares. Legal fees of $244,000 were
recorded in October 2001 for the aggregate fair value of the 1,000,000 shares
issued.

Through December 2000, holders of 138.92 shares of Series A convertible
preferred stock converted the preferred shares to 3,137,145 shares of common
stock. At December 31, 2000 and 2001, 161.08 shares of Series A convertible
preferred stock remain outstanding.

NOTE 13-STOCK OPTIONS AND WARRANTS:

On March 26, 1999, the board of directors and the majority stockholders of ITIS
adopted the 1999 Stock Option Plan for ITIS. Under the Plan, the compensation
committee of the board of directors, consisting of at least two non-employee
members of the board of directors, may grant stock options to purchase common
stock of ITIS (either incentive or non-qualified stock options) and stock
appreciation rights to officers and employees, including directors who are
employees, of ITIS. The Compensation Committee has discretion to determine the
terms and conditions upon which the options may be exercised. Originally, the
stockholders approved 300,000 shares of common stock for the grant of options
under the Plan, subject to anti-dilution provisions. In February 2000, the
stockholders approved a resolution increasing this number to 3,000,000 shares.

Also, on March 26, 1999, the board of directors and the majority stockholders
approved the 1999 Director Option Plan. The Director Plan provides for automatic
grants of stock options to non-employee directors. ITIS has reserved 200,000
shares of common stock for the grant of options under the Director Plan, subject
to anti-dilution adjustments. As of December 31, 2001, 109,000 options were due
to non-employee directors under the Director Option Plan; however, no options
had been issued under either the Stock Option Plan or the Director Option Plan.

ITIS granted certain stock options and warrants outside both the Stock Option
Plan and the Director Option Plan during the years ended December 31, 2001 and
2000, and the six months ended December 31, 1999, as summarized below:
<TABLE>

                                   Year Ended                     Year Ended                 Six Months Ended
                          -----------------------------   ---------------------------- -----------------------------
                               December 31, 2001               December 31, 2000            December 31, 1999
                          -----------------------------   ---------------------------- -----------------------------

                          Weighted                        Weighted                     Weighted
                          Average                         Average                      Average
                          Exercise     Number of          Exercise     Number of       Exercise    Number of
                          Price        Shares             Price        Shares          Price       Shares
                          -----------------------------   ---------------------------- -----------------------------
<S>                       <C>          <C>                <C>          <C>             <C>         <C>
Options Outstanding,

  Beginning of Period     $2.89         4,257,568          $2.72         3,345,000       $2.24        3,300,000
Options Granted           $0.15         1,550,000          $3.33           312,568       $2.97          645,000
Warrants Granted          $0.15           300,000          $3.51           700,000       $   -                -
Options Cancelled         $2.82          (125,000)         $3.00          (100,000)      $   -                -
Options Exercised         $0.15        (1,550,000)         $   -                 -       $0.30         (600,000)
                                    ----------------                ---------------             -----------------
Options Outstanding,
  End of Period           $2.71         4,432,568          $2.89         4,257,568       $2.72        3,345,000
                                       ================                ===============             =================
Options Exercisable,
  End of Period           $2.88         3,727,568          $3.12         3,167,568       $3.00        2,250,000
                                       ================                ===============             =================
</TABLE>
Other information regarding stock options outstanding at December 31, 2001
is as follows:
<TABLE>
                     Options Outstanding Options Exercisable
          ------------------------------------------------------------

                                                          Weighted                     Weighted
                          Remaining                       Average                      Average
   Range of Exercise      Life         Number of          Exercise     Number of       Exercise
         Price            (Years)      Shares             Price        Shares          Price
------------------------- -----------------------------   ---------------------------- ------------
<S>                       <C>          <C>                <C>          <C>             <C>

$      .15-1.00                4.2        750,000            $0.66           300,000         $0.15
$     2.50-3.56           .6 - 7.2      3,570,000            $3.07         3,350,000         $3.08
$     4.50-5.19            1.8-5.6        112,568            $4.78            77,568         $4.78

</TABLE>

In January 1999, as partial consideration for arranging ITIS's acquisition of
National Law Library, options were awarded to a consulting firm for the purchase
of 600,000 shares of common stock at an exercise price of $.30 per share. The
estimated fair value of these options was immaterial. These options were
exercisable for a period of ten days following the first day on which the quoted
market price of ITIS's common stock reached a price of $1.10 per share.
Effective in April 1999, this option agreement was amended to extend the
exercise period from ten days to anytime on or before December 31, 1999. The
estimated fair market value incrementally provided to the consulting firm as a
result of changing the measurement date of this stock option was approximately
$12,500, which was not recorded due to its immateriality. Pursuant to this
award, as amended, two blocks of options, each for 300,000 shares, were
exercised in July 1999 and December 1999.

In April 1999, the board of directors granted an option for 1,000,000 shares of
common stock to a stockholder as an incentive for this person to join the Board.
This individual subsequently became a member of the board of directors in August
1999. Both of these options were fully vested at the grant date and may be
exercised in whole or in part at any time for a period of 10 years at an
exercise price of $3.00 per share. This board member subsequently resigned from
the board.

During December 1999, ITIS granted stock options for the purchase of an
aggregate of 300,000 shares of common stock that are classified as a variable
award. Pursuant to APB Opinion No. 25, the initial compensation expense related
to these options was calculated based on the difference between the market price
of the underlying common stock on the grant date and the exercise price of the
option. The charge is recognized ratably over the expected service period
related to the variable award. Additionally, a periodic adjustment to deferred
compensation and related compensation expense is computed at the end of each
reporting period based on the difference between the then current market price
and the exercise price less previously recognized compensation expense. In
January 2000, ITIS granted two officers variable option awards for an aggregate
of 105,000 shares of common stock subject to terms similar to the
above-described variable option.

In May 2000, ITIS entered into a consulting agreement pursuant to which an
option was issued for common shares of ITIS. The option has an exercise price of
$4.63 per share, vests on October 31, 2000, and is exercisable through October
2003. The shares under this option are calculated as the number of shares
aggregating $35,000 in value on the exercise date. Upon completion of the
service agreement at October 31, 2000, total expense of $8,150 was recorded
relative to this option.

On February 22, 2001, ITIS issued warrants to James W. Christian to purchase
300,000 shares of ITIS's common stock at an exercise price of $0.15 per share,
at any time and from time to time from and after February 22, 2001 and through
and including February 22, 2006. These warrants were issued in exchange for
services provided to ITIS and have an estimated value of $46,000. At the
September 2001 annual meeting, stockholders ratified the 2001 Executive Stock
Option Plan which had been approved by the board of directors in March
2001.Under the Plan, the stock option committee of the board of directors,
consisting of at least two non-employee members of the board of directors, may
grant stock options to purchase up to 7 million shares of common stock of ITIS
(either incentive or non-qualified stock options) to employees of ITIS or its
subsidiary corporations. The stock option committee has discretion to determine
the terms and conditions upon which the options may be exercised.

On April 16, 2001, pursuant to the 2001 Executive Stock Option Plan, ITIS
awarded 1,000,000 stock options to Kelley V. Kirker, Director and Chief
Operations Officer of ITIS. These options were fully vested at the grant date
and were exercisable in whole or in part at any time for a period of 3 years at
an exercise price equal to 67% of the bid price of common shares of ITIS at the
date of exercise. Mr. Kirker exercised these options on April 18, 2001, and
1,000,000 shares of ITIS common stock were issued to Mr. Kirker on April 19,
2001. Compensation expense of $69,000 was recorded in April 2001 as a result of
this award.

On April 19, 2001, pursuant to the 2001 Executive Stock Option Plan, ITIS
awarded 500,000 stock options to Joanna Hoover, Chief Financial Officer of ITIS.
These options were fully vested at the grant date and were exercisable in whole
or in part at any time for a period of 3 years at an exercise price equal to 67%
of the bid price of common shares of ITIS at the date of the exercise. Ms.
Hoover exercised these options on May 16, 2001, and 500,000 shares of ITIS
common stock were issued to Ms. Hoover on May 17, 2001. Compensation expense of
$38,000 was recorded in April 2001 as a result of this award.

In July 2001, pursuant to the 2001 Executive Stock Option Plan, ITIS issued
50,000 stock options to Robert Sarlay, previously Vice President for Special
Programs and Shareholder Relations for ITIS, in appreciation of his service to
ITIS. These options were fully vested at the grant date and were exercisable in
whole or in part at any time for a period of 3 years at an exercise price equal
to 67% of the bid price of common shares of ITIS at the date of exercise. Mr.
Sarlay exercised these options and 50,000 shares of ITIS common stock were
issued to him on July 20, 2001. Compensation expense of $8,040 was recorded as a
result of this award.

Had the compensation cost for all stock options been determined under the
alternative method under SFAS No. 123, ITIS's net loss for the years ended
December 31, 2001 and 2000, and for the six months ended December 31, 1999,
would have changed to the following pro forma amounts:
<TABLE>

                                           Year Ended               Year Ended            Six Months Ended
                                       December 31, 2001        December 31, 2000         December 31, 1999
                                    -------------------------------------------------- ------------------------
<S>                                 <C>                         <C>                    <C>
Net loss applicable to common shareholders:
          As reported:                      7,379,005                9,040,241                 1,525,787
          Proforma:                         7,409,435                9,374,790                 2,402,795

Basic loss per common share:
          As reported:                           0.19                     0.31                      0.07
          Proforma                               0.19                     0.32                      0.11

</TABLE>
For pro forma disclosures, the fair value of each option
grant is estimated at the date of the grant using the Black-Scholes option
pricing model with the following assumptions: no expected dividends, risk-free
interest rate of six percent, price volatility of approximately 58% for the year
ended December 31, 2001, 94% for the year ended December 31, 2000, and 85% for
the six months ended December 31, 1999, and an average expected life of 5 years.

NOTE 14-CONDITIONS AFFECTING ONGOING OPERATIONS:

ITIS's financial statements are prepared using principles applicable to a going
concern, which contemplate the realization of assets and liquidation of
liabilities in the normal course of business. However, at this time ITIS does
not have significant cash or other material liquid assets, or an established
source of revenues, sufficient to cover operating costs to allow the Company to
remain in business. Management's business plan realizes that anticipated
revenues to be generated by the automated litigation support services of
Litidex(R) will be critical in providing some of the funds necessary to continue
company operations and to remain in business. While management believes that
such revenues may be adequate to fund company operations, it is possible that
such revenues may never be sufficient to meet company needs. While additional
automated litigation support contracts are anticipated, the revenues of
Litidex(R) cannot be sustained if no additional contracts are obtained. If this
should be the case, management plans to continue to utilize additional loans
from Mr. Carr (President and Chairman of the Board of Directors of ITIS) and
other directors and investors as long as funds from these sources remain
available. If adequate funding from the operations of Litidex(R) or other
sources is not available, ITIS will be unable to remain in business.

ITIS will be required to obtain additional financing or capital to remain in
business, and that capital may have provisions that could suppress future stock
prices or cause significant dilution to current shareholders. Our internally
generated cash flows from operations have historically been insufficient for our
cash needs and will continue to be for the foreseeable future. While management
projects that the internal source of liquidity may improve, this objective may
not be achieved in the near term, if ever. As of March 31, 2002 sources of
external and internal financing are very limited. It is not expected that the
internal source of liquidity will improve until significant net cash is provided
by operating activities (which may not be achieved), and until such time, ITIS
will rely upon external sources for liquidity. ITIS's current working capital is
not sufficient to cover cash requirements for the balance of the 2002 fiscal
year or to bring the Company to a positive cash flow position. ITIS may not ever
become profitable and could fail as a going concern.

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

As of the date of the accompanying accountants' report, ITIS's regular monthly
cash operating expenditures exceeded monthly cash receipts, not including cash
receipts related to the automated litigation support services of Litidex(R), by
approximately $225,000. Cash receipts related to the automated litigation
support services, approximately $1.2 million for the year ended December 31,
2001, are received on an inconsistent basis and are therefore not included in
the above negative cash flow calculation.

Continued development of database and content revenues and obtaining additional
automated litigation support contracts through Litidex(R) are critical to the
success of the Company's business plan. Continued integration of prior period
acquisitions of GoverNet, Brief Reporter, and Litidex(R), as well as any
potential future acquisitions, is also critical to the success of the Company's
business plan. Management hopes to continue reductions in administrative costs
and to increase revenues through increased marketing and the pursuit of joint
marketing relationships with other entities. While many factors can impact
future operations and these improvements cannot be assured of success, the
management of ITIS intends to take all actions deemed prudent and necessary.

NOTE 15-SUBSEQUENT EVENTS:

Business

On March 8, 2002, MedEx Systems, Inc. and Litidex(R) signed an agreement whereby
Litidex(R), through a newly formed Litidex(R) subsidiary, PharmHouse, Inc.,
intends to operate pharmacies that focus primarily on pain medications in 81
exclusive territories identified in a Settlement and Separation Agreement. MedEx
is a Louisiana corporation that has developed a system that is pending a patent
for the operation of such pharmacies. The agreement between MedEx and Litidex(R)
provides for a perpetual license from MedEx for the operating system to be used
in the pharmacies to be established in territories belonging to Litidex(R). This
licensing agreement has been recorded at its cost of $150,000.

Notes Payable and Common Stock

On February 28, 2002, an unaffiliated third party holder of a demand promissory
note dated February 28, 2001 in the principal amount of $25,000 exercised his
option to convert the note plus accrued interest into restricted common shares
of ITIS. Accordingly, on March 4, 2002, ITIS issued 192,384 restricted common
shares to the lender, such shares representing $25,000 in principal and $2,068
in accrued and unpaid interest at February 28, 2002.

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

Stock Options

On March 1, 2002, ITIS issued options to Merit Financial, Inc. to purchase
600,000 shares of ITIS's common stock at an exercise price defined as the market
price of the stock on the date that the option is exercised, less fifteen
percent. These options were issued in exchange for services provided to ITIS and
have an estimated value of $45,900.

Because these transactions occurred subsequent to December 31, 2001, they are
not recorded in the accompanying financial statements on pages F-4 through F-9.


                                  EXHIBIT INDEX
<TABLE>
Exhibit      Description
Number
<S>          <C>
2.1          Agreement and Plan of Reorganization dated March 25, 1999, between Planet Resources, National Law Library
             and the stockholders of National (incorporated by reference to Exhibit A to ITIS's Form 8-K filed on
             April 2, 1999).
2.2          First Amendment to Agreement and Plan of Reorganization dated as of March 30, 1999, between Planet
             Resources, National Law Library and the stockholders of National Law Library (incorporated by reference to
             Exhibit 2.2 to ITIS's Form 10-K filed on October 13, 1999).
2.3          Agreement and Plan of Distribution dated as of March 25, 1999,
             between Planet Resources, New Planet Resources, Inc. and National
             Law Library (incorporated by reference to Annex B to ITIS's
             Information Statement Pursuant to Section 14(c) of the Securities
             Exchange Act of 1934 filed on April 19, 1999).
2.4          Contract for Sale of Stock, dated November 8, 1999, by and between John R. Marsh, Ronald W. Hogan, and
             Charles E. Bowen, Jr., as Sellers, and ITIS, as Buyer (incorporated by reference to Exhibit 2.1 to ITIS's
             Form 8-K filed on November 30, 1999).
2.5          Option Agreement to Purchase Stock, dated November 8, 1999, by and
             between ITIS, as Seller, and Ronald W. Hogan, as Optionee
             (incorporated by reference to Exhibit 2.2 to ITIS's Form 8-K filed
             on November 30, 1999).
2.6          Option Agreement to Purchase Stock, dated November 8, 1999, by and between ITIS, as Seller, and Charles E.
             Bowen, Jr., as Optionee (incorporated by reference to Exhibit 2.3 to ITIS's Form 8-K filed on November 30,
             1999).
2.7          Option Agreement to Purchase Stock, dated November 8, 1999, by and
             between ITIS, as Seller, and John R. Marsh, as Optionee
             (incorporated by reference to Exhibit 2.4 to ITIS's Form 8-K filed
             on November 30, 1999).
2.8          Contract of Sale, dated December 8, 1999, by and between David P. Harriman, Andrew Wyszkowski, Eugene
             Meyung, Suzanne Meyung, and Christina Brown, as Sellers, and ITIS, as Buyer (incorporated by reference to
             Exhibit 2.7 to ITIS's Form 8-K filed December 23, 1999).
2.9          Stock Exchange Agreement by and among ITIS and the shareholders of ITIS relating to the acquisition of all
             of the outstanding stock of ITIS, dated April 30, 2000 (incorporated by reference to Exhibit 2.9 to ITIS's
             Form 10-K/A filed on May 24, 2000).
2.10         Stock Purchase Agreement by and between ITIS and Jeremiah Kane,
             dated July 27, 2000, as amended by that amendment dated effective
             October 1, 2000 (Incorporated by reference to Exhibit 2.10 to the
             Registrant's Form 8-K filed with the SEC on October 16, 2000).
2.11         Stock Purchase Agreement by and between ITIS and John McHugh, dated
             July 27, 2000, as amended by that amendment dated effective October
             1, 2000 (Incorporated by reference to Exhibit 2.11 to the
             Registrant's Form 8-K filed with the SEC on October 16, 2000).
2.12         Stock Purchase Agreement by and between ITIS and Jack Ben Ezra,
             dated July 27, 2000, as amended by that amendment dated effective
             October 1, 2000 (Incorporated by reference to Exhibit 2.12 to the
             Registrant's Form 8-K filed with the SEC on October 16, 2000).
2.13         Stock Exchange Agreement by and among ITIS and all of the
             shareholders of Venco Compliance, Inc., a Texas corporation, dated
             effective October 1, 2000 (Incorporated by reference to Exhibit
             2.13 to the Registrant's Form 8-K filed with the SEC on October 16,
             2000).
2.14         Amended and Restated Agreement and Plan of Distribution dated as of
             March 13, 2001, between Planet Resources, National Law Library and
             the stockholders of National Law Library.
3.1          Amended and Restated Certificate of Incorporation of ITIS (incorporated by reference to the Annex A of
             ITIS's Definitive Proxy Statement on Schedule 14A filed on January 31, 2000).
3.2          Bylaws of ITIS, as amended (incorporated by reference to Exhibit 3.2 to ITIS's Form 10-K filed on
             October 13, 1999).
3.3          Certificate of Designation for ITIS's 5% Series A Convertible Preferred Stock (incorporated by reference to
             Exhibit 3.3 to ITIS's Form 10-K/A filed on May 24, 2000).
3.4          2001 Executive Stock Option Plan dated effective March 15, 2001 (incorporated by reference to Exhibit 4.4
             to ITIS's Registration Statement on Form S-8 filed on March 30, 2001).
10.1         Stock Option Agreement between ITIS and Hunter M.A. Carr (incorporated by reference to Exhibit D to
             Schedule 13D filed on October 12, 1999, by Hunter M.A. Carr).
10.2         Stock Option Agreement between ITIS and Jack I. Tompkins (incorporated by reference to Exhibit D to
             Schedule 13D filed on October 12, 1999, by Jack I. Tompkins).
10.3         Consulting Agreement between National Law Library and Castle Development, Ltd.  (incorporated by reference
             to Exhibit 4(A) to ITIS's Registration Statement on Form S-8 filed on April 2, 1999).
10.4         Continuing Service Agreement between National Law Library and ITIS,
             effective December 1, 1998 (incorporated by reference to Exhibit
             10.4 to ITIS's Form 10-K filed on October 13, 1999).
10.5         Management and Financial Services Agreement between National Law
             Library and ITIS, effective March 1, 1999 (incorporated by
             reference to Exhibit 10.5 to ITIS's Form 10-K filed on October 13,
             1999).
10.6         Software Development and Consulting Agreement between National Law
             Library and ITIS, dated March 24, 1999 (incorporated by reference
             to Exhibit 10.6 to ITIS's Form 10-K filed on October 13, 1999).
10.7         Option Agreement to Purchase Stock, effective March 30, 1999, by
             and between ITIS and Jonathan Gilchrist (incorporated by reference
             to Exhibit 10.7 to ITIS's Form 10-K filed on October 13, 1999).
10.8         Planet Resources 1999 Stock Option Plan (incorporated by reference to Exhibit 10.1 to ITIS's Form 10-K/A
             filed on October 28, 1999).
10.9         Planet Resources Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.2 to ITIS's
             Form 10-K/A filed on October 28, 1999).
10.10        New Planet Resources, Inc.  Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to ITIS's
             Form 10-K/A filed on October 28, 1999).
10.11        Planet Resources 1999 Director Option Plan (incorporated by reference to Exhibit 10.4 to ITIS's Form 10-K/A
             filed on October 28, 1999).
10.12        Consulting and Option Agreement by and between ITIS, Frank Fisher
             and Steve Tebo, dated January 22, 2000, as amended (incorporated by
             reference to Exhibit 10.12 to ITIS's Form 10-K/A filed on May 24,
             2000).
10.13        Convertible Preferred Stock Purchase Agreement by and among ITIS
             and Cootes Drive LLC, dated May 11, 2000 (incorporated by reference
             to Exhibit 10.13 to ITIS's Form 10-K/A filed on May 24, 2000).
10.14        Registration Rights Agreement by and among ITIS and Cootes Drive LLC, dated May 11, 2000 (incorporated by
             reference to Exhibit 10.15 to ITIS's Form 10-K/A filed on May 24, 2000).
10.15        Warrant to purchase 200,000 shares of ITIS's common stock issued to
             Aspen Capital Partners, Inc., dated May 19, 2000 (incorporated by
             reference to Exhibit 10.16 to ITIS's Form 10-K/A filed on May 24,
             2000).
10.16        Securities Purchase Agreement by and between ITIS and Cootes Drive LLC, dated November 20, 2000.
10.17        Amended and Restated Registration Rights Agreement by and between ITIS and Cootes Drive LLC, dated November
             20, 2000.
10.18        Warrant to purchase 250,000 shares of ITIS's common stock issued to Cootes Drive LLC, dated May 11, 2000.
10.19        Warrant to purchase 250,000 shares of ITIS's common stock issued to Cootes Drive LLC, dated November 20,
             2000.
10.20        Minimum Commitment Warrant to purchase up to 100,000 shares of ITIS's common stock issued to Cootes Drive
             LLC, dated November 20, 2000.
10.21        Vesting Warrant to purchase 1,000 shares of ITIS's common stock per $100,000 invested issued to Cootes
             Drive LLC, dated November 20, 2000.
10.22        Convertible Promissory Note made by ITIS in favor of Cootes Drive LLC in the principal amount of $500,000,
             dated December 5, 2000.
10.23        Warrant to purchase 41,650 shares of ITIS's common stock issued to Cootes Drive, LLC, dated December 5,
             2000.
10.24        Side Letter Agreement dated December 5, 2000, by and between ITIS
             and Cootes Drive LLC to enter into a convertible Promissory Note
             financing arrangement for $500,000.
10.25        Consulting Agreement by and between Venco Compliance, Inc. and
             Kathryn Tull d/b/a First Choice Consulting, dated October 1, 2000
             (incorporated by reference to Exhibit 10.17 to the Registrant's
             Form 8-K filed with the SEC on October 16, 2000).
10.26        Consulting Agreement by and between Venco Compliance, Inc. and
             Cathryn Tull d/b/a First Choice Consulting, dated October 1, 2000
             (incorporated by reference to Exhibit 10.17 to ITIS's Form 8-K
             filed with the SEC on October 16, 2000).
10.27        Warrant to purchase 300,000 shares of ITIS's common stock issued to
             James W. Christian dated February 22, 2001 (incorporated by
             reference to Exhibit 10.27 to ITIS's Form 10-Q filed with the SEC
             on May 15, 2001).
16.1         Letter, dated April 5, 2000, from Harper and Pearson Company to the
             Securities and Exchange Commission (incorporated by reference to
             Exhibit 16.1 to ITIS's Form 8-K/A filed on April 5, 2000).
16.2         Letter, dated February 21, 2001, from Arthur Andersen LLP to the
             Securities and Exchange Commission (incorporated by reference to
             Exhibit 16.2 to ITIS's Form 8-K filed on February 23, 2001)
21*          Subsidiaries of ITIS.
24*          Power of Attorney (included on signature page)
*Filed herewith

</TABLE>




                                   EXHIBIT 21
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The following are ITIS's subsidiaries, all of which are wholly owned:

         National Law Library, Inc., incorporated in the State of Texas

         GoverNet Affairs, Inc., incorporated in the State of Georgia

         Brief Reporter, LLC, incorporated in the State of Virginia

         ITIS, Inc., incorporated in the State of Texas

         PharmHouse Inc., incorporated in the State of Texas
           (a wholly owned subsidiary of ITIS, Inc. [Texas])