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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-QSB

[X] Quarterly Report Under Section 13 or 15(D) of the Securities
  Exchange Act of 1934

for the quarterly period ended August 31, 2006

[   ] Transition Report Under Section 13 or 15(D) of
the Securities Exchange Act of 1934

for the transition period from _______________ to
_______________

Commission File Number: 000-52201

ITONIS INC.(Name of small
business issuer as specified in its charter)

|NEVADA                                           | 20-3885298                       
|------------------------------------------------ | ---------------------------------
|(State or other jurisdiction of incorporation or | (IRS Employer Identification No.)
|organization)                                    |                                  

Klimentska 10, 110 00 Praque 1, Czech Republic(Address of principal executive offices)

+420 296 578 180Issuer's telephone number

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

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes [   ] No [X]

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.22,477,327
shares of common stock as of October 16, 2006.

Transitional Small Business Disclosure Format (check one): Yes
[   ] No [X]

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ITONIS INC.

Quarterly Report On Form 10-QSB For The Quarterly Period
Ended August 31, 2006

INDEX

|PART I  FINANCIAL INFORMATION | 1      
|------------------------------ | -------
|                               | Item 1.
|                               | Item 2.
|                               | Item 3.
|PART II  OTHER INFORMATION    | 12     
|                               | Item 1.
|                               | Item 2.
|                               | Item 3.
|                               | Item 4.
|                               | Item 5.
|                               | Item 6.

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-QSB contains forward-looking
statements 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 forward-looking statements involve risks and uncertainties, including
statements regarding our capital needs, business plans and expectations. Such
forward-looking statements involve risks and uncertainties regarding our ability
to achieve commercial levels of sales of our ITonis video solution, our ability
to successfully market our ITonis video solution, our ability to continue
development and upgrades to the ITonis video solution, availability of funds,
government regulations, common share prices, operating costs, capital costs and
other factors. Forward-looking statements are made, without limitation, in
relation to our operating plans, our liquidity and financial condition,
availability of funds, operating costs and the market in which we compete. Any
statements contained herein that are not statements of historical facts may be
deemed to be forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as may, will, should,
expect, plan, intend, anticipate, believe, estimate, predict,
potential or continue, the negative of such terms or other comparable
terminology. Actual events or results may differ materially. In evaluating these
statements, you should consider various factors, including the risks outlined in
our registration statement on Form SB-2, filed originally with the Securities
and Exchange Commission (the SEC) on May 12, 2006, as amended, this quarterly
report on Form 10-QSB, and, from time to time, in other reports we file with the
SEC. These factors may cause our actual results to differ materially from any
forward-looking statement. Given these uncertainties, readers are cautioned not
to place undue reliance on such forward-looking statements.

i

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PART I  FINANCIAL INFORMATION

Item
1.               
Financial Statements

The following unaudited condensed consolidated interim
financial statements of ITonis Inc. (the Company) are included in this
Quarterly Report on Form 10-QSB:

|                                                                                                                                                                                             | Page
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|                                                                                                                                                                                             |     
|Interim Consolidated Balance Sheets as at August 31, 2006
      (unaudited) and November 30, 2005 (audited)                                                                                  | F-1 
|                                                                                                                                                                                             |     
|Interim Consolidated Statements of Changes in
      Stockholders Equity for the period from incorporation (July 5, 2005) to
      August 31, 2006                                           | F-2 
|                                                                                                                                                                                             |     
|Interim Consolidated Statements of Operations for the
      three months and nine months ended August 31, 2006 and for the period from
      incorporation (July 5, 2005) to August 31, 2006 | F-3 
|                                                                                                                                                                                             |     
|Interim Consolidated Statements of Cash Flows for the nine
        months ended August 31, 2006 and for the period from incorporation (July
        5, 2005) to August 31, 2006              | F-4 
|                                                                                                                                                                                             |     
|Notes
      to Interim Consolidated Financial Statements                                                                                                                                     | F-5 

- 1 -

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ITONIS INC.

(Formerly Kenshou Inc.)

(A Development Stage Company)

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2006

US FUNDS

(Unaudited)

---

|ITonis Inc.                         | Statement 1
|----------------------------------- | -----------
|(Formerly Kenshou Inc.)             |            
|(A Development Stage Company)       |            
|Interim Consolidated Balance Sheets |            
|US Funds                            |            

|                                                          |   |             |   |   | As at        |  
|--------------------------------------------------------- | - | ----------- | - | - | ------------ | -
|                                                          |   |             |   |   | November 30, |  
|                                                          |   | As at       |   |   | 2005         |  
|                                                          |   | August 31,  |   |   | (Audited)    |  
|                                                          |   | 2006        |   |   | (Restated   |  
|ASSETS                                                    |   | (Unaudited) |   |   | Note 10      | )
|Current                                                   |   |             |   |   |              |  
|Cash                                                      | $ | 11,800      |   | $ | 164,550      |  
|Prepaid expenses                                          |   | 42,311      |   |   | -            |  
|                                                          |   | 54,111      |   |   | 164,550      |  
|                                                          |   |             |   |   |              |  
|Equipment(Note 3)                                         |   | 55,300      |   |   | 29,442       |  
|                                                          | $ | 109,411     |   | $ | 193,992      |  
|                                                          |   |             |   |   |              |  
|                                                          |   |             |   |   |              |  
|LIABILITIES                                               |   |             |   |   |              |  
|Current                                                   |   |             |   |   |              |  
|Accounts payable                                          | $ | 134,354     |   | $ | 36,324       |  
|Accrued liabilities                                       |   | 14,165      |   |   | 15,801       |  
|Due to related parties
      (Note 7c and e)              |   | 146,702     |   |   | 31,332       |  
|                                                          |   | 295,221     |   |   | 83,457       |  
|                                                          |   |             |   |   |              |  
|                                                          |   |             |   |   |              |  
|Going Concern(Note 1)                                     |   |             |   |   |              |  
|                                                          |   |             |   |   |              |  
|                                                          |   |             |   |   |              |  
|STOCKHOLDERS
      EQUITY (DEFICIENCY)                   |   |             |   |   |              |  
|Capital Stock(Note 9)                                     |   |             |   |   |              |  
|Common stock                                              |   |             |   |   |              |  
|Authorized:                                               |   |             |   |   |              |  
|100,000,000 common shares with $0.001 par value           |   |             |   |   |              |  
|Issued, allotted
      and fully paid:                    |   |             |   |   |              |  
|22,527,327
      common shares (15,738,763               |   |             |   |   |              |  
|November 30, 2005) - Statement 2                          |   | 22,528      |   |   | 15,739       |  
|Additional paid-in capital
      - Statement 2            |   | 2,355,728   |   |   | 661,274      |  
|Preferred stock                                           |   |             |   |   |              |  
|Authorized:                                               |   |             |   |   |              |  
|5,000,000 preferred shares with $0.001 par value          |   |             |   |   |              |  
|Issued
      and fully paid: Nil                          |   | -           |   |   | -            |  
|Accumulated Comprehensive Gain- Statement
      2         |   | 329         |   |   | -            |  
|Deficit Accumulated during the development stage
      - |   |             |   |   |              |  
|Statement 2                                               |   | (2,564,395  | ) |   | (566,478     | )
|                                                          |   | (185,810    | ) |   | 110,535      |  
|                                                          | $ | 109,411     |   | $ | 193,992      |  

- See Accompanying Notes -

F-1

---

|ITonis Inc.                                                                           | Statement 2
|------------------------------------------------------------------------------------- | -----------
|(Formerly Kenshou Inc.)                                                               |            
|(A Development Stage Company)                                                         |            
|Interim Consolidated Statements of Changes
      in Stockholders Equity (Deficiency) |            
|US Funds                                                                              |            
|(Unaudited)                                                                           |            

DeficitAccumulated
      
      
      
      
      
      TotalCommon Stock
      
      
      Additional
      
      
      During the
      
      
      Accumulated
      
      
      Stockholders'Paid-in
      
      
      Development
      
      
      Comprehensive
      
      
      EquityShares
      
      
      Amount
      
      
      Capital
      
      
      Stage
      
      
      Gain
      
      
      (Deficiency)Founder shares issued for cash at$0.002 per share on July 8,
        2005
      
      250,000
      
      $
      250
      
      $
      250
      
      $
      -
      
      $
      -
      
      $
      500Shares issued for cash at $0.02 pershare on September 14, 2005
      
      4,000,000
      
      
      4,000
      
      
      76,000
      
      
      -
      
      
      -
      
      
      80,000Shares issued for cash at $0.10 pershare on November 16, 2005
      
      1,488,763
      
      
      1,489
      
      
      147,387
      
      
      -
      
      
      -
      
      
      148,876Shares issued for acquisition ofsoftware at $0.045 per
        share onNovember 16, 2005 (Note 4a)
      
      10,000,000
      
      
      10,000
      
      
      437,637
      
      
      -
      
      
      -
      
      
      447,637Loss for the period
      
      -
      
      
      -
      
      
      -
      
      
      (566,478
      )
      
      -
      
      
      (566,478
      )Balance - November 30, 2005(Audited) (Restated
         Note 10)
      
      15,738,763
      
      
      15,739
      
      
      661,274
      
      
      (566,478
      )
      
      -
      
      
      110,535Shares issued for acquisition ofintellectual property at $0.25
        pershare on February 7, 2006 (Note 4b)
      
      6,000,000
      
      
      6,000
      
      
      1,494,000
      
      
      -
      
      
      -
      
      
      1,500,000Shares issued for cash at $0.25 pershare on April 10, 2006
      
      738,564
      
      
      739
      
      
      183,902
      
      
      -
      
      
      -
      
      
      184,641Shares allotted for consulting services
        at$0.25 per share
      
      50,000
      
      
      50
      
      
      12,450
      
      
      -
      
      
      -
      
      
      12,500Stock-based compensation
      
      -
      
      
      -
      
      
      4,102
      
      
      -
      
      
      -
      
      
      4,102Loss for the period
      
      -
      
      
      -
      
      
      -
      
      
      (1,997,917
      )
      
      -
      
      
      (1,997,917
      )Foreign currency translation adjustment
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      329
      
      
      329Balance  August 31, 2006 (Unaudited)
      
      22,527,327
      
      $
      22,528
      
      $
      2,355,728
      
      $
      (2,564,395
      )
      $
      329
      
      $
      (185,810
      )


- See Accompanying Notes -

F-2

---

|ITonis Inc.                                   | Statement 3
|--------------------------------------------- | -----------
|(Formerly Kenshou Inc.)                       |            
|(A Development Stage Company)                 |            
|Interim Consolidated Statements of Operations |            
|US Funds                                      |            
|(Unaudited)                                   |            

|                                              |   |              |   |   |             |   |   | From          |   |   | From          |  
|--------------------------------------------- | - | ------------ | - | - | ----------- | - | - | ------------- | - | - | ------------- | -
|                                              |   | For the      |   |   | For the     |   |   | Incorporation |   |   | Incorporation |  
|                                              |   | Three Months |   |   | Nine Months |   |   | (July 5, 2005 | ) |   | (July 5, 2005 | )
|                                              |   | Ended        |   |   | Ended       |   |   | to            |   |   | to            |  
|                                              |   | August 31,   |   |   | August 31,  |   |   | August 31,    |   |   | August 31,    |  
|                                              |   | 2006         |   |   | 2006        |   |   | 2005          |   |   | 2006          |  
|Sales                                         | $ | 24,351       |   | $ | 24,351      |   | $ | -             |   | $ | 24,351        |  
|Cost of Sales                                 |   | 9,424        |   |   | 9,424       |   |   | -             |   |   | 9,424         |  
|Gross Profit                                  |   | 14,927       |   |   | 14,927      |   |   | -             |   |   | 14,927        |  
|General and Administrative Expenses           |   |              |   |   |             |   |   |               |   |   |               |  
|Intellectual property (Note
      4)          |   | -            |   |   | 1,500,000   |   |   | -             |   |   | 1,947,637     |  
|Salaries & wages                              |   | 90,652       |   |   | 198,435     |   |   | -             |   |   | 198,435       |  
|Marketing and distribution                    |   | -            |   |   | 120,000     |   |   | -             |   |   | 120,000       |  
|Consulting                                    |   | 31,901       |   |   | 53,337      |   |   | -             |   |   | 53,337        |  
|Legal                                         |   | 16,633       |   |   | 49,760      |   |   | -             |   |   | 61,552        |  
|Audit and accounting                          |   | 19,371       |   |   | 39,995      |   |   | -             |   |   | 104,459       |  
|Office and rent                               |   | 5,975        |   |   | 22,627      |   |   | -             |   |   | 23,250        |  
|Depreciation                                  |   | 5,896        |   |   | 14,893      |   |   | -             |   |   | 15,734        |  
|Software development costs                    |   | -            |   |   | 13,814      |   |   | -             |   |   | 54,935        |  
|Filing fees                                   |   | 2,365        |   |   | 9,820       |   |   | -             |   |   | 9,820         |  
|Bad debts                                     |   | 9,789        |   |   | 9,789       |   |   | -             |   |   | 9,789         |  
|Foreign exchange loss                         |   | 4,811        |   |   | 4,811       |   |   | -             |   |   | 4,811         |  
|Investor relations                            |   | 2,287        |   |   | 2,287       |   |   | -             |   |   | 2,287         |  
|                                              |   | 189,680      |   |   | 2,039,568   |   |   | -             |   |   | 2,606,046     |  
|                                              |   |              |   |   |             |   |   |               |   |   |               |  
|Loss from Operations                          |   | (174,753     | ) |   | (2,024,641  | ) |   | -             |   |   | (2,591,119    | )
|                                              |   |              |   |   |             |   |   |               |   |   |               |  
|Income                                        |   |              |   |   |             |   |   |               |   |   |               |  
|Other income (Note 7d)                        |   | 4,974        |   |   | 26,724      |   |   | -             |   |   | 26,724        |  
|                                              |   |              |   |   |             |   |   |               |   |   |               |  
|Loss for the Period                           | $ | (169,779     | ) | $ | (1,997,917  | ) | $ | -             |   | $ | (2,564,395    | )
|                                              |   |              |   |   |             |   |   |               |   |   |               |  
|Loss per Share - Basic and Diluted            | $ | (0.01        | ) | $ | (0.10       | ) | $ | -             |   |   |               |  
|                                              |   |              |   |   |             |   |   |               |   |   |               |  
|Weighted Average Shares Outstanding           |   | 22,477,327   |   |   | 20,613,269  |   |   |               |   |   |               |  
|                                              |   |              |   |   |             |   |   |               |   |   |               |  
|Comprehensive Loss                            |   |              |   |   |             |   |   |               |   |   |               |  
|Loss for the period                           | $ | (169,779     | ) | $ | (1,997,917  | ) | $ | -             |   | $ | (2,564,395    | )
|Foreign currency
      translation adjustment |   | 820          |   |   | 329         |   |   | -             |   |   | 329           |  
|                                              |   |              |   |   |             |   |   |               |   |   |               |  
|Total Comprehensive Loss for the Period       | $ | (168,959     | ) | $ | (1,997,588  | ) | $ | -             |   | $ | (2,564,066    | )
|                                              |   |              |   |   |             |   |   |               |   |   |               |  
|Comprehensive Loss per Share                  | $ | (0.01        | ) | $ | (0.10       | ) | $ | -             |   |   |               |  

- See Accompanying Notes -

F-3

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|ITonis Inc.                                   | Statement 4
|--------------------------------------------- | -----------
|(Formerly Kenshou Inc.)                       |            
|(A Development Stage Company)                 |            
|Interim Consolidated Statements of Cash Flows |            
|US Funds                                      |            
|(Unaudited)                                   |            

|                                                 |   | For the Nine |   |   | From              |  |   | From              |  
|------------------------------------------------ | - | ------------ | - | - | ----------------- |  | - | ----------------- | -
|                                                 |   | Months       |   |   | Incorporation     |  |   | Incorporation     |  
|                                                 |   | Ended        |   |   | (July 5, 2005) to |  |   | (July 5, 2005) to |  
|                                                 |   | August 31,   |   |   | August 31,        |  |   | August 31,        |  
|                                                 |   | 2006         |   |   | 2005              |  |   | 2006              |  
|Operating                                        |   |              |   |   |                   |  |   |                   |  
|Loss for the period                              | $ | (1,997,917   | ) | $ | -                 |  | $ | (2,564,395        | )
|Items not involving an
      outlay of cash:     |   |              |   |   |                   |  |   |                   |  
|Bad debts                                        |   | 9,789        |   |   | -                 |  |   | 9,789             |  
|Depreciation                                     |   | 14,893       |   |   | -                 |  |   | 15,734            |  
|Stock-based compensation
      included in       |   |              |   |   |                   |  |   |                   |  
|wages                                            |   | 4,102        |   |   | -                 |  |   | 4,102             |  
|Shares allotted for services
      included in   |   |              |   |   |                   |  |   |                   |  
|investor relations                               |   | 1,287        |   |   | -                 |  |   | 1,287             |  
|Intellectual property                            |   | 1,500,000    |   |   | -                 |  |   | 1,947,637         |  
|Changes in non-cash working
      capital items: |   |              |   |   |                   |  |   |                   |  
|Due from related party                           |   | (9,789       | ) |   | -                 |  |   | (9,789            | )
|Prepaid expenses                                 |   | (31,098      | ) |   | -                 |  |   | (31,098           | )
|Accounts payable                                 |   | 98,030       |   |   | -                 |  |   | 134,354           |  
|Accrued liabilities                              |   | (1,636       | ) |   | -                 |  |   | 14,165            |  
|Due to related parties                           |   | 115,370      |   |   | 10                |  |   | 146,702           |  
|                                                 |   | (296,969     | ) |   | 10                |  |   | (331,512          | )
|                                                 |   |              |   |   |                   |  |   |                   |  
|Investing                                        |   |              |   |   |                   |  |   |                   |  
|Purchase of equipment                            |   | (36,925      | ) |   | -                 |  |   | (67,208           | )
|                                                 |   | (36,925      | ) |   | -                 |  |   | (67,208           | )
|                                                 |   |              |   |   |                   |  |   |                   |  
|Financing                                        |   |              |   |   |                   |  |   |                   |  
|Share issuances for cash                         |   | 184,641      |   |   | 500               |  |   | 414,017           |  
|                                                 |   | 184,641      |   |   | 500               |  |   | 414,017           |  
|                                                 |   |              |   |   |                   |  |   |                   |  
|Effect of exchange rate translation adjustments  |   | (3,497       | ) |   | -                 |  |   | (3,497            | )
|                                                 |   |              |   |   |                   |  |   |                   |  
|Net Increase (Decrease) in Cash                  |   | (152,750     | ) |   | 510               |  |   | 11,800            |  
|Cash - Beginning of period                       |   | 164,550      |   |   | -                 |  |   | -                 |  
|Cash - End of Period                             | $ | 11,800       |   | $ | 510               |  | $ | 11,800            |  
|                                                 |   |              |   |   |                   |  |   |                   |  
|Income Taxes Paid                                | $ | -            |   | $ | -                 |  | $ | -                 |  
|Interest Paid                                    | $ | -            |   | $ | -                 |  | $ | -                 |  
|                                                 |   |              |   |   |                   |  |   |                   |  
|Supplemental Schedule of Non-Cash                |   |              |   |   |                   |  |   |                   |  
|Investing and Financing Transactions             |   |              |   |   |                   |  |   |                   |  
|Stock-based
      compensation included in wages | $ | 4,102        |   | $ | -                 |  | $ | 4,102             |  
|Shares issued for intellectual property          | $ | 1,500,000    |   | $ | -                 |  | $ | 1,947,637         |  
|Shares
      allotted for services               | $ | 12,500       |   | $ | -                 |  | $ | 12,500            |  
|Effect of exchange rate changes on equipment     | $ | 3,826        |   | $ | -                 |  | $ | 3,826             |  

- See Accompanying Notes -

F-4

---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|August 31, 2006                                   
|US Funds                                          
|(Unaudited)                                       
|                                                  
|                                                  

|1. | Organization and Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Organization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | ITonis Inc. (formerly Kenshou Inc.) (the "Company" or
        ITonis) was incorporated on July 5, 2005 as Kenshou Inc. under
        the laws of the State of Nevada. On December 2, 2005, the Company changed
        its name to ITonis Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company intends to be a provider of video solution
        and services for video content owners and distributors. Its goal is to
        facilitate the distribution of video content by providing an electronic
        channel for distribution based on on-demand services. The Company intends
        to position itself as a service/platform provider for the delivery of
        such content.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | As a platform provider, the Company will offer video
        content distributors (ISP, Mobile operators, Cable operator) a modular
        platform with Value Added Services such as IPTV, Video on Demand, and
        TV in the Past. The platform varies in size and the business model can
        be adapted to the customer needs. Outsourced services include content
        for small ISPs to full-scale deployment for millions of subscribers.                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | As a Service provider, the Company will deploy video
        services on the customers network. It will be able to integrate
        any video solutions into any network.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Going Concern and Liquidity Considerations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The accompanying unaudited interim consolidated financial
        statements have been prepared by management in accordance with accounting
        principles generally accepted in the United States for interim financial
        information and in accordance with Item 310(b) of Regulation S-B. Accordingly,
        they do not include all of the information and footnotes required by United
        States generally accepted accounting principles for annual financial statements.
        In the opinion of management, all adjustments (consisting of normal recurring
        accruals) considered necessary for a fair presentation have been included.
        Operating results for the nine-month period ended August 31, 2006 are
        not necessarily indicative of the results that may be expected for the
        year ended November 30, 2006.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The accompanying unaudited interim consolidated financial
        statements have been prepared assuming that the Company will continue
        as a going concern, which contemplates, among other things, the realization
        of assets and satisfaction of liabilities in the normal course of business.
        As at August 31, 2006, the Company has a working capital deficiency of
        $241,110, an accumulated deficit of $2,564,395 and has incurred an accumulated
        operating cash flow deficit of $331,512 since incorporation. The Company
        intends to continue funding operations through sales, debt, and equity
        financing arrangements, which may be insufficient to fund its capital
        expenditures, working capital and other cash requirements for the next
        fiscal year.                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Thereafter, the Company will be required to seek additional
        funds, either through sales, debt, and/or equity financing, to finance
        its long-term operations. The successful outcome of future activities
        cannot be determined at this time, and there is no assurance that, if
        achieved, the Company will have sufficient funds to execute its intended
        business plan or generate positive operating results. In response to these
        conditions, management intends to raise additional funds through future
        debt agreement and private placement offerings.                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | These factors, among others, raise substantial doubt
        about the Company's ability to continue as a going concern. The accompanying
        unaudited consolidated financial statements do not include any adjustments
        that might result from the outcome of this uncertainty.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

F-5

---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|August 31, 2006                                   
|US Funds                                          
|(Unaudited)                                       
|                                                  
|                                                  

|2. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | These unaudited interim consolidated financial statements
        follow the same accounting policies and methods of their application as
        the most recent annual consolidated financial statements, except as noted
        below. These unaudited interim consolidated financial statements should
        be read in conjunction with the audited consolidated financial statements
        of the Company as at November 30, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Basis of Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | On November 25, 2005, the Company incorporated a wholly
        owned subsidiary in the Czech Republic named Itonis CZ s.r.o. (ITonis
        CZ) for the purposes of operating the Companys development
        offices.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | These unaudited consolidated financial statements include
        the accounts of both companies since their respective incorporation dates.
        All intercompany balances and transactions have been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Stock-Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Effective March 1, 2006, the Company adopted the provisions
        of Statement of Financial Accounting Standards (SFAS) No.
        123(R), Share-Based Payment, which establishes accounting
        for equity instruments exchanged for employee services. Under the provisions
        of SFAS 123(R), stock-based compensation cost is measured at the grant
        date, based on the calculated fair value of the award, and is recognized
        as an expense over the employees requisite service period (generally
        the vesting period of the equity grant). Before March 1, 2006, the Company
        accounted for stock-based compensation to employees in accordance with
        Accounting Principles Board Opinion No. 25, Accounting for Stock
        Issued to Employees, and complied with the disclosure requirements
        of SFAS No. 123, Accounting for Stock-Based Compensation.
        The Company adopted FAS 123(R) using the modified prospective method,
        which requires the Company to record compensation expense over the vesting
        period for all awards granted after the date of adoption, and for the
        unvested portion of previously granted awards that remain outstanding
        at the date of adoption. Accordingly, financial statements for the periods
        prior to March 1, 2006 have not been restated to reflect the fair value
        method of expensing share-based compensation. Adoption of SFAS No. 123(R)
        does not change the way the Company accounts for share-based payments
        to non-employees, with guidance provided by SFAS 123 (as originally issued)
        and Emerging Issues Task Force Issue No. 96-18, Accounting for Equity
        Instruments That Are Issued to Other Than Employees for Acquiring, or
        in Conjunction with Selling, Goods or Services.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Recently Issued Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | In March 2006, the FASB issued Statement of Financial
        Accounting Standards No. 156, Accounting for Servicing of Financial Assets
        (SFAS No. 156), which amends FASB Statement No. 140 (SFAS
        No. 140). SFAS 156 may be adopted as early as January 1, 2006, for
        calendar year-end entities, provided that no interim financial statements
        have been issued. Those not choosing to early adopt are required to apply
        the provisions as of the beginning of the first fiscal year that begins
        after September 15, 2006 (e.g., January 1, 2007, for calendar year-end
        entities). The intention of the new statement is to simplify accounting
        for separately recognized servicing assets and liabilities, such as those
        common with mortgage securitization activities, as well as to simplify
        efforts to obtain hedge- like accounting. Specifically, the FASB said
        FAS No. 156 permits a servicer using derivative financial instruments
        to report both the derivative financial instrument and related servicing
        asset or liability by using a consistent measurement attribute, or fair
        value. The adoption of SFAS 156 is not expected to have a material impact
        on the Companys financial position, results of operations or cash
        flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

F-6

---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|August 31, 2006                                   
|US Funds                                          
|(Unaudited)                                       
|                                                  
|                                                  

|3. | Equipment              
|-- | -----------------------
|   |                        
|   | Details are as follows:

| |                                |   |        |  |   |              |   |   | Net Book    |  |   | Net Book     | 
| | ------------------------------ | - | ------ |  | - | ------------ | - | - | ----------- |  | - | ------------ | 
| |                                |   |        |  |   |              |   |   | Value       |  |   | Value        | 
| |                                |   |        |  |   |              |   |   | August 31,  |  |   | November 30, | 
| |                                |   |        |  |   | Accumulated  |   |   | 2006        |  |   | 2005         | 
| |                                |   | Cost   |  |   | Depreciation |   |   | (Unaudited) |  |   | (Audited)    | 
| | Office equipment and furniture | $ | 67,208 |  | $ | (15,734      | ) | $ | 51,474      |  | $ | 29,442       | 
| | Effect of exchange rate        |   |        |  |   |              |   |   |             |  |   |              | 
| | changes on equipment           |   | 4,615  |  |   | (789         | ) |   | 3,826       |  |   | -            | 
| |                                | $ | 71,823 |  | $ | (16,523      | ) | $ | 55,300      |  | $ | 29,442       | 

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | Software Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|5. | Marketing and Distribution Consulting Service
        Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company entered into a two-year consulting
        service agreement dated January 1, 2006 with a company (the Agent)
        with a significant interest in the Company. Under the terms of the agreement,
        the Company granted the Agent with the exclusive rights in Denmark and
        non-exclusive rights in Europe and Greenland, to market and distribute
        the Companys services and products. The Agent also agreed to provide
        the Company the services of one of its employee for the duration of this
        agreement, to act as Commercial Director of the Company and to provide
        such services to the Company in accordance with a job description to be
        agreed in writing between the parties. The Company agreed to pay the Agent,
        the greater of 40% of the net profits resulting from the sale of services
        and products or $30,000 per month. Either party may, at any time, give
        three months advance written notice of termination of this agreement.
        As at August 31, 2006, $120,000 has been accrued in these unaudited interim
        consolidated financial statements for marketing and distribution fees
        payable under this agreement (Note 7c).

F-7

---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|August 31, 2006                                   
|US Funds                                          
|(Unaudited)                                       
|                                                  
|                                                  

|5. | Marketing and Distribution Consulting Service Agreement
        -Continued                                                                                                                                                                                                                                                                                                                                                              
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | During the quarter, the Company executed a letter agreement
        with the Agent confirming that the provision of the agreement relating
        to the services of the Commercial Director has been terminated and the
        only obligation in respect of such services is the $120,000 previously
        accrued and that no further payments are required under the agreement
        except for payment of the 40% commission.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         
|6. | Segmented Information                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Details on a geographic basis as at August 31, 2006
        are as follows:                                                                                                                                                                                                                                                                                                                                                             

| |                     |   | ITonis CZ |   |   | ITonis Inc. |   |   |            |  
| | ------------------- | - | --------- | - | - | ----------- | - | - | ---------- | -
| |                     |   | Czech     |   |   | U.S.A.      |   |   | Total      |  
| | Assets              | $ | 85,380    |   | $ | 24,031      |   | $ | 109,411    |  
| | Loss for the period | $ | (253,146  | ) | $ | (1,744,771  | ) | $ | (1,997,917 | )

Details on a geographic basis as at November
  30, 2005 are as follows:

| |                     |   | ITonis CZ |   |   | ITonis Inc. |   |   |          |  
| | ------------------- | - | --------- | - | - | ----------- | - | - | -------- | -
| |                     |   | Czech     |   |   | U.S.A.      |   |   | Total    |  
| | Assets              | $ | 39,812    |   | $ | 154,180     |   | $ | 193,992  |  
| | Loss for the period | $ | (1,798    | ) | $ | (564,680    | ) | $ | (566,478 | )

|   |                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------
|7. | Related Party Balances and Transactions                                                                 
|   |                                                                                                         
|   | Related party transactions not disclosed elsewhere
        in these financial statements are as follows:
|   |                                                                                                         
|   | a)                                                                                                      
|   |                                                                                                         
|   | b)                                                                                                      
|   |                                                                                                         
|   | c)                                                                                                      
|   |                                                                                                         
|   |                                                                                                         
|   |                                                                                                         
|   |                                                                                                         
|   |                                                                                                         
|   |                                                                                                         
|   |                                                                                                         
|   | d)                                                                                                      

F-8

---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|August 31, 2006                                   
|US Funds                                          
|(Unaudited)                                       
|                                                  
|                                                  

|7. | Related Party Balances and Transactions
        -Continued                                                                                                                                                                                                                                                                                                                                                                     
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | e)                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | f)                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | These transactions were incurred in the normal
        course of operations and were measured at the exchange amount of consideration
        established and agreed to by the related parties.                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|8. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company has accumulated net operating
        losses for U.S. federal income tax purposes of approximately $356,425,
        which may be carried forward until 2025 and used to reduce taxable income
        of future years and net operating losses for Czech income tax purposes
        of approximately $254,944, which may be carried forward until 2011 and
        used to reduce taxable income of future years.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Details of future income tax assets:                                                                                                                                                                                                                                                                                                                                                                                           

| |                            |   | August 31, |   |   | November 30, |  
| | -------------------------- | - | ---------- | - | - | ------------ | -
| | Future income tax assets:  |   | 2006       |   |   | 2005         |  
| | Non-capital tax
      loss | $ | 182,371    |   | $ | 69,500       |  
| | Valuation allowance        |   | (182,371   | ) |   | (69,500      | )
| |                            | $ | -          |   | $ | -            |  

|   | The potential future tax benefits of these
        losses have not been recognized in these financial statements due to uncertainty
        of their realization. When the future utilization of some portion of the
        carryforwards is determined not to be more likely than not,
        a valuation allowance is provided to reduce the recorded tax benefits
        from such assets.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|9. | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                

F-9

---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|August 31, 2006                                   
|US Funds                                          
|(Unaudited)                                       
|                                                  
|                                                  

|9. | Capital Stock -Continued
|-- | ------------------------
|   |                         
|   | c)                      
|   |                         
|   |                         
|   |                         
|   |                         
|   |                         
|   |                         

| | Expected dividend yield         | 0.00%   | 
| | ------------------------------- | ------- | 
| | Expected stock price volatility | 77%     | 
| | Risk-free interest rate         | 4.88%   | 
| | Expected life of options        | 3 years | 

Because the shares of the Company have
  not begun trading on any recognized stock exchange, there is no trading history
  to establish the expected volatility. The Company has used the average volatility
  for three companies in the same industry or considered to be comparable. The
  weighted average fair value of the options granted was $0.06.

Option pricing models require the input
  of highly subjective assumptions including the estimate of the share price volatility.
  Changes in the subjective input assumptions can materially affect the fair value
  estimate, and therefore, the existing models do not necessarily provide a reliable
  single measure of the fair value of the Companys stock options.

|    |                                                                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10. | Restatement                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                             
|    | The consolidated financial statements for the period
        ended November 30, 2005 have been restated to properly reflect the value
        assigned to the intellectual property acquired by the Company on October
        1, 2005 (Note 4a)from $1,000,000 to $447,637.
|    |                                                                                                                                                                                                                                                                             
|    | The 10,000,000 shares issued to acquire the intellectual
        property were re-valued from $0.10 to $0.045 per share to reflect Onyxs
        historical cost of $447,637 in relation to developing the intellectual
        property.                                  

F-10

---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|August 31, 2006                                   
|US Funds                                          
|(Unaudited)                                       
|                                                  
|                                                  

|10. | Restatement -Continued                                                            
|--- | ----------------------------------------------------------------------------------
|    |                                                                                   
|    | The effects of the restatement on the financial statements
        are as follows:

| |                                                          |   | From          |   |   |               |  
| | -------------------------------------------------------- | - | ------------- | - | - | ------------- | -
| |                                                          |   | Incorporation |   |   | From          |  
| |                                                          |   | (July 5,      |   |   | Incorporation |  
| |                                                          |   | 2005          | ) |   | (July 5,      |  
| |                                                          |   | to            |   |   | 2005          | )
| |                                                          |   | November 30,  |   |   | to            |  
| |                                                          |   | 2005          |   |   | November 30,  |  
| |                                                          |   | (Prior to     |   |   | 2005          |  
| |                                                          |   | restatement)  |   |   | (Restated)    |  
| | Loss for the period                                      | $ | (1,118,841    | ) | $ | (566,478      | )
| | Loss per share  Basic and diluted                       | $ | (0.16         | ) | $ | (0.08         | )
| | Deficit  Accumulated during the development
      stage | $ | (1,118,841    | ) | $ | (566,478      | )
| | Shares issued for acquisition of intellectual property   | $ | 1,000,000     |   | $ | 447,637       |  

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|11. | Subsequent Event                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Subsequent to the period-end, the Company is in the
        process of negotiating a subscription agreement with a private investor
        for the purchase of 66,667 units at a price of $1.50 per unit, for total
        proceeds of $100,000 (received). Each unit is comprised of one (1) share
        of our common stock, two and one-half (2.5) Series A share purchase warrants
        and five (5) Series B share purchase warrants. Each Series A share purchase
        warrant will entitle the holder to purchase one additional share of our
        common stock at a price of $1.50 per share for a period of six months
        from the date of purchase of the units. Each Series B share purchase warrant
        will only vest in the event the Series A warrants are exercised in full
        and, upon vesting, will entitle the holder to purchase one additional
        share of our common stock at a price of $1.50 per share for a period of
        six months from the date of purchase of exercise of the Series A warrants.
        There is no assurance that any of the Series A or Series B share purchase
        warrants will be exercised.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

F-11

---

Item
2.               
Managements Discussion and Analysis

The following discussion of our financial condition, changes in
financial condition and results of operations for the nine months ended August
31, 2006 should be read in conjunction with our unaudited consolidated interim
financial statements and related notes for the nine months ended August 31,
2006.

Overview of Our Business

We are the owner of a suite of proprietary software
applications that we refer to as the ITonis video solution. We are engaged in
the business of commercializing the ITonis video solution. The ITonis video
solution enables the on-demand delivery of video content, including television
channels and videos, to consumers via broadband Internet for viewing on the
consumers television.

Our business plan is to market and sell the ITonis video
solution as a technology solution that will enable the on-demand delivery of
video content via the Internet. The ITonis video solution is one of three
components that are essential to the on-demand delivery of video content via
broadband Internet, namely:

- the intellectual property rights to distribute the video content;
- a set-top box located near the consumers television that is connected to
  broadband Internet; and
- a technology solution that enables the on-demand delivery of the video
  content to the consumers television via the set top box.

We do not have any plans to engage in the business of acquiring
intellectual property rights to distribute video content or manufacturing and
selling set top boxes for televisions. Our focus will be on the marketing and
sale of the ITonis video solution in circumstances where other parties will be
responsible for the provision of the intellectual property rights to distribute
the video content and the necessary set-top boxes.

The ITonis video solution is comprised of the following
components, each of which will be achieved by the installation of our software
applications on computer servers that are used to implement our video
solution:

- the ITonis media acquisition system that allows the upload of video content
  onto media storage servers;
- ITonis media storage servers that provide for the storage of video and
  other media content;
- ITonis media streamers that provide for the streaming of video content in
  real time to the end consumer via the Internet;
- an ITonis television portal (IPTV) application server that provides the
  interface between the computer system and the ultimate consumer; and
- an ITonis service server that performs automatic maintenance tasks on the
  solution.

We have developed the basic functionality of ITonis video solution
  and have demonstrated the solution in a laboratory environment. We have not
  deployed the ITonis video solution as a whole in any commercial operations to
  date. However, we have delivered a single component of our ITonis video solution
  that has been deployed in a larger video on demand solution. We are now attempting
  to secure pilot projects for the demonstration of the ITonis video solution
  in real world operations. We are also planning to continue additional
  development of the ITonis video solution in order to extend the functionality
  of the solution.

- 2 -

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Although sales and marketing activities have been initiated,
  we have earned minimal revenues to date and, as such, we are presently a development
  stage company. We presently have limited funds with which to pursue our plan
  of operations. While we have completed private placement financings as part
  of our corporate organization, we will require additional funding in order to
  pursue our plan of operations over the next twelve months. We currently have
  no arrangements for any additional financing and there is no assurance that
  any additional financing will be obtained.

Incorporation

We were incorporated on July 5, 2005 as Kenshou Inc. under the
laws of the state of Nevada. We changed our name to ITonis Inc. on December 2,
2005 to reflect our acquisition of certain intellectual property underlying the
ITonis video solution and our new business focus.

We commenced the process of incorporating a wholly owned Czech
subsidiary called ITonis CZ on November 25, 2005. The incorporation process
was formally completed under Czech law on January 4, 2006.

We completed a one for two consolidation of our outstanding
shares of common stock on June 15, 2006.

Principal Executive Offices

Our principal executive offices and the offices of Itoniz CZ
are located in leased premises at Klimentska 10, 110 00 Prague 1, Czech
Republic. We refer to this facility as our research and development facility as
this is where we carry out the research, development and testing of our ITonis
video solution.

Our Plan of Operations

Our business plan is to market and sell the ITonis video
solution as a technology solution that will enable the on-demand delivery of
video content via the Internet.

We plan to market our ITonis video solution to the following
participants engaged in the telecommunications and media distribution industry:

- video content owners and distributors, including television broadcast and
  cable companies, that wish to enable their customers to purchase video content
  and other value added services via the Internet; and
- Internet service providers that wish to be able to offer their customers
  the ability to purchase on- demand video content for viewing on their
  televisions via the Internet.

We plan to commercialize our ITonis video solution using two
distinct business models:

- Our direct sales model involves selling the ITonis video solution as an
  end to end computer based platform to video content owners and distributors
  who will install the ITonis video solution on their computer servers and use
  the solution to deliver on-demand video content to their customers via the
  Internet. In this scenario, we would achieve revenues from sales of the ITonis
  video solution. We would also have the ability to earn further ongoing product
  support fees and consulting fees.
- Our Internet service provider model involves partnering with video content
      providers to provide a fully outsourced video on-demand and television solution
      to Internet service provider businesses. By partnering with content provides
      and set-top box manufactures, we will be able to offer a fully

- 3 -

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outsourced Video on Demand and Internet Protocol over
  television (IPTV) solution to Internet service providers that would
  like to provide their customers with this service but do not have the resources
  to successfully deploy a video on-demand solution. In this model, our plan is
  to earn revenues either on a revenue sharing basis with the Internet service
  provider or on a monthly fee basis.

Our plan of operations for the next twelve months is to
complete the following objectives within the time periods and within the budgets
specified, subject to our achieving the requisite financing:

|1. | We plan to carry on the development of the ITonis video
      solution from our research and development facility in Prague. Our general
      administrative overhead cost for our Prague office is approximately
      $40,000 per month. This amount includes salaries, computer hardware, rent
      and other general expenses associated with our Prague office. If we are
      successful in securing initial commercial sales of our ITonis video
      solutions, then we anticipate that these expenses may increase to $80,000
      per month by the end of the first quarter of fiscal 2007, subject to
      financing. This increase in cost would be attributable to adding
      additional personnel to our development team and to put in place a team of
      employees to provide customer support services.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2. | We plan to carry out sales and marketing of our ITonis
      video solution over the next twelve months with the objective of securing
      sales to several clients. Our direct marketing activities will be carried
      out by our employees from our Prague office. As such, the expense for
      these marketing activities will be within our general and administrative
      expenses for the Prague office, as outlined above. In addition, Nordic
      IPTV will undertake sales and marketing activities for which we will pay
      40% of the net profits, in accordance with our research and consulting
      services agreement with Nordic IPTV as amended.                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|3. | We plan to launch an operation pilot scale solution for
      an Internet service provider ISP. The purpose of the pilot project would
      be to allow us to complete the testing of our ITonis video solution in a
      live environment and to enable us to have an operating solution that we
      can use for demonstration purposes in connection with our marketing
      activities. We anticipate that it would cost approximately $10,000 in
      additional expenses to launch this operation.                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4. | We plan to deploy a small scale commercial solution for
      an Internet service provider that will offer the basic functionality of
      the ITonis video solution. We anticipate that this installation would cost
      approximately $84,000. This cost would cover the hardware and software for
      the solution. Implementation will be performed by ITonis CZ. This
      component of our plan of operations is contingent upon us securing an
      agreement with an Internet service provider. Alternatively, we plan to
      look for a strategic partner that would be able to invest in the required
      hardware and offer basic content.                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|5. | We anticipate spending approximately $4,000 in ongoing
      general, legal and administrative expenses per month for the next twelve
      months, for a total anticipated expenditure of $48,000 over the next
      twelve months. These general, legal and administrative expenses are
      external expenses that we anticipate incurring and are in addition to the
      general and administrative expense of the Prague office discussed
      above.                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|6. | We anticipate spending approximately $53,000 in complying
      with our obligations as a reporting company under the Securities
      Exchange Act of1934. These expenses will consist primarily of
      professional fees relating to the preparation of our financial statements
      and completing our annual report, quarterly report, current report and
      proxy statement filings with the SEC.                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|7. | We anticipate spending $120,000 to pay the accrued
      liability in connection with the services provided to us by John Marienhof
      pursuant to our reseller and consulting agreement with Nordic IPTV as
      further described in the sections entitled Organization Since
      Incorporation and Certain Relationships and Related Transactions and
      $17,948 to repay the loan made to us by                                                                                                                                                                                                                                                                                                                                                                                                                   

- 4 -

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our chief executive officer described
below under the heading Liquidity and Capital Resources and in the section
entitled Certain Relationships and Related Transactions.

As at November 30, 2005, we had cash reserves of $164,550 and
working capital of $81,093. As at August 31, 2006, our cash reserves had
declined to $11,800 and we had a working capital deficit of $241,110. Our
planned expenditures over the next twelve months are $812,948. Accordingly, we
anticipate that we will require financing in the amount of approximately
$1,040,000 in order to carry out our plan of operations for the next twelve
months.

In order to raise the necessary financing to fund our plan of
operations, we are negotiating a subscription agreement with a private investor
for the purchase of 66,667 units at a price of $1.50 per unit, for total
proceeds of $100,000. We have received the subscription proceeds from the
investor but the subscription agreement has not been executed. If this
subscription is completed, each unit will be comprised of one (1) share of our
common stock, two and one-half (2.5) Series A share purchase warrants and five
(5) Series B share purchase warrants. Each Series A share purchase warrant will
entitle the holder to purchase one additional share of our common stock at a
price of $1.50 per share for a period of six months from the date of purchase of
the units. Each Series B share purchase warrant will only vest in the event the
Series A warrants are exercised in full and, upon vesting, will entitle the
holder to purchase one additional share of our common stock at a price of $1.50
per share for a period of six months from the date of purchase of exercise of
the Series A warrants. There is no assurance that the subscription agreement
will be executed or that any of the Series A or Series B share purchase warrants
will be exercised.

During the twelve month period following the date hereof, we
anticipate that we will not generate revenues that exceed our operating costs.
We anticipate based on our current cash and working capital and our planned
expenses that we will be able to continue our plan of operations over the next
two months without additional financing. This projection does not account for
any revenues that we may earn from licensing sales of components to our ITonis
video solution. We believe that we will require additional financing in order to
commercialize our ITonis video solution in order to earn revenues that exceed
our operating expenses.

We have reduced our operating costs to a minimum in order to
preserve our available cash and working capital so that we can continue to
sustain our operations. We anticipate that additional funding will be in the
form of equity financing from the sale of our common stock. We may also seek to
obtain additional financing from our principal shareholders, although none of
our shareholders have committed to advance any shareholder loans to us. We
presently have no arrangements in place for additional financing beyond the
completed offering of units. In the absence of such additional financing, we may
not be able to continue our plan of operations beyond the next two months and
our business plan may fail. If we do not obtain the required additional
financing, we will initially scale back our business operations and may
ultimately be forced to abandon our plan of operations and our business
activities.

Critical Accounting Policies

Development Stage Company

We are a development stage company as defined by Financial
Accounting Standards No. 7. We are presently devoting all of our present efforts
to establishing a new business. All losses accumulated since inception have been
considered as part of our development stage activities.

Revenue Recognition

We recognize revenue when all of the following criteria have
been met: persuasive evidence for an arrangement exists; delivery has occurred;
the fee is fixed or determinable; and collection is reasonably assured. Revenue
derived from the sale of services is initially recorded as deferred revenue on
the balance sheet. The amount is recognized as income over the term of the
contract.

- 5 -

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Revenue from time and material service contracts is recognized
as the services are provided. Revenue from fixed price, long-term service or
development contracts is recognized over the contract term based on the
percentage of services that are provided during the period compared with the
total estimated services to be provided over the entire contract. Losses on
fixed price contracts are recognized during the period in which the loss first
becomes apparent. Payment terms vary by contract.

Foreign Currency Translations

Our functional currency is the Czech Crown, and our reporting
currency is the U.S. dollar. All transactions initiated in other currencies are
re-measured into the functional currency as follows:

| | i)   | Monetary assets and liabilities at the rate of exchange
      in effect at the balance sheet date,
| | ---- | --------------------------------------------------------------------------------------------------
| |      |                                                                                                   
| | ii)  | Non-monetary assets and liabilities, and equity at
      historical rates, and                    
| |      |                                                                                                   
| | iii) | Revenue and expense items at the average rate of exchange
      prevailing during the period.     

Gains and losses on re-measurement are included in determining
net income for the period

Translation of balances from the functional currency into the
reporting currency is conducted as follows:

| | i)   | Assets and liabilities at the rate of exchange in effect
      at the balance sheet date,    
| | ---- | ---------------------------------------------------------------------------------------------
| |      |                                                                                              
| | ii)  | Equity at historical rates, and                                                              
| |      |                                                                                              
| | iii) | Revenue and expense items at the average rate of exchange
      prevailing during the period.

Translation adjustments resulting from translation of balances
from functional to reporting currency are accumulated as a separate component of
shareholders equity as a component of comprehensive income or loss. Upon sale
or liquidation of the net investment in the foreign entity the amount deferred
will be recognized in income.

Use of Estimates

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make certain estimates and assumptions that affect the
reported amounts and timing of revenues and expenses, the reported amounts and
classification of assets and liabilities, and disclosure of contingent assets
and liabilities. These estimates and assumptions are based on the Company's
historical results as well as management's future expectations. The Company's
actual results could vary materially from management's estimates and
assumptions.

Software Costs

Our policy is that software development costs related to the
product line are charged to expense as incurred in accordance with SFAS No. 86,
Accounting for the Costs of Computer Software to Be Sold, Leased, or
Otherwise Marketed. This Statement specifies that costs incurred internally
in creating a computer software product shall be charged to expense when
incurred as research and development until technological feasibility has been
established for the product. Technological feasibility is established upon
completion of a detail program design or, in its absence, completion of a
working model. To date, technological feasibility of the software underlying our
ITonis video solution has not been achieved.

Results Of Operations  Three and Nine months Ended August
31, 2006

References to the discussion below to fiscal 2006 are to our
current fiscal year which will end on November 30, 2006. References to fiscal
2005 is to our fiscal year ended November 30, 2005.

- 6 -

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References to the first nine months of fiscal 2006 are to the
nine months ended August 31, 2006.

|                                 |   |              |   |   |              |   |   | From              |  |   | Cumulative from   |  
|-------------------------------- | - | ------------ | - | - | ------------ | - | - | ----------------- |  | - | ----------------- | -
|                                 |   | Three months |   |   | Nine months  |   |   | Incorporation     |  |   | Incorporation     |  
|                                 |   | ended August |   |   | ended August |   |   | (July 5, 2005) to |  |   | (July 5, 2005) to |  
|                                 |   | 31, 2006     |   |   | 31, 2006     |   |   | August 31, 2005   |  |   | August 31, 2006   |  
|                                 |   | (Unaudited)  |   |   | (Audited)    |   |   | (Audited)         |  |   | (Unaudited)       |  
|                                 |   |              |   |   | (Restated)   |   |   | (Restated)        |  |   |                   |  
|Revenue from sales               | $ | 24,351       |   | $ | 24,351       |   | $ | Nil               |  | $ | 24,351            |  
|Cost of sales                    | $ | 9,424        |   | $ | 9,424        |   | $ | Nil               |  | $ | 9,424             |  
|Gross profit                     | $ | 14,927       |   | $ | 14,927       |   | $ | Nil               |  | $ | 14,927            |  
|General and Administrative       | $ | (189,680     | ) | $ | (2,039,568   | ) | $ | Nil               |  | $ | (2,606,046        | )
|Expenses                         |   |              |   |   |              |   |   |                   |  |   |                   |  
|Marketing and
      Distribution |   | Nil          |   |   | (120,000     | ) |   | Nil               |  |   | (120,000          | )
|Salaries
      and Wages         |   | (90,652      | ) |   | (198,435     | ) |   | Nil               |  |   | (198,435          | )
|Legal                            |   | (16,633      | ) |   | (49,760      | ) |   | Nil               |  |   | (61,552           | )
|Consulting                       |   | (31,901      | ) |   | (53,337      | ) |   | Nil               |  |   | (53,337           | )
|Audit and Accounting             |   | (19,371      | ) |   | (39,995      | ) |   | Nil               |  |   | (104,459          | )
|Office
      and Rent            |   | (5,975       | ) |   | (22,627      | ) |   | Nil               |  |   | (23,250           | )
|Software Development
      Costs |   | Nil          |   |   | (13,814      | ) |   | Nil               |  |   | (54,935           | )
|Depreciation                     |   | (5,896       | ) |   | (14,893      | ) |   | Nil               |  |   | (15,734           | )
|Bad debts                        |   | (9,789       | ) |   | (9,789       | ) |   | Nil               |  |   | (9,789            | )
|Filing
      Fees                |   | (2,365       | ) |   | (9,820       | ) |   | Nil               |  |   | (9,820            | )
|Foreign exchange loss            |   | (4,811       | ) |   | (4,811       | ) |   | Nil               |  |   | (4,811            | )
|Intellectual Property            |   | Nil          |   |   | (1,500,000   | ) |   | Nil               |  |   | (1,947,637        | )
|Investor relations               |   | (2,287       | ) |   | (2,287       | ) |   | Nil               |  |   | (2,287            | )
|Other Income
      (Expense):    |   |              |   |   |              |   |   |                   |  |   |                   |  
|Other Income                     | $ | 4,974        |   | $ | 26,724       |   |   | Nil               |  | $ | 26,724            |  
|Loss for the Period              | $ | (169,779     | ) | $ | (1,997,917   | ) |   | Nil               |  | $ | (2,564,395        | )
|Foreign currency translation     |   | 820          |   |   | 329          |   |   | Nil               |  |   | 329               |  
|adjustment                       |   |              |   |   |              |   |   |                   |  |   |                   |  
|Total Comprehensive Loss for     | $ | (168,959     | ) | $ | (1,997,588   | ) |   | Nil               |  | $ | (2,564,066        | )
|the Period                       |   |              |   |   |              |   |   |                   |  |   |                   |  

Revenue

We generated our initial revenues during the three months ended
August 31, 2006. We delivered our encoding platform a customer for encoding
content from DVD disks onto the customers video demand platform. The encoding
platform is one of the components of the ITonis video solution.

These initial revenues are not significant in relation to our
overall expenses. We anticipate that we will not earn any significant revenues
until such time as we have achieved commercial deployment of our ITonis video
solution.

- 7 -

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Marketing And Distribution

Our marketing and distribution expenses include amounts that we
pay under our reseller and consulting services agreement with Nordic IPTV. As
this agreement was entered into in February 2006, no expenses under this
agreement were recorded in fiscal 2005.

We recorded $120,000 in expenses under the Nordic IPTV agreement
  in the first nine months of fiscal 2006 in respect of four months of service
  provided by John Marienhof as commercial director of ITonis. In accordance with
  our agreement with Nordic IPTV, this amount has not been paid but has been accrued.

Salaries And Wages

Salaries and wages are primarily comprised of salaries paid to
employees of ITonis CZ who are employed at our research and development facility
in Prague.

Salaries and wages were $nil in fiscal 2005 as we only
completed the acquisition of the our initial software technology from Onyx
Trading on November 16, 2006. Salaries and wages increased in the first nine
months of fiscal 2006 as we hired our initial employees and took over
development of the ITonis video solution from Xeris.

Legal

Our legal expenses include professional fees that we pay to our
legal counsel.

Our legal expenses in fiscal 2005 represent amounts paid to
legal counsel in connection with our corporate organization. Our legal expenses
in the first nine months of fiscal 2006 represent amounts paid to legal counsel
in connection with our corporate organization and the preparation of a
registration statement that we filed with the SEC.

Consulting

Consulting fees represent amounts that we pay to consultants
that are engaged by us.

We did not incur any consulting fees during fiscal 2005 as we
were inactive for most of this fiscal year. We incurred consulting fees during
the first nine months of fiscal 2006 as our business activities increased.

Audit and Accounting

Our accounting and auditing expenses include professional fees
for accounting and auditing expenses incurred in connection with the preparation
and audit of our financial statements.

We incurred significant accounting and auditing expenses during
fiscal 2005 in connection with our corporate organization and the preparation of
our initial financial statements. Accounting and auditing expenses during the
first nine months of fiscal 2006 were in connection with the preparation and
audit of our financial statements for fiscal 2005 prepared in connection with
the filing of a registration statement with the SEC.

Office and Rent

Our office expenses include the rent that we pay for our
research and development facility in Prague and general office expenses.

- 8 -

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Our office expenses increased significantly in the first nine
months of fiscal 2006 as the result of ITonis CZ entering into a lease for our
research and development facility in Prague. This lease expense will be ongoing
through the balance of fiscal 2006.

Software Development Costs

Software development costs represent amounts that we have paid
to others for the development of our proprietary software.

Software development costs during the first nine months of
fiscal 2006 were paid to Xeris in respect of development work on our ITonis
video solution completed by Xeris prior to our taking over software development
activities from Xeris in January 2006.

Depreciation

Depreciation expenses represents depreciation of our computer
hardware and equipment.

Depreciation expenses in fiscal 2005 and in the first nine
months of fiscal 2006 represent depreciation of computer hardware and equipment
that we have acquired in connection with the development and testing of our
ITonis video solution.

Intellectual Property

We acquired the TV Everywhere software technology from Onyx
Trading on November 16, 2005 by issuing 10,000,000 common shares. This resulted
in Onyx Trading holding approximately 64% of our shares. The value assigned to
the 10,000,000 common shares was $447,637, being the historical cost of the
technology to Onyx Trading. This is in accordance with SAB Topic 5G as Onyx
Trading has retained a substantial indirect interest in the technology that was
transferred. This amount was expensed during fiscal 2005 as it did not meet the
criteria for capitalization as set out in SFAS No. 86.

We valued the TV portal application software technology that
  we acquired from Nordic IPTV at $1,500,000 based on a value of $0.25 per share
  being assigned to the 6,000,000 shares that we issued to Nordic IPTV to acquire
  this technology. This amount was expensed during the first nine months of fiscal
  2006 as it did not meet the criteria for capitalization as set out in SFAS No.
  86.

Other Income

Our other income during the first nine months of fiscal 2006
was comprised of:

- Sub-letting part of our ITonis CZ office to iPLATO s.r.o., a company with
  whom ITonis CZ has one director in common;
- Outsourcing the services of Nicolas Lavaud to Xeris., a company with whom
  ITonis CZ has one director in common, as managing director; and
- Outsourcing the services of Libor Bucinsky to Devoteam, an arms length
  party, for the installation of Telefonica Video on Demand platform at Czech
  Telecom.

We did not generate any significant revenues from the sales or
deployment of our ITonis video solutions during fiscal 2005 or the first nine
months of fiscal 2006.

- 9 -

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Liquidity And Capital Resources

As at November 30, 2005, we had cash reserves of $164,550 and
working capital of $81,093. As at August 31, 2006, our cash reserves had
declined to $11,800 and we had a working capital deficit of $241,110.

Related Party Loan

On July 3, 2006 Mr. Lavaud granted us a loan in the amount of
400,000 CZK ($17,948 based on a foreign exchange rate on July 3, 2006 of
1CZK:$0.4487) . The loan is evidenced by a promissory note, is unsecured and
does not bear any interest. The promissory note is payable on demand. The loan
was outstanding in the amount of $18,236 as of August 31, 2006.

Plan Of Operations

Our planned expenditures over the next twelve months are
$812,948. As described above under Our Plan of Operations, we anticipate that
we will require financing in the amount of approximately $1,050,000 in order to
carry out our plan of operations for the next twelve months. While this amount
may be offset by any gross profits that we earn from sales of our ITonis video
solutions, we anticipate that our cash and working capital will not be
sufficient to enable us to undertake our plan of operations over the next twelve
months without our obtaining additional financing. Accordingly, we anticipate
that we will require additional financing in order to enable us to sustain our
operations for the next twelve months, as outlined above under Our Plan of
Operations. We have completed the private placement of units, as outlined above
under Our Plan of Operations, in furtherance of achieving the required
financing, although there is no assurance that the share purchase warrants
issued in connection with this financing will be exercised.

Cash Used In Operating Activities

We used cash in operating activities in the amount of $296,969
during the first nine months of fiscal 2006 and $34,543 in fiscal 2005. Cash
used in operating activities was funded by cash from financing activities.

Cash From Investing Activities

We used cash in investing activities in the amount of $36,925
during the first nine months of fiscal 2006 and $30,283 in fiscal 2005. Cash
used in investing activities was attributable primarily to the purchase of
computer hardware and equipment that we have acquired in connection with the
development and testing of our ITonis video solution.

Cash from Financing Activities

We generated cash from financing activities in the amount of
$184,641 during the first nine months of fiscal 2006 and $229,376 in fiscal
2005. Cash generated by financing activities is attributable to the private
placement financings of our common stock that we have completed since our
incorporation.

Restatement

We restated our consolidated financial statements for the
period ended November 30, 2005 in order to properly reflect the value assigned
to the intellectual property acquired by us on October 1, 2005 (See Note 4 to
our statements for the period ended November 30, 2005) from $1,000,000 to
$447,637.

The 10,000,000 shares issued to acquire the intellectual
property were re-valued from $0.10 to $0.045 per share to reflect Onyxs
historical cost of $447,637 in relation to developing the intellectual property.

- 10 -

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The effects of the restatement on our financial statements for
the period ended November 30, 2005 are as follows:

|                                                         |   | From                  |   |   |                       |  
|-------------------------------------------------------- | - | --------------------- | - | - | --------------------- | -
|                                                         |   | Incorporation         |   |   | From                  |  
|                                                         |   | **(July 5, 2005) to** |   |   | Incorporation         |  
|                                                         |   | November 30, 2005     |   |   | **(July 5, 2005) to** |  
|                                                         |   | (Prior to             |   |   | November 30,          |  
|                                                         |   | restatement)          |   |   | 2005*(Restated)*      |  
|Loss for the period                                      | $ | (1,118,841            | ) | $ | (566,478              | )
|Loss per share  Basic and diluted                       | $ | (0.16                 | ) | $ | (0.08                 | )
|Deficit  Accumulated during the
      development stage | $ | (1,118,841            | ) | $ | (566,478              | )
|Shares issued for acquisition of software                | $ | 1,000,000             |   | $ | 447,637               |  

*Going Concern*

We have not attained profitable operations and are dependent
upon obtaining financing to pursue any extensive business activities. For these
reasons our auditors stated in their report that they have substantial doubt we
will be able to continue as a going concern.

Future Financings

We anticipate continuing to rely on equity sales of our common
shares in order to continue to fund our business operations. Issuances of
additional shares will result in dilution to our existing stockholders. There is
no assurance that we will achieve any additional sales of our equity securities
or arrange for debt or other financing to fund our planned activities.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to stockholders.

Item
3.               
Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of
1934 (the Exchange Act), we carried out an evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures as of August
31, 2006, being the date of our most recently completed quarter. This evaluation
was carried out under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, Mr. Nicolas Lavaud. Based upon
that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures are effective to ensure
that information required to be disclosed by us in the reports that we file or
submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified by the rules and forms of the Securities and
Exchange Commission (the SEC).

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the SECs rules
and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed in our reports filed under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer and our Chief
Financial Officer, to allow timely decisions regarding required disclosure.

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During the fiscal quarter ended August 31, 2006, there were no
changes in our internal control over financial reporting that have materially
affected, or are reasonably likely to affect, our internal control over
financial reporting during the quarter ended August 31, 2006.

The term internal control over financial reporting is defined
as a process designed by, or under the supervision of, the registrants
principal executive and principal financial officers, or persons performing
similar functions, and effected by the registrants board of directors,
management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles and includes those policies and procedures that:

|(a) | Pertain to the maintenance of records that in reasonable
      detail accurately and fairly reflect the transactions and dispositions of
      the assets of the registrant;                                                                                                                                                                                                   
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                
|(b) | Provide reasonable assurance that transactions are
      recorded as necessary to permit preparation of financial statements in
      accordance with generally accepted accounting principles, and that
      receipts and expenditures of the registrant are being made only in
      accordance with authorizations of management and directors of the
      registrant; and
|    |                                                                                                                                                                                                                                                                                                                                                                                
|(c) | Provide reasonable assurance regarding prevention or
      timely detection of unauthorized acquisition, use or disposition of the
      registrants assets that could have a material effect on the financial
      statements.                                                                                                                                              

PART II  OTHER INFORMATION

Item
1.               
Legal Proceedings

We currently are not a party to any material legal proceedings
and to our knowledge, no such proceedings are threatened or contemplated.

Item
2.               
Unregistered Sales of Equity Securities and Use of Proceeds

We did not complete any sales of securities without
registration under the Securities Act of 1933 during the quarter ended August
31, 2006.

Item
3.               
Defaults Upon Senior Securities

None.

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

No matters were submitted to our security holders for a vote
during the three months ended August 31, 2006.

Item
5.               
Other Information

None.

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Item
6.               
Exhibits

The following exhibits are included with this Quarterly Report
on Form 10-QSB:

|Exhibit |                                                                                                                                                                                                          
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                                                                   
|        |                                                                                                                                                                                                          
|3.1     | Articles of
        Incorporation (1)                                                                                                                                                                    
|        |                                                                                                                                                                                                          
|3.2     | Certificate
        of Amendment to Articles of Incorporation (1)                                                                                                                                        
|        |                                                                                                                                                                                                          
|3.3     | By-Laws (1)                                                                                                                                                                                              
|        |                                                                                                                                                                                                          
|10.1    | Asset Purchase
        Agreement dated October 1, 2005 between ITonis Inc. and Onyx Trading Inc.
        (1)                                                                                             
|        |                                                                                                                                                                                                          
|10.2    | Employment Agreement
        between ITonis Inc. and Antonin Kral dated January 1, 2006. (1)                                                                                                             
|        |                                                                                                                                                                                                          
|10.3    | Employment Agreement
        between ITonis Inc. and Nicolas Lavaud dated February 1, 2006. (1)                                                                                                          
|        |                                                                                                                                                                                                          
|10.4    | Asset Purchase
        Agreement between ITonis Inc. and Nordic IPTV Company ApS (formerly Makeitwork
        ApS) dated January 31, 2006 (1)                                                          
|        |                                                                                                                                                                                                          
|10.5    | Reseller Agreement
        dated February 7, 2006 between ITonis Inc. and Makeitwork ApS (1)                                                                                                             
|        |                                                                                                                                                                                                          
|10.6    | Lease Agreement
        dated December 23, 2005 between Achat Real a.s. and ITonis CZ s.r.o. (1)                                                                                                         
|        |                                                                                                                                                                                                          
|10.7    | 2006 Stock Option
        Plan (2)                                                                                                                                                                       
|        |                                                                                                                                                                                                          
|10.8    | Amendment dated
        February 15, 2006 to Employment Agreement between ITonis Inc. and Nicolas
        Lavaud dated February 1, 2006 (3)                                                              
|        |                                                                                                                                                                                                          
|10.9    | Amendment dated
        August 9, 2006 to Reseller Agreement dated February 7, 2006 between ITonis
        Inc. and Nordic IPTV Company ApS (formerly, Makeitwork ApS") (3)                              
|        |                                                                                                                                                                                                          
|10.10   | Promissory Note
        issued by ITonis Inc. to Nicolas Lavaud in the amount of CZ 400,000Kc
        dated July 3, 2006 (3)                                                                             
|        |                                                                                                                                                                                                          
|31.1    | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to 18
        U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002 (4)
|        |                                                                                                                                                                                                          
|32.1    | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to 18
        U.S.C. Section 1350, as adopted pursuant to section 906 of the sarbanes-oxley
        act of 2002 (4)

|(1) | Filed as an exhibit to the registration statement on Form
      SB-2 filed with the SEC on May 12, 2006.                            
|--- | ------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                     
|(2) | Filed as an exhibit to Amendment No. 1 to the
      registration statement on Form SB-2 filed with the SEC on June 27,
      2006.  
|    |                                                                                                                                     
|(3) | Filed as an exhibit to Amendment No. 2 to the
      registration statement on Form SB-2 filed with the SEC on August 11,
      2006.
|    |                                                                                                                                     
|(4) | Filed as an exhibit to this Quarterly Report on Form
      10-QSB.                                                                  

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SIGNATURES

In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|ITONIS INC. |                                                    
|----------- | ---------------------------------------------------
|            |                                                    
|            |                                                    
|            |                                                    
|By:         | /s/ *Nicolas Lavaud*                               
|            | Nicolas Lavaud                                     
|            | Chief Executive Officer and Chief Financial Officer
|            | Date: October 16, 2006                             

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