---

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 May 31, 2007

[   ]  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.(Exact 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 [X]  No[   ]

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. 73,111,853
shares of common stock as of July 12, 2007.

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 May 31, 2007

INDEX

|PART I  FINANCIAL INFORMATION | 1          
|------------------------------ | -----------
|                               | Item 1.    
|                               | Item 2.    
|                               | Item 3.    
|                               | Item 3A(T).
|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
below, 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. We disclaim any obligation to publicly update these
statements, or disclose any difference between our actual results and those
reflected in these statements. The information constitutes forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. 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
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|                                                                                                                                                                                              |     
|Unaudited
      Interim Consolidated Balance Sheets as at May 31, 2007 (unaudited) and
      November 30, 2006 (audited)                                                                      | F-1 
|                                                                                                                                                                                              |     
|Unaudited
      Interim Consolidated Statements of Changes in Stockholders Equity
      (Deficiency) for the period from incorporation (July 5, 2005) to May 31,
      2007                  | F-2 
|                                                                                                                                                                                              |     
|Unaudited
      Interim Consolidated Statements of Operations for the six months ended May
      31, 2007 and 2006 and for the period from incorporation (July 5, 2005) to
      May 31, 2007 | F-3 
|                                                                                                                                                                                              |     
|Unaudited
      Interim Consolidated Statements of Cash Flows for the six months ended May
      31, 2007 and 2006 and for the period from incorporation (July 5, 2005) to
      May 31, 2007 | 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

May 31, 2007

US FUNDS

(Unaudited)

---

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

|                                                      |   | As at       |   |   | As at        |  
|----------------------------------------------------- | - | ----------- | - | - | ------------ | -
|                                                      |   | May 31,     |   |   | November 30, |  
|                                                      |   | 2007        |   |   | 2006         |  
|ASSETS                                                |   | (Unaudited) |   |   | (Audited)    |  
|Current                                               |   |             |   |   |              |  
|Cash                                                  | $ | 2,880       |   | $ | 1,571        |  
|Accounts receivable                                   |   | 136,950     |   |   | 4,934        |  
|Prepaid expenses                                      |   | 119,444     |   |   | 25,590       |  
|                                                      |   | 259,274     |   |   | 32,095       |  
|                                                      |   |             |   |   |              |  
|Equipment                                             |   | 82,209      |   |   | 47,859       |  
|                                                      | $ | 341,483     |   | $ | 79,954       |  
|                                                      |   |             |   |   |              |  
|                                                      |   |             |   |   |              |  
|LIABILITIES                                           |   |             |   |   |              |  
|Current                                               |   |             |   |   |              |  
|Accounts payable                                      | $ | 764,251     |   | $ | 228,463      |  
|Accrued liabilities                                   |   | 40,337      |   |   | 62,668       |  
|Due to related parties                                |   | 212,954     |   |   | 183,831      |  
|                                                      |   | 1,017,542   |   |   | 474,962      |  
|                                                      |   |             |   |   |              |  
|                                                      |   |             |   |   |              |  
|Going Concern                                         |   |             |   |   |              |  
|                                                      |   |             |   |   |              |  
|                                                      |   |             |   |   |              |  
|STOCKHOLDERS DEFICIENCY                              |   |             |   |   |              |  
|Capital Stock                                         |   |             |   |   |              |  
|Common stock                                          |   |             |   |   |              |  
|Authorized:                                           |   |             |   |   |              |  
|300,000,000
      common shares with $0.001 par value |   |             |   |   |              |  
|Issued,
      allotted and fully paid:                |   |             |   |   |              |  
|72,111,853
      common shares (68,781,981           |   |             |   |   |              |  
|November 30, 2006)                                    |   | 72,112      |   |   | 68,782       |  
|Additional paid-in capital                            |   | 2,672,712   |   |   | 2,414,386    |  
|Preferred stock                                       |   |             |   |   |              |  
|Authorized:                                           |   |             |   |   |              |  
|5,000,000 preferred shares with $0.001 par value      |   |             |   |   |              |  
|Issued and fully paid: Nil                            |   | -           |   |   | -            |  
|Accumulated Comprehensive Loss                        |   | (12,283     | ) |   | (9,420       | )
|Deficit Accumulated during the development stage     |   | (3,408,600  | ) |   | (2,868,756   | )
|                                                      |   | (676,059    | ) |   | (395,008     | )
|                                                      | $ | 341,483     |   | $ | 79,954       |  

- See Accompanying Notes -

---

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

DeficitAccumulated
      
      
      
      
      
      TotalCommon
        Stock
      
      
      Additional
      
      
      During the
      
      
      Accumulated
      
      
      Stockholders'Paid-in
      
      
      Development
      
      
      Comprehensive
      
      
      EquityShares
      
      
      Amount
      
      
      Capital
      
      
      Stage
      
      
      Loss
      
      
      (Deficiency)Founder shares issued for cash at$0.001 per share on July 8, 2005
      750,000
      
      $
      750
      
      $
      (250
      )
      $
      -
      
      $
      -
      
      $
      500Shares issued for cash at $0.007 pershare on September 14, 2005
      12,000,000
      
      
      12,000
      
      
      68,000
      
      
      -
      
      
      -
      
      
      80,000Shares issued for cash at $0.033 pershare on November 16, 2005
      4,466,289
      
      
      4,466
      
      
      144,410
      
      
      -
      
      
      -
      
      
      148,876Shares issued for acquisition ofsoftware at $0.015 per share onNovember 16, 2005
      30,000,000
      
      
      30,000
      
      
      417,637
      
      
      -
      
      
      -
      
      
      447,637Loss for the period
      -
      
      
      -
      
      
      -
      
      
      (566,478
      )
      
      -
      
      
      (566,478
      )Balance - November 30, 2005
      47,216,289
      
      
      47,216
      
      
      629,797
      
      
      (566,478
      )
      
      -
      
      
      110,535Shares issued for acquisition ofintellectual property at $0.083 pershare on February 7, 2006
      18,000,000
      
      
      18,000
      
      
      1,482,000
      
      
      -
      
      
      -
      
      
      1,500,000Shares issued for cash at $0.083 pershare on April 10, 2006
      2,215,692
      
      
      2,216
      
      
      182,425
      
      
      -
      
      
      -
      
      
      184,641Share allotted for consulting services at$0.083 per share
      150,000
      
      
      150
      
      
      12,350
      
      
      -
      
      
      -
      
      
      12,500Shares issued for cash at $0.083 pershare
      1,200,000
      
      
      1,200
      
      
      98,800
      
      
      -
      
      
      -
      
      
      100,000Stock-based compensation
      -
      
      
      -
      
      
      9,014
      
      
      -
      
      
      -
      
      
      9,014Loss for the period
      -
      
      
      -
      
      
      -
      
      
      (2,302,278
      )
      
      -
      
      
      (2,302,278
      )Foreign currency translation adjustment
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (9,420
      )
      
      (9,420
      )Balance  November 30, 2006
      68,781,981
      
      
      68,782
      
      
      2,414,386
      
      
      (2,868,756
      )
      
      (9,420
      )
      
      (395,008
      )Shares issued for cash at $0.083 pershare
      1,355,364
      
      
      1,355
      
      
      111,592
      
      
      -
      
      
      -
      
      
      112,947Shares issued for consulting servicesat $0.083 per share
      600,000
      
      
      600
      
      
      49,400
      
      
      -
      
      
      -
      
      
      50,000Shares allotted for cash at $0.075 pershare
      438,208
      
      
      438
      
      
      32,428
      
      
      -
      
      
      -
      
      
      32,866Shares allotted for cash at $0.05 pershare
      936,300
      
      
      937
      
      
      45,878
      
      
      -
      
      
      -
      
      
      46,815Stock-based compensation
      -
      
      
      -
      
      
      19,028
      
      
      -
      
      
      -
      
      
      19,028Loss for the period
      -
      
      
      -
      
      
      -
      
      
      (539,844
      )
      
      -
      
      
      (539,844
      )Foreign currency translation adjustment
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (2,863
      )
      
      (2,863
      )Balance  May 31, 2007 (Unaudited)
      72,111,853
      
      $
      72,112
      
      $
      2,672,712
      
      $
      (3,408,600
      )
      $
      (12,283
      )
      $
      (676,059
      )


- See Accompanying Notes -

---

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

FromFor the
      
      
      For the
      
      
      For the
      
      
      For the
      
      
      IncorporationThree Months
      
      
      Three Months
      
      
      Six Months
      
      
      Six Months
      
      
      July 5,Ended
      
      
      Ended
      
      
      Ended
      
      
      Ended
      
      
      2005 toMay 31,
      
      
      May 31,
      
      
      May 31,
      
      
      May 31,
      
      
      May 31,2007
      
      
      2006
      
      
      2007
      
      
      2006
      
      
      2007Sales
      $
      11,546
      
      $
      -
      
      $
      171,570
      
      $
      -
      
      $
      195,921Cost of Sales
      
      33,372
      
      
      -
      
      
      149,890
      
      
      -
      
      
      159,314Gross Profit
      
      (21,826
      )
      
      -
      
      
      21,680
      
      
      -
      
      
      36,607General and AdministrativeExpensesSoftware development costs
      
      99,945
      
      
      -
      
      
      174,046
      
      
      13,814
      
      
      536,600Consulting
      
      76,451
      
      
      10,768
      
      
      105,958
      
      
      21,436
      
      
      141,294Salaries and wages
      
      41,324
      
      
      48,638
      
      
      99,348
      
      
      107,783
      
      
      165,929Auditing and accounting
      
      35,836
      
      
      15,656
      
      
      63,072
      
      
      20,624
      
      
      219,029Office
      
      31,892
      
      
      11,718
      
      
      37,632
      
      
      16,652
      
      
      92,579Depreciation
      
      10,413
      
      
      5,477
      
      
      19,067
      
      
      8,997
      
      
      39,757Stock-based compensation
      
      10,500
      
      
      -
      
      
      19,028
      
      
      -
      
      
      28,042Legal
      
      11,328
      
      
      27,877
      
      
      14,186
      
      
      33,127
      
      
      85,454Rent
      
      5,682
      
      
      -
      
      
      13,484
      
      
      -
      
      
      45,503Investor relations
      
      415
      
      
      -
      
      
      6,235
      
      
      -
      
      
      24,915Filing fees
      
      4,912
      
      
      7,455
      
      
      5,453
      
      
      7,455
      
      
      12,740Foreign exchange loss
      
      4,217
      
      
      -
      
      
      4,015
      
      
      -
      
      
      9,865Intellectual property
      
      -
      
      
      -
      
      
      -
      
      
      1,500,000
      
      
      1,947,637Marketing and distribution
      
      -
      
      
      60,000
      
      
      -
      
      
      120,000
      
      
      120,000Bad debt
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      9,789332,915
      
      
      187,589
      
      
      561,524
      
      
      1,849,888
      
      
      3,479,133Loss from Operations
      
      (354,741
      )
      
      (187,589
      )
      
      (539,844
      )
      
      (1,849,888
      )
      
      (3,442,526
      )Other IncomeOther income
      
      -
      
      
      4,517
      
      
      -
      
      
      21,750
      
      
      33,926Loss for the Period
      $
      (354,741
      )
      $
      (183,072
      )
      $
      (539,844
      )
      $
      (1,828,138
      )
      $
      (3,408,600
      )Loss per Share  Basic andDiluted
      $
      (0.00
      )
      $
      (0.00
      )
      $
      (0.01
      )
      $
      (0.03
      )Weighted Average SharesOutstanding
      
      71,107,805
      
      
      66,444,553
      
      
      70,375,061
      
      
      59,012,994Comprehensive LossLoss for the period
      $
      (354,741
      )
      $
      (183,072
      )
      $
      (539,844
      )
      $
      (1,828,138
      )
      $
      (3,408,600
      )Foreign currency translationadjustment
      
      (4,497
      )
      
      2,360
      
      
      (2,863
      )
      
      (491
      )
      
      (12,283
      )Total Comprehensive Lossfor the Period
      $
      (359,238
      )
      $
      (180,712
      )
      $
      (542,707
      )
      $
      (1,828,629
      )
      $
      (3,420,883
      )Comprehensive Loss perShare
      $
      (0.01
      )
      $
      (0.00
      )
      $
      (0.01
      )
      $
      (0.03
      )


- See Accompanying Notes -

---

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

|                                                |   |              |   |   |              |   |   | From          |  
|----------------------------------------------- | - | ------------ | - | - | ------------ | - | - | ------------- | -
|                                                |   |              |   |   |              |   |   | Incorporation |  
|                                                |   | For the Six  |   |   | For the Six  |   |   | (July 5, 2005 | )
|                                                |   | Months Ended |   |   | Months Ended |   |   | to            |  
|                                                |   | May 31,      |   |   | May 31,      |   |   | May 31,       |  
|                                                |   | 2007         |   |   | 2006         |   |   | 2007          |  
|Operating                                       |   |              |   |   |              |   |   |               |  
|Loss for the period                             | $ | (539,844     | ) | $ | (1,828,138   | ) | $ | (3,408,600    | )
|Items not involving an
      outlay of cash:    |   |              |   |   |              |   |   |               |  
|Bad debts                                       |   | -            |   |   | -            |   |   | 9,789         |  
|Depreciation                                    |   | 19,067       |   |   | 8,997        |   |   | 39,757        |  
|Stock-based compensation                        |   | 19,028       |   |   | -            |   |   | 28,042        |  
|Shares issued
      for services included in    |   |              |   |   |              |   |   |               |  
|investor
      relations                        |   | 19,287       |   |   | -            |   |   | 28,938        |  
|Intellectual
      property                     |   | -            |   |   | 1,500,000    |   |   | 1,947,637     |  
|Changes in non-cash working capital items:      |   |              |   |   |              |   |   |               |  
|Prepaid expenses                                |   | (63,141      | ) |   | (18,308      | ) |   | (85,882       | )
|Accounts receivable                             |   | (132,016     | ) |   | (9,789       | ) |   | (146,739      | )
|Accounts
      payable                          |   | 535,788      |   |   | 30,067       |   |   | 764,251       |  
|Accrued liabilities                             |   | (22,331      | ) |   | (11,263      | ) |   | 40,337        |  
|Due to related
      parties                    |   | 29,123       |   |   | 89,938       |   |   | 212,954       |  
|Net cash flows used in operations               |   | (135,039     | ) |   | (238,496     | ) |   | (569,516      | )
|                                                |   |              |   |   |              |   |   |               |  
|Investing                                       |   |              |   |   |              |   |   |               |  
|Purchase of equipment                           |   | (51,789      | ) |   | (35,066      | ) |   | (115,191      | )
|Net cash flows from investing activities        |   | (51,789      | ) |   | (35,066      | ) |   | (115,191      | )
|                                                |   |              |   |   |              |   |   |               |  
|Financing                                       |   |              |   |   |              |   |   |               |  
|Share issuances for cash                        |   | 192,628      |   |   | 184,641      |   |   | 706,645       |  
|Net cash flows from financing activities        |   | 192,628      |   |   | 184,641      |   |   | 706,645       |  
|                                                |   |              |   |   |              |   |   |               |  
|Effect of exchange rate translation adjustments |   | (4,491       | ) |   | (491         | ) |   | (19,058       | )
|                                                |   |              |   |   |              |   |   |               |  
|Net Increase (Decrease) in Cash                 |   | 1,309        |   |   | (89,412      | ) |   | 2,880         |  
|Cash - Beginning
      of period                |   | 1,571        |   |   | 164,550      |   |   | -             |  
|Cash - End of Period                            | $ | 2,880        |   | $ | 75,138       |   | $ | 2,880         |  
|                                                |   |              |   |   |              |   |   |               |  
|Income Taxes Paid                               | $ | -            |   | $ | -            |   | $ | -             |  
|Interest Paid                                   | $ | -            |   | $ | -            |   | $ | -             |  
|                                                |   |              |   |   |              |   |   |               |  
|Supplemental Schedule of Non-Cash               |   |              |   |   |              |   |   |               |  
|Investing and Financing Transactions            |   |              |   |   |              |   |   |               |  
|Shares issued for intellectual
      property   | $ | -            |   | $ | 1,500,000    |   | $ | 1,947,637     |  
|Shares allotted for services                    | $ | 50,000       |   | $ | -            |   | $ | 62,500        |  
|Effect of exchange rate changes on equipment    | $ | 1,628        |   | $ | -            |   | $ | 6,775         |  

- See Accompanying Notes -

---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|May 31, 2007                                      
|(Unaudited)                                       
|US Funds                                          
|                                                  
|                                                  

|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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | As a full service video solution and backend platform
        service provider the Company will be making a shift in overall corporate
        strategy that will involve entry into the Chinese market that should occur
        over the next 120 days. The Company intends to offer a full range of IPTV
        services for television, film and sport entertainment programming including
        premium entertainment channels, video on demand movies, and television
        shows in foreign and Chinese languages. The future implementation of this
        proposed project based on current understanding and scope as defined in
        the MOU signed on the 16thof April, 2007 will allow for a
        full-scale deployment for millions of Chinese subscribers utilizing the
        Companies core technology.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Going Concern and Liquidity Considerations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The accompanying 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 May
        31, 2007, the Company has a working capital deficiency of $758,268, an
        accumulated deficit of $3,408,600 and has incurred an accumulated operating
        cash flow deficit of $569,516 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
        consolidated financial statements do not include any adjustments that
        might result from the outcome of this uncertainty.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 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 interim consolidated financial statements include
        the accounts of both companies since their respective incorporation dates.
        All intercompany balances and transactions have been eliminated.                                                                                                                                                                                                                                                                                                                                                                            

---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|May 31, 2007                                      
|(Unaudited)                                       
|US Funds                                          
|                                                  
|                                                  

|2. | Significant Accounting Policies- Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The accompanying unaudited interim consolidated financial
        statements have been prepared as at May 31, 2007 and for the six month
        period then ended, in accordance with accounting principles generally
        accepted in the United States of America relating to the preparation of
        financial statements for interim periods. Accordingly, they do not include
        all the information and footnotes required by generally accepted accounting
        principles for complete 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
        six month period ended May 31, 2007 are not necessarily indicative of
        the results that may be expected for the year ending November 30, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | These interim consolidated financial statements follow
        the same accounting policies and methods of their application as the most
        recent annual financial statements. These interim consolidated financial
        statements should be read in conjunction with the audited interim financial
        statements of the Company as at November 30, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Recently Adopted Accounting Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | In February 2007, the Financial Accounting Standards
        Board (the FASB) issued SFAS No. 159, The Fair Value
        Option for Financial Assets and Financial Liabilities (SFAS 159).
        SFAS 159 allows the company to choose to measure many financial assets
        and financial liabilities at fair value. Unrealized gains and losses on
        items for which the fair value option has been elected are reported in
        earnings. SFAS 159 is effective for fiscal years beginning after November
        15, 2007. The Company is currently evaluating the requirements of SFAS
        159 and the potential impact on the Companys financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | In September 2006, the FASB issued SFAS No. 158, Employers
        Accounting for Defined Benefit Pension and Other Postretirement Plans
         an amendment of FASB Statements No. 87, 88, 106 and 132(R)
        (SFAS 158). SFAS 158 requires an employer that sponsors one or more
        single-employer defined benefit plans to (a) recognize the overfunded
        or underfunded status of a benefit plan in its statement of financial
        position, (b) recognize as a component of other comprehensive income,
        net of tax, the gains or losses and prior service costs or credits that
        arise during the year but are not recognized as components of net periodic
        benefit cost pursuant to SFAS 87, Employers Accounting for
        Pensions, or SFAS 106, Employers Accounting for Postretirement
        Benefits Other Than Pensions, (c) measure defined benefit plan assets
        and obligations as of the date of the employers fiscal year-end,
        and (d) disclose in the notes to financial statements additional information
        about certain effects on net periodic benefit cost for the next fiscal
        year that arise from delayed recognition of the gains or losses, prior
        service costs or credits, and transition asset or obligation. SFAS 158
        is effective for the Companys fiscal year ending September 30, 2007.
        The adoption of SFAS 158 is not expected to have a material impact on
        the Companys financial position, results of operation or cash flows.

---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|May 31, 2007                                      
|(Unaudited)                                       
|US Funds                                          
|                                                  
|                                                  

|2. | Significant Accounting Policies- Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Recently Adopted Accounting Standards- Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In September 2006, the FASB issued SFAS No. 157, "Fair
        Value Measurement" ("SFAS 157"). The Statement provides guidance for using
        fair value to measure assets and liabilities. The Statement also expands
        disclosures about the extent to which companies measure assets and liabilities
        at fair value, the information used to measure fair value, and the effect
        of fair value measurement on earnings. This Statement applies under other
        accounting pronouncements that require or permit fair value measurements.
        This Statement does not expand the use of fair value measurements in any
        new circumstances. Under this Statement, fair value refers to the price
        that would be received to sell an asset or paid to transfer a liability
        in an orderly transaction between market participants in the market in
        which the entity transacts. SFAS 157 is effective for the Company for
        fair value measurements and disclosures made by the Company in its fiscal
        year beginning on October 1, 2008. The adoption of SFAS 157 is not expected
        to have a material impact on the Companys financial position, results
        of operation or cash flows.                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On July 2006, the FASB issued FIN. 48, Accounting
        for Uncertainty in Income Taxes (an interpretation of FASB Statement No.
        109) (FIN 48) which is effective for fiscal years beginning
        after December 15, 2006. This interpretation was issued to clarify the
        accounting for uncertainty in income taxes recognized in the financial
        statements by prescribing a recognition threshold and measurement attribute
        for the financial statement recognition and measurement of a tax position
        taken or expected to be taken in a tax return. The Company is currently
        evaluating the potential impact of FIN 48, but it is not expected to have
        a material impact on the Companys financial position, results of
        operations or cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|May 31, 2007                                      
|(Unaudited)                                       
|US Funds                                          
|                                                  
|                                                  

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

| |                                |   |         |  |   |              |   |   | Net Book |  |   | Net Book     | 
| | ------------------------------ | - | ------- |  | - | ------------ | - | - | -------- |  | - | ------------ | 
| |                                |   |         |  |   |              |   |   | Value    |  |   | Value        | 
| |                                |   |         |  |   | Accumulated  |   |   | May 31,  |  |   | November 30, | 
| |                                |   | Cost    |  |   | Depreciation |   |   | 2007     |  |   | 2006         | 
| | Office equipment and furniture | $ | 115,066 |  | $ | (39,632      | ) | $ | 75,434   |  | $ | 42,712       | 
| | Effect of exchange rate        |   |         |  |   |              |   |   |          |  |   |              | 
| | changes on equipment           |   | 8,686   |  |   | (1,911       | ) |   | 6,775    |  |   | 5,147        | 
| |                                | $ | 123,752 |  | $ | (41,543      | ) | $ | 82,209   |  | $ | 47,859       | 

|   |               
|-- | --------------
|4. | Software Costs
|   |               
|   | a)            
|   |               
|   | b)            
|   |               
|   |               
|5. | Commitments   
|   |               
|   | a)            

---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|May 31, 2007                                      
|(Unaudited)                                       
|US Funds                                          
|                                                  
|                                                  

|5. | Commitments -Continued
|-- | ----------------------

| |    | During the prior year, 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. No further payments are required under the agreement except for
        payment of the 40% commission based on sales as the agreement remains
        in effect until December 31, 2007.                                                                                                                                                                  
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | b) | By agreement dated August 17, 2006, the Company entered
        into a Supply Services Contract with an unrelated party for investor relations
        services ended December 31, 2006. The consideration for the services includes
        $12,000 in cash payments and 150,000 common stock of the Company. The
        amount of $6,000 (accrued)and 75,000 common shares were payable
        on August 25, 2006, the execution date, and the balance of $6,000 and
        75,000 common shares are due within 90 days from the execution date. These
        150,000 shares were allotted as at November 30, 2006 at $0.083 per share
        and will be issued in fiscal 2007.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Upon agreement of both parties, the contract will continue
        on a month-to-month basis requiring a payment of $4,000 per month. Specific
        services that are outside the terms of the contract will be charged at
        $200 per hour or $1,500 per full workday. Termination of the contract
        will occur upon written notice to either party by the other party.                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

|6. | Segmented Information                                                   
|-- | ------------------------------------------------------------------------
|   |                                                                         
|   | Details on a geographic basis as at May 31, 2007 are
        as follows:

| |                   |   | Eastern  |   |   |          |   |   |          |  
| | ----------------- | - | -------- | - | - | -------- | - | - | -------- | -
| |                   |   | Europe   |   |   | U.S.A.   |   |   | Total    |  
| | Assets            | $ | 265,320  |   | $ | 76,163   |   | $ | 341,483  |  
| | Revenue           | $ | 171,570  |   | $ | -        |   | $ | 171,570  |  
| | Loss for the year | $ | (374,401 | ) | $ | (165,443 | ) | $ | (539,844 | )

Details on a geographic basis as at November
  30, 2006 are as follows:

| |                   |   | Eastern  |   |   |            |   |   |            |  
| | ----------------- | - | -------- | - | - | ---------- | - | - | ---------- | -
| |                   |   | Europe   |   |   | U.S.A.     |   |   | Total      |  
| | Assets            | $ | 73,623   |   | $ | 6,331      |   | $ | 79,954     |  
| | Revenue           | $ | 24,351   |   | $ | -          |   | $ | 24,351     |  
| | Loss for the year | $ | (437,093 | ) | $ | (1,865,185 | ) | $ | (2,302,278 | )
| |                   |   |          |   |   |            |   |   |            |  

---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|May 31, 2007                                      
|(Unaudited)                                       
|US Funds                                          
|                                                  
|                                                  

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



---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|May 31, 2007                                      
|(Unaudited)                                       
|US Funds                                          
|                                                  
|                                                  

|8. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company has accumulated net operating losses for
        U.S. federal income tax purposes of approximately $655,597, which may
        be carried forward until 2026 and used to reduce taxable income of future
        years and net operating losses for Czech income tax purposes of approximately
        $547,371, which may be carried forward until 2012 and used to reduce taxable
        income of future years. In addition, the Company has $1,947,637 of intellectual
        property costs deductible for tax purposes at $130,000 per year. Details
        of deferred income tax assets:

| |                                                      |   | May 31,   |   |   | November 30, |  
| | ---------------------------------------------------- | - | --------- | - | - | ------------ | -
| | Deferred income tax assets:                          |   | 2007      |   |   | 2006         |  
| | Non-capital
      losses                             | $ | 1,573,082 |   | $ | 1,018,672    |  
| | Intellectual property costs
      deductible for tax |   | 1,764,566 |   |   | 1,829,487    |  
| | purposes                                             |   |           |   |   |              |  
| |                                                      |   | 3,337,648 |   |   | 2,848,159    |  
| | Effective
      US and CZ corporate tax rates        |   | 29%       |   |   | 30%          |  
| | Deferred income tax asset                            |   | 968,081   |   |   | 854,451      |  
| | Valuation
      allowance                            |   | (968,081  | ) |   | (854,451     | )
| |                                                      | $ | -         |   | $ | -            |  

|   | The potential future tax benefits of these
        losses have not been recognized by the Company 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)                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                               

---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|May 31, 2007                                      
|(Unaudited)                                       
|US Funds                                          
|                                                  
|                                                  

|9. | Capital Stock -Continued
|-- | ------------------------
|   |                         
|   | d)                      
|   |                         
|   | e)                      
|   |                         
|   | f)                      
|   |                         
|   | g)                      
|   |                         
|   | h)                      
|   |                         
|   | i)                      
|   |                         
|   | j)                      
|   |                         
|   |                         
|   |                         
|   |                         
|   |                         
|   |                         
|   |                         
|   |                         

---

|ITonis Inc.                                       
|--------------------------------------------------
|(Formerly Kenshou Inc.)                           
|(A Development Stage Company)                     
|Notes to Interim Consolidated Financial Statements
|May 31, 2007                                      
|(Unaudited)                                       
|US Funds                                          
|                                                  
|                                                  

|9. | Capital Stock -Continued
|-- | ------------------------

| | j) | Share Purchase Options -Continued
| | -- | ---------------------------------

Expected dividend yield
      0.00%Expected stock price volatility
      83%Risk-free interest rate
      4.82%Expected life of
        options
      1.92
        years


Because the shares of the Company have
  not begun trading on any recognized stock exchange when the options were granted,
  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 $0.05.

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. | Subsequent Events                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                        
|    | On June 11, 2007, the Company issued for cash 1,000,000
        restricted units comprised of 1,000,000 shares at $0.25 and 1,000,000
        share purchase warrants exercisable at $0.25 for two years from date of
        issuance.
|    |                                                                                                                                                                                                                                        

---

Item
2.               
Managements Discussion and Analysis or Plan of Operation

The following discussion of our financial condition, changes in
financial condition and results of operations for the six months ended May 31,
2007 should be read in conjunction with our unaudited consolidated interim
financial statements and related notes for the six months ended May 31, 2007.

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.

Corporate Organization

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 5,
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.

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.

Three for One Forward Stock Split

On March 20, 2007 (the Record Date), we completed an increase
in the number of shares of our authorized share capital and correspondingly
increase the number of its issued and outstanding common shares, in each case on
a three (3) new shares for one (1) old share basis (the Forward Stock Split)
in accordance with Section 78.207 of the Nevada Revised Statutes: Chapter 78, as
amended.

The forward stock split was implemented taking into account our
authorized share capital and number of issued and outstanding shares of common
stock as of the Record Date. As such, our authorized common share capital
increased from 100,000,000 shares to 300,000,000 shares, and our issued and
outstanding common stock increased from 23,129,115 shares to 69,387,345 shares,
with a par value of $0.001 per share. There was no change to our authorized
preferred share capital of 5,000,000 shares, with a par value of $0.001 per
share. No shares of preferred stock of the Company are currently issued and
outstanding. All share numbers presented in this annual report are on a
post-split basis.

Recent Developments

On July 2, 2007, by a written consent resolution of our board
of directors, Mr. Thomas Neal Roberts was appointed as our director, president,
chief executive officer, chief financial officer and secretary. Concurrent with
the appointments of Mr. Roberts, Mr. Nicolas Lavaud resigned as our director,
president, chief executive officer, chief financial officer and secretary of the
Company. As a result, Mr. Lavaud is no longer a director or officer of the
Company.

Our new management has determined to shift to our efforts for
commercialization of our ITonis video solution from the European market to the
Chinese market. As a result of this determination, the Company plans to reduce
its operations in the Czech Republic during this current fiscal quarter.

On April 16, 2007, we entered into a memorandum of
understanding with iOcean Media Limited (iOcean) for the launch of a joint
venture project to provide Internet Protocol Television services in the

- 3 -

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Peoples Republic of China. Under terms of the memorandum of
understanding, we have agreed with iOcean to enter into good faith negotiations
towards the execution of a formal joint venture agreement and a license
agreement that will govern the joint venture project. The definitive agreements
will be based on the terms of the memorandum of understanding. The definitive
agreement is to be executed within three months of the date of the memorandum of
understanding. To date, we have progressed with negotiations for the execution
of the formal joint venture agreement but no agreement has been executed.

The memorandum of understanding contemplates that we and iOcean
will jointly develop and operate an IP Television and Video on Demand service in
the province of Shandong in the Peoples Republic of China (the Project). The
IPTV solution would be based on our ITonis delivery platform and backend
solutions which we would license to the joint venture as a non-exclusive,
non-transferable license with a term of 20 years. The legal set-up of the joint
venture and its management and financing post-pilot rollout would be the
responsibility of iOcean. Profits under the joint venture would be split 51% in
favour of iOcean and 49% to us.

iOcean is a sino/foreign company that is engaged in the
business of developing solutions and forming partnerships for the delivery of
Internet Protocol Television services in the Peoples Republic of China.

Formation of the joint venture will be subject to the execution
of definitive agreements. There is no assurance that definitive agreements will
be executed within the time frame contemplated by the memorandum of
understanding.

This summary of certain material provisions of the memorandum
of understanding is qualified by the full text of the memorandum of
understanding, a copy of which has been filed as Exhibit 10.1 to our
current report on Form 8-K filed with the SEC on April 24, 2007, which investors
should read in full.

Our Plan of Operations

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
      $50,000 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 second 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, ITonis
      distributors (Nordic IPTV Company ApS and Sofia Digital) undertake those
      activities for which we pay a percentage of the sales.                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|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 in China that will offer the basic
      functionality of the ITonis video solution. We anticipate that this
      installation would cost approximately $50,000. This cost would cover the
      hardware and software for the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

- 4 -

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|   | solution. Implementation will be performed by ITonis CZ.
      This component of our plan of operations is contingent upon us securing a
      joint venture with a local partner.                                                                                                                                                                                                                                                                             
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|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 and
      $39,830 to repay the loan made to us by our former chief executive officer
      described below under the heading Liquidity and Capital
  Resources.                                                                                 

As at November 30, 2006, we had cash reserves of $1,571 and
working capital of deficit of $442,867. As at May 31, 2007, our cash reserves
had increased to $2,880 and our working capital deficit had increased to
$758,268. Our planned expenditures over the next twelve months are approximately
$1,000,000. Accordingly, we anticipate that we will require financing in the
amount of approximately $1,760,000 in order to carry out our plan of operations
for the next twelve months.

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
one month 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 presently have no
arrangements in place for any additional equity financings. In the absence of
such additional financing, we may not be able to continue our plan of operations
beyond the next month 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. Upfront
  contract payments received from the sale of services not yet earned are initially
  recorded as deferred revenue on the balance sheet.

- 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 Koruna (CZK), 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

Effective March 1, 2006, the Company adopted the provisions of
Statement of Financial Accounting Standards (SFAS) No. 123(R), Share-Based
Payment (SFAS 123(R)), 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 (SFAS
123). The Company adopted SFAS 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

- 6 -

---

method of expensing share-based compensation. Adoption of SFAS
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.

Results Of Operations  Six months ended May 31, 2007 and
2006

References to the discussion below to fiscal 2007 are to our
current fiscal year which will end on November 30, 2007. References to fiscal
2006 is to our fiscal year ended November 30, 2006.References to the
first six months of fiscal 2006 are to the six month period ended May 31, 2006
and references to the first six months of fiscal 2007 are to the six month
period ended May 31, 2007.

For the
    
    
    
    
    
    
    
    
    
    
    
    FromThree
    
    
    For the
    
    
    For the
    
    
    For the
    
    
    IncorporationMonths
    
    
    Three Months
    
    
    Six Months
    
    
    Six Months
    
    
    July 5,Ended
    
    
    Ended
    
    
    Ended
    
    
    Ended
    
    
    2005 toMay 31,
    
    
    May 31,
    
    
    May 31,
    
    
    May 31,
    
    
    May 31,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007Sales
    $
    11,546
    
    $
    -
    
    $
    171,570
    
    $
    -
    
    $
    195,921Cost of Sales
    
    33,372
    
    
    -
    
    
    149,890
    
    
    -
    
    
    159,314Gross Profit
    
    (21,826
    )
    
    -
    
    
    21,680
    
    
    -
    
    
    36,607General andAdministrativeExpensesSoftware
      developmentcosts
    
    99,945
    
    
    -
    
    
    174,046
    
    
    13,814
    
    
    536,600Consulting
    
    76,451
    
    
    10,768
    
    
    105,958
    
    
    21,436
    
    
    141,294Salaries and wages
    
    41,324
    
    
    48,638
    
    
    99,348
    
    
    107,783
    
    
    165,929Auditing
      and accounting
    
    35,836
    
    
    15,656
    
    
    63,072
    
    
    20,624
    
    
    219,029Office
    
    31,892
    
    
    11,718
    
    
    37,632
    
    
    16,652
    
    
    92,579Depreciation
    
    10,413
    
    
    5,477
    
    
    19,067
    
    
    8,997
    
    
    39,757Stock-based compensation
    
    10,500
    
    
    -
    
    
    19,028
    
    
    -
    
    
    28,042Legal
    
    11,328
    
    
    27,877
    
    
    14,186
    
    
    33,127
    
    
    85,454Rent
    
    5,682
    
    
    -
    
    
    13,484
    
    
    -
    
    
    45,503Investor
      relations
    
    415
    
    
    -
    
    
    6,235
    
    
    -
    
    
    24,915Filing fees
    
    4,912
    
    
    7,455
    
    
    5,453
    
    
    7,455
    
    
    12,740Foreign
      exchange loss
    
    4,217
    
    
    -
    
    
    4,015
    
    
    -
    
    
    9,865Intellectual property
    
    -
    
    
    -
    
    
    -
    
    
    1,500,000
    
    
    1,947,637Marketing
      anddistribution
    
    -
    
    
    60,000
    
    
    -
    
    
    120,000
    
    
    120,000Bad debt
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    9,789332,915
    
    
    187,589
    
    
    561,524
    
    
    1,849,888
    
    
    3,479,133Loss from Operations
    
    (354,741
    )
    
    (187,589
    )
    
    (539,844
    )
    
    (1,849,888
    )
    
    (3,442,526
    )Other IncomeOther income
    
    -
    
    
    4,517
    
    
    -
    
    
    21,750
    
    
    33,926Loss for the Period
    $
    (354,741
    )
    $
    (183,072
    )
    $
    (539,844
    )
    $
    (1,828,138
    )
    $
    (3,408,600
    )


Revenue

We generated our initial revenues during the first quarter of
fiscal 2007. During the first quarter of fiscal 2007, we delivered our encoding
platform to a customer for encoding content from DVD disks onto the

- 7 -

---

customers video demand platform. The encoding platform is one
of the components of the ITonis video solution. Our revenues increased to
$171,570 for the first six months of fiscal 2007 from $Nil for the first six
months of fiscal 2006.

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.

Software Development Costs

Software development costs represent amounts attributable to
the development of our proprietary software.

Our software development costs increased to $174,046 during the
first six months of fiscal 2007 as we continued development of our ITonis video
solution. Software development costs during fiscal 2006 included:

- amounts 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; and
- software development work that we completed in-house.

Consulting

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

Consulting expenses increased significantly to $105,958 for the
first six months of fiscal 2007 compared to $21,436 for the first six months of
fiscal 2006. Consulting expenses have increased in part due to marketing
campaigns that were undertaken based on the previous strategy for the firm.
Outside consultants were required to facilitate these campaigns because of lack
of in-house expertise. We anticipate that management and consulting expenses
will increase during fiscal 2007 because of our determination to focus on China.

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 $99,348 during the first six months of
fiscal 2007 compared to $107,783 during the first six months of fiscal 2006.

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.

Accounting and auditing expenses decreased during the first six
months of fiscal 2007 compared to the first six months of fiscal 2006 as a
result of the completion of our audited annual and unaudited interim financial
statements prepared in connection with our annual report on Form 10-KSB for the
year ended November 30, 2006 that we have filed with the SEC.

Depreciation

Depreciation expenses represents depreciation of our computer
hardware and equipment.

- 8 -

---

Depreciation expenses in the first six months of fiscal 2006
and fiscal 2007 represented depreciation of computer hardware and equipment that
we acquired in connection with the development and testing of our ITonis video
solution.

Legal

Legal expenses are attributable to legal fees paid to our legal
counsel in connection with the completion of our corporate reorganization and
our filing a registration statement with the SEC and becoming a reporting
company under the Securities Exchange Act of 1934.

Legal expenses during the first six months of fiscal 2007
declined compared to the first six months of fiscal 2006 as a result of our
completing our corporate reorganization and preparing and filing of a
registration statement with the SEC during fiscal 2006. Legal expenses during
the first months of fiscal 2007 have related to our ongoing continuous reporting
obligations under the Securities Exchange Act of 1934.

Rent

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

Our rent expenses increased significantly in 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 fiscal 2007.

Intellectual Property

We did not incur any expenses on any intellectual property
during the first six months of fiscal 2007. In fiscal 2006, we determined that
the cost of the intellectual property purchased during our fiscal 2006 does not
meet the criteria for capitalization as set out in SFAS No. 86.

Marketing And Distribution

Our marketing and distribution expenses include amounts that we
pay under our reseller and consulting services agreement with Nordic IPTV. We
recorded $120,000 in expenses under the Nordic IPTV agreement in 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. We did not record any marketing
and distribution expenses during the first six months of fiscal 2007.

Other Income

We did not generate any other income during the first six
months of fiscal 2007. Our other income during 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 our former director and officer, 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.

- 9 -

---

Liquidity And Capital Resources

Cash and Working Capital

As at May 31, 2007, we had cash of $2,880 and a working capital
deficit of $758,268, compared to cash reserves of $1,571 and working capital of
deficit of $442,867 as at November 30, 2006.

Related Party Loan

During fiscal 2006 Mr. Nicolas Lavaud, our former director and
chief executive officer, granted us a loan which was outstanding in the amount
of $39,830 as of May 31, 2007. The loan is evidenced by a promissory note, is
unsecured and does not bear any interest. The promissory note is payable on
demand.

Plan Of Operations

Our planned expenditures over the next twelve months are
approximately $1,000,000. As described above under Our Plan of Operations, we
anticipate that we will require financing in the amount of approximately
$1,760,000 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 of $135,039 in operating activities during the
first six months of fiscal 2007 compared to cash used of $238,496 in operating
activities during the first six months of fiscal 2006.

Cash From Investing Activities

We used cash of $51,789 in investing activities during the
first six months of fiscal 2007 which consisted of upgrades and enhancements to
technology and purchases of equipment. We used cash in investing activities in
the amount of $35,066 during the first six months of fiscal 2006. Cash used in
investing activities in fiscal 2006 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 of $192,628 from financing activities during
the first six months of fiscal 2007 compared to cash of $184,641 generated from
activities during the first six months of fiscal 2006.

Cash generated from financing activities during the first six
months of fiscal 2007 was attributable to shares issued for cash.

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.

- 10 -

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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 May 31,
2007, 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. Thomas Neal Roberts. 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.

During the fiscal quarter ended May 31, 2007, 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 May 31, 2007.

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.                                                                                                                                              

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Item 3A(T).      Controls and
Procedures

Not Applicable.

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 completed the following sales of securities without registration
  under the Securities Act of 1933 during the quarter ended May 31, 2007 and subsequent
  to May 31, 2007.

| | 1. | We issued 438,208 shares of our common stock on April 11,
      2007 at a price of $0.075 per share to a total of one purchaser for total
      proceeds of $32,866. We completed this offering pursuant to Rule 903 of
      Regulation S of the Securities Act. Each sale of shares was completed as
      an offshore transaction, as defined in Rule 902(h) of Regulation S, on
      the basis that: (i) each investor was outside of the United States at the
      time the offer to purchase the shares was made; and (ii) at the time the
      subscription agreement for the shares was executed, the investor was
      outside of the United States or we had a reasonable belief that the
      investor was outside of the United States. We did not engage in any
      directed selling efforts, as defined in Regulation S, in the United
      States. Each investor represented to us that the investor was not a U.S.
      person, as defined in Regulation S, and was not acquiring the shares for
      the account or benefit of a U.S. Person. Each purchaser represented their
      intention to acquire the securities for investment only and not with a
      view toward distribution. Appropriate legends have been affixed to the
      stock certificate issued to each purchaser in accordance with Regulation S
      confirming that the shares cannot be resold or transferred other than
      pursuant to Regulation S, registration under the Securities Act or an
      exemption from the registration requirements of the Securities Act. None
      of the securities were sold through an underwriter and, accordingly, there
      were no underwriting discounts or commissions involved. No registration
      rights were granted to any of the purchasers.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 2. | We issued 936,300 shares of our common stock on May 18,
      2007 at a price of $0.050 per share to one purchaser for total proceeds of
      $46,815. We completed this offering pursuant to Rule 903 of Regulation S
      of the Securities Act. Each sale of shares was completed as an offshore
      transaction, as defined in Rule 902(h) of Regulation S, on the basis
      that: (i) each investor was outside of the United States at the time the
      offer to purchase the shares was made; and (ii) at the time the
      subscription agreement for the shares was executed, the investor was
      outside of the United States or we had a reasonable belief that the
      investor was outside of the United States. We did not engage in any
      directed selling efforts, as defined in Regulation S, in the United
      States. Each investor represented to us that the investor was not a U.S.
      person, as defined in Regulation S, and was not acquiring the shares for
      the account or benefit of a U.S. Person. Each purchaser represented their
      intention to acquire the securities for investment only and not with a
      view toward distribution. Appropriate legends have been affixed to the
      stock certificate issued to each purchaser in accordance with Regulation S
      confirming that the shares cannot be resold or transferred other than
      pursuant to Regulation S, registration under the Securities Act or an
      exemption from the registration requirements of the Securities Act. None
      of the securities were sold through an underwriter and, accordingly, there
      were no underwriting discounts or commissions involved. No registration
      rights were granted to any of the purchasers.             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 3. | We issued 1,000,000 units of our common stock (each a
      Unit) on June 11, 2007 at a price of $0.25 per Unit to a total of one
      purchaser for total proceeds of $250,000. Each Unit consists of one share
      and one share purchase warrant (each a Warrant), each Warrant entitles
      the purchaser                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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to purchase one additional share of
common stock of the Company (each a Warrant Share) at a price of $0.25 per
Warrant Share within a two year period from the date of grant. We completed this
offering pursuant to Rule 903 of Regulation S of the Securities Act. Each sale
of the Units was completed as an offshore transaction, as defined in Rule
902(h) of Regulation S, on the basis that: (i) each investor was outside of the
United States at the time the offer to purchase the Units was made; and (ii) at
the time the subscription agreement for the Units was executed, the investor was
outside of the United States or we had a reasonable belief that the investor was
outside of the United States. We did not engage in any directed selling efforts,
as defined in Regulation S, in the United States. Each investor represented to
us that the investor was not a U.S. person, as defined in Regulation S, and was
not acquiring the Units for the account or benefit of a U.S. Person. Each
purchaser represented their intention to acquire the securities for investment
only and not with a view toward distribution. Appropriate legends have been
affixed to the stock certificate issued to each purchaser in accordance with
Regulation S confirming that the securities cannot be resold or transferred
other than pursuant to Regulation S, registration under the Securities Act or an
exemption from the registration requirements of the Securities Act. None of the
securities were sold through an underwriter and, accordingly, there were no
underwriting discounts or commissions involved. No registration rights were
granted to any of the purchasers.

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 six months ended May 31, 2007.

Item
5.               
Other Information

None.

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)                                                                                                                          
|        |                                                                                                                                      
|3.4     | Certificate of Change pursuant to NRS 78.209 effective
      March 19, 2007 (6)                                                      
|        |                                                                                                                                      
|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)                                                                                                           

- 13 -

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|Exhibit |                                                                                                                                                                                                                                                 
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                 
|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)                                                                                                                    
|        |                                                                                                                                                                                                                                                 
|10.11   | Subscription
        Agreement between ITonis Inc. and Spectrum Managers Ltd. dated December
        12, 2006 (4)                                                                                                                               
|        |                                                                                                                                                                                                                                                 
|10.12   | Memorandum of
        Understanding between the Company and iOcean Media Limited dated April
        16, 2007 (7)                                                                                                                               
|        |                                                                                                                                                                                                                                                 
|14.1    | Code of Ethics
        (8)                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                 
|16.1    | Letter of Moores
        Rowland dated February 15, 2007 (5)                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                 
|31.1    | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to Rule
        13a-14(a) of the Exchange Act (9)                                                                                                         
|        |                                                                                                                                                                                                                                                 
|32.1    | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to Rule
        13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002 (9)

|(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 our Current Report on Form 8-K
      filed with the SEC on December 15, 2006.                                
|    |                                                                                                                                     
|(5) | Filed as an exhibit to our Current Report on Form 8-K
      filed with the SEC on February 23, 2007.                                
|    |                                                                                                                                     
|(6) | Filed as an exhibit to our Current Report on Form 8-K
      filed with the SEC on March 20, 2007.                                   
|    |                                                                                                                                     
|(7) | Filed as an exhibit to our Current Report on Form 8-K
      filed with the SEC on April 24, 2007.                                   
|    |                                                                                                                                     
|(8) | Filed as an exhibit to our Annual Report on Form 10-KSB
      filed with the SEC on April 27, 2007.                                 
|    |                                                                                                                                     
|(9) | 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/ Thomas Roberts                                 
| |                 | Thomas Roberts                                     
| |                 | Chief Executive Officer and Chief Financial Officer
| |                 | Date: July 16, 2007                                

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